by Tony E. Rutherford, News Editor
Stare Farm Auto Accused of Racketeering by Paying $4 Million Dollars to Judge's Campaign to Influence His Vote to Prevent Paying Policyholders

State Farm policyholders are receiving notifications via postcard of an upcoming trial that may allow them to recover for alleged actions and/or conduct by the company to influence actions by the Illinois Supreme Court by providing $4 million dollars to the campaign.

The underlying class action complaint comes from Illinois in which a jury awarded over a billion dollars to policyholders. However, the company and others named "created and conducted a  RICO (Racketeer Influence and Corrupt Organization) enterprise to evade  paying the $1.05 billion dollar judgement to 4.7 million State Farm policy holders," according to the federal court complaint. ( Mark Hale, et. al. v State Farm Mutual Auto Insurance Company, 12-cv-00660) 

According to the class action, State Farm provided money to support two Illinois Supreme Court candidates in an attempt to overturn the judgment:

"From the fall of 2003 until November 2004, Trial Judge Lloyd Karmeier (“Karmeier”) and Appellate Judge Gordon Maag waged a judicial campaign for a vacant seat on the Illinois Supreme Court, ultimately resulting in Karmeier’s election. In January 2005, having received reliable information that State Farm had exerted financial and political influence to achieve Karmeier’s election, the Avery plaintiffs moved to disqualify Karmeier him from participating in the appeal of the Avery Action." (Complaint available below via PDF)

"Plaintiffs’ motion was denied, and on August 18, 2005, with now-Justice Karmeier participating in the Court’s deliberations and casting his vote in State Farm’s favor, the Illinois Supreme Court issued a decision overturning the $1.05 billion judgment. See Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill.2d 100, 835 N.E.2d 801 (Ill. 2005). (A true copy of this decision is attached hereto as Exhibit “B”).


9. In December 2010, spurred in part by a recent United States Supreme Court decision vacating a West Virginia Supreme Court ruling in a case which featured similar facts, i.e., involving a party’s political and financial influence to elect a justice whose vote it sought for its appeal, Plaintiffs’ counsel launched an investigation into State Farm’s covert involvement in the Karmeier campaign. The investigation, led by a retired FBI Special Agent, uncovered evidence that to gain reversal of the $1.05 billion judgment in the Avery Action, State Farm - acting through Murnane, Shepherd and the Illinois Civil Justice League (“ICJL”) - recruited Karmeier, directed his campaign, had developed a vast network of contributors and funneled as much as $4 million to the campaign. Then, after achieving Karmeier’s election, State Farm deliberately concealed all of this from the Illinois Supreme Court while its appeal was pending.

10. On September 9, 2011, based on information uncovered in the Reece investigation, the Avery plaintiffs petitioned the Illinois Supreme Court to vacate its decision overturning the $1.05 billion judgment. Responding on September 19, 2011, State Farm again deliberately misrepresented its role in directing and financing Karmeier’s campaign. On November 17, 2011, the Illinois Supreme Court denied Plaintiffs’ petition, without comment.

The current plaintiffs claims are:

"... are typical of the claims of the Class, as required by Rule 23(a)(3), in that Plaintiffs are persons or entities who, like all Class members, were members of the certified class in the Avery Action and “were insured by a vehicle casualty insurance policy issued by State Farm” and “made a claim for vehicle repairs pursuant to their policy and had non-factory authorized and/or non-OEM (Original Equipment Manufacturer) ‘crash parts’ installed on their vehicles or else received monetary compensation determined in relation to the cost of such parts.” Plaintiffs, like all Class members, have been damaged by Defendants’ misconduct, in that, among other things, they have lost the value and benefit of the $1.05 billion judgment entered against State Farm by the Illinois Appellate Court on April 5, 2001 as a direct result of Defendants’ continuing pattern of fraudulent conduct."

The case has been rendered "different" than the original Avery complaint:

"Avery was about State Farm’s failure to equip its insureds’ vehicles with proper replacement parts and this case is about State Farm’s alleged conduct in secretly recruiting Judge Karmeier, covertly funneling millions of dollars to support Judge Karmeier’s campaign and concealing and misrepresenting the degree and nature of its support of Justice Karmeier."

Policy holders receiving notification have an opportunity to "opt out" of the pending litigation. By opting out, a policy holder would retain their individual right to separately sue State Farm for compensation. 

Since this case is set for trial in September 2018 , should the defendants (State Farm, et. al.) prevail in the class action those who did not opt out would lose their right to sure. On the other hand, should the company lose the litigation, those opting in would be eligible for compensation that could be awarded by the federal jury. 

In brief, the firm failed to compensate policy holders in 48 states for breach of contract involving automobile replacement parts:

"Plaintiffs in the Avery Action filed their class action complaint in July 1997. At trial, a Williamson County jury found that State Farm had breached its contracts with 4.7 million policyholders in 48 states by specifying the use of inferior non OEM parts."

 To view full complaint:


Policy holders receiving a postcard notification should visit:

and carefully read these documents:



  3. LONG FORM NOTICE (934.61 KB)