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Racketeering case against State Farm headed to trial

State Farm's legal woes continue as the company faces a trial on racketeering charges after the federal appeals court denied its motion to block the class action.

By Sue Reisinger | Updated on December 16, 2016
A federal appeals court denied State Farm's petition to block a class action in a case charging the company with racketeering.

The policyholders who sued State Farm Mutual Automobile Insurance Co. and its in-house counsel for racketeering have cleared a major hurdle after a federal appeals court denied State Farm’s petition to block the class action.

The appellate judges on Dec. 8 also ordered to be released several documents that had been under seal, including an expert’s 145-page report that tracks a multimillion-dollar money trail at the heart of the racketeering charge. The trail traces the dark money from the company through various groups and then allegedly into the campaign of a state Supreme Court justice who eventually ruled in State Farm’s favor on a billion-dollar case.

In denying to hear State Farm’s appeal of class action certification, the U.S. Circuit Court of Appeals for the Seventh Circuit returned the case to U.S. District Court in East St. Louis, Illinois, to proceed with trial.

State Farm spokesman Justin Tomczak issued this statement: “We respect the court’s decision … We will continue to vigorously defend against this case, which improperly and erroneously attacks not only State Farm, but also the integrity of our legal system.”

“Under plaintiffs’ theory, any company that contributes to any organization could be deemed solely responsible for any contribution that organization makes to others, ” says Tomczak. “ This assault on the First Amendment would have a far reaching, chilling effect on corporate and institutional philanthropy, sponsorship and partnership.”

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