Claims News Service, Apr. 9, 10:59 a.m. EST — In what is turning out to be a big week for State Farm, a group of law firms that had formed to prosecute the insurer and its third-party administrator E.A. Renfroe in a large number of Katrina-related cases have all been disqualified for engaging in unethical behavior. In addition, two star witnesses for prosecutors have been disqualified from testifying or using any material they gathered.

The ruling was issued by Mississippi U.S. District Court Senior Judge L.T. Senter, Jr., who past rulings have been for and against big insurers. Just this week, his initial ruling on Broussard v. State Farm — which granted a policy-limits payout on a home along with $1 million in punitive damages against State Farm — was overturned by an appeals court, giving the insurer two major legal victories in just one week.

Previously known as the Scruggs Katrina Group (SKG), the litigation group pursuing State Farm was forced to realign itself recently after lead attorney Richard Scruggs and his law firm withdrew as counsel for allegedly bribing a judge in a separate, unrelated case. The remaining law firms of Barrett Law Office, Nutt & McAlister, and Lovelace Law Firm reorganized to form the Katrina Litigation Group (KLG), and it was this group that was going to represent a large number of policyholders who were suing State Farm over claim-handling procedures following Hurricane Katrina.