Hood won't comment on State Farm motion

By John O'Brien | Dec 20, 2007


JACKSON, Miss. - Even the most eye-opening, jaw-dropping allegations remain, merely, allegations until proven otherwise.

However, Mississippi Attorney General Jim Hood on Wednesday refused to comment on statements made in a motion filed Tuesday by State Farm Insurance Cos. to disqualify every member of the former Scruggs Katrina Group from their Katrina cases.

The company claims a member of Hood's office discussed the effects a criminal conviction could have on State Farm with regards to a civil settlement with a private attorney representing civil claims against the company.

Also, they claim the same Assistant Attorney General, Courtney Schloemer, wanted to prevent former engineer Brian Ford from being hired as a consultant with the SKG until he could testify in the criminal case.

"It's shocking beyond words," said insurance attorney David Rossmiller, a partner at Dunn Carney in Portland, Ore., who has been analyzing the Gulf Coast's insurance situation for Legal Newsline.

"What's detailed in the Brian Ford notes are two very, very shocking allegations: That the assistant attorney general was manipulating testimony before a grand jury and discussing using criminal prosecution to benefit one party's civil litigation. It's absolutely outstanding."

Nineteen pages of Ford's journal were entered as an exhibit with State Farm's motion. The company says Ford was paid "hefty sums" to perform consulting work for the SKG even though Ford, a former engineer at Forensic Analysis and Engineering Corp., was a material fact witness in another case.

Scruggs offered Ford indemnity, a $10,000 monthly retainer and a percentage of each settlement work for the SKG to become a "fact witness" and "consultant" on a case, State Farm alleges.

"(O)n June 25, 2007, (SKG attorney Derek) Wyatt again spoke to Ford, telling that while the SKG could not pay him as a 'fact witness,' it could pay him as a 'consultant,' ultimately prompting Ford to ask, 'Do I need to move assets?'" the motion says.

Ford's journal contains an entry from Oct. 25, 2006. Part of it reads, "Courtney talked to Derek. They agree that a criminal conviction could help civil cases."

It also says, "Courtney does not want Brian to be a paid consultant prior to testifying before grand jury."

"If this conduct is true, there is no defense for it," Rossmiller said. "I've never seen anything like this before. I don't know that there has ever been anything like this before."

Scruggs and two other members of the Scruggs Law Firm were indicted last month for allegedly attempting to bribe a state judge in a $26.5 million attorneys fees dispute, causing the firm to drop out of the SKG.

The group renamed itself the "Katrina Litigation Group" and now features the Barrett Law Firm, Nutt and McAlister and the Lovelace Law Firm. State Farm wants all of them to drop their Katrina cases.

Hood has remained mostly quiet in the time since the indictment of Scruggs, a campaign contributor to Hood who is noted as one of the nation's most high-profile trial lawyers because of his work in the 1990s on the Tobacco Master Settlement Agreement.

The State Farm motion portrays Hood's office and Scruggs' group working hand-in-hand against State Farm, one of five companies sued by Hood for allegedly misrepresenting the amount they owed to policyholders after Hurricane Katrina.

State Farm has sued Hood for allegedly using the threat of a criminal investigation to force a civil settlement to which was previously agreed by the two sides but not approved by a federal judge.

"The ethics of politics and the ethics of the courtroom are not necessarily the same thing," Rossmiller said. "You're crossing borders and crossing lines, you can forget where you are at any point in time."

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