Lawyers for four million plaintiffs suing State Farm for $8 billion must explain what they would do with the money.
At a hearing on April 28, U.S. Magistrate Stephen Williams gave Mark Hale, Todd Shadle and Marc Covington 10 days to set forth a theory of damages.
Williams set the deadline after State Farm counsel Joseph Cancila of Chicago said Shadle, a Texas lawyer, could not identify his damage in a deposition the previous Friday.
Hale, Shadle and Covington seek to recover a $1 billion judgment that lead plaintiff Michael Avery won at trial in Williamson County, in 1999.
Jurors held that State Farm supplied inferior parts for crash repairs.
The Illinois Supreme Court reversed Avery in 2005, in a decision Shadle, Hale, and Covington now challenge as a violation of racketeering law.
They claim State Farm tainted the Supreme Court in 2004, by secretly starting and sustaining the successful campaign of Justice Lloyd Karmeier.
They would multiply the original billion by adding interest at nine percent and by tripling damages as racketeering law provides.
Eight billion among four million would average $2,000 per plaintiff, but the lawyers haven’t decided whether to split it equally or not.
At the hearing, plaintiff attorney Steven Blonder of Chicago said the Avery court would have allocated damages through a claims process.
Williams asked the size of the class. Blonder said, “About 4.2 million.”
State Farm counsel Joseph Cancila of Chicago said Avery alleged specification damages for driving an inferior car, installation damages, fraud, and extra payments.
State Farm counsel Harnaik Kahlon of Chicago waved a deposition and said Shadle changed his testimony in certain respects.
Kahlon said, “We just need to know what theory is, your honor.” He said he asked Shadle, “What piece of the judgment is your damage?”
Blonder said, “What each individual plaintiff had was never quantified.” He said each Hale plaintiff has an interest in the Avery judgment.
Williams said, “I understand how you are looking at it. I’m asking a different question.”
He said one class member has a hood and one has a fender, and he asked, “Isn’t that the information you are looking for?”
Blonder said, “Not necessarily.” He said they could divide the new judgment equally or allocate the Avery judgment.
Williams said, “That’s what they are asking. Which way are you going?”
Blonder said they should deal with allocation, “when we get there.”
Williams said, “You are obligated to advance a theory of damages.”
Blonder said, “We have.” He said they could either divide it by class or another way.
Williams said, “Do it.”
Blonder said, “Why now? How is it an issue now?”
Cancila said, “It is absolutely relevant now.”
Williams said, “A damages model is absolutely relevant here. Damages are always put forward at the beginning of a case....If you want to revise it, that’s okay.”
Blonder said, “We respectfully disagree.”
Williams said, “The final piece is important. It’s how damages will be calculated.”
Blonder said, “Is that the horse we have to ride all the way?”
Williams said, “I just told you, it will be subject to change.”
He gave Blonder 10 days.
He signed an order providing that, “To the extent that plaintiffs have proposed two alternative methods of calculating damages, plaintiffs shall disclose both of those theories to State Farm.”
He set the next hearing May 29.
Rule 26 of federal procedure requires a plaintiff to disclose the computation of each category of damages claimed.
A plaintiff must also make available the basis of each computation, “including materials bearing on the nature and extent of injuries suffered.”