State Farm to Face Charges it Attempted to Sway a Judge

Last week a federal judge refused to block a racketeering lawsuit against State Farm from moving forward. The company is charged with spending $4 million towards the campaign of an Illinois judge who later overturned a $1 billion award held against State Farm.

The case stems from a legal decision from the early 2000s, in which State Farm had been levied with $1.05 billion in a legal compensatory and punitive damage award. That award was total payments out to 4.7 million State Farm customers who complained the company had failed to supply proper replacement parts for vehicles during auto insurance repairs.

State Farm had appealed the award to see it reversed. It did so both through the legal system and by the insurance company allegedly paying $4 million towards the election campaign of then Judge Lloyd Karmeier as he was running for an open seat on the Supreme Court of the Illinois. Karmeier won the election and ended up being directly in line to hear the appeal to the lower court decision against State Farm.

State Farm not only provided that funding, they also went out of their way to hide it.  In fact it took retired FBI Special Agent Daniel Reece and his team considerable digging to uncover what State Farm had done, and all they had done to hide it.

As expected, after news of State Farm having thrown money after Karmeier to get him elected to the very court which would hear the appeal, plaintiffs in the case requested that Karmeier recuse himself from the appeal. The court refused to so order, unfortunately. The appeal was heard by a panel Karmeier served on, and the case was decided in State Farm’s favor. The decision was reversed in August 2005.

In response to the apparent attempt to bribe Justice Karmeier for that decision, lead plaintiff Mark Hale of New York filed a racketeering class action case against State Farm in the Southern District of Illinois. On the grounds that the decision had already been litigated on the basis of the claims involved, State Farm asked the court to reject the whole basis for the racketeering charges – that the decision had already been made in their favor.

On February 6, U.S. District Judge David Herndon issued a 17-page decision rejecting State Farm’s request to dismiss the racketeering suit. Within that decision, Judge Herndon said, “Clearly, these are two separate causes of action that do not arise from the same transactions or involve the same factual allegations. Simply, defendants’ actions in the two cases are entirely different and do not seek redress from the same wrong.” Herndon also noted that at the time of the original trial the plaintiffs did not have sufficient knowledge of what State Farm had done in backing Karmeier’s election. There was therefore no way the issue in this new case could have been effectively litigated already.

The racketeering case is now going forward.

As for potentially corrupt Judge Karmeier, he is now Chief Justice of the Illinois Supreme Court. He is not charged in the racketeering suit and has yet to face justice.

Illinois is consistently ranked as one of the most corrupt U.S. states, with an appalling degree of corruption repeatedly exposed at the state, county and city level.