A tentative ruling in the class action lawsuit A&J Liquor Co. Inc., et al v. State Compensation Insurance Fund found in favor of California’s largest workers’ comp insurer April 7.
San Francisco Superior Court Judge John Munter tentatively decided for State Fund, relinquishing the company of charges alleging they overcharged for workers’ comp coverage between the years of 1987 to 1994 in efforts to build up a “war chest” to garner market share against competing insurers.
The trial lasted almost four months, and the some 160,000 employers represented charged State Fund with breach of fraud, good faith and breach of contract. In addition, they alleged the insurer violated California’s unfair competition law.
The class action suit puts almost $2 billion in damages at stake, an amount that would be most detrimental to State Fund’s financial stability. If the judge’s ruling stands, the company owes nothing.
Nick Roxborough, an attorney with Roxborough, Pomerance and Nye LLP, the firm representing the plaintiffs, said he was disappointed on a personal level, but added, “There’s good news and there’s bad news. At least it adds some stability to the market. For California, it’s probably a good decision.” RPN attorney Drew Pomerance was the lead counsel on the case.
Topics Lawsuits California Legislation
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