State Farm Racketeering Case Ruled Class Action Suit | WGLT

State Farm Racketeering Case Ruled Class Action Suit

Sep 19, 2016

Chief Justice Lloyd Karmeier
Credit Illinois Supreme Court

A federal judge in Saint Louis has granted class action certification in a civil racketeering case against Bloomington-based State Farm Insurance.

The Clifford Law Office in Chicago alleges State Farm employees ran a dark money campaign to elect Lloyd Karmeier to the State Supreme Court, believing he would support the insurance company once a certain case reached the high court.

The case alleges State Farm conspired to hide contributions to the campaign to select and then elect Lloyd Karmeier to the Illinois Supreme court  in 2004 by channeling more than four million dollars through the Illinois Civil Justice league, U.S. Chamber of Commerce, State Republican Party, and political action committees. Named in the case are Ed Murnane of the Civil Justice League and State Farm Lobbyist Bill Shepherd.

The plaintiffs also allege then State Farm Chairman Ed Rust Junior was involved in picking judicial races to target in the 2004 election year.

The original case involved a costly verdict against State Farm for forcing use of allegedly inferior after market car parts in auto repairs.

Shortly after his election, Karmeier did cast the deciding vote overturning the 1.1 billion dollar award in the so-called Avery case. Karmeier refused to recuse himself even though he came on the court after oral arguments were heard.

Judicial conduct rules indicate judges should recuse themselves whenever questions could reasonably arise about their decision making. The language covering recusals does not specifically mention campaign contributions as a possible source of questions.

Judicial recusal questions since 2004 have led to changes in West Virginia and featured prominently in Wisconsin as Governor Scott Walker backed the campaign of a conservative leaning justice to protect his anti-labor agenda by lobbying for donations from various groups.

The class of people now potentially involved in the current Hale v. State Farm case includes 4.7 million State Farm policy holders who had car repairs under a company policy between 1987 and 1998.

State Farm spokesman Justin Tomczak said the company is disappointed in the court's decision on the class certification question and respectfully disagrees with it.

"We intend to ask the appellate court to review this ruling in the very near future. Plantiffs have unsuccessfully asserted and reasserted these allegations for many years and should not be permitted to do so any longer," said Tomczak.

Among the assertions Tomczak referenced was an unsuccessful attempt to revive the Avery case after a former FBI worker did an investigation and found the alleged evidence of the dark money campaign. The State Supreme Court refused to reconsider Avery, partly on procedural grounds and deadlines for filing.

Justice Karmeier has gone on to win a second term on the state high court and his colleagues have just selected him as the next Chief Justice.