EAST ST. LOUIS – If U.S. District Judge David Herndon voids the Illinois Supreme Court decision in Avery v. State Farm, he will void a precedent that has curtailed class actions for eight years.
“It has been cited 11 times by the Illinois Supreme Court, 105 times by the Illinois appellate courts, 16 times by the Seventh Circuit, and 148 times by Illinois federal district courts, as well as by courts around the country,” wrote State Farm counsel Patrick Cloud of Edwardsville on July 8 in a current case accusing the insurer of racketeering to evade Avery’s $1.05 billion judgment.
Herndon must rule on a class certification motion in the case which seeks to void the overturning of Avery.
Voiding Avery would also vindicate U.S. District Judge Patrick Murphy, who as a Marion lawyer filed the action against State Farm on July 28, 1997.
Murphy stuck with it after President Clinton nominated him for judge on July 31, 1997, after the Senate confirmed him, and after he started taking cases as judge in the Southern District of Illinois.
He is retiring from the bench on Dec. 1.
Murphy didn’t invent the theory that State Farm breached its policies by replacing crash parts with inferior parts, but he and his colleagues greatly expanded it.
They decided to create a nearly national class, leaving out Arkansas and Tennessee.
Lead lawyer Don Barrett of Mississippi picked Murphy for local counsel and brought along Morris Ratner from California, Patrick Pendley from Louisiana, Gordon Ball from Tennessee, and Steven Martino from Alabama.
Barrett also brought along Thomas Thrash from the Rose Law Firm of Little Rock, where Hillary Clinton had practiced.
Murphy filed the complaint in Williamson County on behalf of county resident Jeanne Teter.
He moved for an immediate hearing on conditional class certification.
Presiding Judge Ronald Eckiss assigned the case to Circuit Judge Paul Murphy, no relation to Patrick, but Judge Murphy was out of state.
Eckiss assigned it to Judge Murphy’s backup, associate judge John Speroni, but he disqualified himself because he had represented State Farm within seven years.
Eckiss wrote, “In Judge Murphy’s absence I will handle the case today.”
He held a hearing and conditionally certified the class, pending a hearing in 60 days.
Three days later, President Clinton nominated Patrick Murphy for district judge.
Plaintiffs served the suit on State Farm, where lawyers rushed to catch up.
On Aug. 27, Murphy added county resident Tammy Snider as a plaintiff.
Judge Paul Murphy took the case when he returned, but Teter moved for substitution.
Any party can substitute a judge without cause in Illinois, once only, if the judge has not made a substantial ruling.
Eckiss referred the file to Speroni, who qualified his disqualification by asking for comments from both sides.
Murphy wrote, “On behalf of the plaintiffs, I waive your disqualification pursuant to Supreme Court Rule 63 and expressly consent that you handle the case.”
State Farm counsel Christy Solverson of Carbondale waived it too, and on the same day she moved to vacate the conditional class certification order.
She wrote that the plaintiff team left out Arkansas and Tennessee because one of them was pursuing cases in those states.
Murphy opposed the motion to vacate, writing that the order was conditional.
“The case is fairly simple,” he wrote. “All courts can make determinations about a suit at any time and decide how best to proceed without notifying any party.”
On the same day he filed an emergency motion to enjoin State Farm from appealing to a Cook County judge hearing a similar case that had run 10 years.
A new lawyer popped up on the plaintiff team on Sept. 10, when Patricia Littleton of Carbondale appeared at a hearing with Murphy and Barrett.
She and Murphy would later marry.
At the hearing, State Farm opposed the emergency motion and Speroni granted it.
He entered a scheduling order that State Farm branded as extreme and unreasonable at a hearing two days later.
At the hearing he allowed Murphy to add Michael Avery as plaintiff.
State Farm moved a week later to dismiss the action and Murphy responded by writing, “Has the court heard any defense to the allegations in the complaint? No. There are none.”
Teter fell short as class representative, however, and he moved to dismiss her claim.
State Farm responded that he dropped her an hour before inspection of her car.
The hearing Eckiss had promised in two months happened after four months, and it ended with Speroni certifying the class.
On Dec. 23, State Farm notified Speroni that it would petition for review at the Illinois Supreme Court.
State Farm asked the Justices to consolidate the action with the one in Cook County and another in Champaign County, and to transfer all three to a single court.
On Jan. 21, 1998, the Justices announced that they could not act on the petition. They had split three to three, with the seventh Justice taking no part.
Next, Speroni adopted Murphy’s plan for notifying the class about the action.
State Farm moved to stay the plan, arguing that the schedule in it would deprive State Farm of the right to seek review.
At a hearing on Feb. 26, Speroni denied a stay and denied State Farm an interlocutory appeal of the denial.
State Farm sought a stay at the Supreme Court the next day anyway, and the Justices denied it on March 9.
Back in Marion, State Farm moved to introduce an interpretation of policy requirements through an affidavit of counsel for the state insurance commissioner.
Speroni denied it on March 23.
As Murphy prepared to switch jobs, Michael Hyman of Chicago began signing briefs for the plaintiff team.
Murphy’s name appeared first on the list of lawyers below Hyman’s signatures.
Murphy appeared in court on March 30, but a docket entry for April 2 declared that “Attorney Murphy is unavailable.” The U.S. Senate confirmed him on April 2.
On April 24, the federal court in East St. Louis started assigning cases to him.
On April 27, he signed deposition notices in the suit against State Farm.
On April 29, he signed motions to serve interrogatories, bar depositions, compel compliance with Speroni’s scheduling order, and impose sanctions.
Speroni set the motion to compel for May 4, and directed the clerk to call Murphy and defense counsel.
Patricia Littleton entered an appearance as Murphy’s substitute on May 4, and Murphy withdrew on that date.
The first motion that Littleton filed showed her address at Murphy’s former office.
Speroni presided over a jury trial for seven weeks in 1999, denying mistrial motions from State Farm all the way through.
The jury awarded the class $456,180,000 in damages and Speroni added $600 million in punitive damages, for a total of $1,056,180,000.
Fifth Circuit appellate judges in Mount Vernon affirmed the judgment in 2001.
The Illinois Supreme Court wiped out the judgment in 2005, ruling that individual issues predominated over class issues.
The Justices held that Speroni improperly instructed jurors to read different policies as a single contract.
They held that he improperly applied the state consumer fraud law to other states.
Class action defendants clutched the decision and rushed to judges for relief.
Now the relief hangs in suspense in Herndon’s court.
Plaintiffs Mark Hale, Todd Shale and Carly Vickers Morse, who were plaintiffs in Avery, sued in the Southern District of Illinois in May 2012.
They accuse defendants State Farm, its attorney William Shepherd, and Ed Murnane, president of the Illinois Civil Justice League (ICJL), of violating the Racketeer Influenced and Corruption Organizations (RICO) Act by creating an enterprise “to enable State Farm to evade payment of a $1.05 billion judgment affirmed in favor of approximately 4.7 million State Farm policyholders” in Avery.
The plaintiffs are represented by more than 20 attorneys, including some original to Avery - Don Barrett, W. Gordon Ball, Patrick Pendley and Steven Martino.
Edwardsville attorney Patrick D. Cloud and Chicago attorneys J. Timothy Eaton, Joseph A. Cancila, Jr. and James P. Gaughan, represent State Farm, along with three New York attorneys are listed as of counsel.
Belleville attorneys Russell Scott and Laura Oberkfell represent Shepherd. Chicago attorneys Richard J. O'Brien, Scott M. Berliant and David Gavin Jorgensen represent Murnane.