In what turned out to be a month of positive legal verdicts 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 were all disqualified for engaging in unethical behavior. In addition, two star witnesses for prosecutors have been disqualified from testifying or using any material they gathered.

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). It was this group that was to represent a large number of policyholders who were suing State Farm over claim-handling procedures following Hurricane Katrina.

That was until Mississippi U.S. District Court Senior Judge L.T. Senter, Jr.'s ruling in early April. It again involved ethical misconduct charges against Scruggs, this time for paying two key witnesses — sisters and independent adjusters Cori and Kerri Rigsby — more than $150,000 for secretly gathering thousands of pages of evidence to use against State Farm and E.A Renfroe. They argued that there was an inherent conflict of interest with the payments since the sisters were likely to be called as material witnesses in many of the hurricane damage cases that Scruggs' group was handling.