Knoxville attorney Gordon Ball filed a lawsuit against an Illinois insurance company 20 years ago and the suit has been settled this month for $250 million. And thereby hangs a tale worthy of a John Grisham novel.
Ball and other plaintiff attorneys won a judgment of over $1 billion against State Farm of Illinois in 1999. Cars in accidents were not being repaired with appropriate parts, but with cheap, after-market imports. The insurance company appealed. While the case wended its slow way up to the Illinois Supreme Court a vacancy occurred on the court. The justice elected to fill the seat was the deciding vote overturning the verdict. Ball countered that the insurance company had spent over $300,000 helping the justice get elected and he should have recused himself. The insurance company denied spending that much and the court rejected the argument.
Ball refused to let the issue go, believing that his clients had been cheated. In 2011, he hired a retired FBI agent named Dan Reece to investigate. Over the years it was revealed that the insurance company had recruited the candidate, had run his campaign and, along with its allies, had contributed $4 million in “dark money” to the campaign, using PACs whose donors do not have to be identified.
Meanwhile, a coal company executive in West Virginia funded a state Supreme Court candidate that was the deciding vote relieving him of hundreds of thousands of dollars in fines. The case went to the U.S. Supreme Court and the court ruled that the justice should have recused himself and ruled against the coal mine owner.
So, Ball and company had a U.S. Supreme Court decision to back them up. Evidence of $4 million being spent, far beyond the $300,000 originally claimed. So, they came with a suit based on the RICO statute, arguing that it was a conspiracy to elect a justice to overturn the verdict by manipulating the Illinois Supreme Court.
All of this was happening in fits and starts over a period of years. When a federal court ruled that a RICO case could go forward, a trial date was set for this month, 20 years after the original verdict. The law provides for triple damages and additional damages and State Farm of Illinois faced a liability of over $7 billion. State Farm Illinois then had an argument that such a verdict would be damaging to the health of the company.
On the day the trial was to start, lawyers for both sides announced a settlement of $250 million. The company could not afford to risk losing and facing a $7 billion judgment and the plaintiffs, fearing another round of appeals and years more of litigation, agreed to settle. If the class action attorneys in the case receive the usual one-third fee then they will share $83 million. It will be up to the court to make the award.
The case has been closely watched by the legal community since elected justices are often funded by law firms in the state. John Grisham wrote a novel called “The Appeal,” set in Mississippi, in which a chemical company manipulates the election of a state Supreme Court justice in order to overturn a verdict. It has parallels to the Illinois case.
Ball has won substantial class action lawsuits before. He is best known here for suing paper companies to clean up the Pigeon River. Ball grew up on the banks of the Pigeon River in Cocke County.
Budget Busting: Last week I criticized attack ads against Phil Bredesen as unfair and not true. This week I offer some things that could be used to describe Bredesen’s record as governor. Gov. Don Sundquist’s last budget totaled $20.5 billion. Bredesen’s last budget totaled $29.3 billion. So, the state budget grew to an extra $9 billion a year during Bredesen’s two terms.
If you look at the state general fund, that excludes federal revenue, it was $9.6 billion in Sundquist’s last year and $12.6 billion for Bredesen’s last budget. So, the amount of taxes paid by Tennessee taxpayers under Bredesen grew to an extra $3 billion a year.
The anti-Bredesen ad makers might also look at something called the Technical Corrections bill. Usually this end of session bill is as boring as it sounds. It cleans up language and clarifies legislation. It usually sails through and nobody reads it, the press ignores it and the public doesn’t have a clue. But some legislators caught on eventually. Bredesen’s Technical Corrections bill was chock full of fee increases and tax levies that some Republican legislators estimate added almost $1 billion in additional revenue by the end of Bredesen’s terms. Stealth tax increases.
When Bredesen took office, the legislature had just passed a one-cent sales tax that gave him an extra billion a year. Then there was President Bush’s stimulus package money. Then the President Obama stimulus package money. When you get $4 billion in found money it’s hard to screw up the budget he so proud of balancing. Or, as one prominent Democrat called him “the luckiest governor ever.”
You could also argue that when Bredesen took money from the highway trust fund it slowed the growth of the transportation budget and that necessitated a gas tax increase this year to catch up. It’s a stretch, but it’s an argument.
So much for whiz-bang executive competence.
Come in out of the rain:
Does it seem strange to you that television reporters stand on beaches or hang onto light poles in a driving rain and whipping wind to scream at residents Evacuate! Evacuate!
Did you see the video from Florence of the reporter seemingly being blown over by the wind and the camera pulled back to reveal a couple of people behind him just strolling along? Reminds me of a scene from Hurricane Harvey in Houston when a reporter was sitting in a boat giving her report and two guys walked behind her to reveal the water was just over ankle deep.
You can reach Frank at email@example.com.