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Did State Farm “bribe” a Supreme Court Justice who overturned a billion-dollar judgment?

December 6, 2011 by Steven M. Gursten

Class-action lawyers want to reopen case after investigation by former FBI agent suggests insurer lied, possibly making illegal donations of $2 million to $4 million

Last week, I wrote about the new John Grisham book, The Litigators. The case that I’m going to discuss today is not a John Grisham novel (yet), but it sure reads like one.

It also serves as a cautionary tale about the distorting and perverse effect that campaign contributions can have on our legal system. In this post- Citizens United world of ours (Citizens United being possibly the worst U.S. Supreme Court opinion of the past 100 years) it shows how unlimited corporate and insurance company campaign contributions can undermine our entire justice system.

Bottom line: State Farm is accused of lying about having spent millions of dollars to support a conservative Republican candidate for the Illinois Supreme Court whose vote ultimately saved the insurance giant billions of dollars.

Here are the facts:

In 1997, State Farm Insurance Company got clobbered with a $1 billion class-action judgment in Avery v. State Farm for allegedly using inferior parts in its vehicle-damage repairs.

The Appellate Court upheld the judgment in 2001 and arguments were heard before the Illinois Supreme Court in May 2003.

Enter Judge Lloyd Karmeier.

Within six months of the Supreme Court arguments, Karmeier, a conservative Republican, threw his hat in the race for an open Supreme Court seat.

With the financial backing of State Farm, Karmeier won the election in November 2004.

Subsequently, Karmeier fended off claims that he should disqualify himself from participating in Avery v. State Farm. He insisted State Farm’s support would not influence his decision in the case. For its part, State Farm swore to the Illinois Supreme Court that it had only contributed $350,000 to Karmeier’s campaign.

Accordingly, Karmeier stayed on the case.

And in July 2005, he voted to throw out the billion-dollar judgment against State Farm, which is exactly what the Illinois Supreme Court did.

Unseemly as it was, that appeared to be the end of the story.

Until now.

Did State Farm really donate between $2 million and $4 million in campaign contributions to this judge?

Based on an investigation conducted by a former FBI agent, the plaintiffs’ class-action lawyers in Avery want the Illinois Supreme Court to reopen the case and reexamine the propriety of having allowed Karmeier to sit in judgment over his campaign benefactors.

Of particular concern are investigation results which allege that State Farm played a much bigger role in Karmeier’s campaign — financially and otherwise — than it previously disclosed to the Illinois Supreme Court.

According to news reports, the investigation contends that State Farm allegedly funneled between $2 million and $4 million to Karmeier’s campaign through the Illinois Civil Justice League and through the Illinois Republican Party by way of the U.S. Chamber of Commerce.

Additionally, it is alleged that a State Farm lawyer “vetted” Karmeier for the Supreme Court seat and consulted with the head of the Civil Justice League who was effectively “running” Karmeier’s campaign.

Obviously, these scandal allegations are only allegations unless and until the evidence proves them to be true.

But it is much more than an allegation to say that State Farm gave more than a quarter of a million dollars to a state supreme court candidate who, upon being elected, voted to throw out a billion-dollar judgment against State Farm.

That is a fact. And from where I’m standing, that is scandalous enough.

State Farm one of worst insurance companies in Michigan

Now, this is not the first time I’ve written about State Farm.

State Farm has made my list of the worst insurance companies for many years. As a No-Fault insurance lawyer (and including the other 17 lawyers here who also only handle auto accident insurance cases in Michigan), we have litigated Michigan No-Fault “PIP” insurance cases with every auto insurance company in the state.

This qualifies me to say from my own personal experience that State Farm is one of the very worst, if not the very worst insurance company in Michigan, about paying benefits right away and putting its own customers under “investigation” – often for no other reason than to avoid paying what they should have to begin with. But what State Farm did here, if it proves true, goes far, far beyond that.

This threatens our very civil justice system and our democracy

Note: This blog relies on information contained in the following news stories:

Lawyers: State Farm covered up support of candidate in most expensive judicial race in U.S. history, 9/15/2011, Belleville News-Democrat, bnd.com.

Plaintiffs lawyers: State Farm bought Karmeier’s SC seat, 9/16/2011, LegalNewsline.com.

State Farm Secretly Gave $2.4 Million to Ill. Judge in $1B Case, 9/22/2011, Strategist.

State Farm tries to block reopening of $1 billion Avery case, 9/30/2011, The Madison-St. Clair Record.

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