State Farm pursues Scruggs, records in whistle-blower case

By ANITA LEE – calee@sunherald.com

GULFPORT

State Farm has subpoenaed former attorney and current federal prisoner Dickie Scruggs, along with a host of documents he may possess, for pretrial testimony in a whistle-blower lawsuit filed against the insurer over Katrina-claims handling.

The lawsuit, filed by former claims adjusters Cori and Kerri Rigsby of Ocean Springs, is scheduled for trial Dec. 1. A flurry of motions are being filed as a July 1 deadline approaches for each side to finish requests for pretrial fact-gathering, called discovery.

State Farm’s subpoena of Scruggs requests information involving the same cast of characters tied to a North Mississippi judicial bribery scheme that netted Scruggs seven years in prison. State Farm seeks to take his pretrial testimony Tuesday at the Federal Correctional Institute in Ashland, Ky., where he is serving a seven-year sentence.

Scruggs admitted trying to bribe a circuit court judge who was presiding over a lawsuit filed against him by Jackson attorney John G. Jones. Jones was a member of the Scruggs Katrina Group, which represented hundreds of policyholders suing insurance companies, including State Farm, over unpaid Katrina claims.

Jones claimed he was not paid what he was owed when SKG settled the bulk of its policyholder claims against State Farm.

Among other records, State Farm seeks any communications between Scruggs and two associates, former State Auditor Steve Patterson and attorney Timothy Balducci. who pleaded guilty in the bribery case. The subpoena also seeks communications between Scruggs and P.L. Blake, a former North Mississippi businessman who said he clipped newspaper articles and tracked political developments to earn $50 million from Scruggs’ settlement of landmark tobacco litigation in the 1990s.

When money was needed to bribe the North Mississippi judge, court records indicate, Blake was called to secure it from Scruggs. The records do not indicate Blake knew why the $40,000 was needed. Blake was not charged with any crime in the bribery case, which first came to light in late 2007.

The Rigsby sisters, who adjusted Katrina claims for State Farm, turned to Scruggs in early 2006 with allegations the insurance company was defrauding the federal government by shifting its responsibility to pay claims to the National Flood Insurance Program. State Farm denies any wrongdoing.

Scruggs encouraged them to file t

Read more: http://www.sunherald.com/2010/06/22/2280387/state-farm-pursues-scruggs-records.html#ixzz0rgNrWB00

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