Day: July 24, 2009

Merlin pops the question: Should Rust family stay in State Farm’s power and ownership given the recent record of policyholder and corporate citizen ethics?

Like his grandfather and father before him, Edward B. Rust Jr. became the chairman and chief executive officer of State Farm Insurance Companies…Rust’s grandfather, Adlai H. Rust, was a young lawyer when he helped George Mecherle found State Farm and became his right-hand man. Mecherle’s son, Raymond, took over the presidency of the company in 1937, and when Raymond died in 1954, Adlai Rust took over as chief executive officer. His son, Edward B. Rust Sr., joined State Farm in 1941, succeeded him as CEO in 1967, and was named chairman in 1983…

In August 1985 Rust’s father died at the age of 66 and his namesake, only 35 years old, was promptly appointed the new chief executive officer.

With Rust’s family fortunes so intertwined with State Farm’s history, it was difficult clearly to distinguish the corporate culture from the CEO’s personal worldview… The company was so committed to controlling costs in the name of its policyholders that its corporate culture appeared to take on the zeal of religion, and to many it went too far….

In 1989 State Farm was accused in a policyholder lawsuit of being too conservative in maintaining reserves, with the effect of trimming dividend payments to policyholders… During the 1990s Rust would face a number of legal problems that critics said were an outgrowth of State Farm’s inbred culture and obsession with cost controls…

In 1998 State Farm was “rocked by a string of blistering punitive damage decisions,” as reported by BusinessWeek (“State Farm: What’s Happening to the Good Neighbor?” November 8, 1999).

[In Utah], the company was fined $25 million in punitive damages, in part for the “systematic destruction of documents” and “systematic manipulation of individual claim files to conceal claim mishandling.

With this background as reference, SLABBED turns to the Property Insurance Coverage Law Blog where policyholder attorney Chip Merlin pops the question: Should the Rust Family Stay in State Farm’s Power and Ownership Given the Recent Record of Policyholder and Corporate Citizen Ethics.

State Farm lost its most significant claims case Continue reading “Merlin pops the question: Should Rust family stay in State Farm’s power and ownership given the recent record of policyholder and corporate citizen ethics?”

Whitfield Appeal provides timely review of law re: judicial bribery, USA v Minor

Alan over at Y’all recently reported Judge Wingate’s largely unreported denial of Paul Minor co-defendant John Whitfield’s motion for release pending Appeal, adding this link to the Order.  Wingate hung his hat – or flipped his lid – guided by Rule 9(c) of the Federal Rules of Appellate Procedure:

The applicable provision in the instant case, Title 18 U.S.C. § 3143(b )(1), says that the defendant in this case shall be detained unless this court is able to find that the appeal raises a substantial question of law or fact…this court is not persuaded that the defendant has submitted any substantial question of law which would result in reversal or a new trial on all counts for which the defendant has been sentenced to prison. Therefore, the motion of the defendant to be released pending appeal is denied.

Earlier this week Whitfield filed an Appeal at the 5th Circuit and SLABBED was among the media outlets receiving a copy of the Appeal brief from his new counsel.

A review of the Appeal provides the opportunity to explore the basis for his appeal in the context of related information about applicable law, cases currently in litigation with similar issues, and the circumstances surrounding Mr. Whitfield’s relationship with Paul Minor and subsequent conviction.

In its review of Mr. Whitfield’s Motion for Release, the District Court applied the wrong standard in two instances, resulting in a flawed ruling that is clearly erroneous. Continue reading “Whitfield Appeal provides timely review of law re: judicial bribery, USA v Minor”

A couple of stories from the Bay I found both encouraging and amusing

Nowdy will be proud the new Mayor is trying to spruce up the commercial corridor on Highway 90.

I had to laugh that the new Mayor and City Council changed the time and put a time limit on public comments at City Council meetings. I think I know one of the reasons and I ask our readers to forgive this very inside joke illustrated by the following video:

[youtube=http://www.youtube.com/watch?v=znv_sUPaKfE]