Kerri and Cori Rigsby are also the whistleblowers who proved to a Mississippi jury that State Farm committed fraud against the U.S.
[3][4] The Rigsbys were managers who worked in Gulfport, Mississippi for a subcontractor hired by State Farm to adjust wind and flood claims after Hurricane Katrina.
State Farm and Renfroe allege 1) that Scruggs participated and encouraged the Rigsby sisters to wrongfully appropriate and disclose confidential documents in which both State Farm and Renfroe had a legitimate right to confidentiality; and 2) that Scruggs paid the Rigsby sisters a substantial sum in furtherance of Scruggs's efforts to encourage the misappropriation of these documents.State Farm and Renfroe have alleged additional acts of misconduct relating to other witnesses and to the plaintiffs' counsel having obtained documentary and physical evidence without following the established procedure for the use of out-of-state subpoenas in the discovery process.I have determined that disqualification is required because Scruggs, acting in furtherance of the SKG joint venture, paid the Rigsby sisters a substantial sum of money (a consulting fee of $150,000 per year) despite Scruggs's knowledge that the Rigsby sisters were material witnesses in connection with many hurricane damage claims that were likely to become the subject of litigation.
Even if this were not the case, the performance of legitimate work that is closely related to a matter in litigation cannot justify an attorney's payment of a substantial sum of money to a non-expert material witness.Payments to non-expert witnesses are specifically limited to statutory witness fees; reasonable expenses actually incurred for mileage, meals, and lodging; and reasonable compensation for time lost from work while attending a trial or testifying by deposition.
The payments Scruggs made to the Rigsby sisters bears no reasonable connection to any work they performed or to any of expenses they incurred in testifying.
v. Thermon Heat Tracing Services, Inc., 143 F.3d 181 (5 Cir.1998); Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n, 865 F.Supp 1516, 1526 (S.D.Fla.1994); Rentclub, Inc. v. Transamerica Rental Fin.
"); See American Can Co. v. Citrus Feed Co., 436 F.2d 1125, 1128-29 (5th Cir.1971).The payments made to the Rigsby sisters require the disqualification of the successors to the SKG and those whom they have added as associates from further participation in any litigation in this Court against State Farm and Renfroe arising from property damage attributable to Hurricane Katrina.
An appropriate order will be entered, and the plaintiffs in all cases affected by this disqualification shall be allowed a period of forty-five days in which to retain new counsel or to notify the Court of their intention to proceed pro-se.
The plaintiff's failure to retain new counsel or to inform the court of the intention to proceed pro-se will make a case subject to this order eligible for dismissal without prejudice.
The attorneys subject to disqualification by the terms of this order shall send, via United States mail, postage prepaid, a copy of the opinion and order in this case to each client affected by this ruling.The Rigsby sisters will be disqualified as witnesses in any actions now pending on this Court's docket against State Farm or Renfroe in which the SKG or the KLG has represented the plaintiffs, and any documents supplied by the Rigsby sisters to the SKG or the KLG or its associates shall also be excluded from evidence unless the plaintiffs can show that the documents were obtained through ordinary methods of discovery.The sisters say they ultimately obtained about 15,000 pages of claims records.
State Farm representatives in Bloomington, IL, the home office, say what the women describe would be contrary to the company's claims practices.
[17] Renfroe alleged in its lawsuit that Cori and Kerri Rigsby broke the law when they turned over reams of internal State Farm records to their attorney, Richard Scruggs.
Renfroe successfully asked a judge to order the Rigsby sisters to return the documents they presented Scruggs and to bar them from continuing to disclose information.
06-CV-1752, should be suspended until the Mississippi Attorney General's office completed its criminal investigation into post-Katrina insurance claims practices.
A federal judge dismissed the action by Thomas and Pamela McIntosh of bad faith and fraud against State Farm and Renfroe.
Federal Magistrate Judge Robert Walker ruled that State Farm should not be required to hand over engineering reports to the Risbys, The case involved claimants Thomas and Pamela McIntosh whose house was damaged and two engineering reports, the first citing wind damage and the second tidal surges.
The plaintiffs suggested that State Farm minimized its wind damage payout to $30,000 when the policy provided for up to $500,000 by charging the National Flood Insurance Program where payments were paid by the government.
State Farm argues that the case should have been dismissed as the Rigsbys lawyer, Scruggs sent documents to the media when they were still under seal.
Their argument centres around the plaintiffs talking with the media and thus violating the 60 day seal provisions of the False Claims Act.
State Farm is arguing that the attorneys for the Rigsbys violated a part of the False Claims Act, that is they released documents which were under the 60 day seal rule.
The justices will vote at the end of the week, but the complexity of the case means that it will most probably come down to a written judgement after they achieve consensus over the winter.