Strasen v. Allstate--a class action glacier, colossal beacon

By Steve Korris | Nov 9, 2005

Four years before the Illinois Supreme Court knocked the props out from under class action attorneys with its decision in Avery vs. State Farm, the Court ignored pleas to recognize the dangers of class actions.

Troy Bozarth

Gordon Broom

Four years before the Illinois Supreme Court knocked the props out from under class action attorneys with its decision in Avery vs. State Farm, the Court ignored pleas to recognize the dangers of class actions.

In 2001, the Court received a motion from Allstate Insurance, seeking to vacate Madison County Circuit Judge Nicholas Byron’s certification of a class action.

Plaintiff Dennis Strasen had complained that Allstate disallowed some of his medical bills. Byron certified him to represent a nationwide class.

As friends of the court, the National Association of Insurance Commissioners and the Chamber of Commerce took Allstate’s side.

“The practical effect of this class certification has reached far beyond the borders of Illinois in contravention of established principles of constitutional and regulatory law,” the insurance commissioners wrote.

The Chamber wrote, “If left in place, the nationwide class certification order will foster the trend and stand as a beacon signaling that Illinois courts are uniquely receptive to a form of litigation which is, by its nature, unsettling to the commercial environment and which thereby endangers Illinois’ reputation as a good place to do business.”

Bubble grows

The Supreme Court denied the motion without comment on Dec. 13, 2001, pumping new air into the class action bubble.

This year, after the warnings proved prophetic, the Supreme Court threw out a $1.2 billion class action verdict in the Avery case from Williamson County.

Avery has gone away for good, but Strasen’s suit grinds on like a glacier. In its course, it has picked up five more plaintiffs, including two refugees from Cook County justice.

Discovery, after creeping for two years, came to a full stop this summer after Allstate withheld documents it considered confidential.

Strasen’s lead attorney, Jeffrey Millar of the Lakin Law Firm of Wood River, moved Sept. 23 to compel Allstate to produce the documents. In the alternative, Millar wrote, Byron could read them in chambers.

Byron heard arguments on the motion Monday, Nov. 7. No decision appeared on the docket Tuesday.

Strasen’s suit started in 1999. Brad Lakin signed the complaint. At the time, his firm had just begun to explore class action possibilities.

Lakin wrote that Strasen incurred thousands of dollars of medical bills from a 1998 auto accident. Lakin wrote that Allstate denied full payment by manufacturing a dispute over the meaning of “reasonable and necessary.”

An attached bill audit showed a $1,074 reduction for chiropractic treatments in 1999.

Allstate moved to dismiss, arguing that the case was already pending in Cook County with the same proposed plaintiff class and the same defendant.

Its attorneys deposed Strasen in 2000. One asked him if he knew up front that his attorney would pay his chiropractor. Strasen said, "yes."

An Allstate attorney asked how he intended to handle the cost of the suit. Strasen said, “I don’t have to pay for it.”

Lakin amended his complaint to claim that Allstate’s improper reduction of claims made its policies worth less than the amounts of its premiums.

In a memo opposing the motion to dismiss, Lakin described the amended complaint as “two cases combined into one.”

He proposed to certify two classes – everyone that Allstate fraudulently induced to buy insurance and everyone whose claims Allstate reduced.

Warming up

Attorney Edward Joyce of Chicago, representing Strasen at a hearing, said he would not ask for full refunds of premiums because the class got some benefit from them. He asked the difference between what they paid and the value of what they got.

Attorney Kurtis Reeg of St. Louis, for Allstate, said it was unclear whether Strasen’s treatments related to an accident or to his carpal tunnel and arthritis.

Allstate attorney Gordon Broom, of Edwardsville, kept still until Joyce said Strasen paid the disputed charges out of his own pocket.

Broom said Strasen was paid $17,000 in a settlement. “The man was rear ended by a truck,” he said. “The insurance company paid it. The tortfeasor paid it.”

Broom grew warmer.

“The man never even saw the bills,” he said. “He didn’t even know if they were reasonable or not. This man was never injured."

Joyce responded, “The plaintiff received a recovery pursuant to a settlement. That is his money.”

Broom countered, “We would have got it back. We have a lien against it. I mean that’s how preposterous this whole thing is.”

Byron certified a nationwide class on Sept. 10, 2001.

Broom moved the Supreme Court to vacate the order, writing that Byron abused his discretion.

Suddenly, plaintiffs in the parallel case in Cook County tried to hijack Strasen. They asked the Supreme Court to consolidate his suit into their suit.

Strasen’s attorneys and the Chicago attorneys reached an agreement. Strasen would not join the Chicago team. The Chicago team would join him.

The Cook County plaintiffs withdrew their Supreme Court motion. They moved to intervene as plaintiffs in Madison County, and Byron allowed the motion.

Nine days later, the Supreme Court denied Allstate’s motion to vacate Byron’s class certification order.

Class certification, new plaintiffs, new attorneys, and Supreme Court approval should have given the suit great momentum, but something went wrong.

The takeover

At a hearing in 2002, attorney William Harte of Chicago said Richard Burke of the Lakin firm had told him he was not on the case.

“I’ve been around a few years, judge,” Harte said. “I understand what is happening.”

Harte said, “They simply take over the case.”

Another Chicago attorney composed a list of objections and sent it to Byron with records attached.

Millar moved Byron to seal the records. Millar moved for a hearing in chambers and Byron granted it.

In chambers, attorney Troy Bozarth appeared for Allstate. At some point, Byron told him to leave. Bozarth objected but Byron ordered him out.

Byron ordered the Chicago objections and records withdrawn from the court file and held them under seal. He sealed the portion of the transcript after Bozarth left.

On Nov. 15, 2002, Byron ordered publication of notice to the class in People, Parade, Sports Illustrated, National Geographic, and six health publications.

Millar amended the complaint in 2003, adding three more plaintiffs. Allstate moved to dismiss, arguing that Millar presumed all bills reasonable and necessary.

More than a year later, Byron overruled Allstate’s motion to dismiss.

Three times this year, the parties appeared for case management conferences and agreed to continue them. Byron has set the next case management conference Dec. 21.

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