I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years :
By Anita Lee
McClatchy Newspapers
In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to—;try this—;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
I’m not surprised to see my state on the “sinners” list. We’re the ones who handed out a multi-billion dollar tobacco verdict to dead janitor’s family.
These rankings conform pretty much to my multi-state litigation experiences over a good while. Texas has cleaned it’s act up more than most and Louisiana is hopeless. Florida is just plain gastly anywhere south of Orlando/Tampa. New York in the 5 burroughs is as bad as anywhere on earth but upstate is reasonable (Buffalo area an exception). I still think we should expell the former Confederate states from the Union and toss in
New Jersey/Manhatten/Brooklyn/Queens for good measure
A quick check of the Bureau of Labor Statistics shows only one “Saint” state – Utah – had better than average job growth since 2005, and Ohio comes in second-to-last. Meanwhile, four of the “Sinner” states were in the top eleven in job growth. I guess the statement “”In the competition for jobs and capital investment among the states, those states that suffer from high tort costs and litigiousness will continue to lose jobs and businesses to states with superior tort systems” deserves some qualification.
Well, it turns out we do need a stinking actuary to dispel this right wing nonsense. Elimination of access to justice is their goal so that corporations and one party right wing government can roll all over us. In exchange for flipping burgers…why thank you, massah!
If the U.S. weren’t the most expensive country in which to write insurance (due to frivolous litigation), maybe I’d buy some of the pyas, anti-business, civil liberites rhetoric of the left….
My state might as well have a barbed-wire fence around it, it does such a good job of keeping new businesses out since they won’t move here because of our WC, Products & E&O rates fueled by the good ‘ol boy lawyers in our legislature… (making HUGE buck of the back of the “lottery mentality” suckers they brainwash into joining their class action suits. But don’t get me started…
Dickie Scruggs, Legendary Trial Lawyer, Pleads Guilty to Trying to Bribe a Judge
This is a May 31, 2007 file photograph of prominent Mississippi attorney Richard “Dickie” Scruggs, taken in Jackson, Miss. Scruggs has pleaded guilty to a charge of conspiracy in a judicial bribery case. The surprise plea came Friday, March 14, 2008,during a hearing in Oxford, Miss. on pretrial matters. (AP Photo/Rogelio V. Solis)
03-14-2008 1:07 PM
By EMILY WAGSTER PETTUS, Associated Press Writer
JACKSON, Miss. (Associated Press) — Richard “Dickie” Scruggs, the legendary trial lawyer who made Big Business tremble every time he set foot in court, pleaded guilty Friday to conspiring to bribe a judge _ a crime that will almost surely send him to prison and perhaps spell the end of his storied legal career.
Federal prosecutors are asking for the maximum of five years behind bars for the 61-year-old Scruggs, the multimillionaire “King of Torts” who combined a shrewd legal mind and the aw-shucks charm of a Southern country lawyer to extract billion-dollar settlements from the tobacco and asbestos industries, among others.
He could also lose his license to practice law.
Scruggs and another lawyer in his firm, Sidney Backstrom, pleaded guilty to conspiracy to defraud for offering a $50,000 cash bribe to a Mississippi judge for a favorable ruling in a dispute over legal fees from a Hurricane Katrina insurance lawsuit.
In return for Scruggs’ guilty plea, prosecutors agreed to drop several other counts against him, including fraud. No sentencing date was set.
Scruggs’ son and law partner, Zach, also is charged in the case but did not enter a plea and is expected to go to trial.
For months, Scruggs appeared intent on fighting the charges, and many reporters who had closely followed the case were caught off-guard by the plea bargain. Scruggs folded after two of his co-defendants turned on him, one of them secretly tape-recording him for the FBI.
Federal prosecutors refused to comment, and Scruggs’ attorneys did not immediately return calls.
A giant of the nation’s plaintiffs’ bar, Scruggs was a chief architect of the $206 billion nationwide tobacco settlement in the 1990s, working with whistleblower Jeffrey Wigand, a former tobacco company scientist. The actor Colm Feore played Scruggs in the 1999 movie about the case, “The Insider,” starring Al Pacino and Russell Crowe.
After Katrina struck in 2005, Scruggs sued insurance companies on behalf of hundreds of homeowners whose claims were denied.
Many industries that have tangled with Scruggs regard him as a buccaneer, a shakedown artist with a law degree.
Scruggs has been “the bane of Wall Street,” and leaders of some of the companies he sued might take satisfaction in his downfall, said Stephen Gillers, a New York University law professor and authority on legal ethics. He described Scruggs as “an exceptionally prominent American lawyer with astonishing success and wealth from law practice.”
Scruggs was indicted along with his son and three associates in November.
They were accused of conspiring to bribe Lafayette County Circuit Judge Henry L. Lackey, who was overseeing a dispute between Scruggs and other lawyers over $26.5 million in legal fees from a mass settlement of Katrina cases. Lackey reported the bribe overture to the FBI and worked undercover.
Two of the men indicted, attorney Timothy Balducci and former Mississippi State Auditor Steve Patterson, pleaded guilty and began working with the prosecution.
Balducci admitted to the FBI that he paid Lackey $50,000 in cash and said he did so at the behest of the Scruggses and Backstrom. Balducci also wore a wire and recorded incriminating statements from Scruggs.
Scruggs lives in Oxford and flies to and from legal engagements around the South in his personal jet. The Mississippi native is also supremely well-connected politically as both the brother-in-law of former Sen. Trent Lott, R-Miss., and a major contributor to Democrats.
A graduate of the University of Mississippi, he is one of the school’s largest donors. The music department building at Ole Miss bears his name.
Subject: RE: RE: RE: Yes, but…threatens to expose State Farm
Posted On: March 14, 2008, 6:53 pm CDT
Posted By:
Comment:
“This is another desperate attempt to discredit and disqualify anyone who threatens to expose State Farm. This effort is part of an orchestrated campaign to direct the attention away from State Farm’s conduct and onto persons who threaten to expose their conduct
Millions to the family of a dead janitor’s family because of a jury verdict? How crazy. About as immoral as the “Saint & Sinner” title to the article. Given the opportunity, the human being would be worth nothing in some people’s public policy: They call it redistribution of the wealth. Two observations: (1) “those folks want the good old U.S. of A. to have a tort system like some third-world banana republic – people of are ono value; and, (2) what would Jesus do? Clearly, the only real sinners are the ones who ascribed to the philosophy of the writer of the “saint and sinner” piece, and those law makers who do their bidding.
Neither side in this debate is totally clean. Neither side deserves either of the labels. Plaintiff’s bar does serve a very useful service of keeping the powerful in check. Sometimes they just get a little full of themselves and want to pretend that they are the saviours of the downtrodden and anyone else who might be able to make a prima facie case for a claim. Are Insurers worthy of the title Saints? Of course not. Insurers are in business to make money, and part of their effort will always go to trying to defeat the plaintiffs. Most often the effort to defeat is directed toward the cases that are overstated, or overblown or downright fraudulent. If both sides would spend time constantly trying to clean up their own houses, the world would be a better place and we would not have to listen to the empty posturings of popinjays who are fat on the money of the people.
I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years :
By Anita Lee
McClatchy Newspapers
In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to—;try this—;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
“No,” Rust said.
“Why not?” Marr asked. “Is it privileged?”
Rust said, “I believe so.”
(c)
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
I’m not surprised to see my state on the “sinners” list. We’re the ones who handed out a multi-billion dollar tobacco verdict to dead janitor’s family.
At least we are consistant in RI… Our legislators are crooks, the state employees are crooks, our laws are terrible and our lawyers are…. you know!
These rankings conform pretty much to my multi-state litigation experiences over a good while. Texas has cleaned it’s act up more than most and Louisiana is hopeless. Florida is just plain gastly anywhere south of Orlando/Tampa. New York in the 5 burroughs is as bad as anywhere on earth but upstate is reasonable (Buffalo area an exception). I still think we should expell the former Confederate states from the Union and toss in
New Jersey/Manhatten/Brooklyn/Queens for good measure
A quick check of the Bureau of Labor Statistics shows only one “Saint” state – Utah – had better than average job growth since 2005, and Ohio comes in second-to-last. Meanwhile, four of the “Sinner” states were in the top eleven in job growth. I guess the statement “”In the competition for jobs and capital investment among the states, those states that suffer from high tort costs and litigiousness will continue to lose jobs and businesses to states with superior tort systems” deserves some qualification.
Hard to believe biased surveys. Feel sorry for Colorado folks
Well, it turns out we do need a stinking actuary to dispel this right wing nonsense. Elimination of access to justice is their goal so that corporations and one party right wing government can roll all over us. In exchange for flipping burgers…why thank you, massah!
Long live the fighters!
If the U.S. weren’t the most expensive country in which to write insurance (due to frivolous litigation), maybe I’d buy some of the pyas, anti-business, civil liberites rhetoric of the left….
My state might as well have a barbed-wire fence around it, it does such a good job of keeping new businesses out since they won’t move here because of our WC, Products & E&O rates fueled by the good ‘ol boy lawyers in our legislature… (making HUGE buck of the back of the “lottery mentality” suckers they brainwash into joining their class action suits. But don’t get me started…
Dickie Scruggs, Legendary Trial Lawyer, Pleads Guilty to Trying to Bribe a Judge
This is a May 31, 2007 file photograph of prominent Mississippi attorney Richard “Dickie” Scruggs, taken in Jackson, Miss. Scruggs has pleaded guilty to a charge of conspiracy in a judicial bribery case. The surprise plea came Friday, March 14, 2008,during a hearing in Oxford, Miss. on pretrial matters. (AP Photo/Rogelio V. Solis)
03-14-2008 1:07 PM
By EMILY WAGSTER PETTUS, Associated Press Writer
JACKSON, Miss. (Associated Press) — Richard “Dickie” Scruggs, the legendary trial lawyer who made Big Business tremble every time he set foot in court, pleaded guilty Friday to conspiring to bribe a judge _ a crime that will almost surely send him to prison and perhaps spell the end of his storied legal career.
Federal prosecutors are asking for the maximum of five years behind bars for the 61-year-old Scruggs, the multimillionaire “King of Torts” who combined a shrewd legal mind and the aw-shucks charm of a Southern country lawyer to extract billion-dollar settlements from the tobacco and asbestos industries, among others.
He could also lose his license to practice law.
Scruggs and another lawyer in his firm, Sidney Backstrom, pleaded guilty to conspiracy to defraud for offering a $50,000 cash bribe to a Mississippi judge for a favorable ruling in a dispute over legal fees from a Hurricane Katrina insurance lawsuit.
In return for Scruggs’ guilty plea, prosecutors agreed to drop several other counts against him, including fraud. No sentencing date was set.
Scruggs’ son and law partner, Zach, also is charged in the case but did not enter a plea and is expected to go to trial.
For months, Scruggs appeared intent on fighting the charges, and many reporters who had closely followed the case were caught off-guard by the plea bargain. Scruggs folded after two of his co-defendants turned on him, one of them secretly tape-recording him for the FBI.
Federal prosecutors refused to comment, and Scruggs’ attorneys did not immediately return calls.
A giant of the nation’s plaintiffs’ bar, Scruggs was a chief architect of the $206 billion nationwide tobacco settlement in the 1990s, working with whistleblower Jeffrey Wigand, a former tobacco company scientist. The actor Colm Feore played Scruggs in the 1999 movie about the case, “The Insider,” starring Al Pacino and Russell Crowe.
After Katrina struck in 2005, Scruggs sued insurance companies on behalf of hundreds of homeowners whose claims were denied.
Many industries that have tangled with Scruggs regard him as a buccaneer, a shakedown artist with a law degree.
Scruggs has been “the bane of Wall Street,” and leaders of some of the companies he sued might take satisfaction in his downfall, said Stephen Gillers, a New York University law professor and authority on legal ethics. He described Scruggs as “an exceptionally prominent American lawyer with astonishing success and wealth from law practice.”
Scruggs was indicted along with his son and three associates in November.
They were accused of conspiring to bribe Lafayette County Circuit Judge Henry L. Lackey, who was overseeing a dispute between Scruggs and other lawyers over $26.5 million in legal fees from a mass settlement of Katrina cases. Lackey reported the bribe overture to the FBI and worked undercover.
Two of the men indicted, attorney Timothy Balducci and former Mississippi State Auditor Steve Patterson, pleaded guilty and began working with the prosecution.
Balducci admitted to the FBI that he paid Lackey $50,000 in cash and said he did so at the behest of the Scruggses and Backstrom. Balducci also wore a wire and recorded incriminating statements from Scruggs.
Scruggs lives in Oxford and flies to and from legal engagements around the South in his personal jet. The Mississippi native is also supremely well-connected politically as both the brother-in-law of former Sen. Trent Lott, R-Miss., and a major contributor to Democrats.
A graduate of the University of Mississippi, he is one of the school’s largest donors. The music department building at Ole Miss bears his name.
Subject: RE: RE: RE: Yes, but…threatens to expose State Farm
Posted On: March 14, 2008, 6:53 pm CDT
Posted By:
Comment:
“This is another desperate attempt to discredit and disqualify anyone who threatens to expose State Farm. This effort is part of an orchestrated campaign to direct the attention away from State Farm’s conduct and onto persons who threaten to expose their conduct
Millions to the family of a dead janitor’s family because of a jury verdict? How crazy. About as immoral as the “Saint & Sinner” title to the article. Given the opportunity, the human being would be worth nothing in some people’s public policy: They call it redistribution of the wealth. Two observations: (1) “those folks want the good old U.S. of A. to have a tort system like some third-world banana republic – people of are ono value; and, (2) what would Jesus do? Clearly, the only real sinners are the ones who ascribed to the philosophy of the writer of the “saint and sinner” piece, and those law makers who do their bidding.
Neither side in this debate is totally clean. Neither side deserves either of the labels. Plaintiff’s bar does serve a very useful service of keeping the powerful in check. Sometimes they just get a little full of themselves and want to pretend that they are the saviours of the downtrodden and anyone else who might be able to make a prima facie case for a claim. Are Insurers worthy of the title Saints? Of course not. Insurers are in business to make money, and part of their effort will always go to trying to defeat the plaintiffs. Most often the effort to defeat is directed toward the cases that are overstated, or overblown or downright fraudulent. If both sides would spend time constantly trying to clean up their own houses, the world would be a better place and we would not have to listen to the empty posturings of popinjays who are fat on the money of the people.