On Dec. 30, in a hearing over Attorney General Gentner Drummond’s effort to intervene in a homeowner’s lawsuit against State Farm, Oklahoma District Court Judge Amy Palumbo wasted no time in announcing her belief that the maneuver was supported by Oklahoma law.

Drummond in a Dec. 4 court filing accused the insurance giant of racketeering. Tuesday’s proceeding kicked off with brief presentations that Palumbo interrupted with questions about what an intervention would look like and whether the homeowners objected to the attorney general’s maneuver.

Satisfied by the answers, Palumbo appeared ready to issue a ruling that may eventually enable release of documents in a case that has been mired in baroque legal shenanigans.

“I just fail to see how what State Farm has filed is anything other than irrelevant and disparaging material,” Palumbo said. “I understand what State Farm wanted me to get distracted by, but I do not find it to be on point or relevant. Having given it extensive thought, I believe the law does allow the attorney general to intervene. I do not think I require any further argument or explanation.”

Further argument is exactly what she got.

120,755 Claims

Hursh v. State Farm has become the symbolic figurehead of an alleged scheme to deny hundreds of wind and hail claims.

Drummond’s petition to intervene was the second time, at least, that State Farm has been accused of racketeering — in 2018, State Farm paid $250 million to settle a RICO case in which they were accused of buying a seat on the Illinois Supreme Court.

In the Hursh case, State Farm has consistently argued that what is at issue is a single family’s roof. This is incorrect. The Hursh case was always connected to another case known as Faust v. State Farm, and together the two cases have come to represent nearly 200 total homeowners represented by Oklahoma City law firm Whitten Burrage.

It’s even bigger than that. State Farm acknowledged in a Dec. 23 motion that denied wind and hail claims in Oklahoma actually number in the thousands.

Specifically, between 2019 and 2024, Oklahoma policyholders filed 120,755 claims of wind and hail damage, State Farm said. Of these, 27,764 policyholders were denied any kind of compensation at all.

Of the 91,588 policyholders who received full or partial payments, some who sustained comprehensive damage but were denied total roof replacement sought legal representation. Subsequently, State Farm paid tens of millions of dollars to secretly settle those cases.

In court, Deputy Attorney General Cameron Capps emphasized that the concerns raised by the Hursh case stretched well beyond the story of the Hursh’s roof or the 200 cases similar to it.

“This is a much bigger issue, because State Farm’s actions are impacting the state interest,” Capps said.

Seldom used legal maneuver Drummond’s petition to intervene — a rare legal maneuver that would give the attorney general special discovery powers — argued that his office’s authority to intervene was granted by Title 12 and Title 74 of Oklahoma law, the latter of which grants special powers when the interests of the state or the people are at issue.

Drummond’s request described State Farm’s alleged scheme as a shock to the conscience.

“These practices upset the essential bargain of risk and premium that anchors a lawful insurance market, leaving Oklahoma consumers bearing disproportionate risk,” the petition reads.

Alongside full intervention, Drummond’s petition proposed an option for Palumbo that would grant limited intervention focusing on discovery alone.

“Alternatively, limited intervention and access to discovery materials subject to a protective order should be granted,” the petition reads.

A cynical note

In court, State Farm attorney Lance Leffel spoke quickly, appearing to attempt to sneak his arguments in before Palumbo issued a ruling. On five occasions, Palumbo asked him to slow down for the court reporter.

In the main, Leffel repeated arguments contained in State Farm’s Dec. 22 response, arguing that Drummond did not have authority to intervene in an insurance case.

“The Attorney General’s attempt at intervention is nothing more than a ploy that violates constitutional separation of powers,” the response reads.

State Farm did not object to Drummond’s characterization of the alleged scheme, but asserted that the hundreds of millions of dollars allegedly bilked from Oklahomans was not an interest of the state. “There is no public interest implicated in this case,” Leffel said, in court. The State Farm response cited a NonDoc article in which Drummond appeared to criticize then-Attorney General Mike Hunter’s intervention in an earlier case that also involved Whitten Burrage.

Notably, even though State Farm paid $250 million to settle a case in which they were accused of buying a seat on the Illinois Supreme Court, the State Farm response cited an Illinois Supreme Court case to argue that regulation of the insurance industry, by itself, did not justify intervention by an attorney general.

State Farm’s response appeared to split fine hairs. On one hand, it argued that Drummond was wrongly seeking dominion over litigation in Oklahoma. On the other hand, it argued that Oklahoma law granted dominion to the insurance commissioner over insurance law.

In court, Capps argued that this threatened the attorney general’s fundamental ability to enforce laws.

“They are conflating regulatory authority and enforcement authority,” Capps said. “They are saying that law enforcement has no authority.” A particularly cynical note To assert the insurance commissioner’s sole regulatory authority, State Farm cited Article 6 of the Oklahoma Constitution and various sections of Title 36, primarily the problematic Property and Casualty Competitive Loss Cost Rating Act, which has been criticized by former politician Kevin Easley, who lamented changes to the law that were introduced after he helped to pass the bill decades ago.

“If they changed a law that was meant to apply to business, and was never meant to apply to homeowners’ insurance, then they can damn sure change it back, can’t they?” Easley said in May.

Legislators are currently considering changes to Oklahoma insurance law.

The State Farm response struck a particularly cynical note: Palumbo should deny the attorney general’s petition to intervene, the response argued, because the request would be denied at the Oklahoma Supreme Court.

The Supreme Court has already weighed in on a separate tranche of Whitten Burrage’s wind and hail cases. On Dec. 15, the Court sided with State Farm on a technicality, vacating two of Palumbo’s earlier orders and complicating attorneys’ effort to expose State Farm’s alleged scheme.

Notably, Justice Travis Jett recused from the ruling. Prior to being named to the Court in April — despite lacking judicial experience — Jett was employed by Oklahoma City law firm GableGotwals, which has represented State Farm for many years and was representing State Farm in court on Tuesday.

That’s not the only connection between State Farm and the Oklahoma Supreme Court.

Attorney Mary Quinn Cooper, vicechair of the Judicial Nominating Commission that advanced Jett’s name to Gov. Kevin Stitt, is a principal in a law firm that has openly bragged of defending State Farm.

“McAfee & Taft successfully represented State Farm Fire and Casualty Company in a lawsuit arising from State Farm’s handling of plaintiff ’s homeowner’s insurance claim arising from a hot water tank leak,” a profile of the firm reads.

‘Oklahomans Know the Answer’

On Tuesday, Whitten Burrage attorney Blake Sonne lashed out at State Farm’s argument about the authority of Oklahoma’s insurance commissioner.

“This idea that the insurance commissioner has a carte blanche dominion over insurance law is completely false,” Sonne said. “The attorney general does have the statutory authority to represent insurance consumers.”

Whitten Burrage’s Dec. 23 response for Tuesday’s hearing argued that the insurance commissioner had no authority outside of Title 36.

“State Farm’s reliance on the Oklahoma Constitution and Title 36 is misplaced and misleading,” the response reads.

The response posed a list of questions at the core of all of Whitten Burrage’s lawsuits: Did State Farm identify hail claims as a bucket of opportunity to save money on denying claims? How much money has State Farm withheld from policyholders with valid damage claims? Have State Farm executives publicly boasted of 50% savings on hail claims?

The response accused State Farm of slinging mud against attorneys to deflect attention from their alleged scheme.

In court, Sonne went a step further than that.

“State Farm is offering a masterclass on how to deflect on their wind hail claims,” Sonne said. “They are pulling out old newspaper articles published during a political campaign and pretending that it’s binding. It’s insulting.”

The response suggested that the true motives behind State Farm’s tactics were easy to discern.

“Why deflect?” the response reads. “Oklahomans know the answer.”

This is not a game

After an hour of argument, Palumbo had had enough.

“Your motion is going to be granted,” Palumbo told Capps, granting the attorney general full intervention in Hursh v. State Farm — that is, more than the limited intervention the original petition said it would have accepted.

Heaving a deep sigh from the bench, Palumbo warned that the intervention might slow down discovery in the short term, but vowed to do everything she could to move the case forward despite a pattern of obstruction from State Farm.

“If my orders are not followed, fully and flawlessly, sanctions or other options I will certainly entertain,” Palumbo said. “We’re going to get this thing streamlined. I am going to concisely steer this ship to eliminate obstacles along the way.”

She ended with a stern warning.

“This is not a game,” Palumbo said. “Discovery games are going to stop. I am telling you now that I am not going to be pleased if there is a continuous pattern to disregard the orders of this court.”

JC Hallman covers a variety of topics for Oklahoma Watch. Contact him at jchallman@oklahomawatch.org.