Seventh Circuit denies mandamus relief for State Farm; Plaintiffs seek discovery order in case seeking billions

Attorney Gordon Ball is asking for discovery to commence in a proposed class action that accuses State Farm of working to elect Illinois Supreme Court Justice Lloyd Karmeier so that he would vote to overturn a $1.05 billion judgment against the insurer.

Ball filed a motion to lift a stay in the case on Friday, the same day the Seventh Circuit Court of Appeals denied State Farm’s move to stop the racketeering lawsuit through a writ of mandamus.

The proceedings are taking place in U.S. District Judge David Herndon’s court in the Southern District of Illinois.

Herndon had granted State Farm’s motion to stay on Jan. 13 while the Seventh Circuit considered the insurer’s petition for mandamus in Hale v. State Farm. 

Seventh Circuit judges Richard Posner, Frank Easterbrook and David Hamilton on Jan. 24 held that contentions now made by State Farm can be reviewed on appeal from a final decision or by permission of both courts. 

Plaintiffs Mark Hale, Todd Shadle and Carly Morse claim that the Illinois Supreme Court improperly overturned a $1.05 billion judgment in a consumer class action, Avery v. State Farm, in 2005. The alleged racketeering occurred when State Farm and Karmeier’s campaign committee worked together to recruit, finance and elect Karmeier to the Supreme Court so he would vote to overturn the judgment against State Farm once elected, plaintiffs claim.

The plaintiffs propose to represent a class that is identical to the one Williamson County Associate Judge John Speroni certified for Avery in 1998.  Their claim in Hale v. State Farm would triple the damages under racketeering law to $3.15 billion, with 14 years of interest.

Co-defendants in the case are William Sheperd, an attorney at State Farm, and Ed Murnane, president of the Illinois Civil Justice League.

Ball and 20 other attorneys from across the country represent the proposed class. The case was filed May 24, 2012.

“Thus far, in those 20 months, the parties have made no initial disclosures, have not exchanged any discovery documents, have not noticed or taken a single deposition, have not had a scheduling conference, and no scheduling order has been entered,” Ball wrote in his motion.

In addition to asking for the stay to be lifted, Ball wants Herndon to set an initial scheduling and discovery conference and to direct parties to either submit a proposed joint scheduling and discovery order, or if they are unable to agree, submit their own plans.

In previous rulings, Herndon has denied State Farm’s immediate appeal and its motion for reconsideration of the denial order.

In previous court filings, plaintiffs have indicated they will seek to depose Karmeier.

State Farm is represented by Patrick D. Cloud of Heyl Royster in Edwardsville, attorneys from Schiff Hardin and Shefsky & Froelich in Chicago and Quinn Emanuel Urquhart & Sullivan in New York.

Sheperd is represented by Laura Oberkfell and Russell Scott of Greensfelder, Hemker & Gale in Swansea.

Murnane is represented by attorneys at Sidley Austin in Chicago.