Madison - St. Clair Record

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Madison County circuit court served as class action mecca until CAFA; President Bush called for reform in Collinsville

By The Madison County Record | Sep 5, 2014


Many local lawyers and judges reject a "Judicial Hellhole" designation that the American Tort Reform Association first branded on Madison County in 2003.

Whether the label is fair or not depends on who you ask. But how was it derived?

When the Record first began publishing in September 2004, class action lawyers at the Madison County courthouse were developing consumer actions out of a wide range of transactions from across the nation.

Thomas Maag of the Lakin firm, son of appellate judge Gordon Maag, sued multiple retailers for refusing to make change on gift card purchases. One suit involved a grievance of less than a dollar.

Lakin lawyers sued dozens of mortgage lenders, claiming each one charged a few too many dollars for a fax, a courier, a record search, or some other service.

Lakin lawyers also sued health insurers and claim handlers over adjustments of a few dollars.

Stephen Tillery, who had won a $10 billion class action judgment in Madison County in 2003, sued mutual funds over microscopic variations in timing of transactions.

Lanny Darr sued his auto insurer on behalf of himself, for renting him a low class vehicle while he awaited repair of his high class vehicle.

The lawyers may not have recognized that their extraordinary claims which reaped mammoth successes for them and very little for plaintiffs helped destroy public faith in class actions across America.

The Manhattan Institute for Policy Research had turned a spotlight on Madison County in 2001, to make a case for federal jurisdiction over all class actions.

The institute found that the county ranked third in class action filings nationally, behind Cook County and Los Angeles County.

It also found that:

- 63 percent of the named plaintiffs were county residents;

- Lawyers filed “cut and paste” complaints against nine auto insurers in one week, claiming each one committed fraud in calculations of total losses;

- The impetus for class actions generally came from lawyers "eager" for substantial fees, not from individual consumers seeking redress for grievances;

- A firm boasted on its website that it had brought 24 nationwide class actions in Madison County;

- A suit against Sprint on behalf of everyone who ever got disconnected on a cell phone;

- Defendants removed some cases to federal courts for consolidation into multi district proceedings, but that lawyers went to great lengths to avoid removal; and

- This strategy pitted federal and state judges against each other on the appropriateness of class certification or proposed settlements.

In 2002, the New York Times panned Madison County justice.

Boston University ethics teacher Susan Koniak told the Times that judges approved settlements that might benefit plaintiff lawyers and defendants more than plaintiffs.

"Madison County judges are infamous for approving anything put before them, however unfair to the class or suggestive of collusion that is," Koniak said.

The paper found a settlement providing television owners with $25 and $50 coupons on future purchases, while providing $22 million to lawyers.

Washington lawyer John Beisner told the Times that, "It's a capital transfer from defendants to plaintiffs' lawyers."

The Times reported an angry outburst from Madison County circuit judge Nicholas Byron.

"This court will not be affected by any public relations output in this case or any other case,” he said. “This court will not be intimidated."

In those days assignment of a case to Byron or judge Philip Kardis meant almost certain success for the plaintiff, and assignment to judges Andy Matoesian and Dan Stack meant likely success.

No plaintiff got a judge he or she didn’t want. When assignments fell to circuit judge George Moran, plaintiffs moved for substitution.

Byron most notably found in 2003 that Philip Morris owed $10 billion for tricking smokers into expecting health benefits from light and low tar cigarettes.

Plaintiffs filed 106 class actions in Madison that year.

President George Bush showed up in Madison County in 2005, and after his visit Congress passed a law that would direct most new class actions to federal courts.

The law didn’t ruin class litigation in Madison County, for lawyers there had piled up more than 200 pending cases that they could develop for years.

The ruin of class actions in state court came to pass anyway, when the Illinois Supreme Court reversed Byron’s judgment and a billion dollar Williamson County judgment against State Farm.

The State Farm decision barred courts from applying Illinois consumer laws in other states, effectively ending all nationwide class actions in Illinois courts.

The Court decision hit Tom Lakin hardest because his firm pursued the most class actions.

The firm further weakened when federal prosecutors charged high profile lawyer Gary Peel with bankruptcy fraud, obstruction of justice and child pornography.

Federal prosecutors then charged Lakin with drug and sex crimes.

Jurors would convict Peel, and Lakin would bargain a guilty plea only on the drugs.

Tom’s son Brad Lakin carried on the class action practice, but the tide had turned.

When a defendant in federal court pleaded that class certification would bankrupt it, Chief Judge David Herndon told Lakin lawyers it wasn’t a judge’s job to bankrupt companies.

A Lakin lawyer said the defendant deserved it, but Herndon ruled otherwise.

When a Lakin lawyer in Madison County called for class certification no matter how small the claim, he stuck to the argument even when the judge whittled it down to a penny.

Byron retired in 2006. Stack certified three class actions on his way out, in 2007, but his actions did not survive appeals.

All stayed quiet on the class action front for years, but the losers of the Supreme Court decisions currently pursue second chances to win their cases.

Losers in the Philip Morris case seek reinstatement of their judgment at the Supreme Court, and losers in the State Farm case seek recovery under federal racketeering law.

The cases have intertwined, as lawyers suing State Farm and those suing Philip Morris both assert privilege over documents subject to a State Farm subpoena.

Brad Lakin joined Tillery in objecting to production of a researcher’s documents on Philip Morris, revealing for the first time the Lakin firm’s connection to the case.

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Organizations in this Story

Illinois Supreme CourtManhattan Institute