$7.6 Billion ‘Dark Money’ Suit Against State Farm Moves Forward

A 19-year-old lawsuit continues to haunt State Farm Insurance, and billions potentially hang in the balance.

A federal judge in East St. Louis on Sept. 16 conferred class-action status on plaintiffs representing 4.7 million State Farm policyholders. The plaintiffs allege that State Farm schemed to contribute millions to the U.S. Chamber of Commerce with the intention of having the money funneled to the re-election campaign of lllinois Supreme Court Justice Lloyd Karmeier in 2004.

Karmeier, who has been chosen the next chief justice of the state’s high court, at the time was in an intense battle to retain his seat.

He won, and ultimately proved to be the deciding vote in a surprising 2005 Supreme Court decision overturning a $1.05 billion judgment against State Farm for basing the value of claims in car wrecks in part on the use of old parts that the insurer maintained were of like quality to new parts and failing to inform policyholders.

The plaintiffs then sued State Farm under the federal Racketeering Influenced and Corrupt Organizations Act (RICO), alleging the insurer schemed to unduly affect Karmeier’s campaign but elude detection.

In a release today, Clifford Law Offices, which represents the plaintiffs, put potential damages in the case at more than $7.6 billion, “given the interest that has accrued.”

In a statement, State Farm said, “We are disappointed in the court’s decision on the class certification question, and respectfully disagree with it. We intend to ask the appellate court to review this ruling in the very near future. Plaintiffs have unsuccessfully asserted and reasserted these allegations for many years and should not be permitted to do so any longer.”

Source: www.chicagobusiness.com www.chicagobusiness.com

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