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State Farm To Pay $250 Million To End $10 Billion Suit


State Farm Insurance is settling a class action conspiracy suit for $250 million. At stake if the matter Hale vs. State Farm had proceeded to trial was $10 billion.

The case alleged State Farm recruited and funded the campaign of now State Supreme Court Chief Justice Lloyd Karmeier to place him on the bench. State Farm denied wrongdoing.

State Farm allegedly used a variety of contributions to business groups such as the U.S. Chamber of Commerce, The Illinois Jobs Coalition, the American Tort Reform Association, the Illinois Business Roundtable, and the Illinois Chamber of Commerce that funneled donations into Karmeier's campaign.

Karmeier was the swing vote in reversing a billion-dollar judgment against the Bloomington-based insurance company for its use of after-market parts in car repairs. That case called the Avery case started in the late 1990s.

At the time of the Avery appeal in 2005, State Farm denied it had substantial connections to the Karmeier campaign. The plaintiffs in Hale alleged State Farm did not disclose holding a fundraiser for Karmeier with top State Farm executives in attendance. The plaintiffs also introduced phone logs indicating hundreds of calls between State Farm and the Illinois Civil Justice League.

The Hale suit also named State Farm lawyer Bill Shepherd and Ed Murnane of the Illinois Civil Justice League as defendants with State Farm.

State Farm says it still denies the accusations and liability and is settling only to bring an end to the litigation.

The plaintiffs say they remain confident of the merits of the case, but the settlement provides relief to more than 4 million people in the class.

The case was filed seven years ago and it has now been nearly two decades since the Avery case began. Over the last month as the trial date approached, the two sides skirmished over which expert witnesses would be allowed to testify. State Farm had also argued the case was brought too late. In filings, the company also said Karmeier was known to many groups to be a business-friendly judge and there was no conspiracy.

A federal judge in southern Illinois will review the proposed settlement before accepting or rejecting it.

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GLT Assistant News Director Charlie Schlenker grew up in Rock Island, Illinois and graduated from Augustana College. He has spent more than three decades in radio and has won numerous state and national awards for journalism. He lives in Normal with his family.
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