Reporter asked to leave hearing in Colossus class action

TEXARKANA, Ark.-A reporter covering a hearing in the biggest class action lawsuit ever filed in America was asked to leave a Miller County, Ark., courtroom Tuesday, May 13, by Circuit Judge Kirk Johnson.

The judge's decision followed a frenzy of canceling and resetting of hearings in "Colossus," a massive suit that originally named 581 insurers and three software companies. The complaint alleges cost containment programs systematically undervalue bodily-injury auto claim settlements.

Insurers and software makers, who are accused of conspiracy to defraud consumers, say the software programs provide a means of consistent estimates of bodily-injury claims through the data inputs of insurance adjusters.

Shortly before arguments were set to begin in plaintiff's motion to sever defendants, Johnson summoned reporter Steve Korris for Legal Newsline to his bench and told him he needed to leave, even though, as Johnson said, it "goes against the grain of the First Amendment."

Lead plaintiffs' attorney John Goodson filed the original class action complaint on Feb 7, 2005, against Computer Science Corporation's software Colossus, Insurance Services Office's software COA, Claim IQ Inc.'s software Injury IQ and most every other auto insurance company in America that uses the software programs.

Korris asked what issues would be discussed at the closed hearing.

Judge Johnson described that the hearing would be in two parts: In the first part, defendants would argue against plaintiff's motion to sever. In the second part, defendant United Services Automobile Association (USAA) -- the largest insurer of military members and their families-- would argue its motion to dismiss after other defendants left the courtroom.

The Miller County Circuit Clerk's notice and the Judge's office did not indicate beforehand that the hearing was closed to the public. However, many of the issues before the court were filed under court seal.

Early in the litigation, Judge Johnson filed a protective order allowing documents to be filed under seal that contained confidential or highly confidential material, such as information not known or freely obtainable by the general public, trade secrets, personal information, confidential research, financial information, and policy holder and claims handling information.

As the massive case lumbers through the tiny Arkansas courthouse, many defendants have argued that Judge Johnson's scheduling for plaintiffs' motion to sever was inappropriate and premature.

The plaintiff's motion to sever was filed Feb. 28, while defendants' motions to dismiss have been pending before the court since 2006.

At a previous hearing, Judge Johnson scheduled arguments to continue April 22. The court was supposed to allow further arguments by the plaintiffs' attorneys regarding how the "crime-fraud" exception to the attorney-client privilege would require public disclosure of an inadvertently disclosed document written between USAA's attorneys and employees.

The crime-fraud exception can render the attorney-client privilege moot when communications between an attorney and client are used to further a crime or fraud.

However, on April 22, the court announced the hearing was cancelled.

The following day, Judge Johnson issued a new notice of hearing but the notice was not filed on the court's docket until April 28, a day and a half before the newly scheduled April 30's morning hearing.

Issues not resolved at the April 30 hearing were scheduled to be heard at a second hearing on May 12. However, the May 12 hearing was postponed until May 13.

Case No.: CV-2005-0059-3.

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