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Karmeier deposition key factor in State Farm's summary judgment move in multi-billion RICO case

Madison County Record

Wednesday, July 19, 2017  |  Article  |  by The Madison County Record

Courts (27) , Tobacco, Smoking Ban, E-Cigarettes , Tort Reform (27)
EAST ST. LOUIS – Illinois Supreme Court Justice Lloyd Karmeier swore he knew nothing of campaign contributions from State Farm in 2004, according to a motion the insurer filed against a $10 billion racketeering claim on July 17.

Ronald Safer of Chicago quoted a deposition of Karmeier in support of a summary judgment motion challenging federal jurisdiction.

Safer wrote that while plaintiffs seek relief from State Farm, they also seek relief from a decision of the Illinois Supreme Court.

That decision overturned a Williamson County judgment awarding more than $1 billion to policyholders whose vehicles crashed from 1987 to 1998.

Safer wrote that according to plaintiffs, Karmeier participated in a racketeering enterprise and knew the sources of his contributions.

“Plaintiffs have asserted that the factual basis for that claim would be provided by testimony from Justice Karmeier and Al Adomite,” Safer wrote.

“But theproof is not forthcoming.

“Plaintiffs have no evidence that Justice Karmeier knew that any campaign contributions came from State Farm or anyone related to State Farm or that he knew of any State Farm support of his campaign.”

“Justice Karmeier’s uncontroverted testimony is that he had no knowledge of campaign contributions from or in any way related to State Farm.”

“Likewise, Al Adomite testified at his deposition in this case that he had no knowledge that Justice Karmeier knew anything about the sources of his contributions and that Adomite himself had no knowledge of State Farm providing any support to Justice Karmeier’s campaign.”

Adomite, who worked for the campaign, currently serves as mayor of Troy.

"Notably, plaintiffs now contend that they do not need to show that Justice Karmeier knew anything about supposed State Farm contributions in order to prove their claims,” Safer

He wrote that plaintiffs couldn’t rely on precedents they cited without proving that Karmeier knew State Farm supported him and knew his vote was corrupt.

They can’t meet their burden, he wrote.

Patrick Murphy of Marion filed the original suit in 1997, as local counsel for a national team representing policy holders in 48 states.

Murphy later served as U.S. district judge, returning to private practice in 2013.

His complaint alleged that State Farm provided inferior parts for repairs.

At trial before Williamson County associate judge John Speroni, jurors awarded almost $1 billion to lead plaintiff Michael Avery and his class.

Speroni added damages under Illinois consumer fraud law, pushing the judgment above $1 billion.

Fifth District appellate judges shrank it a bit in 2001, leaving it above $1 billion.

State Farm appealed to the Supreme Court.

In 2004, Karmeier ran for the Supreme Court as a Republican.

Fifth District judge Gordon Maag, author of the Avery decision, ran as a Democrat.

Karmeier won, and took office on Dec. 6, 2004.

On Jan. 26, 2005, Avery’s counsel moved to disqualify him.

The Court denied the motion, and Avery moved for reconsideration.

The Court denied it, and decided the case in August 2015.

Avery moved for rehearing, again challenging Karmeier’s participation.

The Court denied it.

Avery sought relief at the U.S. Supreme Court, and didn’t get it.

In 2011, he petitioned the Illinois Supreme Court to vacate its judgment and recall its mandate.

The Court denied his petition.

His lawyers sued State Farm in U.S. district court in 2012, on behalf of lead plaintiff Mark Hale of New York State.

Hale sought to recover the judgment, plus interest, with triple damages.

He named State Farm employee William Shepherd and Illinois Civil Justice League director Ed Murnane as parties to the conspiracy.

State Farm moved to dismiss the suit, and Herndon denied the motion.

State Farm moved for reconsideration, and he denied it.

State Farm petitioned Seventh Circuit judges to stop the proceedings, but they denied the petition.

Herndon certified aclass action identical to the Avery class last year, and the Seventh Circuit denied a petition to decertify it.

Class counsel moved to expand the class definition, and Herndon granted it.

State Farm sought relief at the Seventh Circuit, and didn’t get it.

Herndon has set trial next May, but Safer’s motion aims to close the case.

“There can be no reasonable dispute that plaintiffs are attempting to use this federal case to seek redress for the Illinois Supreme Court’s reversal of the $1.05 billion judgment in Avery,” he wrote.

He wrote that Karmeier testified he had no memory of meeting Shepherd, and that Shepherd never served on his campaign committee or finance committee.

He quoted a Seventh Circuit precedent that delving into whether fraud tainted a state court’s judgment amounts to exercise of de facto appellate jurisdiction.

“Plaintiffs, moreover, had a reasonable opportunity to litigate in the Illinois Supreme Court the same due process and other issues they now raise in this federal court, and repeatedly did so.”

He wrote that all six participating Justices in Avery reversed the judgment for three reasons and decertified the class.

He wrote that two Justices who partially dissented would have remanded the case to circuit court to identify possible sub classes claiming breach of contract.

“Plaintiffs state that they do not contend that any of the rulings in theIllinois Supreme Court’s decision on the merits in Avery were erroneous," he wrote.

He wrote that they admitted that they claimed in each of five challenges that Karmeier’s participation violated their due process rights.

He wrote that they produced a document stating that they didn’t file a petition at the U.S.Supreme Court after the decision of the Illinois Supreme Court in 2011, out of concern that it might have a negative impact on a racketeering suit.