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Case: McNeil v. American General Life & Accident Insurance Co., No. 3-99-1157 (M.D. Tenn.). Outcome: A $206 million settlement with American General Life & Accident Insurance Co. [AGLA] on behalf of millions of customers buying burial policies who were discriminated against as a result of alleged racial bias. What was the key factor in making the settlement? The key factor in making this settlement, I believe, was conducting a thorough investigation supporting our allegations that the companies purchased by AGLA engaged in racial discriminatory practices. Once we’d collected the data, going back 40 and more years, showing that these companies had charged African-Americans more for life insurance than they had charged Caucasians, we then crafted legal arguments which would help our case withstand the numerous legal defenses that defendants would avail themselves … We conducted the pre-complaint investigation for well over a year’s time. And we then went to a number of resources, including insurance libraries, old agents and old books at my firm, and were able to learn at that time that these companies were charging more for African-Americans than Caucasians….The primary thing that we had were industry publications where I had specific documentation showing blatant racial discrimination. For example, they said, “white rate and black rate.” Then we went and confirmed what was true. What was the most difficult hurdle to the settlement? The most difficult aspect of getting this case settled was overcoming the numerous obstacles because of prior regulatory activity and the passage of time. First, many of the insurance regulators around the U.S. where these industrial, or burial, policies were sold had approved the sale of these policies and the rates that were being charged for the policies. So the defendants were adamant that when the policies were sold to our clients, they had done nothing wrong and were operating under the approval of regulatory bodies. Also, the defendants were able to point to numerous actuary studies that they claimed justified the discriminatory rates that were being charged since at the time the studies were done, they showed that African-Americans had shorter life expectancies than Caucasians. Another point was the statute of limitations. It’s been 20 years since one of these policies has been sold. American General could say, “We never sold any of these policies of race-based premiums.” These were all companies [they] had acquired….We prevailed because of persistence and dogged determination. We were very adamant in our position and felt very strongly. There are laws in this country that prohibit discrimination. Not only did we have strong legal ground, we stood on a higher moral ground, and that ultimately prevailed. What tip do you have generally for negotiating a settlement? When I’m involved in big, complex settlements such as this one, you must put together a team of professionals who are comprised of experienced and dedicated experts in the legal and professional fields that are at issue and which you’re attempting to resolve. Without these people…it would be extremely difficult to resolve complex cases such as this one. Also important is the willingness to take it to the very end. To be willing to spend the money, to hire the expert and get co-counsel who are willing to stand by you and fight with you. When defendants call your bluff, when you say you’re ready to walk, [co-counsel] better be willing to walk. If they sense any weakness, the game is up.

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