Anyone who’s suspected their insurance company gave their claim closer scrutiny because of their race will likely find the allegations in this lawsuit alarming. In short, the insurance company was sued alleging it discriminated against insureds represented by attorneys identified on the insurance company’s secret “Jewish Lawyer List.” The insurer settled that lawsuit, but then turned around and sued the plaintiffs and their lawyers for defamation. The ensuing litigation provides a fascinating glimpse into some appalling racist insurance practices.
The case goes all the way back to 1987. Four drivers were involved in a car crash and sustained damages their insurer refused to cover, claiming the drivers’ claims were fraudulent. The drivers hired attorney Erwin Sobel to sue the insurer to obtain coverage.
In the course of litigating, attorney Sobel discovered documents suggesting his clients’ claims had been flagged as fraudulent because Sobel was Jewish. Sobel uncovered a 1983 insurer memo containing a list of about 160 Los Angeles lawyers, including Sobel – the majority of whom were Jewish. Insureds with lawyers on the so-called “Jewish Lawyer List” had their claims automatically sent to the insurer’s special fraud unit with instructions not to pay any claims. The memo directed the insurer’s agents to destroy the memo after forwarding all the lawyers’ clients to the fraud unit, and to keep the entire system secret from the insureds and their lawyers.
The insurer denied the allegations, but ultimately paid Sobel, his co-counsel and their clients $30 million to settle their allegations of discriminatory claims handling. Among other things, Sobol presented testimony from an economist showing the list contained wildly disproportionately Jewish attorneys.
The case is an unfortunate reminder that insurance practices aren’t immune from racism and discrimination.