State Farm indifferent about unsealing of Hood settlement

John O'Brien May 6, 2010, 9:00pm


HATTIESBURG, Miss. (Legal Newsline) - State Farm Insurance isn't making any arguments to keep the settlement in its case against Mississippi Attorney General Jim Hood sealed.

The company said Thursday that it does not care if the settlement and videotaped testimony are unsealed, a request made by four media outlets in April. State Farm's attorneys wrote that they consider the matter moot.

Earlier this week, Hood objected to the motion.

"State Farm takes no position with respect to unsealing Richard Scruggs' Feb. 4, 2007 deposition transcript," State Farm's attorneys wrote.

"As the court heard the in camera testimony at issue without State Farm representatives or counsel present, State Farm -- like the intervenors -- does not know its exact contests.

"While State Farm timely objected to the ex parte and in camera testimony by General Hood's witnesses, the issue is moot as to State Farm, given General Hood and State Farm's settlement of this litigation."

Jackson New Media, WLBT, WDAM and WLOX filed their motion April 20. Jackson New Media owns the political Web site Y'All Politics.

"Defendant Jim Hood is attorney general of the state of Mississippi and New Media has a clear right under both federal and state law to know and report on the facts and details of the circumstances under which Mr. Hood and the State Farm plaintiffs settled this matter," the motion says.

In May 2009, Hood argued that the settlement should stay sealed, saying a judge can't grant intervenor status to a party after a case is over.

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 had 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?"

The motion also asks Bramlette to unseal the transcript and/or video deposition of the disgraced plaintiffs attorney Scruggs that was sealed during his criminal proceedings and to unseal in camera testimony taken while the case was originally under seal.

Scruggs organized a group of attorneys to handle Katrina claims but is in jail after pleading guilty to two judicial bribery schemes.

From Legal Newsline: Reach John O'Brien by e-mail at

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State of Mississippi
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Jackson, MS 39201

Mississippi Attorney General
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Jackson, MS 39201

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