U.S. District Court Minnesota, No. 06-cv-1281 (filed April 3, 2006)
Former and current African American GEICO customers allege GEICO discriminates against African Americans through its process of establishing auto insurance premiums for its customers. When GEICO receives a request to purchase auto insurance, it determines which of its four companies will write the insurance policy. As part of this determination, GEICO takes into consideration the applicant's occupation and level of education. GEICO then assigns less educated applicants and applicants with occupations that require less education to companies offering higher auto insurance premiums. Research shows that persons in occupations that do not require higher levels of education and persons who have not obtained higher levels of formal education do not, as a group, pose a higher insurance risk than persons with advanced education or persons who hold jobs requiring advanced education. On the other hand, statistics show African Americans are significantly less likely than Caucasians to have attained advanced levels of education or occupy jobs requiring advanced levels of education.
As a result, Plaintiffs allege that GEICO intentionally discriminates against them by charging them higher rates for insurance than similarly situated Caucasians, in violation of 42 U.S.C. §1981. As a result, Plaintiffs seek, among other things, a declaration that this practice is unlawful and violates 42 U.S.C. §1981, a preliminary and permanent injunction preventing GEICO from engaging in this unlawful practice, and exemplary and punitive damages.
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