912-574-7575

Blog

Firm Announcements and Law Updates

State Farm, Campaign Finance Reform, and Buying Votes on Appeal?

If you could spend four million dollars to save over a billion dollars, I am sure everyone would agree that it would be a good investment.  Should you make the deal if you have to do it secretly, and if the deal is made with an eye toward undermining the American justice system? If you were a regular person who engaged it that kind of fraud, I am sure you would agree that you would likely end up underneath the jail.  If you are a large corporation in this country, the results are apparently different. Sadly, the rules that we live by in this country are broken in part because we, the people, have allowed things to get in such bad shape. . .

Last week, scandalous news broke about the large insurance company, State Farm, which has agreed to settle a class action lawsuit with allegations that are indefensible if true, seemingly not capable of being settled if false, and for far too large a number to just overlook.  The settlement was not widely reported in the national corporate news media, although it should have been a front page story.  I can only guess that the reason why it was not considered news is because State Farm is a big advertiser with the national media companies, which is another scandal for a different blog post.

State Farm will pay $250 million to settle a class action RICO conspiracy lawsuit, which alleged that the insurer secretly funded the election of Illinois Supreme Court Justice Lloyd Karmeier, who would later cast a deciding vote to overturn a $1.05 billion verdict in 2005.  In the underlying state class action case, the plaintiffs filed and won a claim against State Farm at the trial court level, alleging that State Farm breached its contract with them by using nonoriginal parts in vehicles damaged in crashes.

The federal lawsuit alleged that State Farm was responsible for as much as $4 million of Justice Karmeier’s $4.8 million total in campaign contributions, and that it raised and contributed the funds in secret, through other organizations, including the Chamber of Commerce.

The federal class action suit, currently pending in the Southern District of Illinois, is scheduled for a hearing for final approval in December, but it has already received preliminary approval by the Court.  

State Farm settled on the courthouse steps, with the jury chosen and the trial scheduled to begin, and perhaps uncomfortably, with Justice Karmeier set to be one of the first witnesses called in the case.  It is not clear whether Justice Karmeier will face additional fallout from the case, either at the ballot box or otherwise, although he is not due to have another retention election until 2024, when he will be 84 years old.

This case is a prime example of the problems with recent U.S. Supreme Court cases that have allowed unlimited and anonymous political contributions under the rationale that money equals speech, and companies should have unlimited speech.  Sadly, this line of decisions from the High Court is poisoning our Republic and we need to fix that flawed line of cases as soon as we can.  It won’t be quick or easy, but we can fix it, either legislatively through constitutional amendment, or perhaps through better reasoning at the U.S. Supreme Court.  

In any event, it is a stark indication of a lack of integrity that ought not be justifiable in the marketplace – consumers should vote with their wallets and put companies that behave like this out of business.  And the allegations are so shocking, and the settlement amount is so large, it is difficult to believe that the allegations against State Farm are false.  Of course, consumers cannot vote with their wallets when this kind of story is not reported by the mainstream media.  This is an important news story that needs to be more widely known and it is incredibly sad and disgraceful statement of corporate greed, governmental incompetence, and public apathy.