Objector to $250 million State Farm settlement wants to know why wife of former federal judge is entitled to fees

By Record News | Feb 11, 2019

EAST ST. LOUIS – Class action objector Lisa Marlow of Tennessee, appealing an $80 million fee for class action lawyers who sued State Farm, wants to know how much attorney Patricia Murphy of Marion would get and why she should get it.

Patricia Murphy is the wife of former federal judge Patrick Murphy who once presided at federal court where Hale v. State Farm played out until a $250 million settlement was reached in September.

Before he was a federal judge, Patrick Murphy filed the underlying Hale lawsuit - Avery v. State Farm - that resulted in a $1.18 billion Williamson County jury award in 1999. 

In a motion he filed at U.S. district court on Feb. 6, Marlow’s lawyer, Mark Downton of Nashville, estimated Murphy’s share at $8 to $10 million.


Downton  

Downton asked the court to supplement the record on appeal at the Seventh Circuit.

“Trish Murphy is not listed as counsel of record for plaintiffs at the district court,” Downton wrote. 

Her name did not appear anywhere in the record before former district judge David Herndon referred to her at a hearing, according to Downton, and she did not submit an affidavit for fees.

“When did she become involved?” Downton wrote. “What services did she perform?

“Is her share of the fee commensurate with her workload and contribution toward expenses?” 

While working as a plaintiff’s attorney in southern Illinois, Patrick Murphy sued State Farm in Williamson County in 1997, as local counsel for a national team of lawyers. They claimed State Farm specified and provided inferior parts for crash repairs. 

Patricia “Littleton” of Murphy’s firm worked on Avery v. State Farm as well; Littleton would later marry Patrick Murphy.

Also in 1997, President Clinton nominated Patrick Murphy for judge. He served at the Southern District of Illinois in East St. Louis from 1998 to 2013. 

In 1999, after jurors found in favor of Avery plaintiffs, Williamson County associate judge John Speroni entered judgment. In 2001, the Fifth District Appellate Court affirmed in a decision that Justice Gordon Maag delivered. 

State Farm appealed to the Supreme Court, which hadn’t acted by 2004. 

Maag ran for Supreme Court on the Democratic ticket that year, but lost to Republican Lloyd Karmeier. 

Karmeier and other Justices reversed Maag’s opinion in 2005, in a decision that curtailed class actions in Illinois and echoed through courts nationwide. 

In 2011, Avery petitioned the Court to review evidence that State Farm secretly supported Karmeier in 2004. 

The Supreme Court denied the petition. 

In 2012, Avery class member Mark Hale of New York State sued State Farm in district court under civil provisions of racketeering law. 

He sought the amount of the judgment with interest and triple damages. 

Herndon started trial last September, with class counsel seeking about $7 billion. 

No sooner had trial begun than they settled for $250 million

Marlow objected to their $80 million fee, claiming they gave up too easily. 

Downton wrote for her that class counsel obtained a series of favorable rulings from Herndon and the Seventh Circuit. 

He quoted class counsel’s lofty claims about their theory and their experts. 

The objection upset Herndon, who showed it at a fairness hearing on Dec. 13.

“Her lawyer engaged in a great deal of hyperbole and speculation and a suggestion of knowledge he could not possibly have possessed,” Herndon said of Marlow. 

Herndon called Downton wrong on every point he brought up. 

He said Downton’s objection showed a lot about how he gathered information to make statements about risk and likelihood of recovery. 

“Presuming that seven million dollars, seven billion dollars, was going to be awarded, that’s just stunning to me,” he said.

“Without a settlement, plaintiffs and defendants faced the prospect of many more years of litigation and great uncertainty regarding the outcome.” 

Herndon said the settlement more likely than not overestimated the odds that plaintiffs would win, and that it came close to suggesting the chance they had. 

He indicated he wouldn’t have awarded interest and said that tripling of damages was rank speculation at best. 

He said a statute of limitations was a significant impediment to a positive result. 

He said trial would have depended heavily on expert testimony, and a great many disputes were identified relative to experts.

“The likely experience of trying the case clearly would have been far greater than the usual class action,” Herndon said.

Trial had been set for a month, to begin the day after Labor Day. Herndon said costs would have “ballooned.”

He noted that there was a large contingent of plaintiffs’ attorneys.

“Trish Murphy is from Southern Illinois but the others were, by and large, from distances far and wide which would have involved a huge expense for plaintiffs for travel, lodging, and meals,” Herndon said. 

He declared the settlement and the fee fair and reasonable, and Marlow appealed. 

In a motion to supplement the record on appeal, Downton wrote that the fee splitting arrangement was not filed or made available to class members.

“Apparently, this information was provided to Judge Herndon for in camera inspection,” Downton wrote.

“Other than Judge Herndon’s reference to Ms. Murphy at the fairness hearing, there is nothing in the record which reveals Ms. Murphy’s role in the case.

“Nor is there anything in the record that reveals Ms. Murphy’s fee allocation or why she might be entitled to a multi million dollar fee.” 

Downton wrote that an equal split would mean $8 to $10 million for each firm. 

Herndon won’t hear Marlow’s motion. He retired in January. 

He left the case to District Judge Michael Reagan, who plans to retire in March. 

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