State Farm fought the RICO case vigorously, including more than 100 contested motions and taking the depositions of 68 witnesses, including Justice Karmeier.
A Plaquemine attorney was awarded Public Justice's 2019 Trial Lawyer of the Year Award along with his co-counsel for representation of a class of State Farm insureds for almost 20 years, earning a settlement for the class members and shedding light on corruption in judicial politics. Mr. Patrick W. Pendley, Esq. was presented with the award, along with his co-counsel, on July 29, 2019 in San Diego, California.
In 1997, Pendley, along with his co-counsel, filed a nationwide class action in Illinois state court accusing State Farm of using lower quality automotive parts from non-brand manufacturers to repair the damaged vehicles of about 4.7 million policy holders. In 1999, the legal team secured a $1.2 billion verdict against the insurance company which was largely affirmed by the intermediate appeals court in Illinois. State Farm appealed the verdict to the Illinois Supreme Court and while the case was pending in the Supreme Court, a vacancy occurred in the Supreme Court and plaintiffs began to suspect that State Farm was providing significant funding to the successful 2004 campaign of Judge Lloyd Karmeier. In the wake of those concerns, the legal team filed a motion requesting that Karmeier recuse himself from the case after he won the open seat. In opposing that motion, State Farm argued that it had not contributed more than about $300,000.00, directly or indirectly, to the Karmeier campaign. Justice Karmeier refused to recuse himself and by his own account, in 2005, broke the deadlock when he voted to overturn the billion-dollar verdict in its entirety.
Subsequently, in 2009 the United States Supreme Court issued an opinion in Caperton v. A.T. Massey Coal Co., in which the Court found in a similar case that the company's contributions to a Judge’s campaign were of such magnitude that the Judge was required to recuse himself from considering the case. Relying on Caperton, Pendley and his co-counsel proceeded to investigate further and asked the Illinois Supreme Court to withdraw their earlier opinion citing new evidence. The Illinois Supreme Court refused to do so, relying again on State Farm’s renewed insistence that it had not made any significant monetary contributions to the Karmeier campaign.
The legal team remained convinced that State Farm was not being truthful and as their investigation revealed, State Farm had funneled millions of dollars to the Karmeier campaign through intermediaries such as the U.S. Chamber of Commerce, the Illinois Chamber of Commerce and the Illinois Republican Party. In 2012, Pendley and his co-counsel filed a new action in federal court alleging that State Farm had engaged in a RICO conspiracy. The basis of the second case was that State Farm had engaged in mail fraud when it denied in court pleadings that it had not provided significant funding to the Karmeier campaign.
State Farm fought the RICO case vigorously, including more than 100 contested motions and taking the depositions of 68 witnesses, including Justice Karmeier. Just days after the trial of this case began, State Farm agreed to a $250 million settlement rather than risk trial and the appeals process. In addition to the compensation for the State Farm policy holders, the case also shines a spotlight on the problems of dark money in judicial elections.
In addition to Patrick W. Pendley, the plaintiffs’ lawyers were: Robert Clifford and Chis Riddle from Chicago, Illinois; Elizabeth Cabraser, Robert Nelson and Kevin Budner from San Francisco, California; Steve Blonder from Chicago, Illinois; Tom Thrash from Little Rock; Gordon Ball from Knoxville; Don Barrett and Richard Barrett from Lexington, Mississippi; and, Professor Erwin Chemerinsky from the Berkeley School of Law in Berkeley, California.
Contributed by PBC Law Firm