State Farm’s own company overview says its values include “selling and keeping promises” and that its customers’ needs will determine its path. That sounds wonderful. The fine print apparently fails to warn that State Farm customers should not ask to see the claims handling roadmaps.
State Farm is currently fighting discovery battles in many states, including Alabama and Oklahoma, over internal claim procedures, performance measurements, corporate initiatives, and other materials that policyholders contend may explain why their roof claims were denied or underpaid. State Farm maintains that much of this information is confidential, proprietary, or protected as a trade secret.
No serious lawyer argues that filing a bad faith lawsuit automatically converts every internal insurer document into a public record. Insurers can have legitimate trade secrets, and courts should protect truly confidential information from competitors and misuse. But calling something “confidential” does not make it so any more than calling every claims initiative a “quality improvement” program establishes that it improves claims quality.
The Alabama Supreme Court recently confronted this issue in Ex parte State Farm Fire and Casualty Company. 1 The policyholders, James and Krystina Foor, alleged that a January 2024 storm damaged their roof. Their contractor estimated the repairs at $9,112.02, while State Farm offered $4,059.10. The Foors alleged that State Farm had a pattern of lowballing roof claims and had implemented a program to reduce roof payments without regard to the merits of individual claims. Those remain allegations, not judicial findings.
The immediate dispute before the Alabama Supreme Court was not whether State Farm acted in bad faith. The question was whether confidential discovery produced in the Foor case could be shared under a protective order with lawyers handling eight other existing State Farm roof-claim bad faith cases and with appropriate governmental agencies.
State Farm asked the Alabama Supreme Court to eliminate the sharing provisions entirely. The court declined. It held that “[t]here is nothing inherently wrong with the inclusion of a sharing provision in a protective order” and that sharing is not prohibited by Alabama civil discovery rules. The court required additional safeguards, including identifying the eight existing cases, requiring recipients to sign the protective order, submitting them to the Alabama trial court’s enforcement jurisdiction, and specifying when the materials must be returned or destroyed.
This is hardly unrestricted publication of State Farm documents to the general public or to competitors looking to copy State Farm’s allegedly secret method recipes of handling property claims. Instead, it is controlled sharing among lawyers litigating existing cases involving similar allegations against the same company.
The government-sharing dispute produced an especially awkward moment. State Farm argued that the trial court’s order allowed disclosure to unnamed governmental agencies. The Alabama Supreme Court observed that State Farm’s own proposed protective order also allowed disclosure to the Alabama Department of Insurance, law enforcement, and other government agencies. The opinion stated that State Farm “simply misstated the contents of its own proposed protective order” during oral argument.
Somewhere, Jake from State Farm may want to check what it says to different courts.
The court also found that State Farm’s broader complaint about sharing “rings hollow” because State Farm acknowledged that it routinely produces relevant confidential materials after a standard protective order is entered in each case. In practical terms, State Farm was not arguing that the other policyholders could never obtain the materials. It preferred that each one spend months fighting separately for substantially the same discovery.
State Farm has an excellent litigation strategy if the goal is to make discovery expensive enough that fewer policyholders can afford it. It is harder to explain as protection against competitive harm.
The Oklahoma ruling is even more direct. In West v. State Farm Fire and Casualty Company, 2 the court considered State Farm’s confidentiality designations covering an enormous discovery production. State Farm represented that it had produced nearly 800,000 documents comprising millions of pages, including more than 600,000 documents previously produced in other litigation.
This week, the court struck what it described as State Farm’s blanket designation of its production as confidential. It ruled that a uniform designation did not satisfy the protective order’s requirement of a bona fide, good-faith determination that the material qualified as a trade secret or other protected information.
The court gave State Farm thirty days to conduct a genuine review and re-designate only documents or portions of documents that fall within a defined protected category. State Farm must identify the category supporting each designation. If a designation remains contested, State Farm must make a particular and specific showing that disclosure would cause competitive or other legally protected harm.
The court also ruled that materials concerning the handling of the Wests’ own claim—including alleged efforts to lower indemnity payments and the denial or partial denial of the claim—could not be labeled trade secrets under the parties’ protective order. Apparently, a policyholder is allowed to learn how the policyholder’s own claim was handled. Civilization survived the ruling.
The Oklahoma court did not throw open State Farm’s filing cabinets. It left the protective order in place, preserved confidentiality obligations imposed by other courts, and recognized that unfiled discovery is not automatically a public record. It simply rejected the proposition that a confidentiality stamp substitutes for evidence.
These cases are not new to the State Farm litigation story. In 2008, I recommended Professor Jeffrey Stempel’s Litigation Road: The Story of Campbell v. State Farm Insurance. Stempel used the remarkable Campbell litigation against State Farm to show how an automobile accident became a bad faith case, a punitive damages battle, and ultimately a United States Supreme Court decision touching virtually every part of civil litigation.
In 2015, I wrote in Insurance Companies Always Fight Requests for Production of Internal Claims Management Objectives and Goals that the Campbell case involved years of fighting over personnel records, corporate goals, compensation systems, and the internal Performance, Planning and Review program. The Supreme Court ultimately limited the punitive damages award and the use of dissimilar out-of-state conduct. It did not praise State Farm’s treatment of its insured. The Court expressly said State Farm’s handling of the Campbells’ claim “merits no praise.”
Campbell also teaches an important restraint. Corporate discovery must connect to what happened to the particular policyholder. A lawyer cannot discover every PowerPoint ever created in Bloomington and assume that proves bad faith in one roof claim. Pattern evidence needs a meaningful nexus to the decision being challenged.
Focused institutional claims practice discovery is important. A policyholder cannot determine whether an underpayment was an isolated mistake or the intended result of a corporate system without examining the rules, training, measurements, software triggers, management approvals, and incentives behind the individual claim.
State Farm may have an innocent and persuasive explanation for every program, metric, dashboard, training course, and management-approval requirement described in those cases. Discovery is where State Farm gets to provide it and where policyholders get to test it.
Good faith does not require unrestricted public disclosure of every corporate document. It should require enough transparency that an insurer cannot deny a claim, proclaim that the decision was individualized and reasonable, and then prevent its customer from discovering the processes and measurements that may have produced the result.
A good neighbor should not be offended when the neighbors compare notes, especially after the court has supplied the ground rules for sharing.
Thought For The Day
“At the very least, lawyers, judges, and juries should not let them get away with it.”
—Insurance Law Professor Jeffrey W. Stempel
1 Ex parte State Farm Fire & Cas. Co., No. SC-2025-0918 (Ala. Aug. 14, 2026).
2 West v. State Farm Fire & Cas., No. CJ-2025-135 (Okla. Dist. Ct. Aug. 20, 2026).
