Miss. media gets access to Hood/State Farm settlement

John O'Brien Sep. 3, 2010, 11:00am


JACKSON, Miss. (Legal Newsline) - A group of Mississippi media outlets will be granted access to state Attorney General Jim Hood's settlement in a lawsuit State Farm Insurance Cos. brought against him.

U.S. District Judge David Bramlette granted the group's motion to unseal the settlement on Thursday. Hood fought the group in court, but State Farm's attorneys have written that the company is indifferent.

"A court-ordered unsealing of the agreement does not void any crucial terms of the settlement, and the parties have failed to show how unsealing the agreement could significantly harm either the plaintiffs or the defendant," Bramlette wrote.

"Under these circumstances, a generalized interest in encouraging settlements does not outweigh the public's common law right of access."

Jackson New Media, WLBT, WDAM and WLOX filed their motion to unseal April 20 after being granted intervenor status. Jackson New Media owns the political Web site Y'All Politics.

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 then 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 media members will not be granted access to the testimony of disgraced plaintiffs attorney Richard "Dickie" Scruggs. Scruggs, an attorney who made his fortune in asbestos and tobacco litigation, is serving a prison sentence after pleading guilty to two judicial bribery schemes.

Bramlette said the court never received Scruggs' testimony.

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

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