A Washington federal court has declined to award enhanced damages under the Washington Consumer Protection Act (CPA) to two classes of State Farm policyholders after determining that a previously ordered $38 million in actual damages fully compensated class members for underpayments on totaled-vehicle claims. The ruling followed an April bench trial focused solely on whether additional damages were warranted in light of the insurer’s former use of a typical negotiation deduction in calculating actual cash value. In findings issued Monday, U.S. District Judge Kymberly K. Evanson concluded the evidentiary record did not support trebling damages for compensation, deterrence, or punishment, noting State Farm stopped using the challenged deduction in Washington.
State Farm total-loss valuations and the typical negotiation deduction
The litigation centers on how State Farm valued vehicles declared total losses in Washington. According to the court’s findings, State Farm used vehicle valuation software called Autosource, which searches a database of comparable vehicle advertisements and then applies adjustments to reach an actual cash value. Autosource used a typical negotiation adjustment, which reflected the premise that negotiated used-vehicle prices may differ from advertised prices. The court’s findings also refer generally to condition-related adjustments.
The policyholders alleged the typical negotiation deduction unlawfully reduced total-loss payouts and violated the Washington CPA. Two certified classes were at issue, identified as the Kelley class and the Jama class. In July 2025, U.S. District Judge Marsha J. Pechman issued a partial summary judgment ruling concluding that State Farm violated the Washington CPA and state insurance regulations through its use of the typical negotiation deduction in calculating class members’ total-loss payments. Judge Pechman awarded nearly $34 million to the Kelley class and $4.3 million to the Jama class, for an aggregate award described by the court as approximately $38 million in actual damages.
Procedural path to the bench trial and the remaining dispute
The cases began in March 2020, when Anysa Ngethpharat and Faysal Jama sued State Farm Mutual Automobile Insurance Co. and State Farm Fire and Casualty Co., challenging the negotiation discount practice; Ngethpharat was later joined by James Kelley. Judge Pechman granted class certification in both lawsuits in July 2021, and the actions were consolidated in August 2021. In May 2022, the district court granted State Farm’s motion to decertify the classes after a Ninth Circuit ruling affirmed class decertification in a similar matter involving Liberty Mutual.
On appeal, a divided Ninth Circuit panel held in August 2024 that the district court abused its discretion by reversing class certification based on the Liberty Mutual decision. The panel concluded, among other points, that damages attributable to the typical negotiation deduction could be determined on a classwide basis. The case was reassigned to Judge Evanson in October 2025. After Judge Pechman’s July 2025 partial summary judgment and damages award, the remaining issue was whether the classes were entitled to enhanced damages under the Washington CPA, which was tried to the court in a bench trial held the week of April 6.
The court’s denial of enhanced damages and the evidentiary record
Following the April bench trial, Judge Evanson found the classes failed to establish entitlement to enhanced damages, concluding class members were already fully compensated by the actual damages award restoring the amounts attributable to the typical negotiation adjustments. The policyholders sought treble damages, arguing the total should reach roughly $115 million, contending enhanced damages were needed to punish State Farm for profiting from an unlawful deduction and for failing to disclose it to consumers. Judge Evanson held that the classes bore the burden on enhanced damages and did not meet it.
In evaluating enhanced damages, the court considered whether additional damages were necessary to fully compensate injured consumers, encourage private CPA enforcement, deter unlawful conduct, and punish unlawful conduct. Judge Evanson described the record as lacking evidence supporting enhancement and noted that plaintiffs’ expert witnesses did not testify on whether greater damages were needed for full compensation or to encourage private citizens to bring CPA claims. Although the court found all trial witnesses credible, it found the class witnesses less credible than State Farm’s witnesses, whom it described as particularly credible, and gave limited weight to portions of the class experts’ testimony.
Expert testimony, compliance measures, and implications for CPA remedies
The court addressed testimony from Mary Owen, offered as an expert on insurance standards and practices, who testified that State Farm violated industry standards by continuing to use Autosource and typical negotiation adjustments after the court denied State Farm’s motion to dismiss. Judge Evanson said she was disinclined to give substantial weight to that testimony, characterizing it as close to an impermissible legal opinion and finding it lacked factual support; the court also noted instances in which Owen declined to answer questions concerning the basis for her asserted expertise. The ruling also discussed testimony from Darrell Harber, offered as an expert in vehicle appraisal practices, including an opinion that State Farm took advantage of policyholders in stressful situations; the court found that opinion insufficiently tethered to admissible evidence and not supported by identification of an insured or a specific loss, and again referenced the absence of testimony from the named plaintiffs.
Judge Evanson further found enhanced damages unnecessary for deterrence or punishment in light of evidence that State Farm stopped using typical negotiation adjustments in Washington after class certification was first granted in 2021. The insurer developed a process to add negotiation adjustments back to Autosource valuations to determine a Washington Only Value. The court viewed State Farm’s manual refunds soon after certification—and its scheduled cessation of Autosource use several weeks later—as evidence of a proactive effort to comply with the law. For State Farm, counsel included attorneys from Alston & Bird LLP, Wheeler Trigg O’Donnell LLP, and Kirkpatrick Symanski Parker LLC. The decision underscores that, even where liability and substantial actual damages are established under the Washington CPA, courts may require specific evidentiary support tied to the statutory purposes of enhancement before ordering treble damages.
