Comment on Illinois Supreme Court Ruling in State Farm Class Action

Published August 18, 2005

(August 19, 2005 — Chicago, IL) On Thursday, August 18, in a unanimous ruling, the Illinois state supreme court reversed a $1.06 billion judgment against State Farm Mutual Automobile Insurance Co. in a class-action lawsuit that accused the company of using unsafe parts to repair damaged vehicles.

The following statement in response to the court’s decision can be attributed to attorney Paul Fisher, a member of the Board of Directors of The Heartland Institute, a 21-year-old nonprofit research organization based in Chicago. Fisher can be contacted for further information by telephone at 312/849-8244 (office) or 312/560-4720 (cell), or by email at [email protected].

“In a unanimous 6-0 decision, the Illinois Supreme Court has reversed what once was considered a landmark class-action verdict against State Farm Insurance. More than $1 billion had been assessed against State Farm in a suit that purported to cover all State Farm policyholders nationwide who had automobile repairs done using replacement parts, pursuant to their policies.

“The state supreme court determined that the lower court had inappropriately applied the Illinois Consumer Fraud Act to non-Illinois residents. The lower court heard no evidence to show that any consumer had actually relied on any allegedly false statements by State Farm about the replacement parts.

“Perhaps more importantly, the state supreme court said this case should not have been certified as a class in the first place, because the policy holders’ claims were not substantially alike.

“This decision will make it much more difficult to certify consumer fraud claims as class actions in Illinois. It is a huge victory for reforming class action abuse in Illinois.”

Paul Fisher ([email protected]) is an attorney and member of the Board of Directors of The Heartland Institute, a national nonprofit organization based in Chicago. Founded in 1984, its goal is to help build social movements in support of ideas that empower people. Among other publications, Heartland publishes Lawsuit Abuse Fortnightly, a newsletter documenting cases of lawsuit abuse and its impact on justice and the Rule of Law. Heartland is supported by approximately 1,500 donors and members. For more information, visit Heartland’s Web site at, call Ralph Conner, Public Affairs Director, 312/377-4000, or email him at [email protected].