Tuesday, August 7, 2007
As Forbes (via AP) reports, on Monday, a federal magistrate judge unsealed the Katrina qui tam suit filed against State Farm. The suit was filed by Dickie Scruggs on behalf of Cori and Keri Rigsby - two sisters who worked for a company that helped State Farm handle claims following Katrina. The sisters quit the company after providing Scruggs with "reams of internal State Farm claims records." (As posted here, Scruggs, meanwhile, faces criminal contempt charges for his handling of those documents).
The suit, which represents only one side of a legal argument, accuses insurance companies of pressuring engineers to falsify reports so storm damage could be blamed on flood water instead of wind, which would shift the financial burden to the National Flood Insurance Program.
The suit was under seal pending a decision by the U.S. Attorney on whether to intervene. Back in May, the U.S. Attorney decided not to intervene in a similar lawsuit filed by a group of former insurance adjusters.