$1Billion Reversal Likely to Curtail Some Class Action Abuses

In what amounts to a significant blow to the plaintiffs’ bar in the notorious Fifth District of Illinois, the Illinois Supreme Court on Thursday reversed a $1.05 billion dollar verdict against State Farm. Avery et al. v. State Farm Mutual Automobile Insurance Co., No. 91494, 2005 WL 1981444 (Ill. Aug. 18, 2005). In an opinion authored by Chief Justice McMorrow with significance far beyond State Farm, the court held that neither the nationwide breach of contract class nor the nationwide statutory fraud class had been properly certified.

At issue was State Farm’s use of non-OEM (original equipment manufacturer) parts for vehicle repairs. Plaintiffs claimed that the use of such parts breached a promise by State Farm to restore vehicles to their pre-loss condition with parts of "like kind and quality," and that State Farm acted deceptively because it failed to tell its policyholders of a "supposed categorical inferiority of non-OEM parts" during the claims process.