State Farm could have argued other companies wanted Karmeier on court because of asbestos, class actions

By Record News | Sep 11, 2018

EAST ST. LOUIS – U.S. District Judge David Herndon gave class action lawyers many tools to damage Illinois Supreme Court Chief Justice Lloyd Karmeier and State Farm, but on the eve of trial he opened a hole in the class’s armor. 

On Aug. 30, the Thursday before trial, he granted a motion allowing State Farm to offer its version of Karmeier’s election in 2004. 

The ruling would let State Farm argue that it wasn't just one lawsuit that formed the basis of support for Karmeier  - other companies supported Karmeier because of the volume of litigation being filed in Southern Illinois – asbestos and class actions.  

Madison County has long been a mecca for asbestos litigants; the circuit court continues to host the largest docket in the nation. Madison County also was the nation's class action capitol during the 2004 election season, having set the stage for enactment of the Class Action Fairness Act (CAFA) in 2005 which moved big class actions into federal court.


Herndon  

Herndon's pre-trial ruling meant that State Farm could have introduced evidence that would contradict the allegation that it secured Karmeier’s election for the sole purpose of overturning the $1 billion Avery judgment from Williamson County. 

During the prior week, Herndon also held that he would have allowed testimony about contributions that an agent of class counsel “double” attributed to both State Farm and Philip Morris. 

While Herndon offered State Farm some prospect of making its case, he stuck with a plan that could have placed Karmeier in a negative light to jurors. 

Class counsel intended to call Karmeier to the stand on the second day of trial, Sept. 5, and Herndon would have allowed leading questions. 

A leading question typically requires a yes or no answer. 

Federal rules allow it not only with a hostile witness but also with an “adverse party,” as a judge might define that.

At the end of the hearing, Karmeier’s attorney Anthony Martin argued for reconsideration on the leading question ruling.

“I’m just a little confused on whether indeed it is appropriate for any counsel to be leading him on direct examination,” he said. 

Herndon denied reconsideration.

“I thought this was clear,” Herndon said. “Maybe it wasn’t. 

“It was due to his association, by the evidence that I’ve looked at so far, due to his association with the defendants and my anticipation preemptively that he would not be receptive to simply answering the questions asked by a plaintiff’s counsel if they asked him in a non leading fashion.” 

At trial, Herndon would have restricted Karmeier and State Farm in other ways. 

He wouldn’t have let them tell jurors that class counsel contributed to the campaign of Karmeier’s opponent in 2004, Gordon Maag. 

He wouldn’t have let them tell jurors that class counsel paid for a campaign to defeat Karmeier’s retention in 2014. 

He wouldn’t have let them tell jurors that Fifth District voters retained him. 

He wouldn’t have allowed character witnesses for Karmeier. 

Herndon reserved until trial a ruling on whether the class could call him corrupt. 

Yet, lawyers who had sought an opportunity to put Karmeier on the stand for six years passed it up for a fortieth of their claim, $250 million out of $10 billion, when the case settled on the day trial was to begin on Sept. 4

In the original judgment, lead plaintiff Michael Avery won more than $1 billion on a claim that State Farm specified and provided inferior parts for crash repairs. 

Fifth District appellate judges affirmed the judgment, and State Farm appealed. 

The Supreme Court heard argument but had not ruled when Karmeier and Maag ran for the Fifth District’s seat on the high court. 

Maag had written the Fifth District opinion affirming the judgment. 

Voters chose Karmeier in 2004. 

In 2005, all six Justices sitting on the Avery appeal reversed the judgment. 

Karmeier and three others dismissed it entirely, while two Justices would have remanded it for division into smaller classes. 

Avery sought review at the U.S. Supreme Court but didn’t get it. 

In 2011, Avery’s national legal team petitioned the Illinois Supreme Court to reopen the case. 

They claimed they found new evidence of State Farm’s secret support, but the Justices denied their petition. 

They sued State Farm in district court in 2012, for lead plaintiff Mark Hale, claiming the election constituted a fraud in violation of racketeering law. 

They sought to recover the judgment with interest and triple damages. By the time of trial, that amount approached about $10 billion. 

For the final pretrial hearing on Aug. 30, class counsel brought along professor Stephen Saltzburg. 

“The conspiracy is all about State Farm giving money to other organizations so they, in our view, could funnel them to the Karmeier campaign and in the process conceal State Farm’s participation so that State Farm could represent falsely to the Illinois Supreme Court that it wasn’t involved in the Karmeier campaign and Justice Karmeier could sit in the Avery case,” Saltzburg said. 

“That’s our case and it’s laid out in enormous detail. The money doesn’t get traced any better than this.” 

Herndon said he determined on reading summary judgment motions that he had a reasonable basis to believe a conspiracy had been proven. 

Then, State Farm won a couple of rounds for a change. 

First, Herndon asked class counsel Steven Blonder about a motion from State Farm to classify investigator Doug Wojcieszak as an agent of plaintiffs. 

Wojcieszak wrote the separate reports connecting the same contributions to State Farm and Philip Morris.

Blonder told Herndon that State Farm sought to use Wojcieszak’s deposition and statements as admissions by a party opponent or statements against interest. 

He said the involvement of class counsel Robert Clifford ended in February 2006. 

He said Clifford wasn’t involved in Avery’s petition in 2011. 

“He’s not counsel of record when this lawsuit is filed in 2012,” Blonder said. 

He said that in the interim period, Wojcieszak worked for Clifford separately with respect to tort reform issues in the state and other matters. 

State Farm counsel Nick Kahlon said, “I’m struck hearing counsel make those representations to the court today because they’re demonstrably untrue.” 

He read email messages among Clifford, Wojcieszak, and others on the case. 

He read a message from Wojcieszak to partner Tom Denton about the petition of 2011, telling him he wouldn’t see Clifford as a signer. 

Kahlon read, “Bob and Clifford law offices are still on the case sharing expenses and any possible settlement or verdict, but they have dropped Bob and Clifford law offices off in a public sense because of all the money Bob gave to Kilbride’s retention campaign.” 

Herndon said, “Does a lawyer have to have entered an appearance in court to be therefore the attorney of record, as you say it, in order for the agency law to apply with respect to somebody that’s doing work for that attorney?” 

Clifford said his involvement began in 2002; he argued the appeal in 2003. 

“I’m very proud of the fact that I hired Doug Wojcieszak and his partner Tom Denton to help me put together what would ultimately have been a document that was able to be used by lawyers in this state to know about the dark money that was used in the campaign to elect Justice Lloyd Karmeier, Justice Rita Garman, the money that was used to attack Justice Tom Kilbride, the dump Kilbride campaign,” Clifford said. 

Herndon asked who Wojcieszak worked for when the emails were generated. 

Clifford said, “He was working for Gordon Ball and I’m sure at times also for me, but in terms of the work that he was doing to develop what he was doing with Gordon Ball, that was on Gordon Ball’s dime, not mine.” 

Herndon said, “The evidence demonstrates that he was an employee throughout and an agent of not only the Hale plaintiffs but also the Avery plaintiffs.” 

Herndon settled a dispute over telephone records and said, “So the next one has to do with asbestos related lawsuits.” 

Clifford said, “There’s a big relevancy issue here, that they ought not to be able to refer to those at all under any circumstances. We don’t know what the asbestos docket has to do with this case under any circumstances.” 

State Farm counsel Ronald Safer said asbestos cases and pending class actions had to do with companies with seats on the boards of organizations that plaintiff expert Thomas Myers had analyzed. 

He said it was relevant to Myers whether other entities had axes to grind with regard to the justice system and therefore an interest in the election. 

“We picked a couple like General Motors that had, I think, over 2,000 asbestos cases,” Safer said. 

“Asbestos, as your honor well knows, is one of those issues that the two political sides debate a lot about … About, why are all these asbestos cases in Southern Illinois?” 

Clifford responded by stating that there was no evidence that money from GM “or these other defendants subjected to large class action lawsuits improperly funneled money to the candidacy of Lloyd Karmeier.” 

“It’s a topic that’s been going on in this community for a while but it doesn’t have an awful lot to do with what’s going on in this courtroom right now,” he said. 

Herndon agreed with Safer.

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