State Farm Dodges RICO Trial with $250 Million Settlement

State Farm will pay $250 million to settle a racketeering suit alleging the auto insurance giant conspired in 2004 to elect an Illinois Supreme Court Justice who then helped overturn a $1 billion judgment against the company.

The settlement amount, announced just before trial was to start Sept. 4 in federal court in East St. Louis, Ill., was a small portion of the billions sought by a group of policyholders who say they were defrauded out of that judgment. The plaintiffs’ valuation of the case ranged to as much as $10 billion, when counting nearly two decades’ interest and potential ...