The Best Judges Money Can Buy

Illustration from New York Times, for a 2006 column: "Judges For Sale."

Illustration from New York Times, for a 2006 column: “Judges For Sale.” http://tinyurl.com/q6zzbts

Have large corporations stacked the deck in their favor when it comes to defending themselves against civil lawsuits?

Pro-big business advocates work zealously to promote so-called “tort reform,” which seeks to limit the amount juries can award to plaintiffs who have suffered harms and losses. We hear a lot about tort reform, but we don’t hear enough about how those same pro-business organizations are hand-picking the judges that hear their civil cases.

One egregious example of justice-for-hire has been in the Illinois news for almost a decade, but new details continue to surface. A legal action against State Farm resulted in a $1.18 billion award against the insurance company — but then the award was reversed by the Illinois Supreme Court. The same plaintiffs then brought a federal lawsuit in 2012, claiming a RICO conspiracy involving State Farm, the Illinois Republican Party and the U.S. Chamber of Commerce.

The whole thing is quite a story. Here are a few of the high points.

Avery v. State Farm

In 1997, a class action lawsuit was filed on behalf of 4 million State Farm policyholders. The suit claimed that although State Farm had promised replacement parts “of like kind and quality,” it was actually providing inferior parts. A jury ordered State Farm to pay $1.18 billion. It sounds like a ton of money, but it comes to less than $300 per affected policyholder.

• Of course, State Farm appealed. The Illinois Supreme Court heard oral arguments in 2003, but did not reach a verdict until 2005.

Judge Lloyd Karmeier

Meanwhile, in 2004, Judge Lloyd Karmeier was elected to the Illinois Supreme Court. Karmeier must have really wanted the job, because his campaign spent more than $4 million — “the most expensive campaign for a single judicial office in [U.S.] history,” according to the Center for American Progress. Karmeier won by a wide margin.

Which corporation do you supposed kicked in a big chunk of that $4 million war chest? State Farm. The following year, the high court finally announced its verdict in the State Farm case, reversing the $1 billion-plus award. Karmeier cast the deciding vote in one of the two components of that reversal.

The plaintiffs argued that because Karmeier had received millions of dollars in donations from State Farm, he should have recused himself from the State Farm decision. They allege that State Farm gave, directly and indirectly, as much as $4 million of the $4.8 million Karmeier’s campaign took in. Was State Farm just taking a civic interest in the judicial system, to the tune of millions of stakeholder dollars, or was State Farm investing $4 million to influence the outcome of the court’s billion-dollar decision the next year?

The plaintiffs asked the U.S. Supreme Court to step in and rule that Karmeier should have recused himself. But the Supremes refused to review the case. Score another one for big business.

Meanwhile, in West Virginia

Three years later, however, the U.S. Supreme Court agreed to hear a similar case. Extremely similar. Caperton v. A.T. Massey Coal Co. is in West Virginia, not Illinois, and it involves a coal company, not an insurance company. But just like Avery, Caperton involves a state Supreme Court justice elected in 2004, who subsequently helped overturn damages against a corporation that had been a big campaign supporter.

In that case, the U.S. Supreme Court ruled in 2009 that a judge must recuse oneself from any case in which there is a “probability of bias.” Did it really take years of legal wrangling to arrive at that conclusion?

As might be expected, that ruling breathed new life into the Avery case. In 2012, the plaintiffs filed their RICO federal lawsuit. But isn’t RICO (Racketeer Influenced and Corrupt Organizations) designed to take down organized crime? Yes, it is. What’s your point?

The plaintiffs allege that that is exactly how to describe State Farm and its buddies at the state Republican Party and U.S. Chamber of Commerce. Evidently the plaintiffs have at least one leg to stand on. In March of this year, a federal court denied State Farm’s request to dismiss the case.

Was There a Conspiracy?

• According to the plaintiffs’ suit, in 2004 State Farm gave the U.S. Chamber $1 million, and the Chamber donated $2.05 million to the Illinois GOP, and the GOP donated $1.9 million to Karmeier’s campaign. It looks like a duck.

• On one particular day, the Chamber gave the Illinois GOP $950,000, and on the exact same day, the GOP moved $911,000 to Karmeier’s campaign. It walks like a duck.

• Edward Rust Jr., State Farm CEO, was on the U.S. Chamber 2004 task force to select judicial races to support. Although that support could have been distributed to various races across the country, 73% of the funds went to the Illinois GOP and to Karmeier. It quacks like a duck.

Conclusions

• Many states pick their judges by public elections. Surveys consistently find that the vast majority of voters, and even a significant percentage of judges, believe campaign contributions influence judges’ decisions in court cases. Strict campaign finance reforms are needed to prevent our judgeships from being sold to the highest bidders.

• There is also a need for mandatory recusal rules. It is startling that in most cases of obvious bias, it is up to the judge to decide whether to recuse oneself. If a judge was financed in one’s election to the bench in order to render a favorable verdict, it is unlikely that that judge will voluntarily remove oneself. The law should require recusal.

“Such reforms are crucial to quashing the widespread belief that our judicial system is up for sale to the highest bidder,” said the Center for American Progress.