How the Star Tribune shined a light on an industry targeting accident victims

Before the pandemic, Jeff Meitrodt, an investigative reporter for the Star Tribune in Minneapolis, made a practice of going to the courthouse to review the monthly docket sheets of civil filings. He wanted to make sure the paper wasn’t missing any good cases.

During one of his visits, Meitrodt kept seeing one company name: J.G. Wentworth. Digging deeper, he discovered the company was one of many firms seeking court approval to purchase future payouts from Minnesotans with legal settlements.

The catch: The people involved were forfeiting large chunks of settlement payments in exchange for upfront cash from the company — sometimes for pennies on the dollar. Even worse, many of those with legal settlements to sell had suffered grievous accidents that left them with disabilities and mental injuries that made it difficult to manage their own finances, work for a living, or defend their own interests in court.

“They were going to court and representing themselves in these deals with no one watching their back and selling off all these payments,” Meitrodt told fellow journalists at the 2021 Data Fellowship last week via Zoom, where he was joined by reporting partner Nicole Norfleet for an in-depth look at the exhaustive reporting and data work that produced the October series.

When Meitrodt initially brought the story lead to his editors, they asked him how much others had already reported on these types of settlements. He turned up one narrowly focused Washington Post story (“How companies make millions off lead-poisoned, poor blacks”) and little else. It seemed largely overlooked.

Some of the deals approved by the courts were eye-popping — sellers were getting 40% of future cash payments on average. In one case, a man who suffered brain damage from a childhood car crash was given just over $12,000 in exchange for a half million dollars in future payments.

The people selling their settlements for such steep discounts were a sympathetic group that was arguably being victimized twice: First by their accident or death of a family member, then from a bad deal for quick cash.

Gary Davis, one of the people profiled in the series, exemplified the issue. After getting hit by a train while working in a rail yard and suffering a stroke, Davis had lost function in 25% of his brain, according to Meitrodt. He ultimately sold more than $2 million in settlement payments, more than anyone else in Minnesota.

“How on earth did someone like that walk into court and a judge not have the same questions we did?” Meitrodt asked.

Pulling records, building spreadsheets

Reporting the series was a massive undertaking. Most of the records the team needed were not online, requiring repeated visits to two dozen courthouses, requests from storage, months of research, and countless hours of spreadsheet work. The pandemic added further delays and challenges.

The team eventually compiled a database of 1,700 cases in Minnesota dating back to 2000, which they tracked in a spreadsheet that grew to include over 100 fields, exhaustively detailing every variable they might want to track. Then, they started pulling records on the people selling their settlements, reading the original lawsuits that led to the settlements, criminal records, and whatever else they could find to write thumbnail summaries of these people.

“There was a wealth of other information that we could gather about these individuals beyond the transactions to create a very rich and detailed portrait of many of the sellers,” Meitrodt said. “And then we looked at other things to see down the road how did this work out for him. Did they squander the money and end up getting evicted from their homes? Did they file for bankruptcy? Again, all publicly obtainable records.”

That legwork allowed the team to narrow down a target group for more detailed interview prospects. In the end, they ended up interviewing more than 50 accident victims or their immediate relatives. They used the thumbnail summaries as quick guides on days in which they might reach out to 30 or 40 people. It was difficult going: Many people were already getting bombarded with marketing calls and were hostile or suspicious of the reporters. Many had endured extensive trauma and were dealing with brain injuries or mental health challenges.

“It took a long time, it took a lot to convince people to talk to us,” Norfleet said. Added Meitrodt: “I’ve never worked on anything to require so much patience and flexibility  as this project.”

In search of solutions

The team created a separate spreadsheet for capturing Norfleet’s reporting on how the other 49 states regulate — or don’t — such settlement sales. Many of the states didn’t regulate the portion of a person’s settlement payments that could be sold or require that the seller be evaluated for cognitive issues that might affect his or her ability to make such decisions. The spreadsheet tracked where all states landed on these detailed questions.

The reporters also wanted to be able to highlight where things might be working better. They discovered that judges in Albuquerque might be handling such deals in a more progressive way by appointing guardians — typically attorneys — to advise the court whether a given deal was in the best interest of the person. They pulled extensive online records before Norfleet traveled to New Mexico to meet with guardians and sit in on court hearings. She found the guardian system tended to deliver better outcomes for those selling their settlements.

 “When the guardians do recommend approval and the judge does go with it, they also end up getting a larger percentage of their money,” Norfleet said.

Strong reactions already

The series was published in early October, and Meitrodt and Norfleet said it has already generated strong reactions from Minnesota’s governor, attorney general, and state legislators, who have indicated they’ll pursue potentially innovative legislation in the coming session.

“They’re fairly creative, I thought, in some cases, offering solutions that have not been tried in any other states, and it was just fascinating to see how they had zeroed in on some issues and some possible solutions that weren't on anybody’s radar before we published the series,” Meitrodt said.

Even more surprising, the companies that buy these settlements have expressed an early willingness to reexamine current practices.

“I was surprised to see that they would even offer anything up like that,” said Norfleet.

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