Magistrate Judge Robert H. Walker already has ruled the Scruggses must testify in the State Farm case, but they are appealing to Walker’s superior, U.S. District Judge L.T. Senter Jr., to change the ruling. U.S. Magistrate Judge Allan Alexander, who sits in Oxford, stopped the Alabama subpoena.
At the heart of the Alabama and Mississippi cases are State Farm records Scruggs got from the whistle-blowers, Ocean Springs sisters Cori and Kerri Rigsby. The women worked for independent adjusting firm E.A. Renfroe, which dispatched them after Hurricane Katrina to adjust claims for State Farm Fire & Casualty Co.
The Rigsbys have said they turned to Scruggs for legal advice in February 2006, after discovering State Farm was defrauding policyholders and the federal government. They turned over records to Scruggs, including engineering reports they said had been altered to minimize what State Farm owed its policyholders.
State Farm has denied any wrongdoing.
In June 2006, the Rigsbys and three friends spent an entire weekend printing out and copying State Farm computer records. The Rigsbys then turned over one set each to federal and state investigators. Court records in both states now refer to this event as “the data dump weekend.” Eventually, Scruggs took a third set of records.
The sisters went to work for Scruggs as consultants for $150,000 a year – less than they’d earned as insurance adjusters, both say. They also went on national television with their allegations.
Media stories featured an engineering report that had allegedly been changed for the Biloxi property of Thomas and Pamela McIntosh, minimizing what State Farm owed them. Afterward the McIntoshes and others signed up with the Scruggs Katrina Group to sue State Farm.
Renfroe sued the Rigsbys in Alabama. The federal judge in that case eventually ordered the sisters to return the “purloined” insurance records. Instead, Scruggs sent his copy to Mississippi Attorney General Jim Hood.