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State Farm wants to question Scruggs

GULFPORT — State Farm has asked a judge to let it question former attorney Richard “Dickie” Scruggs and obtain documents he may possess related to a whistleblower lawsuit filed against the insurer over its handling of Hurricane Katrina claims.

The lawsuit was filed by Cori and Kerri Rigsby of Ocean Springs, who once worked for Alabama-based E.A. Renfroe, a company State Farm contracted to provide damages assessments after the hurricane. The case is scheduled for trial Dec. 1 in U.S. District Court in Gulfport.

The Rigsby sisters allegedly copied thousands of pages of internal State Farm claims records in 2006 and turned them over to Scruggs and others. Scruggs sued State Farm on the sisters’ behalf, claiming they were “whistleblowers” with insider knowledge of fraud.

The Rigsbys claim in their lawsuit that State Farm avoided covering policyholders’ wind losses by blaming the damage on storm surge, which is covered by federal flood insurance.

U.S. District Judge L.T. Senter Jr. has limited the initial phase of the case to one State Farm claim because the sisters have firsthand knowledge of how it was adjusted.

State Farm’s subpoena, which also was filed in federal court in Eastern Kentucky, is among a number of pretrial motions filed by each side. A judge has not ruled on the motions.

The Sun Herald reports that State Farm’s subpoena requests information involving those tied to a Mississippi judicial bribery case. State Farm wants to question Scruggs at the Federal Correctional Institute in Ashland, Ky., where he is serving a seven-year sentence.

Among other records, State Farm seeks any communications between Scruggs and two associates, former State Auditor Steve Patterson and attorney Timothy Balducci. who pleaded guilty in the bribery case.

The subpoena also seeks communications between Scruggs and P.L. Blake, a former Scruggs associate who, according to court documents, earned $50 million from the state’s tobacco settlement by clipping newspapers and assessing political activity for Scruggs.

Blake’s name arose shortly after Scruggs, Balducci, Patterson and others were arrested in 2007. Blake’s attorney said this week that federal prosecutors have dropped their investigation of Blake related to the bribery case.

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