Herndon clarifies Hale v. State Farm, opening door beyond $9 billion dispute

By Record News | Apr 3, 2017

U.S. District Judge David Herndon, who last year certified an exact replica of a 20th Century class against State Farm in state court, now changes the order to make the class bigger.

Herndon signed a clarification order in March, adding three words to the class definition.  

He wrote that, “the omission of the language ‘or specified for’ in the class definition is clearly a scrivener’s error.”  

Those three words open a door for claims beyond the $9 billion already in dispute.  

Plaintiffs claim State Farm fraudulently secured Lloyd Karmeier’s election to the Supreme Court in 2004, in order to overturn a judgment from Williamson County.  

Jurors there rendered a verdict for lead plaintiff Michael Avery in 1998, finding State Farm provided auto body parts that the original manufacturers had not made.  

Associate judge John Speroni entered judgment exceeding $1 billion, and Fifth District appellate judges affirmed him in 2001.  

State Farm appealed to the Supreme Court, where years passed without decision.  

In 2004, Fifth District voters picked Karmeier over Fifth District Justice Gordon Maag, author of the opinion that affirmed Speroni.  

In 2005, the Supreme Court reversed the Fifth District in a decision that knocked the props out from under class actions in Illinois.  

The Court denied rehearing, and the U.S. Supreme Court denied review.  

In 2011, Avery petitioned the Illinois Supreme Court to review new evidence of corrupt connections between State Farm and Karmeier.  

The Justices denied review.  

In 2012, lawyers who formerly represented Avery sued State Farm in federal court on behalf of lead plaintiff Mark Hale of New York State.  

Hale sought to recover the amount of the judgment, plus interest, with triple civil damages under federal racketeering law.  

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

State Farm petitioned the Seventh Circuit appellate court in Chicago to stop the proceedings, and the Seventh Circuit rejected the petition.  

Herndon certified a class last September, and ordered preparation of a class notice.  

Plaintiff counsel Steven Blonder of Chicago moved for clarification on Feb. 23, “in order to generate the most accurate class notice.”  

He quoted the definition of the Avery class as all persons in the United States except Arkansas and Tennessee who, between July 28, 1987, and February 24, 1998, were insured by State Farm, made a claim for repairs, “and had non-factory authorized and/or non Original Equipment Manufacturer crash parts installed on their vehicles or else received monetary compensation determined in relation to the cost of such parts.”  

Blonder wrote that plaintiffs proposed a class who had such parts installed on or specified for their vehicles.

“Nevertheless, the definition included in the conclusion of the class certification order omits the phrase relating to the specification of non-OEM crash parts, and instead reverts to the original Avery class definition,” he wrote.  

State Farm counsel Patrick Cloud of Edwardsville opposed the motion on March 3, writing that Hale’s complaint specifically alleged a class identical to Avery.  

Cloud wrote that Herndon’s certification order adopted the Avery definition verbatim, and that the motion would improperly give an interest in the Avery judgment to persons who weren’t Avery class members.  

He described it as a belated motion seeking reconsideration, with no excuse for waiting months to seek it.

“Plaintiffs do not contend that they only just learned of the class definition language, nor do they offer any other reason for their 100 day delay,” Cloud wrote.

“The litigation in Avery encompassed claims for specification damages where State Farm did not pay for an OEM part, but a class member still received an OEM part from his or her body shop.

“It did not encompass claims where State Farm’s initial estimate included non-OEM parts, but State Farm subsequently paid for OEM parts.”  

He wrote that Blonder’s modification would award damages that the jury didn’t award, the trial court didn’t enter, and the appellate court didn’t affirm.  

Herndon granted the motion three days later.  

On March 21, State Farm petitioned the Seventh Circuit for review.

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