NU Online News Service, Aug. 30, 3:37 p.m. EDT
State Farm has recently filed court motions to dismiss the whistle-blower lawsuit filed against it by Cori and Kerri Rigsby--sisters who worked for a private adjusting firm following Hurricane Katrina.
As the five-year anniversary of the most destructive natural disaster in the U.S. approached, State Farm entered motions in the U.S. District Court in Southern Mississippi. The documents ask Judge L.T. Senter to dismiss the case based on a number of factors including that the Rigsby sisters violated the False Claims Act's mandatory seal requirement.
"It is undisputed that there were multiple and intentional public disclosures of both the existence and intent [of the whistle-blower lawsuit] while it was under seal," State Farm said in court documents.
While they gained national recognition with the help of former attorney Richard "Dickie" Scruggs following Katrina, the Rigsby sisters allegedly embarked on a public relations campaign to promote themselves while "demonizing State Farm," court documents say.
In the motion State Farm indicates it discovered more evidence of this alleged violation of court order when it received more pre-trial evidence, or discovery, from the Rigsbys' new attorneys and their public relations firm.
In a separate motion, State Farm asks for a dismissal because, the insurer said, Cori Rigsby has no firsthand knowledge of the insurance claim of Biloxi, Miss., couple Thomas and Pamela McIntosh.
"The fact that she is Kerri Rigsby's sister does not provide her with a pass on establishing her own status as an original source," according to State Farm's motion.
A judge has previously ruled that the Rigsby sisters can only provide testimony on the McIntosh claim, because that is the sole case in which they have firsthand knowledge. However, the documents the sisters are alleged to have stolen from State Farm were used to fuel hundreds of claims against the insurer following Katrina.
The discovery process in the whistle-blower lawsuit is over, but Judge Senter must rule on numerous motions before the trial, set for the start of December, can begin.
Judge Senter recently ruled on one motion from State Farm, which asked that the testimony of a civil engineer, R. Ralph Sinno, be excluded. Judge Senter denied State Farm's request. The insurer has filed other motions like this, asking for the testimonies of certain experts to be thrown out.
According to court documents, Mr. Sinno's report of the McIntosh home concluded it was damaged minimally by storm surge.
Also, the Rigsbys have filed for an extension of the discovery.
The Rigsby sisters allege that State Farm defrauded the federal government by fraudulently denying claims--showing much of the damage was done by flood and shifting the responsibility to the National Flood Insurance Program.
A standard homeowners policy does not cover flood.
The Rigsby sisters, with Mr. Scruggs by their side, were regulars on national news programs following the storm. Mr. Scruggs, once known as the "King of Torts," formed a group of attorneys, the Scruggs Katrina Group, to file hundreds of claims against insurers following the storm.
Mr. Scruggs hired the Rigsby as consultants--a relationship since deemed unethical by a federal judge who then barred the Rigsbys from testifying in other cases against insurers.
Mr. Scruggs is now serving a seven-year sentence in a federal facility in Kentucky. The man who once took on the tobacco industry and won admitted he took part in the attempted bribery of a Mississippi circuit court judge who presided over a case involving the split of attorneys' fees with another attorney in the Scruggs Katrina Group.
According to the court calendar, a settlement conference is scheduled for Oct. 6. Both sides are to bring possible settlement figures to the conference, to be viewed only by the court.
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