Scruggs Nation, Day 19: re-evaluation of the ‘whistleblower’ Rigsby sisters

First off, let’s deal with a bit of news from the ongoing trench warfare between the entity formerly known as the Scruggs Katrina Group and State Farm known as McIntosh v. State Farm.  Judge Robert Walker has ruled that State Farm may take the video depositions of Dickie and Zach Scruggs, as you can see from the following document on PACER from December 12.  Order denying plaintiffs’ motion for protective order/motion to quash.

If you follow these things, you might have noted that two days prior, the McIntoshes filed this brief: Plaintiffs’ opposition to State Farm’s motion for partial summary judgment.  Also, click here to see Exhibit A to the brief.  (One can no longer say "Scruggs filed," as he and his firm have withdrawn from McIntosh and other SKG Katrina cases). In it, including on page 11 of the brief, there is an extended argument about the significance of the fact that three State Farm employees — Lecky King, State Farm Flood Coordinator for Katrina, her assistant, Lisa Wachter and King’s supervisor, Dave Randel, have taken the Fifth to questions during depositions, citing AG Jim Hood’s at-that-time ongoing criminal investigation of State Farm. (The investigation, as you may recall, has since been enjoined by the federal district court, as you can see by clicking on this copy of this November 13 order extending injunction against Hood).   In light of Judge Walker’s December 12 order the question must be asked: will the Scruggses themselves take the Fifth in the depositions?

You can see the original notices of the depositions of the Scruggses by clicking on this link to a post I wrote in August and going to the bottom of the post.

Now back to a question I have raised before, including in my post from Saturday — should the role of the so-called "whistleblower" Rigsby sisters in SKG litigation receive a new review and closer scrutiny? For example, has their importance, and the importance of the 5,000 to 15,000 documents State Farm documents they took from their employer, E.A. Renfroe, and gave to Scruggs and AG Jim Hood been vastly over-hyped? Is the storyline we have heard about the Rigsby sisters accurate to any degree?

I see in the McIntosh docket that the sisters’ broad assertion of privilege to keep from producing certain documents was rejected fairly decisively on December 14 by Judge Walker.  Click here to read the order requiring them to produce the documents.  

These items from the McIntosh docket may also interest you:

Judge Walker denied the motion to quash the subpoenas on December 14 by a minute order available on the PACER docket.  The minute order states that "The subpoenas are limited to a relatively short time frame, and it appears that the information sought is relevant or may lead to the discovery of relevant evidence."

The subpoenas are to telephone companies and seek the telephone records of the sisters from October 12, 2005 to February 28, 2006.  This appears to be an effort to discover if the storyline is false that the sisters began talking with and working with Scruggs in February 2006, as Scruggs has stated in testimony in the Renfroe v. Rigsby civil case in Alabama (this is the lawsuit out of which the ongoing prosecution of Scruggs for alleged criminal contempt arose).

You may also recall that in State Farm’s lawsuit against Hood — the one that has resulted in a continued injunction against his resuming his criminal probe of State Farm — the insurer has alleged that the documents the sisters took match up virtually case for case with those in the  SKG’s McFarland group of cases.  These are the 640 cases that resulted in the big settlement announced in January between State Farm and SKG, which included the $26.5 million in attorney fees that gave rise to the fee dispute with Jones, Funderburg.  This lawsuit, as we all know, is the one in which Scruggs and four others are alleged to have attempted to bribe Lafayette County Judge Henry Lackey.

You can see the allegation here in the Farm v. Hood amended complaint, paragraph 57.  The complaint alleges that "a comparison between a list of State Farm claim files that Kerri Rigsby accessed in June 2006 and a list of [McFarland] clients . . . reveals that, of the first 118 claim files Kerri Rigsby accessed, 99 matched up name for name and in substantially the same sequence as the names of plaintiffs listed on an exhibit to the McFarland complaint."   

In the McIntosh case, State Farm filed an affidavit back in September with this evidence. Click here to see the affidavit, click here to see Exhibit A with some of the evidence, and click here to see Exhibit B with more of the evidence.

Recall also that Kerri Rigsby is listed in the Brian Ford notes as having discussed Katrina litigation with Sen. Trent Lott, and recall also that Hood has stated in open court in Harrison County, on April 11, 2006, that he already had many of the State Farm documents that he was requesting through grand jury subpoenas: "We know what a lot of it that they’re going to produce and we’re just going to see if they actually give us what is written on them and stuck to them and so forth. So I’ve had this for a long time, this information for a good while and there’s nothing in that civil case that I can do [apparently a reference to his then-civil suit against insurance companies including State Farm]."  

And we must also remember that the deposition of Lee Harrell, assistant Insurance Commissioner of Mississippi, provides evidence that in December 2005, Scruggs called a meeting with Insurance Commissioner George Dale, said he had highly placed "insiders" at State Farm and wanted Dale’s cooperation in working the matter like he and former Mississippi AG Mike Moore had worked the tobacco litigation.  Harrell also testified to meetings in early 2006 in which Hood allegedly said if State Farm didn’t settle civil litigation, "I’m going to indict them all, from Ed Rust [State Farm’s CEO] down."

Finally, let us also journey back through the mists of time to remember that the Alabama federal court prosecution of Scruggs on a charge of criminal contempt came when he, apparently at Hood’s suggestion, failed to send copies of the thousands of documents the Rigsby sisters took from Renfroe to Renfroe’s attorney, and instead send them to Hood, who already had his own copies, having arranged for state employees to go pick them up at home from the Rigsby sisters after they copied them off in a massive "data dump" in June 2006.  In his order recommending Scruggs for prosecution, Judge William Acker wondered why Scruggs would so this, unless it was so Scruggs and Hood could "bully" — his word — State Farm into the McFarland settlement.  The question also arises — if the documents were so damaging, why not return them and thereby increase Scruggs’ bargaining power by showing he had the goods on State Farm?  Unless, of course, all this talk of the documents’ explosive value is just pure bunk.   

Those are sufficient points for today, all on the public record.  The question: are the Rigsby sisters whistleblowers, or espionage agents of a sort who worked on behalf of the team of Scruggs and Hood, a state law enforcement official, to create an enhanced climate of fear in civil litigation out of proportion to the reality that otherwise would have existed? (Note also that they went to work immediately after leaving Renfroe in June 2006 as "consultants" to Scruggs, with no specific duties, at annual salaries of $150,000 paid from SKG funds, and that they, like engineer Brian Ford, who was also approached about being a litigation consultant, are material witnesses to Katrina cases).

One thing’s for sure: Hood isn’t talking about it.  Since the indictment of his "confidential informant," Scruggs, Hood has been uncharacteristically silent. 




Filed under Industry Developments

4 Responses to Scruggs Nation, Day 19: re-evaluation of the ‘whistleblower’ Rigsby sisters

  1. Ironic

    Check out page 5 of Exhibit B, the claims records Cori Rigsby accessed on June 3, 2006. You will find two names, Brenda and Dennis Moran. I also noticed Cori’s name on various documents listed as Cori Rigsby Moran.
    If Cori accessed the claims files of family members and relatives, then I bet this is a clear violation of her employment agreement. A claim adjuster accessing family members files is a no no.
    Perhaps a relatively small item compared to her lawyer bribing a judge, but it does bring Cori’s morals and ethics into question, in my opinion.

  2. THICK

    Page 6 of Ms. Moran’s exhibit has some interesting names as well. Chief Magistrate John Roper, the good Senator Lott and step-father William Lobrano.

  3. Brian Martin

    State Farm is being disingenuous. Again.
    If you go back to the articles just before the settlement, it is clear that Hood was not coercing State Farm to settle. If anything, State Farm was coercing Hood to drop the grand jury investigation by making it a condition of the civil settlement and by telling the media that Hood was the last thing holding up the settlement for 35,000 policyholders.
    Here are excerpts from the Jan. 9 NY Times article by Joseph Treaster. I would rather cite Anita Lee’s Sun Herald article, which included similar statements, but it is not linkable.
    State Farm in Talks to Settle Gulf Claims
    State Farm, the biggest home insurer in the nation, is in the final stages of settling hundreds of lawsuits over its payments for homes wrecked by Hurricane Katrina along the Mississippi Gulf Coast, lawyers briefed on the talks said yesterday.
    The settlement of 639 lawsuits for $80 million could be the first step in resolving a bitter legal battle between homeowners and their insurers that had threatened to drag on for years and has already slowed Mississippi’s recovery since the storm in August 2005.
    As part of the proposed deal, which other insurers are expected to adopt, State Farm has agreed to review and possibly increase payments to as many as 35,000 additional homeowners. In some cases, these homeowners received only a few thousand dollars for homes along the Mississippi coast that suffered major damage or were destroyed.
    … To close the deal, State Farm wants the approval of Mississippi’s attorney general, Jim Hood, and the state’s insurance regulator, George Dale, lawyers close to the talks said. As a condition of the deal, these lawyers said, Mr. Hood would be required to drop a criminal investigation into State Farm’s handling of claims as well as a civil lawsuit against State Farm and other insurers.
    In a statement late yesterday, Mr. Hood said: “I am working day and night attempting to get our coastal residents a fair shake in the insurance litigation.” He added, “It would not help our negotiations to disclose any details at this time.”
    Lee Harrell, a deputy to the insurance commissioner, would not comment on the talks but said that the regulators consistently monitored insurance agreements to make sure that they were fair to both policyholders and the insurers.
    Phil Supple, a spokesman for State Farm, acknowledged that the insurer had been in settlement talks but he said that a final agreement had not yet been reached. “At this point,” he said, “we have no settlement.”
    He said State Farm would absolutely like to settle the cases: “We see it in the best interest of policyholders, the Gulf Coast of Mississippi and State Farm.”
    Richard F. Scruggs, who has been leading a team of about a dozen lawyers against State Farm, said that talks toward a settlement began early last fall and that he hoped to see a final agreement this week. “All the details are finalized,” he said.
    The last element, he said, was the approval of the attorney general and the insurance commissioner. “We are awaiting,” he said, “a decision from the state officials who have helped craft the settlement.”