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Settlement means state’s chief justice won’t be testifying

Wednesday, Sep 5, 2018

* AP

Insurance giant State Farm on Tuesday reached a $250 million preliminary settlement in a federal class-action lawsuit claiming the company funneled money to the campaign of an Illinois Supreme Court candidate.

The lawsuit filed in U.S. District Court in East St. Louis alleged Bloomington-based State Farm secretly funneled money to the campaign of Supreme Court Chief Justice Lloyd A. Karmeier while he was a candidate for the high court in 2004.

In the 2005 case of Avery v. State Farm, Karmeier cast the deciding vote to reverse a $1.06 billion judgment in 1999 against State Farm for its use of aftermarket car parts in repairs. The court ruled the nationwide plaintiff class was improperly certified by a Williamson County trial judge. It also contended using aftermarket parts was not a breach of State Farm policyholders’ contracts.

The class-action lawsuit sought nearly $10 billion from State Farm in a trial that was scheduled to begin Tuesday. The plaintiffs alleged State Farm covertly supported Karmeier’s campaign in order to secure his win and reversal of the Avery lawsuit decision.

* Pantagraph

In a statement released late Tuesday by State Farm and Clifford Law Offices, the Chicago-based law firm representing policyholders in the litigation, the two sides said they reached the agreement “because they believe it is in the best interest of all the parties and to avoid protracted litigation and appeals that could continue for several more years.” […]

State Farm denies liability and maintains its position that the company “considers the claims to be without merit,” according to the settlement. […]

The millions in so-called “dark money” were channeled through donations to the U.S. Chamber of Commerce, which then sent the money onto a political action committee and the Illinois Republican Party for use in Karmeier’s 2004 campaign, according to the lawsuit.

Karmeier, who is now chief justice of the Supreme Court, cast the deciding vote in favor of overturning the appellate court ruling that upheld the billion-dollar Avery verdict, policyholders noted in their lawsuit.

He was not a defendant in the case.

* Tribune

State Farm “has consistently denied participating in a RICO scheme and to this day denies any role in electing Judge Karmeier,” Bob Clifford, attorney for the plaintiffs, said in an interview Tuesday. “Now they agree to pay a quarter of a billion dollars, and I think that speaks for itself.”

The settlement came after the jury was selected last week and just before opening statements were set to begin. That probably shows State Farm was spooked by the risk of an adverse verdict, said law professor David Logan, of Roger Williams University in Bristol, Rhode Island.

“Corporations generally don’t part with that kind of money just before the opening statement of a trial unless they got a really negative vibe from the jury that was impaneled,” Logan said. The settlement for far less than what plaintiffs were seeking isn’t unusual, he added. “Two hundred and fifty million dollars in hand may be worth declining a shot at a billion, that only would come after many appeals.”

The plaintiffs were seeking $1 billion in damages based on the original verdict and $1.8 billion in interest, plus tripling under the RICO law.. The jury would have determined damages and the judge would have decided on the interest.

* Bloomberg

The settlement ends more than 20 years of litigation over by State Farm customers who alleged they were given generic car parts of lower quality than original equipment for more than a decade, violating the terms of their insurance policies.

In 1999, an Illinois state court jury awarded the customers $456 million for breach of contract, and the trial judge added $730 million in damages on a fraud claim. An appellate court reduced the verdict to $1.056 billion, but it was one of the largest class-action awards in U.S. legal history.

In 2004, Karmeier, a Republican who had been a circuit judge in rural Washington County for almost two decades, was elected to the Illinois Supreme Court. A year later, that court threw out the award, and the U.S. Supreme Court refused to review the case, seemingly ending the litigation.

* And check out the headline on this Clifford Law Offices press release…

State Farm Pays $250 Million to Keep Illinois Chief Justice Off the Witness Stand

Ouch.

- Posted by Rich Miller        

23 Comments »
  1. - Sue - Wednesday, Sep 5, 18 @ 10:06 am:

    There is something wrong when Companies are allowed to skate what seems like criminal activity by making a large cash payment. Rico is a civil matter but it is essentially a civil action to rectify a conspiracy.


  2. - siualum - Wednesday, Sep 5, 18 @ 10:11 am:

    Like a good neighbor…..


  3. - Grand Avenue - Wednesday, Sep 5, 18 @ 10:14 am:

    $250 Million is a lot better than $1.8 Billion for State Farm


  4. - City Zen - Wednesday, Sep 5, 18 @ 10:16 am:

    Whom to root for, the insurance company with their large political contributions or the personal injury law firm with their large political contributions?


  5. - JIbba - Wednesday, Sep 5, 18 @ 10:29 am:

    CZ…easy one. Who hurt or disadvantaged more people? State Farm!


  6. - Former Horse Guy - Wednesday, Sep 5, 18 @ 10:37 am:

    ===There is something wrong when Companies are allowed to skate what seems like criminal activity by making a large cash payment. Rico is a civil matter but it is essentially a civil action to rectify a conspiracy. ====

    Tell that to the race tracks that went out of business after losing a civil RICO case brought on by the riverboats. They were accused of bribing Blago with campaign contributions which was ludicrous considering the riverboats were also big contributors to politicians. The jury (and some say the judge) was out to fix a system they viewed as corrupt. The last statement in the case by the plaintiff attorney to the jury was “Pay to play has been going on for too long in Illinois and this is your chance to do something about it”. And right or wrong they did.
    So settling before going to trial isn’t always a bad idea.


  7. - Chicago 20 - Wednesday, Sep 5, 18 @ 10:50 am:

    Where is the equal justice under the law?

    They all belong in jail.


  8. - Truthteller - Wednesday, Sep 5, 18 @ 10:50 am:

    Better if State Farm execs responsible had gone to jail.
    They’d serve their own time , State Farm policyholders will pay the $250 million settlement.


  9. - SoIL Legal - Wednesday, Sep 5, 18 @ 11:02 am:

    I don’t see how is this a win for the plaintiffs. If you do the math, it means that each of the 4.7 million class members will receive around $55 less any attorneys fees, which will surely make the amount well below $35. After 20 years of litigation, that amount equates to nothing if you take out 5% interest over the years this case was being litigated. I would imagine that the class plaintiffs have moved on after the last two decades.

    So, really, I see this as a win for State Farm and shows that the plaintiff attorneys just wanted to recoup their expenses for 20 years of litigation. The settlement ends the litigation at a quarter of what was originally awarded ($1.1 billion) and is less than 3% of what plaintiffs were seeking in this action ($10.1 billion). It also saves State Farm tons of money in attorney fees from having to go through subsequent appeals and remands.

    I would argue that the settlement shows that this case was nothing than an attack on Karmeier’s reputation. Now that he is Chief and won’t be up for retention for 8 more years, the smear campaign can end. I mean, no plaintiff attorney would settle for less than 3% of what they were trying to win in a case. It is dishonest for the plaintiff attorneys to say that this settlement “provides significant relief to Class Members now.” I guess they can buy a “new” gas cap…


  10. - anon2 - Wednesday, Sep 5, 18 @ 11:12 am:

    State Farm pays a $250 million settlement, yet claims with a straight face that it did nothing wrong. It’s hard to believe an innocent party would agree to such a settlement, which could pay for several decades of litigation.


  11. - Precinct Captain - Wednesday, Sep 5, 18 @ 11:13 am:

    Why isn’t Rauner screaming about this? Oh, right, IOKIYAR


  12. - the old man - Wednesday, Sep 5, 18 @ 11:14 am:

    Well, the ambulance chasing, asbestos loving get rich at any costs lawyers of Madison and St Clair counties, members of the country’s
    most noted judicial hell hole have failed again. They spent millions of dollars trying to keep a peoples judge off the Supreme Court and again spent millions of dollars trying to deny that same judge retention and now they have come to the decision to cut and run
    . Maybe their clients will realize that class actions suits are nothing more than political attempts to undo the peoples’ will and make dirt bag lawyers rich.


  13. - Lester Holt’s Mustache - Wednesday, Sep 5, 18 @ 11:25 am:

    - the old man -

    We get it, Justice Karmeier, we get it - you don’t like people questioning your corrupt ways of doing business. Now don’t you have better things to do on a Wednesday morning than post on Capfax? Surely you have some cases to review or money to funnel to your campaign or something?


  14. - SSL - Wednesday, Sep 5, 18 @ 11:31 am:

    So State Farm dodged a bullet and many are justifiably angry.

    Where’s the anger that they supposedly funneled $4 million to the campaign of a judge that subsequently voted in their favor? Everyone okay with the judge on this?


  15. - Anonymous - Wednesday, Sep 5, 18 @ 11:39 am:

    SSL - The plaintiff attorneys and associate firms in this case donated millions to Karmeier’s opponent Gordon Maag and to the “Campaign For 2016″ which opposed Karmeier’s retention. Plaintiff attorneys were playing by the same rules and ultimately lost.


  16. - The Way I See It - Wednesday, Sep 5, 18 @ 11:39 am:

    I sure hope all the discovery done on this gets made public.


  17. - M - Wednesday, Sep 5, 18 @ 11:44 am:

    What did State Farm Ins. want from the judge in return for their donation?


  18. - Arthur Andersen - Wednesday, Sep 5, 18 @ 12:09 pm:

    I wonder if State Farm had insurance to cover the settlement?


  19. - Hieronymus - Wednesday, Sep 5, 18 @ 12:47 pm:

    “Whom to root for, the insurance company with their large political contributions or the personal injury law firm with their large political contributions?”

    When in doubt, side with the little guys.


  20. - Responsa - Wednesday, Sep 5, 18 @ 12:58 pm:

    Nasty nasty behind the scenes business being exposed here. No heroes on either side anywhere in sight. And the actual class members get a pittance. The Trib article took away my taste for eating any breakfast this morning and it’s noon and still no appetite.


  21. - Anonymous - Wednesday, Sep 5, 18 @ 5:09 pm:

    State Farm does not have a PAC nor do they make any corporate contributions. That is a simple FACT.

    This was a shake down after the trial lawyers lost at the Supreme Court.

    Bob Clifford accused every dollar in the race as coming from SF solely because they might be a member of an organization. I would argue that ITLA allocated $4 billion to Maag in the race because trial lawyers gave money.

    This is why insurance costs more money and businesses despise the trial bar. The so-called injured class get peanuts and the lawyers get millions.


  22. - Chicago 20 - Wednesday, Sep 5, 18 @ 5:24 pm:

    The class action lawsuit was that State Farm was demanding inferior, poorly made, ill fitting, out of spec, cheap knock-off structural body parts from no-name third world manufacturers be used on claimants and insured vehicles after collision accidents.

    All so State Farm could save a buck while ruining people’s vehicles.

    So then State Farm buys a Supreme Court Judge and when the case gets to him, surprisingly they get a favorable ruling.

    Watch the movie “Hot Coffee” and see how the Koch Brothers have been buying judges for years now.

    Our judicial system has been compromised and people need to be punished.


  23. - Keyrock - Wednesday, Sep 5, 18 @ 6:31 pm:

    The Illinois Supreme Court used to have the reputation as the highest court money could buy in this state.

    One hopes those days are past.


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