Katrina Plaintiff Lawyers Deny Infiltrating State Farm Database

A team of plaintiffs lawyers that includes a former high-ranking federal prosecutor denies infiltrating an insurance company’s computer database to help build a case against the insurer after Hurricane Katrina.

Bloomington, Ill.-based State Farm Fire and Casualty Co. is asking a federal judge in Mississippi to disqualify the lawyers from representing plaintiffs in a sweeping lawsuit that accuses State Farm of defrauding the federal government after the August 2005 storm smashed the Mississippi Gulf Coast and flooded New Orleans.

One of the firms accused of misconduct by State Farm responded Monday, April 28th by calling for the judge to sanction the company’s lawyers for making “unsubstantiated allegations.”

“These are outright lies told by an arrogant and corrupt organization that has little regard for the truth or the reputations of the (lawyers) it attacks,” attorneys from the Missouri-based Graves Bartle & Marcus firm wrote in court papers.

The case involves Cori and Kerri Rigsby, two sisters who once worked for Alabama-based E.A. Renfroe, a company State Farm contracted to provide damages assessments after the hurricane.

The Rigsby sisters copied thousands of pages of internal State Farm claims records in 2006 and turned them over to tort lawyer Richard “Dickie” Scruggs and others. Scruggs sued State Farm on the sisters’ behalf, claiming they were “whistleblowers” with insider knowledge of fraud.

State Farm spokesman Phil Supple said Monday the company was “still reviewing the ten documents filed today by the Rigsby sisters and their counsel.”

As for claims the insurer has mislead the court about alleged misconduct by the Rigsby sisters and their attorneys, Supple said: “We would suggest Rigsbys’ counsel review the actual sworn deposition testimony of their own clients.”

State Farm claims Todd Graves, the former U.S. Attorney for the Western District of Missouri, was present at a meeting in Pascagoula in 2006 in which the Rigsby sisters used a laptop to access State Farm databases.

The motion filed Monday says Graves did no such thing.

“Mr. Graves did not use any laptop computer during this meeting or any other meeting with the Rigsbys, and does not recall a laptop computer being used by anyone else,” the motion said. “There simply is nothing to show (Graves Bartle & Marcus) violated any ethical rules in any manner.”

Scruggs, who used a corporate insider to help win billions from tobacco companies in the 1990s, hoped to use information from the Rigsbys in similar manner against State Farm. But, he was indicted last November along with several associates in an unrelated bribery case.

After his indictment was made public, Scruggs withdrew from representing policy holders. His former associates in the Scruggs Katrina Group formed the Katrina Litigation Group and continued with the lawsuits. But earlier this month, U.S. District Judge L.T. Senter Jr. disqualified all of them from suing State Farm over Katrina damages.

Senter said Scruggs had made “improper” payments to the sisters when he paid them salaries of $150,000 a year while also touting them as his “whistleblowers.” The judge disqualified the other lawyers involved because they knew of the payments to the sisters.

Now State Farm wants the law firms of Graves Bartle & Marcus and Bartimus, Frickleton, Robertson & Gorny removed from the sisters’ false claims case in which they say State Farm fraudulently blamed hurricane damage on water rather than wind in order to pass the costs along to the National Flood Insurance Program.

The firm of Bartimus, Frickleton, Robertson & Gorny said in a motion filed Monday that it should be allowed to remain the sisters’ counsel, in part, because it was never associated with the Scruggs Katrina Group or the Katrina Litigation Group.

The firm said it hopes the court “will judge the conduct of the attorneys accused here by State Farm according to those facts and the applicable law, and will render a decision on matters relating to disqualification that will reflect the facts of this matter, not guilt by distant and uninformed association.”

The judge did not immediately rule on the motion.