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State Farm brief disputes federal jurisdiction in $10 billion RICO claim

Madison County Record

Tuesday, August 15, 2017  |  Article  |  by The Madison County Record

Courts (27) , Tobacco, Smoking Ban, E-Cigarettes , Tort Reform (27)
EAST ST. LOUIS – Plaintiffs who claim State Farm rigged the election of Illinois Supreme Court Justice Lloyd Karmeier in 2004 don’t match a precedent that would qualify their claim for U.S. district court, according to State Farm.

The precedent, Nesses v. Shepard, creates federal jurisdiction when a violator corrupts a state judicial process to obtain a favorable judgment.

State Farm counsel Ronald Safer of Chicago disputed its application on Aug. 9, in a brief for a summary judgment motion that State Farm filed in July.

“Plaintiffs have presented no evidence that Justice Karmeier or the Illinois Supreme Court was corrupt, as required by Nesses,” Safer wrote.

“Instead, plaintiffs claim that Justice Karmeier knew State Farm played a significant role in funding his campaign, a claim that, even if supported by the evidence, would not establish corruption.

“Plaintiffs, moreover, ignore Justice Karmeier’s unequivocal testimony that he had no knowledge of State Farm, or anyone related to State Farm, supporting or contributing to his campaign in any way, directly or indirectly, and that testimony is not controverted by evidence cited by plaintiffs.”

He wrote that a statement of plaintiffs that Karmeier’s campaign staff knew State Farm backed his campaign was based on a document by an unknown author.

He wrote that Karmeier’s campaign chairman contradicted the statement.

Plaintiffs seek to recover a judgment that Williamson County associate judge John Speroni entered for lead plaintiff Michael Avery after a jury trial in 1999.

Jurors found State Farm provided inferior parts for crash repairs nationwide.

Fifth District appellate judges affirmed the judgment in 2001, trimming it slightly to about $1 billion.

State Farm appealed to the Supreme Court, which could not reach consensus.

In 2004, Fifth District voters elected Karmeier.

Avery petitioned to disqualify him, but the Justices denied it.

In 2005, a unanimous Court decertified the class and vacated the judgment.

Two Justices argued in partial dissent that a court could certify subclasses.

Avery petitioned the Justices to recall the mandate in 2011, claiming to possess new information about State Farm’s role in Karmeier’s campaign.

Karmeier did not participate in the proceedings, which ended when the Justices swiftly rejected the petition.

Avery’s lawyers turned to U.S. district court in 2012, without Avery.

They sued State Farm on behalf of New York State resident Mark Hale, seeking to recover the judgment with interest and triple damages under racketeering law.

They named State Farm employee William Shepherd and Illinois Civil Justice League director Ed Murnane as conspirators.

With trial approaching next year before District Judge David Herndon, the claim currently runs around $10 billion.

According to Safer, plaintiffs have failed to connect Karmeier’s participation in Avery and the outcome of the case, as the Nesses decision requires.

He wrote that they asserted based on inadmissible hearsay that Karmeier broke a deadlock in Avery.

He wrote that the partial dissent suggested that any deadlock was over the grounds for reversal.

“Nor do plaintiffs contend that the Illinois Supreme Court’s decision was erroneous, a fatal concession that they have suffered no redressable injury,” he wrote.

“Notably, plaintiffs do not contend that the 2011 decision, in which Justice Karmeier did not participate, was the product of a tainted tribunal.”

In the Nesses precedent at the heart of the matter, in 1995, plaintiff Nesses lost.

Current Seventh Circuit Justices Richard Posner and Michael Kanne held that state court judgments against him constituted “res judicata,” matters adjudicated.

They chose not to invoke the Rooker-Feldman doctrine, which generally bans federal court review of state court decisions.

“Were Nesses merely claiming that the decision of the state court was incorrect, even that it denied him some constitutional right, the doctrine would indeed bar his claim,” Posner wrote.

“But if he claims, as he does, that people involved in the decision violated some independent right of his, such as the right, if it is a right, to be judged by a tribunal that is uncontaminated by politics, then he can, without being blocked by the Rooker-Feldman doctrine, sue to vindicate that right and show as part of his claim for damages that the violation caused the decision to be adverse to him and thus did him harm.

“Otherwise there would be no federal remedy for a violation of federal rights whenever the violator so far succeeded in corrupting the state judicial process as to obtain a favorable treatment.”

The late Justice Thomas Fairchild would have invoked Rooker-Feldman.

“The gist of it is, defendant lawyers and one or more state court judges joined in a scheme and conspiracy, and misuse of political power and influence,” Fairchild wrote.

“They caused the entry of judgments against plaintiff contrary to merit and law.

“The judgments deprived plaintiff of property without due process of law, as well as abridging his privileges and immunities and depriving him equal protection of the laws.

“His complaint could have no meaning unless it sought a determination that the state court judgments were wrong.

“It follows that the Rooker-Feldman doctrine requires dismissal for lack of jurisdiction.”

Patrick Cloud, of Heyl Royster in Edwardsville, worked on the brief.

So did Timothy Eaton of Chicago.