Hale et al v. State Farm Mutual Automobile Insurance Company et al
ORDER granting 438 Motion to Certify Class. See Order for details. Signed by Judge David R. Herndon on 9/16/16. (lmp)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
MARK HALE, TODD SHADLE,
and LAURIE LOGER, on behalf of
themselves and all others similarly situated,
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, EDWARD
MURNANE, and WILLIAM G. SHEPHERD,
MEMORANDUM and ORDER
HERNDON, District Judge:
I. Introduction and Background
Now before the Court is plaintiffs’ motion for class certification
(Docs. 438 & 492).
Naturally, defendants strongly oppose the motion
(Docs. 467 & 468). 1 After extensively reviewing the voluminous pleadings
and the various related motions (which include the briefings on the motions
State Farm Mutual Insurance Company (“State Farm”) prepared a response (Doc. 467);
Murnane also prepared a response and joined in State Farm’s response (Doc. 468); and
Shepherd joined in the responses (Docs. 475).
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to exclude experts and the June 2, 2016 Memorandum and Order (Doc.
541) regarding those motions) and the applicable law, the Court finds the
class certification is proper and grants the motion for class certification. 2
On May 29, 2012, plaintiffs Mark Hale, Todd Shadle and Carly
Vickers Morse, on behalf of themselves and all others similarly situated,
filed a two-count Racketeer Influenced and Corrupt Organizations Act
(”RICO”), 18 U.S.C. § 1961 et seq., class action complaint against State
Farm, Ed Murnane, William G. Shepherd and Citizens for Karmeier (Doc.
2). 3 Count One alleges violations of 18 U.S.C. §1962(c) and Count Two
alleges violations of 18 U.S.C. §1962(d) by conspiring to violate 18 U.S.C.
On November 4, 2014, plaintiffs filed a first amended complaint
containing the same counts as the original complaint (Doc. 289). This first
amended complaint added Mark Covington and Laurie Loger as named
plaintiffs. 4 According to the first amended complaint, Hale is a citizen of
New York; Shadle is a citizen of Texas and Loger is a citizen of the State of
Defendants devote a portion of the response inviting the Court to revisit the issues of
Rooker-Feldman, res judicata and collateral estoppel. At this point in the litigation, the
Court declines the invitation. The Court will address these issues via a properly filed
summary judgment motion.
On September 26, 2012, plaintiffs filed a notice of voluntary dismissal as to Citizens for
Karmeier (Doc. 54). That same day, the Court acknowledged the notice of voluntary
dismissal and dismissed without prejudice Citizens for Karmeier as a defendant (Doc. 55).
On October 27, 2014, Magistrate Judge Williams allowed Carly Vickers Morse to
withdraw as a named plaintiff from the case and allowed plaintiffs leave to file an amended
complaint adding Laurie Loger and Mark Covington as named plaintiffs to the case (Doc.
286). Thereafter, on September 11, 2015, the Court granted named plaintiff Mark
Covington’s motion for withdrawal and dismissal of his claims without prejudice (Doc.
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Illinois. State Farm is a mutual non-stock company, organized and existing
under the laws of Illinois, having its principal place of business in
Bloomington, Illinois. Shepherd is a citizen of Illinois and was employed by
State Farm. Murnane is a citizen of Illinois and was the president of the
Illinois Civil Justice League (“ICJL”).
In the first amended class action complaint, plaintiffs allege in their
Introduction and Nature of Action section the following:
1. From 2003 to the present, State Farm, Murnane, and Shepherd
(collectively, “Defendants”) created and conducted the RICO
enterprise described below to enable State Farm to evade payment of
a $1.05 billion judgment affirmed in favor of approximately 4.7
million State Farm policyholders by the Illinois Appellate Court.
2. Plaintiffs bring this class action for damages against Defendants for
violation of the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § § 1961 et seq., in particular, §§ 1962(c), (d);
and 1964 for perpetrating a scheme through an enterprise
specifically designed to defraud Plaintiffs and Class out of a $1.05
3. Plaintiffs were each named plaintiffs, class representatives and class
members in Avery v. State Farm Mutual Automobile Insurance
Company (“Avery Action”), a class action litigated in the Illinois state
court system. The Avery Action was certified as a class action, tried
to jury verdict on a breach of contract claim, and tried to the Court
on a claim under the Illinois Consumer Fraud Act (“ICFA”), resulting
in a judgment of $1.18 billion.
4. The Illinois Appellate Court upheld a $1.05 billion judgment,
sustaining the compensatory and punitive damages, and disallowing
disgorgement damages as duplicative. See Avery v. State Farm Mut.
Auto. Ins. Co., 321 Ill. App. 3d 269, 275, 292 (Ill. App. Ct. 5th Dist.
2001)(A true copy of the Avery Appellate Court decision is attached
hereto as Exhibit “A”).
5. On October 2, 2002, the Illinois Supreme Court accepted State
Farm’s appeal. The appeal was fully-briefed, argued and submitted
as of May 2003, yet the matter remained under submission without a
decision until August 18, 2005.
6. From the fall of 2003 until November 2004, Trial Judge Lloyd
Karmeier (“Karmeier”) and Appellate Judge Gordon Maag waged a
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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 [sic] from participating
in the appeal of the Avery Action.
7. On or about January 31, 2005, State Farm filed its response to the
disqualification motion, grossly misrepresenting the magnitude of
State Farm’s financial support (and the degree of participation by its
executives, surrogates, lawyers and employees) of Karmeier’s
8. Plaintiffs’ motion was denied, and on August 18, 2005, with nowJustice 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
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.
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 the 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 Plaintiff’s petition, without comment.
11. Reece’s investigation had revealed, among other things, that, having
been ordered on April 5, 2001 by the Appellate Court to pay a 1.05
billion judgment to the Avery class, and having succeeded in
persuading the Illinois Supreme Court to accept its appeal, State
Farm had next developed an elaborate plan to obtain reversal of the
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judgment. The initial component of the plan was to recruit a
candidate for the open Fifth District seat on the Illinois Supreme
Court for the November 2004 election who would support State
Farm once its appeal came before the Court for disposition. Of
course, there was no guarantee for State Farm that the appeal would
not be decided before the November 2004 election, but the risk – a
$2 to $4 million investment for a possible $1.05 billion return – was
sufficiently minimal to make it a worthwhile gamble.
12. Defendants’ scheme was developed and implemented in two distinct
but related phases. In the first phase, State Farm sought to recruit,
finance, direct, and elect a candidate to the Illinois Supreme Court
who, once elected, would vote to overturn the $1.05 billion judgment.
As Plaintiffs describe below, Defendants ultimately succeeded in
obtaining this objective. Nine months after his election, Karmeier
voted in favor of State Farm to overturn the $1.05 billion judgment
of the Appellate Court.
13. Once the initial phase of the scheme had succeeded, the second
phase featured two spirits of affirmative fraudulent activity, each
furthered by use the of the U.S. mails: the 2005 and 2011 written
misrepresentations to the Illinois Supreme Court. Specifically, this
phase consisted of: (a) a continuing concealment of these facts to
permit Karmeier to participate in the deliberations and cast his vote
to overturn the judgment in 2005 (this was accomplished, in part, by
State Farm’s January 31, 2005 filing), and (b) withholding
information from the Illinois Supreme Court that would have
conceivably led it to vacate the decision in 2011 (this was
accomplished, in part, by State Farm’s September 19, 2011 filing).
Again, both filings were made through the U.S. mail, having been
mailed to the Clerk of the Illinois Supreme Court and to Plaintiffs’
counsel in several states, including Illinois, Louisiana, Mississippi
14. From its inception, Plaintiffs and the other Class members in the
Avery Action were the targets of and ultimate victims of the
racketeering acts and the RICO enterprise – stripped of hundreds or
even thousands of dollars each, seized of a class-wide judgment
totaling $1.05 billion which compensated them for their losses – as a
proximate result of Defendants’ actions and the actions of the
15. In both the 2005 and 2011 filings, State Farm continued to hide and
conceal its role in Karmeier’s campaign, and deliberately misled the
Court by omitting and concealing material facts regarding State
Farm’s role in Karmeier’s campaign, which it directed through
Shepherd, Murnane, the ICJL and Citizens for Karmeier, including:
(a) recruiting Karmeier to be a candidate; (b) selecting Murnane to
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direct Karmeier’s campaign; (c) creating Karmeier’s judicial
campaign contribution network; and (d) funding Karmeier’s
16. To carry out and conceal this elaborate and covert scheme,
Defendants created and conducted a continuing pattern and practice
of activity through an association-in-fact Enterprise consisting of,
among others, the following: Shepherd; Murnane; Murnane’s nonprofit organization, the ICJL; the Shepherd-led ICJL Executive
Committee (“Executive Committee”); Citizens for Karmeier (the
campaign committee of Karmeier); JUSTPAC (the ICJL’s political
action committee); and the United States Chamber of Commerce
17. The ICJL and the Executive Committee, through Murnane and
Shepherd, respectively, aided by the Citizens for Karmeier,
functioned collectively as State Farm’s vehicle to: (a) recruit
Karmeier as a candidate; (b) direct Karmeier’s campaign, (c) lend
credibility to that campaign via endorsement, and (d) assure that
Karmeier’s campaign was well-funded.
disclosures show that State Farm secretly funneled to Karmeier’s
campaign as much as $4 million (over 80%) of Karmeier’s total $4.8
million campaign contributions. Led by Murnane and Shepherd, the
ICJL and its Executive Committee were the “glue” that held together
the many pieces of State Farm’s judicial campaign contribution
18. The utilization of the U.S. mail throughout every stage of
Defendants’ scheme – to solicit, receive and direct contributions, to
conduct conferences and disseminate communications and
campaign strategies, and to conceal the extent of State Farm’s role in
Karmeier’s campaign – was essential to the conduct of this
19. Various Enterprise participants and co-conspirators also used
electronic mail to carry out the initial phase of Defendants’ scheme
throughout 2003-2004 to communicate details regarding the
direction, management and financing of the campaign to fellow
20. As the following paragraphs illustrate, the motivation for this sevenyear-long-cover-up is both plausible and demonstrable. State Farm’s
misrepresentations and deception directed toward the Illinois
Supreme Court by its mailed court-filings, and the continuing use of
the mails by Defendants and Enterprise participants to carry out the
scheme (to evade payment of the $1.05 billion judgment) constitutes
a pattern and practice of knowing and deceptive conduct employed
to effectuate and then to conceal State Farm’s extraordinary support
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(Doc. 289, ps. 1-6).
In their motion for class certification, plaintiffs assert that
common questions of fact regarding defendants’ pattern of conduct
deprived the class of an unbiased judicial forum, resulting in the loss of the
judgment, which was the property of the class. Plaintiffs maintain that the
proposed class consists of the group of plaintiffs that was deprived of its
property interests in the Avery class judgment due to defendants’ scheme to
taint the tribunal before which that judgment was then pending. Further,
plaintiffs assert that certification is warranted because the claims all rely on
the same evidence and will rise and fall in unison. Specifically, plaintiffs
ask the Court to certify the following class:
all persons who were members of the certified class in Avery v.
State Farm Mut. Auto. Ins. Co., No. 97-L-114 (First Jud. Cir.
Williamson County, Ill.), more specifically described as:
All persons in the United States, except those residing in
Arkansas and Tennessee, who, between July 28, 1987, and
February 24, 1998, (1) were insured by a vehicle casualty
insurance policy issued by Defendant State Farm and (2) 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 or specified for their
vehicles or else received monetary compensation determined in
relation to the cost of such parts. Excluded from the class are
employees of Defendant State Farm, its officers, its directors,
its subsidiaries, or its affiliates.
The following persons are excluded from the class: (1) persons
who resided or garaged their vehicles in Illinois and whose
Illinois insurance policies were issued/executed prior to April
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16, 1994,and (2) persons who resided in California and whose
policies were issued/executed prior to September 26, 1996. 5
The defendants sternly oppose class certification on a number of
grounds: whether common questions predominate; whether superiority and
manageability are satisfied; whether plaintiffs are adequate representatives;
whether the class is ascertainable; whether the class definition is
permissible and whether class counsel are adequate.
A court's analysis of class certification “is not free-form, but rather
has been carefully scripted by the Federal Rules of Civil Procedure.” Chi.
Teachers Union, Local No. 1. v. Bd. of Educ. of City of Chi., 797 F.3d 426,
433 (7th Cir. 2015). To be certified, a proposed class must satisfy the four
requirements of Rule 23(a): “(1) the class is so numerous that joinder of all
members is impracticable; (2) there are questions of law or fact common to
the class; (3) the claims or defenses of the representative parties are typical
of the claims and defenses of the class; and (4) the representative parties
will fairly and adequately protect the interests of the class.” Fed. R. Civ. P.
23(a); see Bell v. PNC Bank, Nat'l Ass'n, 800 F.3d 360, 373–74 (7th Cir.
2015). If Rule 23(a) is satisfied, the proposed class must fall within one of
the three categories in Rule 23(b), which the Seventh Circuit has described
Avery contained an almost identical class:
All persons in the United States, except those residing in Arkansas and Tennessee, who,
between July 28, 1987, and February 24, 1998, (1) were insured by a vehicle casualty
insurance policy issued by Defendant State Farm and (2) 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.
Avery, 835 N.E.2d 801, 814 (2005).
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as: “(1) a mandatory class action (either because of the risk of incompatible
standards for the party opposing the class or because of the risk that
the class adjudication would, as a practical matter, either dispose of the
claims of non-parties or substantially impair their interests), (2) an action
seeking final injunctive or declaratory relief, or (3) a case in which the
common questions predominate and class treatment is superior.” Spano v.
Boeing Co., 633 F.3d 574, 583 (7th Cir. 2011); see also Bell, 800 F.3d at
Plaintiffs seek certification under Rule 23(b)(3), which requires that
plaintiffs establish that “questions of law or fact common to all class
members predominate over any questions affecting only individual
members, and that a class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3).
“Rule 23(b)(3)’s predominance criterion is even more demanding than Rule
23(a).” Comcast Corp. v. Behrend, --- U.S. ---, 133 S.Ct. 1426, 1432 (2013).
Finally, the class must be “identifiable as a class,” meaning that the
the class can
ascertained.” Oshana v. Coca–Cola Co., 472 F.3d 506, 513 (7th Cir.
2006) (citing All. to End Repression v. Rochford, 565 F.2d 975, 977 (7th
Cir. 1977)); see also Mullins v. Direct Dig., LLC, 795 F.3d 654, 659–61 (7th
Cir. 2015). “Failure to meet any one of the requirements of
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23 precludes certification of a class.” Harriston v. Chi. Tribune Co., 992
F.2d 697, 703 (7th Cir. 1993)(internal quotation marks omitted).
The putative class representative bears the burden of showing that
each requirement is satisfied. See Chi. Teachers Union, 797 F.3d at
433; Messner v. NorthShore Univ. Healthsystem, 669 F.3d 802, 811 (7th
Cir. 2012); Retired Chi. Police Ass'n v. City of Chicago, 7 F.3d 584, 596
(7th Cir. 1993). Although “as a general principle, a court is not allowed to
engage in analysis of the merits in order to determine whether
a class action
a class determination
discernible,” Retired Chi. Police, 7 F.3d at 598–99 (internal quotation
considerations that are enmeshed in the factual and legal issues comprising
the plaintiff's cause of action.”
Chi. Teachers Union, 797 F.3d at
435 (quoting Comcast Corp., 133 S.Ct. at 1432); see also Wal–Mart Stores,
Inc. v. Dukes, 564 U.S. 338, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374
(2011) (noting that class certification analysis “[f]requently ... will entail
some overlap with the merits of the plaintiff's underlying claim”)
(quoting Gen. Tel. Co. v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 72
L.Ed.2d 740 (1982)) (internal quotation marks omitted). As the Seventh
Circuit has explained, “a district court must make whatever factual and
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for class certification are satisfied before deciding whether a class should
be certified, even if those considerations overlap the merits of the
case.” Am. Honda Motor Co. v. Allen, 600 F.3d 813, 815 (7th Cir.
2010) (citing Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir.
2001)); see also Kartman v. State Farm Mut. Auto. Ins. Co., 634 F.3d 883,
889–90 & n. 6 (7th Cir. 2011). The Seventh Circuit has instructed district
courts to exercise “caution” before certifying a class. Thorogood v. Sears,
Roebuck & Co., 547 F.3d 742, 746 (7th Cir. 2008). That caution demands
a close look at each of the Rule 23 requirements. With these principles in
mind, the Court turns to consider the motion.
I. Rule 23(a)
A. Rule 23(a)(1): Numerosity
Rule 23(a)(1) requires that the class be “so numerous that joinder of
all members is impracticable.” Fed. R. Civ. P. 23(a)(1). A plaintiff need not
plead or prove the exact number of class members to establish numerosity
under Rule 23(a)(1), Marcial v. Coronet Ins. Co., 880 F.2d 954, 957 (7th
Cir. 1989), and the court may make common sense assumptions to
determine numerosity. See Arreola v. Godinez, 546 F.3d 788, 797 (7th Cir.
14 class members and introduced evidence that “support[ed] a much larger
estimate”). Plaintiffs contend that the class consists of “more than four
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Defendants do not dispute this figure.
numerosity element has been met.
B. Rule 23(a)(2): Commonality
the class members have suffered the same injury” and that “[t]heir claims ...
depend upon a common contention ... of such a nature that it is capable of
class-wide resolution—which means that determination of its truth or
falsity will resolve an issue that is central to the validity of each one of the
claims in one stroke.” Wal-Mart, 131 S.Ct. at 2551 (internal quotation
marks omitted); see also Chi. Teachers Union, 797 F.3d at 434. “[F]or
purposes of Rule 23(a)(2) even a single common question will do.” Wal-
Mart, 131 S.Ct. at 2556 (internal quotation marks and alterations omitted).
Rule 23(a)(2) requires that the claims of the named plaintiff and class:
depend on common contention.... That common contention,
moreover, must be of such a nature that it is capable of
classwide resolution -which means that determination of its
truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one stroke.... What matters
to class certification ... is not the raising of common
“questions” -even in droves- but, rather the capacity of a
classwide proceeding to generate common answers apt to drive
the resolution of the litigation. Dissimilarities within the
proposed class are what have the potential to impede the
generation of common answers.
131 S.Ct at 2551 (quote omitted). “[A] common nucleus of operative fact is
usually enough to satisfy the commonality requirement.”
Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992).
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Courts have found a
common nucleus of operative fact in situations where a defendant has
engaged in standardized conduct toward members of the class. See, e.g.
Keele v. Wexler, 149 F.3d 589, 594 (7th Cir. 1998)(listing cases). “Rule
23(a)(2) does not demand that every member of the class have an identical
claim,” and some degree of factual variation will not defeat commonality
provided that common questions yielding common answers can be
identified. Spano, 633 F.3d at 585.
The commonality requirement is easily satisfied here and the Court
agrees with plaintiff that all questions of law and fact are common as to the
putative class: did defendants act in concert over a period of time to select
and elect Justice Karmeier and to fraudulently conceal the nature and the
scope of their involvement to enable and defend his participation in Avery.
These are allegations that affected plaintiffs and all of the members of the
purported class. According to plaintiffs, each Hale member has an equal
right to an equal share of the damages. By contrast to the circumstances
presented in Wal-Mart, the putative class members here were not affected
by individual decisions made by different decision makers. Instead, each
putative class member’s
conduct. See Berger v. Xerox Corp. Ret. Inc. Guarantee Plan, 338 F.3d 755,
763 (7th Cir. 2003) (“What is sought is a declaration that Xerox's method of
computing the lump sums to which withdrawing employees are entitled is
unlawful. That is a ground common to all members of the class.”).
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C. Rule 23(a)(3): Typicality
The typicality requirement of Rule 23(a)(3) is closely related to the
commonality of Rule 23(a)(2).
Rosario, 963 F.2d at 1018.
23(a)(3) typicality requirement “directs the district court to focus on
whether the named representatives’ claims have the same essential
characteristics as the claims of the class at large.” Retired Chi. Police, 7
F.3d at 597. In Spano, the Seventh Circuit stated that the “starting point”
for the typicality analysis is “that there must be enough congruence between
the named representative’s claim and that of the unnamed members of the
class to justify allowing the named party to litigate on behalf of the group.”
Spano, 633 F.3d at 586. A “plaintiff's claim is typical if it arises from the
same event or practice or course of conduct that gives rise to the claims of
other class members and his or her claims are based on the same legal
theory.” De La Fuente v. Stokely–Van Camp, Inc., 713 F.2d 225, 232 (7th
Cir. 1983). “[T]ypicality under Rule 23(a)(3) should be determined with
reference to the company's actions, not with respect to particularized
defenses it might have against certain class members.” CE Design Ltd. v.
King, 637 F.3d 721, 725 (7th Cir. 2011); see also Danvers Motor Co. v.
Ford Motor Co., 543 F.3d 141, 150 (3d Cir. 2008) (“Factual differences will
not defeat typicality if the named plaintiffs' claims arise from the same event
or course of conduct that gives rise to the claims of the class members and
are based on the same legal theory.”); Rosario, 963 F.2d at 1018 (“[W]e
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look to the defendant's conduct and the plaintiff's legal theory to
satisfy Rule 23(a)(3).”).
The Court concludes that plaintiffs’ claims are typical of those of the
purported class. Similar to commonality, all of the named plaintiffs and
the putative class members allegedly were subjected to the same course of
conduct by defendants. Plaintiffs and the class members had an interest in
the Avery judgment and plaintiffs allege that all of them were deprived of
that judgment before the proceeds could be allocated and distributed
among them. The named plaintiffs’ claims have the same characteristics of
the proposed class.
D. Rule 23(a)(4): Adequacy
The final requirement of Rule 23(a) is that “the representative parties
will fairly and adequately protect the interests of the class.” Fed.R.Civ.P.
23(a)(4). This inquiry “serves to uncover conflicts of interest between the
named parties and the class they seek to represent.” Amchem Prods. v.
Windsor, 521 U.S. 591, 625 (1997). The adequacy inquiry “consists of two
parts: (1) the adequacy of the named plaintiffs as representatives of the
proposed class's myriad members, with their differing and separate
interests, and (2) the adequacy of the proposed class counsel.” Gomez v. St.
Vincent Health, Inc., 649 F.3d 583, 592 (7th Cir. 2011).
Defendants argue that the named plaintiffs lack standing and are
inadequate representatives with atypical claims in that they have no
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concrete or actual injury to business and that they have no clear and
definite amount of damages.
Further, defendants argue that Hale and
Loger lack standing because they cannot prove non-OEM parts were
installed on the vehicles and that Hale and Shadle reside outside of Illinois
therefore barring them from representing any claims of damages under the
IFCA. The Court rejects defendants’ arguments. The Court concludes that
named plaintiffs have no conflicts of interest with the members of the
proposed class that prevent them from serving as adequate class
representatives. Plaintiffs are seeking the same relief and share the same
interest in establishing defendants’ liability.
For class certification
purposes, plaintiffs and the proposed class have standing and the claims
are typical of the purported class. The record reflects that Hale had several
other accidents which occurred within the class period and resulted in the
specification of non-OEM parts. Further, the class definition covers anyone
who had non-OEM parts installed or specified. Thus, Loger and Hale both
hold a property interest in the Avery class judgment. Furthermore, Shadle
and Hale are proper representatives despite their states of residence. Avery
contained a nationwide class action based on breach of contract and ICFA.
This class proposes to be a nationwide class action based on the tainted
tribunal. Lastly, as to defendants’ argument that Shadle disavowed an
interest in the Avery judgment, the record reveals that Shadle, during his
deposition, testified that he stands by the allegations in the complaint and
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that he relies solely upon his counsel to explain the legal theories and
damages models and that he understands that his claim is based on a
tainted tribunal that resulted in the loss of the Avery judgment.
Further, the Court finds that proposed class counsel are adequate
and are qualified to proceed as class counsel for the proposed class. Class
counsel have extensive experience in prosecuting RICO claims, class actions
and various complex cases. Furthermore, class counsel have engaged in
substantial discovery, have litigated discovery issues and have devoted
significant time and resources in this action.
Defendants maintain that
proposed class counsel are inadequate because of conflicts. Specifically,
defendants maintain that proposed class counsel have conflicts with the
class because of the significant contributions the proposed class counsel
made in the 2004 election cycle to the Democratic party and Friends of
Madigan, which significantly contributed to Justice Maag’s campaign,
because of the contributions the proposed class counsel made in support of
other Illinois Supreme Court justices who sat on the Avery appeal in 2005
and 2011. Further, defendants take issue with the investigators that the
proposed class counsel hired. The Court agrees with plaintiffs in that the
fact that the proposed class counsel publicly contributed to Justice Maag’s
campaign is irrelevant to the issues in this case.
contributions were transparent and fully disclosed and do not create a
conflict of interest with the proposed class. Likewise, the Court does not
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see a conflict with the investigators and their findings regarding the
The Court rejects these arguments as unpersuasive and
II. Rule 23(b)(3)
Rule 23(b)(3) specifies two requirements: (1) “that the questions of
law or fact in common to the class members predominate over any
questions affecting only individual members,” and (2) “that a class action is
superior to other available methods for fairly and efficiently adjudicating
the controversy.” Subsection (b)(3) “poses the question whether a single
suit would handle the dispute better than multiple suits.”
In re Aqua Dots
Prods. Liab. Litig., 654 F.3d 748, 752 (7th. Cir. 2011). The policy at the
core of the class action mechanism is to overcome the problem when small
recoveries do not provide incentive for an individual to bring a solo action.
Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 759 (7th Cir. 2014).
Considerations pertinent to the Rule 23(b)(3) requirements include the
class members’ interest in individually controlling separate actions, the
extent of any litigation already begun by class members, the desirability of
concentrating the litigation in this forum, and likely difficulties in managing
a class action. Fed.R.Civ.P. 23(b)(3)(A)-(D).
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In determining whether predominance and superiority are satisfied,
the Court must ask whether the plaintiffs’ “damages are susceptible of
measurement across the entire class.”
Suchanek, 764 at 760 (citing
Comcast Corp. 133 S.Ct. at 1433). If damages can be estimated, the Court
will move on to examine the matters identified in Rule 23(b)(3), which “deal
with interests of individualized members of the class controlling their own
litigations and carry them on as they see fit.” Suchanek, 764 F.3d at 760
(citing Amchem Products, 521 U.S. at615-16 (1997)) (internal quotation
marks omitted); see Fed.R.Civ.P. 23(b)(3). In particular, the Court should
assess the difficulty and complexity of class-wide issues as compared with
the individual issues.” Suchanek, 764 F.3d at 760. The Court should also
assess “whether the class allegations are satisfied through evidentiary
“Damages are susceptible of measurement across the entire class” if
there is “a single or common method that can be used to measure and
quantify the damages of each class member.”
NEWBERG ON CLASS ACTIONS § 12:4 (5th ed. 2013). If damages are
capable for measurement on a class-wide basis, questions of individual
damage calculations will not overwhelm questions common to the class.
Comcast Corp., 133 S.Ct. 1433. “It is well established that the presence of
individualized questions regarding damages does not prevent certification.”
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Messner, 669 F.3d at 815 (citing Wal-Mart 131 S.Ct. at 2558
(“individualized monetary claims belong in Rule 23(b)(3)”)).
Here, plaintiffs argue that the damages theory is a simple one. 6
Plaintiffs argue that but for State Farm’s petition to the Illinois Supreme
Court and defendants’ conspiracy to deprive plaintiffs of the Avery
judgment, the Avery judgment would have been divided and distributed.
Plaintiffs assert that the damages correspond to the loss of the judgment, a
concrete and recognized property interest that the entire class possessed
prior to the RICO misconduct. Plaintiffs propose to allocate the damages
award on a per capita basis, with an equal share to each class member.
Defendants counter that plaintiffs and the class members purported
damages from the loss of the Avery judgment varied considerably as did the
factual circumstances of the repairs to the cars and the legal theories, thus,
defendants contend that whether individual class members would have
been entitled to any recovery under Avery presents overwhelming
individualized issues of liability, injury and amount of damages. The Court
agrees with plaintiffs’ reasoning. The damages in this case are not based on
State Farm’s practice of equipping its insureds’ vehicles with substandard
non-OEM crash parts as the damages were based in Avery; instead the
injury in this case is based on the interest the plaintiffs and the proposed
Plaintiffs’ expert Thomas Myers testified that plaintiffs’ damages are $7,612,643,917.00.
Myers performed the calculation based on the formula supplied by plaintiffs’ lawyers.
Understandably, defendants dispute this figure and the method used to calculate this
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class members had in a neutral forum and the damages correspond with
the undivided interest in the judgment each lost as a result of the tainted
This issue is identical for all plaintiffs and class members.
Accordingly, plaintiffs have met their burden of showing a proposed classwide damage is consistent with their theory of liability.
“Analysis of predominance under Rule 23(b)(3) ‘begins, of course,
with the elements of the underlying cause of action.;” Messner, 699 F.3d at
815 (quoting Erica P John Fund, Inc. v. Halliburton Co.¸--- U.S. ---, 131
S.Ct. 2179 2184 (2011)) (internal quotation marks omitted).
23(b)(3) predominance inquiry test whether the proposed classes are
sufficiently cohesive to warrant adjudication by representation.” Amchem
Prods., 521 U.S. at 623. As the Supreme Court explained:
To gain class-action certification under Rule 23(b)(3), the
named plaintiff must demonstrate, and the District Court must
find, that the questions of law or fact common to the class
members predominate over any questions affecting only
This predominance requirement is
meant to test whether proposed classes are sufficiently
cohesive to warrant adjudication by representation, but it
scarcely demands commonality to all questions. In particular,
when adjudication of questions of liability common to the class
will achieve economies of time and expense, the predominance
standard is generally satisfied even if damages are not provable
in the aggregate.
Comcast Corp, 133 S.Ct. at 1436-37 (alterations, citations, and internal
quotation marks omitted).
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Predominance is similar to Rule 23(a)’s typicality and commonality
requirements but “the predominance criterion is far more demanding.” Id.
(internal quotation marks omitted). Generally, predominance is satisfied
“’when common questions represent a significant aspect of [a] case and …
can be resolved for all members of [a] class in a single adjudication.’” Id.
(quoting 7AA Wright and Miller, Federal Practice & Procedure § 1778 (3
Thus, “common questions can predominate if a common
nucleus of operative facts and issues underlies the claims brought by the
proposed class.” Id. (internal quotation marks omitted). The presence of
some individual questions is not fatal, but individual questions cannot
predominate over the common ones.
Id. To determine if a question is
common, the Court must look to all the evidence necessary to answer that
question: if “the members of a proposed class will need to present evidence
that varies from member to member” to answer the question, then the
question is an individual one.
Id. (internal quotation marks omitted).
Conversely, “if the same evidence will suffice for each member” to answer
the question at issue, then the question is common.” Id. Predominance is
not satisfied where liability determinations are individual and fact-intensive,
see Kartman, 634 F.3d at 891, and “[m]ere assertion by class counsel that
common issues predominate is not enough,” Parko v. Shell Oil Co., 739
F.3d 1083, 1085 (7th Cir. 2014)(alterations omitted).
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Predominance is satisfied here.
Plaintiffs have established that
common questions predominate as there are common questions regarding
defendants’ acts and omissions to evade the Avery judgment. The common
issues predominate over individual issues.
There appears to be no
differences among class members with respect to proving liability,
causation and class-wide damages. According to plaintiffs, defendants did
not take different positions/actions as to the individual class members.
The claims are for an independent legal wrong: the illegal acts or omissions
by defendants. Plaintiffs’ theory of liability is based on defendants’ alleged
conspiracy to secretly subvert the judicial process and deprive plaintiffs of
an impartial forum. All the members of the class will prove the loss of
something of value – the Avery judgment – through common evidence.
Whether plaintiffs’ theory fails or prevails, it does so for the entire proposed
class. As previously discussed, the common class-wide issues in this case
are based on defendants’ acts and omissions. These common questions are
particularly appropriate for class-wide resolution.
It is identical across
every class member because all of the proof needed to resolve causation
and liability – the evidence and expert testimony – is common to all class
members. It is also costly. For these reasons, it would be extraordinary
duplicative and wasteful of the time and resources of both the Court and
the parties to litigate these questions in individual cases.
litigation is not even a realistic alternative.
Page 23 of 29
The extensive evidence and
expert testimony needed to prove the issues of causation and liability would
cost considerably more than the claims are worth, which almost certainly
eviscerates any interest an individual would have in filing individual suit.
Accordingly, the Court finds that “it makes good sense” to resolve the
common issues of causation and liability “in one fell swoop.” Pella Corp. v/
Saltzman, 606 F.3d 391, 394 (7th Cir. 2010) (citing Mejdrech v. Met-Coil
Systems, Inc., 319 F.3d 910, 911 (7th Cir. 2003)). See also Chi. Teachers
Union, 797 F.3d at 444 (“[W]hen adjudication of questions of liability
common to the class will achieve economies of time and expense, the
predominance standard is generally satisfied.”) In sum, the Court has
poured over the parties’ extensive submissions and the accompanying
evidentiary record and finds that plaintiffs have satisfied the predominance
requirement of Rule 23(b)(3) based on competent evidence common to the
The four Rule 23(b)(3) factors all support a finding of superiority.
First, “the class members’ interest in individually controlling the
prosecution or defense of separate actions,” Fed.R.Civ.P 23(b)(3)(A), is
minimal, as there is no other pending individual lawsuits that the Court is
aware. Second, because no other cases have been brought to the Court’s
attention, “the extent and nature of any litigation concerning the controversy
already begun by or against class members” is not a factor. Fed.R.Civ.P.
23(b)(3)(B). Third, “the desirability or undesirability of concentrating the
Page 24 of 29
litigation of the claims in the particular forum” favors predominance,
Fed.R.Civ.P. 23(b)(3(C), as the questions/issues contained in this case
should be decided only once and the Southern District of Illinois is as
appropriate forum as a substantial part of the events giving rise to
plaintiffs’ claims arouse in this district. Fourth, “the likely difficulties in
managing a class action” in this case are minimal given the predominance
of common issues and the readily available identity of all class members
and the relative ease of administering the claims process.
Finally, “as part of careful application of Rule 23(b)(3)’s
superiority standard, [the court] must recognize both the costs and benefits
of class device.” Mullins, 795 F.3d at 663. Parallel litigation for each class
member would entail same discovery and require multiple courts to weigh
the same factual and legal bases. That does not make sense.
To conclude, the RICO liability, causation and damages will be
proved with common evidence in this case. Thus, because common issues
of law and fact predominate, and trying these claims individually would
result in a substantial amount of repetition and wasted resources,
proceeding as a class action is the superior form of adjudication for this
D. Definitiveness, Ascertainability and Administratively Feasible
As noted, class definition “must be definite enough that the class can
be ascertained.” Oshana, 472 F.3d at 513; see also Jamie S. v. Milwaukee
Page 25 of 29
Pub. SCh., 668 F.3d 481, 495-97 (7th Cir. 2012); 7A Charles Alan Wright
et al., Federal Practice and Procedure § 1760 (3d ed. 2005)(“[T]he
requirement that there be a class will not be deemed satisfied unless the
class description is sufficiently definite so that it is administratively feasible
for the court to determine whether a particular individual is a member.”).
“Class definitions have failed this requirement whether they were too vague
or subjective, or when class membership was defined in terms of success
on the merits.” Mullins, 795 F.3d at 657.
The proposed class here is permissible and appropriate. It is set by
a precise and objective definition. It contains State Farm insureds who,
during a particular period of time, (1) had non-OEM crash parts installed
on their vehicles, (2) received monetary compensation determined by the
non-OEM crash parts and/order (3) had such parts specified by State Farm
in a repair estimate. These are the insureds that had claims in Avery.
Defendants’ next objection to the proposed class is that there is no
administratively feasible or objectively determinable way to identify class
members who had their cars repaired over a 10½ year period and either
had non-OEM parts used in the repair or had non-OEM parts specified on
their repair estimates. Defendants also maintain that any of the cars in
Avery were likely disposed of long ago which makes it impossible to
determine whether putative class members had non-OEM parts installed or
Page 26 of 29
whether the installation diminished the car’s value as required for class
The Seventh Circuit has “long recognized an implicit requirement
under Rule 23” that a class must be ascertainable, meaning “the class must
be defined clearly and that membership be defined by objective
criteria.” Mullins v. Direct Digital, LLC, 795 F.3d 654, 657 (7th Cir. 2015).
In Mullins, the Seventh Circuit noted that some courts have recently
imposed a “new” and “heightened” requirement to ascertainability by
“requiring plaintiffs to prove at the certification stage that there is a ‘reliable
and administratively feasible’ way to identify all who fall within the class
definition.” Mullins, 795 F.3d at 657. The Seventh Circuit declined to follow
suit for two general reasons. First, the new, more “stringent” version of
ascertainability “does not further any interest of Rule 23 that is not already
adequately protected by the Rule's explicit requirements.” Id. at 662. And
second, the costs of imposing the requirement are high because it “erect[s]
a nearly insurmountable hurdle at the class certification stage in situations
where a class action is the only viable way to pursue valid but small
individual claims,” namely low-value consumer class actions like the instant
case. Id. Accordingly, the Seventh Circuit opted to “stick with our settled
law,” which focuses on “the adequacy of the class definition itself,” and not
“whether, given an adequate class definition, it would be difficult to identify
particular members of the class.” Id. at 659. Under that standard, as
Page 27 of 29
ascertainability. Plaintiffs have proposed a class that consists of those who
had a property interest in the Avery class judgment: State Farm
policyholders, who during a particular period, received quotes for non-OEM
crash parts and/or had those parts installed.
certification (Doc. 438). The Court CERTIFIES the following class:
All persons who were members of the certified class in Avery v.
State Farm Mut. Auto. Ins. Co., No. 97-L-114 (First Jud. Cir.
Williamson County, Ill.), more specifically described as:
All persons in the United States, except those residing in
Arkansas and Tennessee, who, between July 28, 1987, and
February 24, 1998, (1) were insured by a vehicle casualty
insurance policy issued by Defendant State Farm and (2) 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.
Further, the Court APPOINTS plaintiffs Mark Hale, Todd Shadle and
Laurie Loger as representatives of the class. The Court, also, APPOINTS
the following law firms as class counsel:
Lieff Cabraser Heimann &
Bernstein, LLP; Barrett Law Group, P.A.; Hausfeld, LLP; Clifford Law
Offices; Much Shelist, P.C.; Thrash Law Firm, P.A.; Law Offices of Gordon
Ball; Pendley, Baudin & Coffin, LLP; and Erwin Chemerinsky, Esq.
Page 28 of 29
Lastly, the parties shall confer regarding class notice and shall file a
status report with their joint proposal or competing proposals by October
IT IS SO ORDERED.
Signed this 16th day of September, 2016.
Digitally signed by
Judge David R.
United States District Judge
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