Web site answers Hood's argument on sealed State Farm settlement

John O'Brien May 18, 2009, 1:38pm


JACKSON, Miss. (Legal Newsline) - Since there is no "real objection" from Mississippi Attorney General Jim Hood, his Hurricane Katrina-related settlement with State Farm Insurance Cos. must be unsealed, the publisher of a state political Web site is arguing.

Jackson New Media, Inc., the publisher of Y'all Politics, made the argument in a reply brief filed in federal court Friday. Hood had written in a response to JNM's motion that he had no opposition to making the settlement public but, as an officer of the court, had to remind U.S. District Judge David Bramlette of existing case law that supports keeping the settlement sealed.

Notably, Hood wrote that a judge couldn't grant a motion to intervene once a case is over.

"But the plain fact is that this Court specifically retained jurisdiction over this matter, specifically to oversee the sealed settlement agreement," JNM's reply brief says.

"From the Court's own language in the Judgment of Dismissal of this matter: '(T)he Court retains jurisdiction to enforce the settlement agreement between the parties.'

"The decision already made by this Court to retain jurisdiction is the best possible response to the cases which caused the Attorney General's concern."

The lawsuit alleged Hood was unfairly threatening the company with criminal charges to force it to settle the civil suit filed by Hood weeks after 2005's Hurricane Katrina.

Shortly after Hood was forced to take the stand in federal court in Hattiesburg, the two sides reached a confidential settlement in Feb. 2007.

Hood sued State Farm and four other insurance companies weeks after Katrina, claiming that they intentionally misrepresented to policyholders the amount of damage done by wind (covered by their policies) and water (covered by a federal program).

A proposed settlement with State Farm had the potential to affect more than 35,000 policyholders, but a federal judge did not approve of it for procedural reasons. A separate successful settlement of 640 claims was coupled with a $5 million payment to Hood with the agreement his criminal investigation would cease, the company said.

Hood eventually sued State Farm again for not making the rejected settlement work. State Farm claimed he threatened it with the prospect of another criminal investigation.

The two sides disagreed heavily over the circumstances of the settlement. Hood wrote in a column that "allegations lodged against me by this insurer were shown to be false," while his press secretary wrote the only reason the outcome was referred to as a "settlement" is because "the details of the Attorney General's criminal investigation needed to be protected. The case was dismissed because the allegations were false."

Sheila Birnbaum, a State Farm attorney, accidentally sent an e-mail to members of the press that said, "This is so over the top. Can we ask that (Hood) be held in contempt of court for misrepresenting a settlement agreement and order of the court?"

State Farm spokesman Phil Supple said, "The court has taken control of this case and ruled that our contract with the attorney general is valid, unambiguous and enforceable and we are very pleased with that outcome. Given that, we have no problem dismissing the case."

Editorials on Y'all Politics are frequently critical of Hood.

"Other than to identify a few cases for consideration, Attorney General Jim Hood has advised the Court that he has no other objection to Jackson New Media's motion to intervene here," the reply brief says.

"The State Farm plaintiffs merely advise the Court that they will follow the Court's guidance in the matter."

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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