Judge: Hale plaintiffs not able to connect dots on money trail from State Farm to Karmeier campaign

Plaintiffs claiming State Farm fraudulently secured the election of Illinois Supreme Court Justice Lloyd Karmeier haven’t produced enough evidence to justify invasion of State Farm’s privacy, U.S. Magistrate Judge Stephen Williams ruled on Nov. 25.

Williams blocked the access of plaintiffs to State Farm’s communications with its lawyers, rejecting their plea that the records could reveal crime and fraud.

“Plaintiffs are unable to show, at this time, that their allegations that State Farm funneled massive amounts of money to the Karmeier campaign is founded in fact in the record,” Williams wrote.

“Plaintiffs allege that State Farm contributed in excess of $4 million to Karmeier’s campaign, but at this time plaintiffs are not able to connect the dots on the money trail from State Farm to the Karmeier campaign,” he wrote.

He wrote that plaintiffs didn’t show that State Farm picked Karmeier or provided massive contributions and ran his campaign, as they contend.

“Plaintiffs’ allegations are not grounded in any evidence supporting their claims,” Williams wrote.

He wrote that while further discovery might lead to the facts plaintiffs need to prove their claims, “the evidence presented thus far does not show a fraud on State Farm’s part which would allow plaintiffs to override State Farm’s attorney client privilege.”

Plaintiffs Mark Hale and Todd Shadle belonged to a class of policy holders who won a $1 billion judgment in Williamson County in 1999, but lost it at the Supreme Court in 2005.

Plaintiffs tried to reopen the case at the Supreme Court in 2011, claiming they found new evidence, but the Supreme Court sent them away.

Hale and Shadle filed a racketeering suit against State Farm in federal court in 2012, seeking $7 billion in damages, civil penalties and interest.

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

They claimed State Farm concealed the full extent of its involvement in Karmeier’s campaign from the Supreme Court in 2005 and 2011.

At a hearing in October, plaintiff lawyers told Williams they had gathered enough evidence of fraud to merit an exception to attorney client privilege.

One of the biggest pieces of their theory fell apart right in front of Williams.

They claimed State Farm chief executive Ed Rust voted as a U.S. Chamber of Commerce director to send money to Karmeier, but State Farm lawyers showed it couldn’t have happened.

Williams tossed out another piece of their theory in his Nov. 25 order, finding they didn’t back up their claim that Murnane managed Karmeier’s campaign.

Williams wrote that while Murnane stated in email that he was senior advisor or de facto manager, at that point in time Karmeier had not announced his candidacy.

“He did not announce his candidacy until a full month later and Steve Tomaszewski was ultimately selected as Karmeier’s campaign manager,” Williams wrote.

He wrote that State Farm adequately explained statements of its lawyers in its briefs of 2005 and 2011 as advocacy of positions on the evidence at the time.

He wrote that the 2005 brief merely commented on evidence and does not indicate fraud.

He wrote that plaintiffs were clearly mistaken about Rust sending money to Karmeier.

“But setting that mistake aside, both sides have generated examples of advocacy based on a record," Williams wrote. "A record that at this point is very thin.”

(Editor's note: The Madison-St. Clair Record is owned by the U.S. Chamber Institute for Legal Reform).