Insurance Law

Update on State Farm motion to disqualify Katrina Litigation Group

By David Rossmiller

It's a measure of heightened awareness of the whole scene in Mississippi: here is yet another story by John O'Brien of Legal Newsline reporting on State Farm's efforts to disqualify what's left of the former Scruggs Katrina Group from Katrina litigation, which would have the effect of forcing the group to change its name once again, I suppose.  I sometimes refer to the new group as the Scruggs(less) Katrina Group, after the Scruggs Law Firm withdrew following the handing down of the bribery indictments.  If State Farm's motion is successful, I might have to start calling them the Katrina(less) Litigation Group. 

I mean, when you are getting a news story about a reply brief, you know there's a lot of attention being paid to what's going on.  Here's the opening of the reply brief, if you bear with just a bit of legalese, it gives a pretty good summary of the dispute:

Although Plaintiffs argue vociferously that State Farm's Second Motion for Disqualification is an "attempt to revisit the allegations . . . in its First Motion," it is Plaintiffs -- not State Farm -- who wish to relitigate State Farm's First Motion for Disqualification. State Farm is well aware that this Court found that State Farm had waived its right to seek disqualification based on ethical violations arising out of Cori and Kerry Rigsbys' theft of State Farm confidential documents and their subsequent "consulting" relationship with Richard F. Scruggs and the Katrina Litigation Group. Contrary to Plaintiff's assertions, this motion is not predicated on any of that conduct.  This motion seeks disqualification based on the fact that SKG attorneys -- including those who are still in this case -- offered a different State Farm "insider" and material fact witness in this case, engineer Brian Ford, thousands of dollars a month to "consult" for them.

Here's a copy of the brief, with the accompanying exhibits.

Now, if you read this brief, you may remember what all the fuss is about Brian Ford.  Before we get ringside and watch the punches fly, let's reiterate: Ford was the engineer who did the first report on the McIntosh property -- oddly, he noted no water damage, even though Kerri Rigsby of later "whistleblower" fame subsequently approved a flood payment to the McIntoshes.  A second report, after State Farm requested a new one from the engineering company, found both wind and water damage.  And this makes both Kerri Rigsby and Brian Ford what?  Right, material witnesses to the facts.  That is the reference to Rigsby in the brief's opening paragraph -- a prior motion to disqualify featured uncontested and widely known evidence that Kerri Rigsby and her sister, Cori Rigsby, were paid $150,000 a year as "litigation consultants" by the Scruggs Katrina Group, an arrangement that came to an end only after Scruggs withdrew from the group (I do not know if Scruggs himself is still paying the two, but the Katrina Litigation Group no longer is).  Judge Senter, and later the Fifth Circuit, said State Farm had waited too long to bring that first motion to disqualify, and therefore waived its arguments.  So the new motion is founded, to the extent possible, on newly discovered facts.

Even those who are not lawyers can see the problems with paying witnesses big wads of cash -- either looks like or is a form of bribery or witness tampering.  And when you are peddling these same folks to federal and state grand juries, well, you may have had a good ride, but the credibility of that grand jury process is entirely and irrevocably shot down in flames, like Snoopy vs. the Red Baron (I know -- in this song neither the Red Baron nor Snoopy is shot down, but if you follow this epic struggle you know what I mean). 

So when Brian Ford testified in his January 11, 2008 deposition that he met with Dickie Scruggs on September 7, 2006 and Scruggs offered him $10,000 a month to become a litigation consultant for the SKG, well, at the very least that reeks.  And you really should look through the attached exhibits, including excerpts of the deposition of Maria Brown, whom you may remember as having filed suit against Nutt & McAlister, one of the remaining KLG firms, for wrongful termination and employment discrimination.  In the excerpts, Brown alleges that Nutt & McAlister coerced an employee of an engineering firm to surrender disks with computer hard drive info, which they then used to compile a spreadsheet of policyholders.  Kerri and Cori Rigsby then went over this spreadsheet presumably to give input as to the circumstances of each, and then the law firm sent out solicitation letters and eventually signed many up for lawsuits. 

And let's remember another thing -- the stuff in this post I wrote in October about the Forensic hard drive.  In light of all this new stuff, it gives you a creepy feeling that the U.S. Attorney for the Southern District of Mississippi was playing a little too much footsie with Dickie Scruggs.  Again, perhaps a question of who is using whom, but to the degree Scruggs and the SKG used Scruggs'  proximity to the prosecutor's office to enable tactics like those discussed in the reply brief, it makes you wonder who in that office it was that took leave of their senses to allow this kind of impression to be created.   

Full post as published by Insurance Coverage Law Blog on February 19, 2008 (boomark / email).