MADISON - ST. CLAIR RECORD

Lawyers who plan to depose Illinois Supreme Court Justice Lloyd Karmeier in a $7 billion civil suit against State Farm have decided to wait until after the November election.

Robert Clifford of Chicago broke the news at a hearing before U.S. Magistrate Judge Stephen Williams on June 17, and Williams double-checked the statement.

Williams said, “Are you representing that there will be no deposition before the election?”

Clifford said, “I will make that representation if it will move this along.”

Karmeier’s lawyer, Courtney Cox of St. Louis, had told Williams that video from the deposition might show up on television in campaign advertising.

Williams foreclosed any further prospect that discovery might turn into campaign fodder, by adopting a confidentiality order that State Farm proposed.

Karmeier, finishing a 10-year term, faces retention in November.

Plaintiffs Mark Hale, Todd Shadle and Carly Morse claim State Farm fraudulently secured his election in 2004, so that the Supreme Court would reverse a billion dollar judgment against the insurer.

Hale, Shadle and Morse sued State Farm in 2012, under the Racketeering Influenced and Corrupt Organizations Act.

As members of the class that won the judgment at trial and lost it at the Supreme Court, they claimed triple damages with 16 years of interest.

They named Ed Murnane of Illinois Civil Justice League and State Farm employee William Shepherd as individual parties to the alleged scheme.

They named Citizens for Karmeier as defendant too, but quickly dismissed it.

Last year they advised State Farm that they would seek to depose Karmeier, and this year they served a subpoena for campaign records and current records.

Karmeier moved to quash the subpoena, citing privileges of judicial deliberation and First Amendment freedom of association.

State Farm then proposed its confidentiality order.

Hale, Shadle and Morse opposed it, arguing that public interest in judicial integrity outweighed the need for confidentiality.

At the hearing, State Farm counsel Ronald Safer of Chicago said plaintiffs presume State Farm will act in bad faith and make wholesale designations of confidentiality.

“Your honor should not presume that we will act in bad faith,” Safer said. “We will not.”

He said that in the Seventh Circuit, discovery goes on out of the public eye.

Responding for plaintiffs, Steven Blonder of Chicago talked about telephone records.

Williams said, “This goes way beyond phone records.” He said the most controversial item was the First Amendment.

“This is a big fuzzy area,” Williams said. “What degree of protection do these communications get?”

Blonder said plaintiffs need affidavits for designations of confidentiality.

Williams said, “They say, we’re not keeping this information from you. They say they don’t know if it will be filed or it won’t be.”

Blonder said, “I understand the difference but what we are talking about is political. We allege something was done in secret, a scheme or an artifice.”

Williams said, “Discovery can be conducted privately. Right now we have a dispute between private parties.”

Blonder again called for affidavits.

Williams said, “We haven’t gotten to that point. There is a First Amendment interest in campaign speech.”

He said he would adopt the broadest possible confidentiality language.

“That doesn’t mean this stuff is all going to stay confidential,” Williams said.

He said parties moving to file records under seal should file them with redactions while providing copies without redactions to the other side and the court.

Williams asked for timing of motions to seal, and Safer said 10 days. Blonder and Cox said 10 days was reasonable.

Russell Scott of Belleville, representing Shepherd, asked how non parties would be advised of the filings.

Williams said another option would be simply to file them under seal.

“Then the motion is, what should get unsealed?” Williams said.

He said the default position would be to have everything confidential.

“The issue is how long something will remain under seal that shouldn’t be,” Williams said.

He said non parties would receive notice at the same time.

After a recess, Williams said a million dollars went from State Farm to the U.S. Chamber of Commerce to the Illinois Republican Party to Justpac.

He asked Clifford how much money State Farm gave the Chamber in 2004.

Clifford said he didn’t have the answer. He said State Farm’s position obligated it to give the Chamber a million.

Williams said that was different. He said, “The claim is that State Farm violated RICO by misrepresenting to the Supreme Court its funding of Karmeier.”

Clifford said Shepherd admitted participating in Illinois Civil Justice League.

“He’s right in the heart of it all the time,” Clifford said.

Williams asked again how much State Farm gave the Chamber in 2004, and Clifford said again that he didn’t know.

Williams asked if they were obligated to give a million. Clifford said, “That is our understanding.”

Williams said, “What I’m driving at is, how do we know it’s earmarked? How much did the Chamber give to state parties in 2004?”

Clifford said he didn’t know. He said Illinois was their number one target.

Williams said, “It wasn’t just Illinois?”

Clifford said, “That’s our understanding.”

Williams asked if there was any evidence that they specifically targeted Karmeier.

Clifford said, “I believe the answer to that currently is no.”

Williams asked when the obligation started. Clifford said he wasn’t certain.

Williams asked if others were obligated to give a million.

Clifford said, “We assume so, yes.”

Plaintiff lawyer Gordon Ball of Knoxville, Tenn., said that Murnane hired a person and the party paid him.

Williams asked if the person handled media buys, and Ball said yes.

Williams asked if there was State Farm money in the media buy for Karmeier’s benefit.
“Unless you trace it back to State Farm, it’s not germane,” Williams said.

Ball said, “That’s part of the discovery we haven’t had.”

Williams called on Cox, Karmeier’s lawyer, and said a calendar implies a meeting on Oct. 6, 2004. He asked if a meeting occurred.

Cox said he had just received the calendar and hadn’t spoken to his client about it. He said the calendar appeared to be a list of events a candidate could attend.

He said the calendar showed two events on the same day. He said he didn’t know if Karmeier attended both and if he did, who was present.

For State Farm, Joseph Cancila of Chicago said a forum with multiple candidates took place at a State Farm field office.

He said he understood it was a meeting of agents. He said, “A number of candidates spoke for a few minutes in a general fashion.”

Ball said State Farm chief executive Ed Rust was a board member of the Chamber’s Institute for Legal Reform in 2003-04.

He said the institute targeted judicial races as their number one priority.

“It was the only race of great consequence in the state,” Ball said.

He said Murnane vowed he had nothing much to do with the campaign at all.

Williams said, “He stated that he didn’t have much of a role?”

Ball said, “He stated that he wasn’t the manager or the finance manager.”

Williams said, “That’s different from not having much of a role. There’s no doubt he had a big role. He had an enormous role. Did he ever deny it?”

Ball said they only got half truths from him.

Cox said Karmeier wants to provide information the court finds appropriate.

He asked that before deposing Karmeier, plaintiffs submit questions to Williams so he can determine if they are appropriate.

Williams said he wouldn’t rule on that. He said, “We’ll wait and see.”

After discussion of U.S. Supreme Court cases, Ball said, “We don’t have to prove Justice Karmeier was a part of the conspiracy. I think at the end of the day we will be able to prove that.”

Williams brought up the retention campaign and asked, “What about respect for the judiciary?”

He asked if plaintiffs could get the information from someone else.

Clifford then declared there would be no deposition before the election.

Williams set another hearing July 7.

After the hearing he signed an order adopting State Farm’s confidentiality order.

He withheld ruling on Karmeier’s motion, finding the parties plan to meet and confer on issues it raised.

Williams manages pretrial proceedings. Chief District Judge David Herndon presides.

(The U.S. Chamber of Commerce Institute for Legal Reform owns the Madison-St. Clair Record).