HATTIESBURG, Miss. - State Farm Insurance Cos. says it will get a chance to depose Mississippi Attorney General Jim Hood and indicted trial lawyer Richard "Dickie" Scruggs as a result of a federal court order entered Thursday.
Federal Magistrate Judge Michael Parker made the decision after a Wednesday status conference. Hood had asked Parker that a temporary restraining order preventing Hood from continuing his criminal investigation into State Farm's practices after Hurricane Katrina be lifted.
State Farm has, in turn, sued Hood, claiming he already signed a non-prosecutorial agreement and is only pursuing criminal charges again to force the company to reach civil settlements with unhappy policyholders.
"This order reconvenes State Farm's suit against Attorney General Hood," spokesperson Phil Supple said. "Our lawsuit claims Hood, working in cooperation with Dickie Scruggs and others, has been harassing State Farm and its associates in an attempt to force us to settle lawsuits.
"We are looking forward to this opportunity to air the issues."
Hood was previously scheduled to testify in the case, but the restraining order prevented it from happening. Hood is apparently ready now to go forward.
Parker said Hood must testify at a hearing and granted State Farm leave to depose Scruggs.
Since the TRO, Scruggs has been indicted on federal charges that he and four others, including his son and another member of his law firm, conspired to bribe a state judge in a dispute with another firm over at least $26.5 million in attorneys fees earned when State Farm settled 640 cases early last year.
Two others charged in the alleged scheme have pleaded guilty and are cooperating with federal prosecutors.
"State Farm's ore tenus motion for leave to take the deposition of Richard Scruggs for use at the hearing is granted as this witness may be outside of the subpoena power of this court and, therefore, may not be available to testify live at the hearing," Parker wrote.
In a memo filed last week, attorneys for Hood said State Farm's quest for a preliminary injunction will become "an extensive and expensive fishing expedition."
Just weeks after Katrina, Hood filed suit against five insurance companies. He alleged they misrepresented the amount of damage caused by flood (covered by the federal NFIP) and wind (covered by the insurance company).
State Farm was the first to settle, closing 640 claims. Another agreement to begin an arbitration process to resolve approximately 35,000 claims fell through when a federal judge did not approve it. Since then, State Farm and former Insurance Commissioner George Dale instituted their own procedure to settle those claims, much to Hood's dismay.
Hood moved to force State Farm to settle. Had the settlement been accepted, a group of attorneys led by Scruggs stood to make another $20 million.