Lieff Cabraser Civil Justice Blog
Judge Holds Racketeering Lawsuit Against State Farm Over Election Manipulations Can Go Forward

Judge Holds Racketeering Lawsuit Against State Farm Over Election Manipulations Can Go Forward

Insurer is accused of secretly and improperly funding state judge’s campaign so it could get a $1 billion judgment against overturned

U.S. District Judge David R. Herndon has ruled that Lieff Cabraser’s class action lawsuit can proceed against State Farm over charges the insurer acted illegally in spending millions on a secret campaign to get a judge elected to state court who would then rule in State Farm’s favor in a massive pending fraud lawsuit. After losing an earlier lawsuit where it was hit with a $1.05 billion judgment, plaintiffs allege State Farm defrauded them of the judgment by “handpicking Judge Karmeier, covertly funneling millions into his campaign and lying about its support for the judge in communications to the Illinois Supreme Court and counsel for the class.”

As Law360 further explains, “Lloyd A. Karmeier won his race for a seat on the Illinois Supreme Court in 2004. Nine months later, he cast a [pivotal] vote in State Farm’s favor and helped overturn the massive judgment. That judgment was the result of a separate class action, known as Avery v. State Farm, which accused State Farm of failing to equip vehicles with proper replacement parts.”

The court ruled on July 3rd that a wide range of sufficient factual disputes remain to mandate a denial of State Farm’s motion to dismiss the suit. The case will now proceed to trial scheduled for early September, 2018.

Judge Karmeier’s vote in favor of State Farm overturned the earlier judgment in a separate class action dating back to 1997, Avery v. State Farm, which accused State Farm of failing to equip vehicles with proper replacement parts. The earlier case related to claims arising from damages to policyholder cars in the late 1990s, where the vehicles were repaired with non-original equipment manufacturer parts in violation of the owners’ insurance agreements with State Farm.

The case is Mark Hale et al. v. State Farm Mutual Automobile Insurance Co. et al., case number 3:12-cv-00660 in the U.S. District Court for the Southern District of Illinois.