A Los Angeles judge has denied a petition by State Farm and other insurers to dismiss two lawsuits accusing them of colluding to drive homeowners onto California\u2019s FAIR Plan.<\/p>\n
The lawsuits, which accuse the insurers of violating the state\u2019s antirust and unfair competition laws<\/a>, were largely upheld in a decision Thursday by Los Angeles County Superior Court Judge Samantha Jessner.<\/p>\n The judge struck two less significant claims from the lawsuits filed last year, but allowed the case to proceed against more than dozen major California insurers, led by State Farm General, the state\u2019s largest.<\/p>\n \u201cThis is very good news for our people, our plaintiffs, because we\u2019re going to be able to go ahead now with our antitrust claims in both cases,\u201d said Bob Ruyak, an attorney representing the homeowners.<\/p>\n Sevag Sarkissian, a State Farm spokesperson, said the ruling did not \u201caddress the accuracy of the allegations\u201d and that the company looks \u201cforward to presenting our case in court.\u201d<\/p>\n The lawsuits allege the companies financially benefited when policyholders were dropped and moved onto the FAIR Plan, since they financially back the insurer that sells more expensive policies which offer less coverage.<\/p>\n One lawsuit led by Todd and Kimberley Ferrier \u2014 whose Pacific Palisades home burned down \u2014 seeks to compensate 60 homeowners who experienced fire losses exacerbated by the FAIR Plan\u2019s limited coverage.<\/p>\n The other case is a proposed class action that would compensate policyholders for the higher premiums they paid to the plan.<\/p>\n The case has garnered the attention of the federal Department of Justice, which filed a brief<\/a> this month disputing an argument made by the insurers to have the case thrown out.<\/p>\n The insurers had alleged that they were shielded from antitrust liability under both California and federal law due to a certain legal doctrine.<\/p>\n While the department took no position on the merits of the collusion allegations, it said it files such briefs \u201cwhere doing so helps protect competition and consumers, including by encouraging the sound development of the antitrust laws.\u201d<\/p>\n The decision by the department to insert itself in the case followed a March post by President Trump bashing State Farm on social media<\/a> after a visit to Pacific Palisades by administration officials. <\/p>\n The president called State Farm\u2019s treatment of January 2025 wildfire victims \u201cabsolutely horrible\u201d and asked EPA Administrator Lee Zeldin for a list of insurers who \u201cacted swiftly\u201d and those that were \u201cparticularly bad.\u201d<\/p>\n Also this month, the California Department of Insurance filed an administrative action against State Farm<\/a> seeking possible suspension of the carrier\u2019s insurance license, alleging State Farm mishandled January 2025 wildfire claims.<\/p>\n