State Farm wants Scruggs disqualified from policyholder lawsuit; Scruggs responds

By ANITA LEE
calee@sunherald.com

Attorney Richard "Dickie" Scruggs should be disqualified from representing policyholders who have sued State Farm Fire & Casualty Co. because he has "repeatedly" violated state and national ethics rules that govern attorneys, the insurance company argues in a motion filed in U.S. District Court in Gulfport.

Scruggs responded: "It's a public relations offensive where (State Farm is) just throwing everything against the wall that they can. We've been kicking their fannies for two or three months now. It tells you you're being effective when they try these sorts of shenanigans."

Scruggs said he plans to respond in court to State Farm's motion, but meanwhile is glad legal maneuvering is keeping the post-Katrina insurance woes of Coast residents in the national media spotlight.

State Farm's motion follows an Alabama judge's ruling that Scruggs should be prosecuted for criminal contempt of court over State Farm records he obtained from two former claims adjusters, sisters Cori and Kerri Rigsby. Scruggs is using some of the documents to represent policyholders in a lawsuit against State Farm and hired the Rigsbys to work for his Scruggs Katrina Group after they "pilfered" the records, in State Farm's words, and turned them over to Scruggs.

The Rigsbys had signed employment agreements with E.A. Renfroe, an independent adjusting firm that dispatched them to work for State Farm after Katrina, promising to maintain confidentiality. They supplied Scruggs with thousands of pages of records and also turned over copies to the U.S. Attorney's Office and Mississippi Attorney General.

State Farm also argues that other attorneys with the Scruggs Katrina Group should be disqualified. Spokesman Fraser Engerman said Tuesday morning that State Farm's motion is directed at Scruggs and the group, not the policyholders who filed the lawsuit, Thomas and Pamela McIntosh of Biloxi. In the case, Scruggs maintains State Farm minimized the McIntosh's claim by "coercing" engineers to change their damage assessment.

He is using records the Rigsbys obtained from State Farm to back the allegation.

Charles W. Wolfram, who State Farm says is a nationally recognized expert in the field of professional responsibility and ethics, is quoted in the court motion: "In summary, it is my considered expert opinion that Mr. Scruggs blatantly, seriously and repeatedly departed from the standard of conduct that would be followed by a lawyer of ordinary care and prudence in dealing with clearly confidential and privileged information possessed by the Rigsby sisters as former confidential agents of State Farm."

Scruggs maintained after the ruling Friday in Alabama, where Renfroe is based and filed a lawsuit against the Rigsbys, that he has done nothing wrong. He said he turned over his set of State Farm records the Rigsbys supplied to Attorney General Jim Hood at Hood's request.

Read more about this story in Wednesday's Sun Herald.