Buying the Judicial Process: Was Dickie Scruggs Simply Following the State Farm Model?

I was catching up with my reading on Sam Friedman’s blog and found his piece on Dickie Scruggs one of the more even handed blog treatments of this subject I have run across online. All the more interesting is that Friedman is an insurance guy and frankly is the last place one would expect to find the balance on this subject sought by Steve Eugster at Wikiscruggs. The reason Mr. Eugster has not found balance is because he has not looked in the right places.

Bellesouth for example was run off the anti-Scruggs/Jim Hood blogs because she dared to disagree with the party lines but neither fairness or balance were the goals at the sites where Belle previously posted. The reason I’ve always enjoyed reading Friedman is his even handed treatment of the subject matter; you can learn about the insurance business and not be subject to the hidden agendas of aspiring authors or non stop legal practice marketing and the industry pandering it entails.

So after Mr Friedman had his say on Dickie Scruggs the first comment to his entry from Insured Consumer was eye catching.

Not to put too fine a point on this, but Mr. Scruggs could have learned a few things from State Farm here.

You don’t pay off the judge directly! You contribute substantially to his campaign fund. So substantially, in fact, that should the judge be asked to recuse himself, he will refuse (Avery v. SF).

That’s the way it’s done on the farm!

Illinois Supreme Court Justice Lloyd A. Karmeier
or download this PDF

I followed the tinyurl to a Common Cause press release on the subject calling for an investigation of a member of the Illinois Supreme Court. Adding the search term “Avery” to the suggested google search string brought me to the Slate Online and its story on the subject. Evidently Mississippi is not alone is having its judicial elections tainted by out of control campaign finance but in the case of Illinois, Lloyd Karmeier may just be the best money State Farm ever spent on an election. Consider the numbers involved in the Illinois Supreme Court race, $9.3 million dollars total with $4.8 million of that total raised by Justice Karmeier. Of the $4.8 million, 28% of the total or $1.35 million came from State Farm or entities affiliated with State Farm. Why is that important? Because a case pending before the court at the time of the election was Avery v. State Farm Automobile Ins. Co., an appeal of a class action suit brought against State Farm on behalf of 4.7 million policyholders in 48 states. The appeal sought to overturn earlier rulings against State Farm, to the tune of $1 billion dollars.

State Farm more than lived up to its slogan. “Like a good neighbor” the company was indeed “there” for Judge Karmeier, who received more than $350,000 in direct contributions from its employees, lawyers, and others directly involved with the company and/or the case. Karmeier got an additional $1 million from larger groups of which State Farm was a member or to which it contributed. As is often the case, he won both the fund-raising battle and the election.

Although Karmeier himself described the fund raising as “obscene,” his concern for appearances waned almost immediately upon election. Once seated on the Illinois high court, he refused to recuse himself from the Avery appeal. He then cast the deciding vote on the breach of contract claims, overturning that verdict against State Farm. The public, not to mention the opposing litigants, could be forgiven for questioning whether justice was truly served.

Slate condenses the issue with Avery well and then explains the impacts that bought justice has on everyday people.

Was Justice Karmeier’s decision legitimate, well-reasoned, unbiased? Very possibly yes, but we will never know. Overshadowing the merits of his decision is a single stark fact: Without Karmeier’s vote, State Farm would have faced further proceedings on claims valued at up to $456 million. That’s either a coincidence or an impressive rate of return on State Farm’s investment. Which of the two it was is almost irrelevant—especially where a correlation between a contributor and a decision can’t be known. In either case, the cost to the courts themselves is immeasurable…..

The high price of winning, however, falls hard on the public. Evidence shows a steady decline in public confidence in fair courts. Polls show that 76 percent of Americans believe that campaign contributions have at least some impact on judges’ decisions in the courtroom. Far more worrisome? The fact that nationally, judges now share this view: According to a 2002 written survey of 2,428 state lower, appellate, and supreme court judges, nearly half the judges surveyed themselves believe that campaign contributions influence judicial decisions. Not even the judges believe their colleagues consist only of “Untouchables.”

Lost in the Scruggs case is this simple fact summed up so well by Mr Friedman that you will not hear from insurance defense bar.

…..just because he (Scruggs) was guilty of misdeeds, does not mean those he went after in the industry were victimized. It only shows he was no more honest than many of those he sued for wrongdoing.

Both sides need to clean up their acts big time.

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