20-YEAR-LONG CASE FIGHTING DARK MONEY IN POLITICS and HOW THE FEDERALIST SOCIETY, CHAMBER OF COMMERCE AND STATE FARM BOUGHT A DISHONEST JUDGE FOR $4 MILLION DOLLARS WORTH OF CAMPAIGN MONEY.
Public Justice’s 2019 Trial Lawyer of the Year award was awarded to the legal team who represented a class action beginning almost twenty years ago, earning a settlement for consumers and shedding light on corruption in politics. The award was presented on the evening of Monday, July 29 at Public Justice’s Annual Gala & Awards Dinner at the USS Midway in San Diego, California.
The other finalists for the award were Ecoogical Rights Foundation v. Pacific Gas & Electric, Englund v. World Pawn Exchange, Gloria G. v. City School District of the City of Mount Vernon and In re Swine Farm Litigation. Read about the accomplishments of those finalist teams here. Information about previous TLOY winners is available here.
In 1999, the law firm of Lieff Cabraser, along with co-counsel, filed a nationwide class action in Illinois state court accusing State Farm of using lower-quality automotive parts from non-brand manufacturers to repair the vehicles of about 4.7 million policyholders.
In 1999, the legal team won a $1.2 billion verdict against the insurance company, which was largely affirmed by the intermediate appeals court before State Farm asked the Illinois Supreme Court to revisit the decision.
While the company’s case was being reviewed by the state supreme court, plaintiffs began to suspect that State Farm was providing significant funding to the successful 2004 state supreme court campaign of Judge Lloyd Karmeier.
In wake of those concerns, the team filed a motion requesting that Karmeier recuse himself from the case. In opposing that motion, State Farm argued that it had not contributed money, directly or indirectly, to the judge’s campaign.
Justice Karmeier ultimately refused to recuse himself, and, by his own account, “broke the deadlock” when he voted to overturn the billion-dollar verdict in its entirety, at which point the case appeared to be over.
Statement: “Who has the sample appellees’ brief in the Fifth Circuit Website? Yep….we do! :)” #5CA @SupremeCourt_TX @JusticeWillett @statebaroftexas #legal #ethics #PublicRelations #armslength #judges #counsel #opposingcounsel #visualization #bias pic.twitter.com/5CWSBi1Gva
— LawsInTexas (@lawsintexasusa) August 17, 2019
Then in 2009, the United States Supreme Court decided Caperton v. A.T. Massey Coal Co., in which the Court found that in a similar case, a company’s contributions to a judge’s campaign – and the judge’s refusal to recuse himself – violated the plaintiffs’ due process rights.
Relying on Caperton, the original Hale team proceeded to investigate further, and filed a motion to withdraw the original mandate in the Illinois Supreme Court, citing new evidence. The court refused to do so, relying on State Farm’s renewed insistence that it had not made any contributions to Karmeier’s campaign.
The legal team remained convinced, however, that State Farm was lying and that, as their investigation revealed, the company had funneled millions of dollars to the Karmeier campaign through intermediaries like the U.S. Chamber of Commerce, the Illinois Chamber of Commerce, and the Illinois Republican Party.
In 2012, counsel filed a new action alleging that State Farm had engaged in a RICO conspiracy. The action described the company’s furtive scheme to seat a sympathetic justice and alleged that State Farm had engaged in mail fraud (a predicate of the RICO conspiracy) when it denied in pleadings that it had not funded the Karmeier campaign.
The resulting case was incredibly hard fought, with State Farm arguing repeatedly that the plaintiffs could not prove that the company had funneled money to the Karmeier campaign. State Farm further alleged that there was no RICO causation because the Illinois Supreme Court ruled unanimously on certain issues in the original case, and that the plaintiffs’ case was barred by the statute of limitations.
Despite State Farm’s arguments, the legal team survived motions to dismiss, certified a nationwide class, defeated multiple summary judgment motions, overcame three separate appeals to the Seventh Circuit, and secured significant pre-trial in limine victories. In all, the parties briefed more than 100 contested motions, deposed 68 witnesses (including Chief Justice Karmeier), and prepared for what was to be a six-week trial.
Just days after the trial began – and mere hours before Justice Karmeier was scheduled to testify – the parties reached a $250 million non-reversionary settlement. Rather than risk trial and wait years through the inevitable (and also risky) appeals process, the settlement delivered immediate and significant relief to class members who had been waiting more than 20 years.
And, notably, it employed a state-of-the-art distribution process that will ultimately pay nearly 1.5 million class members automatically, without the need to submit a claim form. In addition to the compensation for policyholders, the Hale team was also able to shine a spotlight on, and gain critical attention for, the problem of dark money in judicial elections.