The indictment and the criminal contempt charge stem from Scruggs’ work on behalf of Katrina victims. Scruggs, who lost his Pascagoula home in the storm, gathered prominent trial attorneys to sue State Farm, saying it had shortchanged Gulf Coast residents who lost homes and businesses.
State Farm alleges in court papers related to those lawsuits that Scruggs colluded with Mississippi Attorney General Jim Hood to force Katrina case settlements by threatening a criminal investigation.
Hood did not return phone messages left at his office. In a letter to U.S. Attorney Alice Martin of the Northern District of Alabama, Hood wrote that Scruggs is a confidential informant for the state’s investigations into how insurers responded post-Katrina.