Named in the civil suit are Allstate Corp., State Farm Mutual Automobile Insurance Co., Nationwide Mutual Insurance Co., and United Services Automobile Association Insurance Co. (USAA).
The disclosure follows in the wake of a so-called whistleblower lawsuit already ongoing in a Mississippi U.S. District Court. The lawsuit was brought in April 2006 by Cori and Kerri Rigsby, two sisters who filed a sealed complaint alleging State Farm doctored engineering reports to support claim denials after Katrina.
The two sisters worked for a company contracted by State Farm, and had secretly passed on thousands of pages of State Farm claims records to state and federal authorities and Richard “Dickie” Scruggs, a Mississippi attorney who gained prominence trying Big Tobacco lawsuits and who now represents literally hundreds of Hurricane Katrina victims in a variety of lawsuits against their insurance companies. Scruggs filed the lawsuit on behalf of the Rigsby sisters.
Spokespersons for the insurers named in the suit were not immediately available for comment, although State Farm has denied the allegations in the Rigsbys’ complaint.
For now, civil discovery has been halted in the case because U.S. Attorney Dunn Lampton and Assistant Attorney General Peter Keisler, head of the U.S. Justice Department's civil division wants more time to conduct a civil investigation of the case, saying it would be more difficult for federal criminal investigators if lawyers in the civil case were interviewing potential witnesses. U.S. District Judge Robert H. Walker has given the Justice Department until January 31, 2008 to either intervene in the case or advise the court it declines to do so.
Last year, State Farm Group was among the top five writers of homeowner’s multiperil coverage in the state, with a 31.6 percent market share.