INFORMATION ABOUT THE LAWSUIT

     FREQUENTLY ASKED QUESTIONS

(1) What is the Lawsuit about?

(2) What is the "80th percentile"?

(3) What is a class action?

(4) What is personal injury protection ("PIP")?

(5) What will be done with the punitive damages award?

(6) How long will the appeals take?

(7) What will happen when all appeals are concluded?

(8) How do I make sure that I receive my distribution of the judgment?

(1) What is the Lawsuit about?

This lawsuit concerns the claims that Farmers Insurance Co. of Oregon ("Farmers"), Mid-Century Insurance Co. ("Mid-Century"), and Truck Insurance Exchange ("Truck") (together, the "insurance companies") wrongfully failed to reimburse their motor vehicle insurance policy holders ("Claimants") for a portion of their Personal Injury Protection ("PIP") medical expenses during the period from January 26, 1998 and July 31, 1999. The Second Amended Complaint alleged breach of insurance contract, breach of the covenant of good faith, and fraud, and sought a declaration that the insurers' alleged practice was unlawful. Essentially, plaintiff claimed - and the jury found -- that the insurance companies failed to pay all reasonable expenses for covered healthcare costs under PIP.

The jury verdict requires the insurance companies to pay the full reimbursements that should have been paid to the PIP Claimants and their assigns, such as medical providers, doctors, hospitals, and other caregivers, to the extent medical expense reimbursements were reduced. It jury also awarded punitive damages.

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(2) What is the "80th percentile"?

The insurance companies ignored the terms of their own insurance policies and refused to pay the "usual and customary" expenses charged by medical providers. Instead, when a provider's charge for a particular procedure exceeded the 80th percentile of charges by other providers for the same procedure, the insurance companies reduced their medical reimbursement rates to the 80th percentile.

For example, assume that the rates charged by the doctors in Portland, Oregon for a particular procedure ranged from $50.00 to $100.00. Also assume that, in a given year, there were 100 of these procedures performed and that 80 of the 100 charges were $85.00 or less. The 80th percentile would be $85.00, because 80 percent of the total number of charges (that is, 80 out of the 100 total charges) were at $85.00 or less. When the insurance companies were asked to pay a claim for a charge of $86.00 for that procedure, they would "reduce" the reimbursement by $1.00 to $85.00. The insurance companies identified this type of reduction as "Reason Code 40," "RC-40" or "B2" in their records.

The action seeks to have the insurance companies pay the full reimbursements that should have been paid to the PIP Claimants and their assigns, such as medical providers, doctors, hospitals, and other caregivers, to the extent medical expense reimbursements were reduced. It may seek punitive damages.

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(3) What is a class action?

A class action is a type of lawsuit in which one or a few named plaintiffs bring suit on behalf of all of the members of a similarly-situated group, to recover damages for all of the group, without the necessity of each member filing an individual lawsuit or appearing as an individual plaintiff. Class actions are used by the Courts where the claims raise basic issues of law or fact that are common to all the class members, making it fair to bind all class members by the Orders and the Judgment in the case, without the need for a trial on each individual claim. Use of the class action eliminates the necessity of filing multiple suits, and assures that all class members are bound by the results of the lawsuit.

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(4) What is personal injury protection ("PIP")?

Personal Injury Protection, which is commonly known as "PIP," is a form of insurance coverage that is included by law in every motor vehicle insurance policy in Oregon. It provides compensation to the insured for the insured's medical expenses and wages loss, up to the limits of the coverage, for injuries sustained in a motor vehicle accident, without regard for whether the insured was at fault for causing the accident.

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(5) What will be done with the punitive damages award?

If after all appeals the insurance companies must pay the punitive damages award, the State of Oregon will receive 60% of the award under Oregon law. The other 40% will be distributed pursuant to the order of the court, which will determine how the money is to be divided. Only class members, not healthcare providers, may share in any punitive damages distribution.

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(6) How long will the appeals take?

As explained on the Home Page of this site, here, on May 19, 2011, the Oregon Supreme Court issued its opinion finding in favor of the Plaintiff Class. On July 8, 2011, the Court affirmed its opinion in ruling on Farmers’ Petition for Reconsideration; the Court’s July 8, 2011 decision is here.

On October 5, 2011, the defendant insurers filed a petition for writ of certiorari with the United States Supreme Court, asking the Court to review the decisions of the Oregon Supreme Court concerning punitive damages. The lawyers for the Class have 30 days to file a brief in opposition to the request for review. The lawyers for the Class estimate that the Supreme Court will take one to three months to rule on the petition. If the Supreme Court grants the petition, the case will be placed on the Court’s docket, and the Court will set deadlines for briefs and a date for oral argument. The Supreme Court’s term runs from the first Monday in October of every year through June 30 of the following year. The lawyers for the Class do not know whether, if the Court grants certiorari, the case will be on the docket for the October 2011-June 2012 term or on the docket for the October 2012-June 2013 term.

If the U.S. Supreme Court denies the petition for writ of certiorari, then the decision by the Oregon Supreme Court will stand and the appellate proceedings on the merits of the case will be concluded. The case will be remanded to the Multnomah County Circuit Court, as explained in FAQ 7, below.

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(7) What will happen when all appeals are concluded?

If the United States Supreme Court denies the defendant insurers’ petition for writ of certiorari and does not agree to review the decision of the Oregon Supreme Court, the case will be remanded to the trial court in Multnomah County. The trial court will conduct further proceedings in order to conclude the case, including a distribution of the award of compensatory and punitive damages.

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(8) How do I make sure that I receive my distribution of the judgment?

In order to ensure that each class member receives her or his distribution, it is important that the class administrators have current mailing addresses. If any class member has relocated since September 2005 but has not provided updated contact information to the class administrator, please send such information to either of the following:

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