Plaintiffs in RICO case now accuse State Farm of corrupting ISBA committee

Plaintiffs who accuse State Farm of corrupting the Illinois Supreme Court now accuse State Farm of corrupting the Illinois State Bar Association.

According to Chicago lawyer Stephen Blonder, three lawyers with connections to State Farm evaluated Illinois Supreme Court candidates for a bar association committee in 2004.

“None recused themselves,” Blonder wrote on Sept. 30, in a racketeering suit that Mark Hale of New York and Todd Shadle of Texas filed in U.S. district court.

Blonder wrote that the committee rated Lloyd Karmeier as highly qualified, while rating opponent Gordon Maag as qualified.

“It is fair to ask whether the ISBA would have given Judge Karmeier the same recommendation had it known that State Farm had packed the committee, vetted and recruited Judge Karmeier, and was financing and controlling his judicial campaign,” he wrote.

“State Farm’s participation compromised the impartiality of the ISBA’s judicial evaluation process, misleading all who relied on its ratings to cast their vote, including the public at large.”

Hale and Shadle claim State Farm fraudulently secured Karmeier’s election so the Supreme Court would overturn a $1 billion judgment from a class action.

In that action, Avery v. State Farm, Williamson County jurors found that State Farm supplied inferior automobile parts for crash repairs.

Fifth District appellate judges - one of whom was Gordon Maag - affirmed the judgment in 2001, and State Farm took the case to the Supreme Court.

The case remained on the Court docket in 2004, when Karmeier defeated Maag.

In 2005, the Supreme Court overturned the judgment.

Avery tried to reopen the case in 2011, but the Supreme Court turned him down.

Hale and Shadle filed the racketeering suit in 2012, claiming State Farm concealed the extent of its involvement in Karmeier’s campaign in 2005 and 2011.

They seek to recover the judgment with interest and triple damages, for a total near $8 billion.

They want to see records of communications between State Farm and its lawyers, arguing that State Farm forfeited the privilege that would normally protect those records.

“A client may abuse the attorney-client relationship and forfeit the corresponding privilege by using the lawyer to further a crime or fraud,” Blonder wrote.

“State Farm used its lawyers to fraudulently conceal and misrepresent its extraordinary involvement in Judge Karmeier’s campaign and election.

“State Farm has committed mail fraud and fraud upon the Illinois Supreme Court, and discovery of State Farm’s lawyers will further demonstrate that.”

Hale and Shadle previously claimed evidence of misconduct on the part of State Farm lawyers, and Blonder offered the bar association action as further evidence.

He wrote that Robert Shultz, who tried the Avery case and represented State Farm on appeal, actively participated in the association’s judicial evaluation committee.

He wrote that Shultz, formerly with Heyl Royster in Edwardsville, is a State Farm vice president in charge of the litigation division of the corporate law department in Bloomington.

He wrote that State Farm associate general counsel Alan Sternberg was on the committee.

He wrote that Stanley Tucker of Carthage, whose firm State Farm retains as local counsel, was one of two committee members who investigated Karmeier’s credentials.

While Blonder denied privilege for communications between State Farm and its lawyers, he invoked it for communications between his legal team and researcher Doug Wojcieszak.

Hale and Shadle have withheld 930 of Wojcieszak’s documents from State Farm.

“Documents are not discoverable simply because they were produced by investigators and not lawyers,” Blonder wrote.

“Investigators are professionals whose work is recognized as an essential component of legal services.”

State Farm argues the documents will prove that a statute of limitations ran out before Hale and Shadle filed the suit.

Lawyers from another case have also withheld hundreds of Wojcieszak’s documents.

Stephen Tillery, who seeks to preserve a $10 billion judgment against Philip Morris at the Supreme Court, asserted privilege over research that State Farm sought by subpoena.

Lawyers Brad Lakin, John Simmons, Jeffrey Cooper, and Randall Bono, who previously had not identified themselves with the Philip Morris case, joined Tillery in asserting privilege.

The State Farm and Philip Morris cases have collided because lawyers suing State Farm attribute to it the same indirect contributions that those suing Philip Morris attribute to it.

Magistrate Judge Stephen Williams plans a hearing on privilege disputes on Oct. 21.

He manages discovery for Chief District Judge David Herndon, who presides over the case.