Avery Again

In thinking about the Avery v. State Farm case (State Farm found liable for using after market parts instead of original manufactured equipment parts), I noticed something new which I hadn't thought about before.  State Farm was assessed some $600 million in punitive damages.  This makes no sense from a logical point of view.

State Farm is a mutual and is owned by its policy holders.  So if the group of policy holders decides to intentionally injure themselves, they can sue themselves for punitive damages?   What does it mean to assess punitive damages against a policy-owner owned company?

Boss:  Get me all the owners, quick.

Lackey:  Duh, OK boss, here they are.

Boss:  Shoot them all in the foot.

Lackey:  But boss, you are an owner and I am an owner.

Boss:  So?

Lackey:  But won't we be hurting ourselves?

Boss:  Yes, but then we all can sue ourselves for punitive damages.

Lackey:  Smaaarrrt.  Gee.  I guess that is why you are the boss.

Boss: Right.

Comments

[E L Eversman]

An excellent point. It seems as if the management and employees of SF are somehow seen as separate from the shareholders. Hmmm . . . it's like citizens suing their governments and recovering punitive damages.