The lawsuit that should have died 20 years ago finally does

By The Madison County Record | Dec 17, 2018

Avery v. State Farm was certified as a class action lawsuit in Williamson County Circuit Court in 1997, with policyholders from 48 states claiming that State Farm had violated its contracts by using generic aftermarket parts to repair insured vehicles.

A jury decided for the plaintiffs in 1999 and the Fifth District Court of Appeals affirmed the decision in 2001.

But the Illinois Supreme Court unanimously reversed the billion-dollar award in 2005, concluding that plaintiffs had suffered no harm, that the class was too diverse to be certified, that consumer protection laws of one state cannot be applied to residents of another, and that State Farm had fulfilled its contractual obligations.

Illinois Supreme Court Justice Lloyd Karmeier participated in that decision.

Nevertheless, Avery dragged on for six more years, until late 2011 when the State Supreme Court denied plaintiff’s motion to reconsider its 2005 decision.

In May of 2012, plaintiffs and some of their original lawyers filed suit in the Southern District of Illinois, accusing State Farm, et al. of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act by creating an enterprise to evade the original billion-dollar judgment.

That’s when Avery v. State Farm morphed into Hale v. State Farm.

Plaintiffs’ counsel convinced U.S. District Judge David Herndon to retry the same case disguised as a $10 billion class-action racketeering suit alleging that State Farm secretly funneled money to Karmeier’s 2004 campaign for the supreme court in hopes of having the $1 billion judgment overturned.

Last week, the resurrected suit came to its second and final close when Herndon approved a $250 million settlement between the opposing parties.

That amount is a far cry from the $1 billion originally won and lost, much less the $10 billion sought in the RICO suit, but it’s better than nothing. At least, that was the conclusion of plaintiffs attorneys, who will pocket roughly one third of the total, while their class of clients for the last 21 years divvy up the rest.

Two decades of litigation ends with no wrongdoing proved, no facts settled and some reputations damaged. How were the people served? 

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