NU Online News Service, June 21, 2:03 p.m. EDT

The largest property insurer in the country and a pair of sisters accusing it of defrauding the federal government are set to square off in court after six years of legal wrangling.

Whistleblowers Cori and Kerri Rigsby, former independent claims adjusters, filed a well-publicized False Claims Act (FCA) lawsuit against State Farm in April 2006, alleging the insurer doctored engineering reports after Hurricane Katrina so it could allegedly send losses to the National Flood Insurance Program.

The years following the lawsuit filing are marked with national print and broadcast news, public outrage, the downfall of a once-prominent attorney, the death of the presiding judge, and countless pre-trial motions to dismiss the case, limit its scope, and disqualify potential witnesses.

But on June 15 District Court Judge Halil S. Ozerden, sitting in the Southern District of Mississippi (having taken the case over after the death of well-known Senior District Judge L.T. Senter) issued the last rulings on the last motions filed by State Farm and the Rigsbys.

“It has been a long haul but [the Rigsby sisters] are absolutely ready to go,” says August J. Matteis Jr. of Weisbrod Matteis & Copley, now representing the Rigsbys. “They are excited and anxious to do this. There is nothing now between us and a trial.”

Via an emailed statement, State Farm says it too is “eager to answer these allegations” and is “confident the evidence at trial will show its conduct was fully appropriate.”

Matteis says the judge is likely to set a trial date early next week.

Among the several recent motions, Judge Ozerden denied State Farm's fourth attempt to have the case dismissed, according to court documents. The insurer has repeatedly alleged the Rigsbys violated the seal requirement of an FCA claim by appearing on, and allegedly supplying information to, broadcast and print media outlets with their then-attorney, Richard “Dickie” Scruggs. The sisters handed Scruggs thousands of lifted State Farm claims documents they say are proof the insurer is guilty of fraud.

Senter had already denied previous requests for dismissal and disqualification, and Ozerden was not persuaded to reconsider.

In another of his final rulings before trial, Ozerden upheld another of Senter's decisions when he denied the Rigsbys' motion to expand the scope of the case.

Senter said the sisters can only provide testimony related to the home of Mississippi couple Thomas and Pamela McIntosh because it is the case in which they have direct and independent knowledge. One of the sisters allegedly saw the home's engineering report, allegedly doctored by State Farm.

Ozerden says he finds no reason to reverse Senter's prior ruling.

If the Rigsbys prevail, the court will consider additional discovery, says court documents.

The McIntoshes in 2008 withdrew a their bad-faith accusation against State Farm. Soon thereafter the insurer settled with the couple for $250,000—much less than the couple originally sought with Scruggs as their attorney.

Scruggs is now serving time in prison after pleading guilty to charges related to his role in bribing a Mississippi district court judge in order to obtain favorable rulings over the split of millions of dollars in attorneys' fees in other Katrina-related settlements with State Farm.

Special Reports /

After 6 Years of Wrangling, State Farm, Rigsby Sisters Headed to Trial

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