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Scruggs attacking Insurance Commissioner Dale

By John O'Brien | Apr 5, 2007

Richard Scruggs' attack ad on Insurance Commissioner George Dale

A prominent plaintiffs attorney with ties to the Mississippi Attorney General's office recently took out a full-page ad in the Jackson Clarion-Ledger depicting state Insurance Commissioner George Dale as a pig wearing lipstick.

Attorney Richard "Dickie" Scruggs calls Dale "political toast," and the ad showed Dale in a bathtub being pampered at a "State Farm Beauty Salon."

After a settlement Scruggs helped negotiate with State Farm in Attorney General Jim Hood's lawsuit against five insurance companies over an alleged lack of coverage following Hurricane Katrina was denied by federal judge L.T. Senter, Dale and State Farm reached an agreement to reopen previously denied claims.

David Rossmiller, an insurance attorney and partner at Dunn Carney in Portland, Ore., who has been analyzing the Gulf Coast's insurance situation for LegalNewsline, said Scruggs sees Dale as a tool of the insurance industry.

"I believe Scruggs was already going to oppose Dale for re-election before the announcement of Dale's deal with State Farm, but that did steal a lot of Scruggs' thunder as well as take millions out of his pocket. I doubt he needs the money, but still, it was right almost in his hands and now it is gone," Rossmiller said.

Scruggs' firm earned $1.4 billion when it was hired by then-Mississippi Attorney General Mike Moore to negotiate the Tobacco Master Settlement Agreement in the 1990s, and recently made $26 million when 640 lawsuits against State Farm that made up part of Hood's class action suit against five insurance companies were settled.

A report from The Associated Press said Scruggs stood to make another $20 million if the second part of that settlement had been approved. It grouped together 35,000 policyholders who had not sued yet but still could. Senter rejected that settlement, which had no cap and was estimated to be worth approximately $500 million, for several reasons.

After all that, Dale and State Farm made an effort to resolve things outside of a courtroom. Scruggs is concerned with the oversight, or lack thereof, in that process.

A report Thursday in the Jackson Clarion-Ledger says 83 percent of the 3,381 cases ordered to the Mississippi Department of Insurance's mediation program, established by Dale, have been settled, according to the department's numbers.

Dale has been told he will be kept off the Democratic primary ballot because he endorsed George Bush, not John Kerry, during the last Presidential election. He is fighting that, and could run as an Independent.

Scruggs said keeping Dale from being re-elected to his eighth term is a priority.

"It would have been easier for him if he had an ally like Attorney General Hood as the insurance commissioner," said Rossmiller, whose blog can be found here.

"Scruggs has said the lawsuits are political and public relations events as much as litigation, so he seeks to get everyone to go along with his purposes.

"Dale has a more traditional view of the office, which doesn't involve grandstanding against insurance companies. This is the old debate about whether the regulators get 'captured' by those they regulate."

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