I must say, I am impressed. This is the kind of thing that I was criticizing State Farm for not doing, but they not only did it, they did it in a fashion that made plaintiff lawyer Dickie Scruggs look unnecessary and somewhat, well, foolish is a harsh word, but it might fit these circumstances.
What I’m talking about is State Farm’s agreement with Insurance Commissioner George Dale to voluntarily reopen thousands of claims in coastal Mississippi — in essence, much of the end result of the failed class action certification and settlement involving Scruggs in the Woullard case. Here’s a story on developments from Lavonne Kuykendall of Dow Jones Newswires. As you may recall, Judge Senter shot down the class settlement on January 26. After a later hearing in which Scruggs and State Farm again failed to convince Senter, Scruggs withdrew his motion for class certification, giving some sort of "I didn’t want to play anyway" speech in his withdrawal notice on the way out the door.
This deal with Dale is not as good for State Farm as the Woullard settlement in several respects. It has no provision for binding arbitration, one of the features that disquieted Senter because it is not in policyholders’ insurance contracts, and the claims process is purely voluntary by policyholders. If they don’t like State Farm’s offer, they can reject it and sue. This process therefore fails to achieve an important goal for any insurer: finality and certainty. That makes it even more impressive that State Farm is going ahead with this renewed claims investigation — an admission that, whether their earlier claims adjustment process was flawed or not — State Farm has been branded public enemy number one by many and needed to do something outside the courtroom to address that image. Obviously State Farm’s talks with Dale had been going on for some weeks, and if Scruggs didn’t know of them, he at least saw State Farm’s attentions had moved elsewhere, because his withdrawal notice criticized State Farm’s lack of effort in reviving the Woullard class action.
Also, this has to be a sweet moment for Dale, whom Scruggs has portrayed as some ineffectual toady of insurance companies. Dale is up for re-election this fall, and Scruggs is working against him.