Plaintiffs’ attorneys alleging that State Farm Mutual AutomobileInsurance Co. bought off an Illinois Supreme Court justice to evadea $1.05 billion award have cleared a major hurdle in theirlong-running litigation against the insurer.

In an order Friday, U.S. District Judge David Herndon of theSouthern District of Illinois granted a motion certifying a classof roughly 4.7 million auto insurance policyholders who wereallegedly deprived of their 1999 trial court victory against StateFarm.

Herndon found that the alleged fixing of the state Supreme Courtdecision affected all the proposed class members uniformly, andthat the named plaintiffs and their attorneys otherwise satisfiedcourt rules around class actions.

“[T]he injury in this case is based on the interest theplaintiffs and the proposed class members had in a neutral forumand the damages correspond with the undivided interest in thejudgment each lost as a result of the tainted tribunal,” the judgewrote. “This issue is identical for all plaintiffs and classmembers.”

The suit alleges violations of the Racketeering Influenced andCorrupt Organizations (RICO) Act and could put State Farm on thehook for more than $7.6 billion because of interest that hasaccrued on the original jury award, according to plaintiffs’lawyers.

State Farm plans appeal

Justin Tomczak, a State Farm spokesman, said the company plans toappeal the ruling “in the very near future.” He said, “Plaintiffshave unsuccessfully asserted and reasserted these allegations formany years and should not be permitted to do so any longer.”

The newly certified class is backed by a squadron of attorneys,led by Charles Barrett of Nashville-based Neal & Harwell, whocouldn’t immediately be reached by email on Monday. Other firmsinvolved include Lieff Cabraser Heimann & Bernstein; Hausfeld;Clifford Law Offices; and Ball & Scott.

State Farm is represented by Riley Safer Holmes & Cancila ofChicago; Heyl, Royster, Voelker & Allen of Peoria, Illinois;and Schiff Hardin. Also on the defense side are Sidley Austin andGreensfelder, Hemker & Gale of St. Louis.

The suit stems from a 2005 decision by the Illinois SupremeCourt that upended the billion-dollar judgement against State Farm.A jury had found the company defrauded policy holders by requiringthe use of cheaper, non-manufacturer parts when repairs were madeto covered vehicles after a crash, handing plaintiffs $1.18 billionin damages. An appeals court affirmed but reduced the amount of theaward.

Unfair influence?

According to the complaint, filed in 2012, the state high court’sdecision reversing the judgment was unfairly influenced by JusticeLloyd Karmeier, who State Farm and its agents worked to electduring a campaign in 2003 and 2004. Karmeier’s campaign received atleast $4 million from the insurer and individuals connected to it,plaintiffs allege.

Illinois’ Supreme Court has seven justices, and the decision atissue was not authored by Karmeier. It won the support of fourjustices, with two issuing a dissent that still concurred on keyholdings, and another abstaining. The court reversed the awardagainst State Farm on the grounds that certification of anationwide class of policyholders was improper, among otherthings.

On Monday, Karmeier was named Illinois chief justice, afterbeing unanimously elected to that post by his fellow state supremecourt justices, the court said in a press release.

Ben Hancock is a reporter for The Recorder, an ALM business.He can be reached at [email protected].