Plaintiffs in Hale v. State Farm resume Karmeier conspiracy argument; State Farm lawyer calls it a 'backtrack on backtracking'

Lawyers who retreated from an allegation that Illinois Supreme Court Justice Lloyd Karmeier conspired with State Farm to win election in 2004 have again taken up that accusation.

They disowned a statement that Gordon Ball of Tennessee made at oral argument in December, admitting that they couldn’t say Karmeier got a direct bribe.

On that occasion Ball said, “Can we prove that Justice Karmeier was in on the scheme? No sir, and we have never said that.”

Karmeier counsel Courtney Cox of St. Louis quoted Ball on Feb. 13, in a brief opposing a deposition of Karmeier.

“Plaintiffs, with no proof of their defamatory allegations about Justice Karmeier, have no good faith basis for deposing him,” Cox wrote.

“Plaintiffs cannot pursue discovery from anyone absent a valid claim against someone.”

He wrote that their claim should be defined by the allegations in their complaint.

Lead counsel for plaintiffs, Robert Clifford of Chicago, chose the complaint over Ball’s words.

“Plaintiffs’ only pleaded causes of action are the well stated and plausible claims in their first amended class action complaint, and not statements made by counsel during oral argument,” Clifford wrote on Feb. 20.

The complaint alleges that Karmeier participated in a racketeering enterprise.

It alleges that the purpose of the enterprise was to evade a $1.05 billion judgment in Avery v. State Farm.

The enterprise was created, controlled and conducted by State Farm, according to the complaint.

It further alleges that a first phase of the scheme was to recruit, finance and elect a candidate who would overturn the judgment.

In second phase, State Farm allegedly concealed facts from the Supreme Court so that Karmeier could participate in the deliberations.

Participants in the enterprise allegedly associated for the common purpose of allowing State Farm to evade the judgment.

All acts of State Farm and the enterprise were allegedly committed to support and elect Karmeier and to conceal that support.

Finally, participants allegedly agreed to join the conspiracy, agreed to commit acts, and knew the acts were part of a pattern of racketeering activity.

Avery class member Mark Hale filed the suit in federal court in 2012, proposing to represent the class Avery represented.

Hale named Ed Murnane of Illinois Civil Justice League and State Farm employee William Shepherd as defendants in the conspiracy.

He named Citizens for Karmeier as a defendant, but soon dismissed the group.

He sought triple damages and interest, for a total now near $8 billion.

State Farm moved to dismiss the suit, and District Judge David Herndon denied the motion.

State Farm petitioned Seventh Circuit appellate judges in Chicago to stop the proceedings, and they denied the petition.

Discovery then began, under Magistrate Judge Stephen Williams.

Last November, after Southern Illinois voters retained Karmeier, Hale served notice of intent to depose him.

Karmeier moved to quash the notice, and Williams granted the motion in January.

Williams allowed written questions within narrow limits.

Hale appealed the decision to Herndon, who has not touched the case for a year.

Hale also wants Herndon to allow a deposition and a subpoena that Williams quashed for State Farm vice president Robert Shultz.

Shultz represented State Farm in the Avery case, while practicing with Heyl Royster in Edwardsville.

Hale claims Shultz evaluated Karmeier and opponent Gordon Maag for an Illinois State Bar Association committee, when he should have recused himself.

When Hale served notice on Shultz, he also sought to depose evaluation committee member Alan Sternberg, a State Farm staff lawyer.

He also sought to depose committee members Stanley Tucker and April Troemper, now a circuit judge.

State Farm opposed depositions on behalf of Shultz and Sternberg, and the Illinois Bar Association opposed them on behalf of Tucker and Troemper.

At oral argument in December, Hale’s lawyers conceded that they could not depose Sternberg, Tucker or Troemper.

That counted as victory for the State Bar, but not a complete one in its view.

When Hale appealed to Herndon to allow a deposition of Shultz, State Bar counsel Michael Nester of Belleville opposed the deposition.

On Feb. 9, Nester wrote that the Bar Association responded to the appeal on its own behalf, not for Tucker and Troemper.

Nester wrote that the appeal to Herndon implicated the Bar Association’s interest with regard to the confidentiality of its evaluation committee’s proceedings.

He wrote that Williams based his order on a judicial evaluation privilege that he applied equally to all four committee members.

“By only moving to appeal the court’s ruling with regard to the deposition of Mr. Shultz, plaintiffs are effectively asking the court to issue an order which is in direct conflict with the court’s prior final order regarding the subpoena and the other three deposition notices,” Nester wrote.

State Farm counsel Patrick Cloud, of Heyl Royster in Edwardsville, opposed a deposition of Shultz on the same date.

Cloud wrote that a State Bar poll of 676 lawyers rated Karmeier at 89.42 percent and Maag at 76.41 percent, in line with the results of the evaluation committee.

He wrote that plaintiffs claimed they had hard evidence of improper motive, influence and manipulation of the evaluation.

“When challenged directly at the hearing on the motions to quash, this supposed hard evidence turned out to be a fabrication,” Cloud wrote.

“Remarkably, plaintiffs appear to backtrack on their backtracking, and now suggest that Mr. Shultz was part of a scheme to defraud, even though plaintiffs admitted to Judge Williams they had no evidence that Mr. Shultz was part of such a scheme.”

He wrote that 17 committee members evaluated Supreme Court candidates.

“One member obviously cannot outvote 16 others,” he wrote.

“Plaintiffs use the occasion of their appeal to mischaracterize the nature of their ever evolving claims, which are not remotely close to those asserted in the complaint.”

Clifford responded for Hale on Feb. 17, arguing that State Farm mischaracterized the nature of the case and that the State Bar should stay out of the proceedings.

He wrote that Williams ordered all the relief the State Bar requested.

“One cannot usually enforce someone else’s legal rights,” he wrote.

While Herndon considers whether to allow depositions of Karmeier and Shultz, Williams continues pushing to resolve discovery disputes.

At a hearing on Feb. 25, he ordered lawyers to meet at least three hours a week until the next hearing, which he set for March 26.