Judicial Bias, the Insurance Industry and Consumer Protection: An Empirical Analysis of State Supreme Courts' Bad Faith, Breach of Contract, Breach of Covenant of Good Faith and Excess Judgement Decisions, 1990-1991
While no universal, legal definition of "judicial bias" exists, it may be defined in at least two different ways. First, "judicial bias" may be intentional, which "is a leaning of the mind or an inclination toward one [litigant] over another." The second type of "judicial bias" occurs when immaterial factors such as region of country, type of insurance contract, an insurer's state of incorporation or race of the insured unwittingly determine the outcome of judicial decisions. This Article focuses on the second type of "judicial bias"-disparate-impact discrimination. The Article examines whether state supreme courts are permitting extralegal factors to influence the disposition of suits involving breach of an implied covenant of good faith and fair dealing, breach of contract, tort of bad faith, and excess liability (excess judgment). An empirical analysis of state supreme court cases decided between 1900-91 was conducted to determine whether "judicial bias" exists. Part I of the Article briefly describes four theories of recovery. Part II surveys various theories of recovery among first-party suits. Part III analyzes third-party suits and discusses various inconsistent bad-faith and excess-liability decisions. Finally, Part IV discusses a disparate-impact analysis. The Article concludes that state supreme courts are unwittingly discriminating against litigants. Specifically, these supreme tribunals allow extralegal factors, which have little to do with the merits of the suits, to influence the disposition of insurance-related cases.