Ill. Supreme Court Overrules State Farm Bid Over Alleged Conspiracy

Feb. 13, 2018—Consumers in a lawsuit linked to State Farm’s use of aftermarket parts received a win last week as an U.S. District judge denied the insurer’s motion for summary judgment.

The class-action Hale et al v. State Farm et al litigation involves everyone who twice won the Avery et al v. State Farm $1.05 billion lawsuit for State Farm’s use of non-OEM collision repair parts but who subsequently lost an Illinois Supreme Court decision following the election of allegedly State Farm-backed Judge Lloyd Karmeier.

The Hale plaintiffs argue that Karmier should have recused himself or been prevented from hearing the appeal, as State Farm allegedly played a huge role in his campaign and contributed more than $4 million of Karmeier’s $4.8 million war chest, and then allegedly concealed their efforts from the State Supreme Court. State Farm denies those allegations.

Karmeier also denies any bias, Saint Louis Public Radio reported in a comprehensive 2015 piece on the case, part of which first appeared in Illinois Issues.

The lawsuit seeks new damages of $7.6 billion for the entire class. (State Farm and the other defendants disagree with that amount.)

State Farm in July 2017 had petitioned for an automatic win by summary judgment on the grounds of Rooker-Feldman, res judicata, and collateral estoppel.

According to the Feb. 6, 2018, decision by Southern District of Illinois Judge David Herndon, the Rooker-Feldman doctrine prevents a party from trying to appeal a state court decision it doesn’t like to the district court instead of the Supreme Court (the only federal court allowed to reverse state court decisions).

“Claims that directly seek to set aside a state-court judgment are de facto appeals that trigger the doctrine,” Herndon wrote.

Herndon rejected State Farm’s argument that such a thing was happening here, determining that the Hale consumers weren’t actually asking to overturn the reversal of the $1.05 billion verdict—an important distinction. Instead, they argued that they were wronged by the alleged State Farm conspiracy putting Karmeier in a place to cost them that verdict, according to Herndon.