Objector wants class counsel fees in $250 million Hale settlement cut; Says they could have won much more at trial

By Record News | Nov 19, 2018

EAST ST. LOUIS – Lawyers who reached a $250 million settlement with State Farm don’t deserve a third in fees because they likely would have won much more at trial, according to class member Lisa Marlow of Cocoa, Fla.

In an objection on Nov. 17, she asked U.S. District Judge David Herndon to cut the fees from $83.3 million to $54.5 million.

Herndon, who halted trial and approved the settlement in September, has set a Dec. 13 hearing on fees. He’ll also review expenses of $6,971,852.80.

Plaintiffs sued in 2012, under civil provisions of racketeering law, to recover a $1 billion judgment from a class action in Williamson County court at Marion.

They claimed State Farm secretly secured the election of current Illinois Supreme Court Chief Justice Lloyd Karmeier in 2004, to overturn the judgment. They sought interest since 1999 and triple damages.

Herndon had set trial to begin after Labor Day and to end around Halloween.

He would have allowed plaintiffs to ask Karmeier leading questions.

The case settled on the day trial was set to begin - Sept. 4 - after lawyers had picked a jury.

Marlow believes class counsel blew it.

Her lawyer, Mark Downton of Nashville, Tenn. wrote, “The record shows they were well situated to succeed at trial.”

Downton laid out class counsel's success. They defeated motions to dismiss and for summary judgment; they also defeated a mandamus appeal at the Seventh Circuit; they certified a national class and defeated two appeals on it. They also defeated motions to exclude their experts and successfully moved to exclude some defense experts. They successfully moved to exclude a substantial portion of State Farm’s evidence. And finally, they impaneled what they believed was a favorable jury.

They now seek to convince the court that their claims weren’t nearly as strong as they objectively appeared, Downton wrote.

"These self serving arguments are a far cry from the positions espoused in their recent summary judgment briefing, where they vigorously extolled the strength of the evidence backing the RICO claims," he wrote.

The Seventh Circuit left Herndon’s rulings intact, indicating that class counsel overstated the risk that a favorable judgment could be overturned.

"It isn’t unusual, of course, for a plaintiff to settle for an amount less than he might reasonably be expected to recover," Downton wrote.

"After all, settlement is by definition a compromise.

“However, in this instance, the compromise proposed must be viewed more skeptically because of the nature of the injury to the plaintiff and class.”

Downton quoted from class counsel’s settlement brief that “this case was about as risky as a case could be.”

“This argument is belied by the fact that, as the case progressed, more and more law firms and attorneys began appearing on behalf of plaintiffs and the putative class,” he wrote.

"There is no evidence that the plaintiffs’ bar saw this litigation as too risky for their practices.”

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Clifford Law Illinois Supreme Court U.S. Court of Appeals for the Seventh Circuit

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