Hood charges that State Farm violated several specific terms of the settlement agreement, including their failure to make an offer of settlement to policyholders based upon criteria and guidelines approved by the United States District Court for the Southern District of Mississippi. This kind of action, he said, allows other conclusions to be drawn.

“We have a state court order that they signed and then backed out on. If they will breach a clear agreement with a State, then this is further evidence that they have breached their own policy provisions with their insureds on the [Gulf] Coast.” The complaint seeks compensatory and punitive damages from State Farm.

State Farm said that it was approached by Hood's office prior to the complaint being filed, and was aware of their intent to file a complaint.

In a statement from the company, Kim Brunner, State Farm's executive vice president, general counsel, and secretary of State Farm Insurance Companies, responded to Hood's threat by writing a letter to his office that said, “We want to work with you. The terms of the Mississippi Insurance Department (MID) program mirrors the reevaluation program that we had hoped to accomplish through the Woullard settlement. It is working, and we will be providing you with a status report in the days ahead. It is completely voluntary, and State Farm receives no release until a policyholder accepts the settlement offer. Policyholders who do not participate in the process or who reject an offer retain all of their legal rights.”

The Woullard case was removed from a court's consideration by the Scruggs Katrina Group, the legal team responsible for much of the litigation against State Farm in Mississippi. After the Scruggs action, State Farm said it cooperated with the MID to extend the same settlement to Mississippi policyholders — only this time without a “set aside” of millions of dollars in compensation for trial lawyers. The MID settlement protects a policyholder's legal rights by allowing for mediation, arbitration, or litigation.

“Sadly, it appears that Mississippi's attorney general is more interested in making headlines in an election year than in making headway for the people of Mississippi,” said Mike Fernandez, State Farm vice president of public affairs, in a release. “You have to wonder what would motivate Attorney General Hood to disrupt an agreement that mirrors the one he was 'happy to announce' on Jan. 23 and asked other insurers to emulate as 'a step to recovery' two days later?”

Through the settlement overseen by the MID, State Farm said it has mailed more than 30,000 letters to Mississippi policyholders and has received thousands of responses from these policyholders. The company said it is processing those claim re-evaluation requests, and has made offers totaling more than $10 million.