One of the largest auto insurance companies has reached a $250 million preliminary settlement in a class-action lawsuit. The lawsuit, filed in federal court, alleges that State Farm violated the Racketeer Influenced and Corrupt Organizations Act (RICO Act). The plaintiffs believe State Farm funneled money through several advocacy groups, which in turn kept donor lists anonymous, in order to elect a certain candidate to the Illinois Supreme Court in 2004.
This past week, the United States Supreme Court dealt a blow to consumers who had relatively small claims and attempted to band together to bring a class-action against a major corporation accused of wrongdoing. In a 5 to 4 decision, the Court ruled against a group of AT&T cell phone customers who were promised free phones in a promotion, but were charged $30.22 in sales tax based on the phone's retail value. Multiple suits were consolidated into the class action alleging that AT&T committed fraud and falsely advertised a "free "phone when there was actually a cost associated with it.