$9 billion claim against State Farm gets class certification nod from Herndon

By Record News | Sep 20, 2016

SPRINGFIELD – As sports metaphors go, Illinois Supreme Court Justice Lloyd Karmeier's recent election as the state's next chief justice was a touchdown, but lawyers in the 13th year of a crusade against him on Friday had to settle for a field goal.  

Karmeier got his boost on Sept. 12, when his colleagues chose him as their chief.         

His foes got a lesser boost when U.S. District Judge David Herndon certified a $9 billion class action over Karmeier’s election in 2004.

Karmeier’s achievement may count for more because his Court settled the question of his integrity, while that question remains open in Herndon’s court.  

Herndon found that a suit against State Farm plausibly alleged that the insurer secretly supported Karmeier in order to overturn a $1 billion judgment.  

That judgment followed a verdict of Williamson County jurors, finding State Farm supplied inferior parts for crash repairs.  

The Supreme Court reversed the judgment in 2005, after Karmeier’s election.  

In the same year it reversed a judgment ten times as great against Philip Morris.  

Lawyers have claimed ever since that State Farm and Philip Morris concealed contributions to Karmeier by funneling cash through other channels.  

Lawyers who lost the Philip Morris judgment tried twice to restore it at the Illinois Supreme Court on that theory, and they lost both times.  

At no point did any other Justice protest against Karmeier’s participation or recommend his disqualification.  

In recent proceedings his colleagues declined his offer to make that decision.  

On the other hand, lawyers who lost the State Farm judgment gave up on the Illinois Supreme Court and turned to U.S. district court.  

The lawyers filed a racketeering suit against State Farm in 2012, seeking to recover the judgment with triple damages and interest.  

They also sued Illinois Civil Justice League director Ed Murnane and State Farm employee William Shepherd.  

They proposed to certify lead plaintiff Mark Hale of New York state to represent a new class identical to the old Williamson County.  

If the clerk had assigned the case to District Judge Patrick Murphy, he likely would have recused himself.  

After all, he filed the original complaint, Avery v. State Farm, in Williamson County.  

Instead, the clerk assigned it to Senior Judge William Stiehl.  

Stiehl recused himself, and the clerk reassigned it to Herndon.  

From the standpoint of judicial philosophy and background, Murphy and Herndon have similar backgrounds.  

Both graduated from Southern Illinois University in 1974, Murphy at Carbondale and Herndon at Edwardsville.  

Both earned law degrees at Carbondale, Herndon in 1977 and Murphy in 1978.  

Both succeeded as injury lawyers, Murphy in private practice at Marion and Herndon in partnership with Tom Lakin of Wood River.  

Both reached the federal bench without working as a circuit judge.  

Herndon spent six years as a Madison County associate judge before President Clinton nominated him.  

Murphy stayed in private practice, specializing in injuries and class actions, until Clinton appointed him.  

In 2012, when Hale sued State Farm, Murphy and Herndon had presided in the same court for 14 years.  

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

State Farm moved for reconsideration, and he denied it.  

State Farm petitioned the Seventh Circuit of Appeals in Chicago to halt the proceedings, and the Seventh Circuit denied the petition.  

The case slipped away from Herndon in 2014, for a short while.  

The clerk assigned it to a new district judge, Staci Yandle, but she recused herself on the same date and the case returned to Herndon.  

That October, with Karmeier ready to stand for retention, lawyers in five states raised $2,070,000 for a television campaign accusing him of selling justice.  

Robert Clifford of Chicago, Hale’s lead counsel, contributed $250,000.   

Fifth District voters provided the necessary 60 percent to keep him on the court.  

Last year, Herndon pondered class certification while Magistrate Judge Stephen Williams managed discovery disputes.  

When plaintiff lawyers moved to depose Karmeier, Williams denied the motion and ruled that they could serve a limited set of written interrogatories on him.  

They appealed to Herndon, who ruled that they could depose Karmeier.  

While Murphy’s old case persists at his former court in its second form, he litigates injury suits in front of his former colleagues.  

Since retiring in 2013, he has filed six suits in district court.  

Defendants have removed two others to district court from Williamson and Franklin counties.  

The clerk assigned four of the eight suits to District Judge Nancy Rosenstengel, who recused herself in all four.  

The clerk assigned one to Senior Judge Phil Gilbert, who exercised his prerogative as senior judge to pass it along.  

The clerk assigned three cases to District Judge Michael Reagan, who like Murphy had joined the court after succeeding as a plaintiff lawyer.  

Reagan also picked up the case Gilbert dropped, and two from Rosenstengel.  

Reagan has set two trials for Murphy clients, one in October on an overtime claim and one in April on an insurance dispute.  

Three Murphy clients have settled claims in Reagan’s court, at a brisk average of seven months from complaint to conclusion.

Murphy has lost once in Reagan’s court, on a claim that Air Evac medical helicopter service improperly billed a patient.  

Herndon plans a December trial for Murphy client George Taylor, who claims a mistake by Williamson County state’s attorney Sean DeMello cost him prison time.  

Taylor seeks $9 million in damages.  

In a job retaliation case that neither Rosenstengel nor Yandle wanted, Magistrate Judge Reona Daly plans a May trial.  

Plaintiff Michael Francescon seeks $4.5 million.

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