A spokesman for State Farm said today that it has now settled more than 200 hurricane damage lawsuits brought by the Scruggs Katrina Group in Mississippi.
Spokesman Jeff McCollum said in addition that a case involving 38 plaintiffs in a federal court action accusing the firm of civil racketeering had been dismissed.
Terms of the settlements were confidential. Mr. McCollum said only about 250 other cases remain.
The cases against the company took a major blow when the key attorney involved in the actions, Richard “Dickie” Scruggs, pleaded guilty in U.S. District Court in Oxford, Miss., last March for attempting to bribe a judge. The judge was assigned to a case involving a Scruggs law firm suit against another lawyer over $26.5 million in attorneys’ fees from another Hurricane Katrina-related settlement with State Farm.
The racketeering suit that was tossed was brought in June of 2007. It accused the insurer of conspiring with an engineering firm and an adjusting concern to defraud coastal homeowners out of $3.97 million.
The Little Rock, Ark., office of Provost Umphrey, the law firm now representing policyholders in the hurricane cases, said in a statement that confidential settlement agreements have been reached.
Ninety percent of the storm damage cases the firm had against State Farm in Mississippi have been settled. “A combination of factors came together to allow the successful resolution of these claims, including the compensation amount, the exhaustion of the clients with the legal pursuit of their claims, unfavorable legal rulings over the last year and half and a fresh perspective afforded by new counsel,” said a statement from Provost Umphrey.
“A settlement always represents compromise on the part of both parties, and while that is true here, both State Farm and the individual claimants were mutually desirous of bringing the litigation to a close and putting this matter behind them,” the statement concluded.
In addition to his comments, Mr. McCollum e-mailed a statement saying, “State Farm always tries to resolve any disputes with our policyholders and are pleased we were able to do so here. We are satisfied with the outcome, but at plaintiff/insured’s request, we’re not able to discuss the settlement amounts.”
Regarding the racketeering suit,the company said it “does not engage in the sort of activity alleged in this litigation. Now-disbarred attorney Dickie Scruggs made unsupported RICO claims to great fanfare in June 2007. Since then, numerous legal, political, media and PR tactics used by Scruggs have been exposed as distortions. The baseless RICO claims have been dismissed and the underlying contract claims are in the process of being settled.”