State Farm says Oklahoma AG lacks standing in racketeering suit

State Farm has further objected to Oklahoma Attorney General Gentner Drummond’s motion to intervene in an alleged racketeering property insurance lawsuit.

The insurance company claims in its Jan. 20 motion to dismiss that Drummond’s three statutory claims are legally insufficient.

The claims Drummond makes violate the Oklahoma Consumer Protection Act (OCPA), the Oklahoma Racketeer-Influenced and Corrupt Organizations Act (ORICO), and the Oklahoma Deceptive Trade Practices Act (ODTPA).

State Farm claims the Consumer Protection Act doesn’t apply to insurance activity. Instead, the state’s insurance commissioner regulates the business of insurance under Oklahoma law, according to the motion.

“The AG accuses State Farm of wrongdoing related to how it allegedly marketed and sold homeowners’ insurance policies and handled claims with policyholders,” the motion states. “This conduct falls squarely within the ‘business of insurance.’ …while State Farm denies the AG’s allegations, they clearly relate to the business of insurance, fit squarely within the insurance commissioner’s regulatory authority and is unquestionably exempt from the ОСРА.”

As for the ORICO claim, State Farm states in its motion that the AG must prove “a pattern of indictable racketeering activity, which requires him to show violations of two or more enumerated predicate acts.”

“The OCPA’s express exception for insurance activity not only defeats his OCPА claim, but it also fatally undermines the ORICO claim,” the motion states. “Even further, he also fails to plead an OCCA violation with particularity, as is required by Oklahoma’s pleading standard applying to allegations of fraud.”

The motion adds that to assert an ORICO claim, a plaintiff “must assert that the defendant ‘(1) conducted the affairs (2) of an enterprise (3) through a pattern (4) of racketeering activity.'”

“While the AG likely fails to plead any of the four requisite elements, he especially fails to show (a) a pattern (b) of racketeering activity, the motion states. “The AG claims State Farm and the Denial Enterprise engaged in a pattern of racketeering activity when it allegedly violated two provisions of the OCPA and one section of the Oklahoma Computer Crimes Act (OCCA). …the AG does not plead any non-insurance conduct. The AG’s OCPA claims, therefore, can’t form the basis of a racketeering act under ORICO.”

State Farm contends that the ODTPA claim must also be dismissed because it only applies to conduct intended to injure business competitors.

“The State of Oklahoma is not in business competition with State Farm,” the motion states. “The AG does not claim otherwise. This fact alone is dispositive of the AG’s ODTPA claim. …the AG may only prosecute a limited number of enumerated ODTPA violations, and his claim is based on no such allegations. The ODTPA claim is hopelessly conjured and should be discarded.”

State Farm argues that, in general, Drummond lacks standing to bring either of the common law claims in the petition.

“The AG is not a ‘super plaintiff’ with power to bring any claim on behalf of any private litigant,” the motion states. “And, the AG cites no statutory or other authority giving him power to bring common law claims on behalf of unnamed plaintiffs.”

The company also states that Drummond didn’t identify a claimant for his unjust enrichment claim, which “can only lie where the plaintiff lacks a remedy at law.”

In a separate property insurance lawsuit against State Farm, The Oklahoman reports that the company must submit documents detailing its internal underwriting and claims practices.

The discovery order seeks documents related to its use of the tool 360Value, created by Verisk Analytics to set property coverage limits, alongside Xactimate for estimating claims evaluations, according to the article.

“The tools have been criticized in lawsuits across the U.S., including the Foster case in Oklahoma, for potentially producing false values,” the article states.

According to the article, Jeff Marr, one of the attorneys representing the Fosters, said State Farm uses “a simplified version that’s customized for them, and it doesn’t include enough information to provide an accurate value of a property,” the article states.

In court on Jan. 23, the article states that Marr said, “as a result of this scheme,” State Farm had record profits in 2025.

The article states he told the court that State Farm had a $145.2 billion record net worth, $24.4 million in CEO compensation, and $1.1 billion in advertising spending.

“Maybe they could just use some of the money they spend on advertising about what a good neighbor they are to help them produce these documents,” he said, according to the article.

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