Hood Settlement Under Suspicion

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Media is seeking to unseal a settlement agreement between Attorney General Jim Hood and State Farm.

by Adam Lynch
April 30, 2009

Attorney General Jim Hood offered no guess as to what media outlets are looking for in a sealed February 2008 settlement between his office and State Farm and Fire and Casualty Company. Jackson New Media, Inc., publisher of the Y'all Politics blog, filed motions to intervene and unseal the settlement this month, joined by three TV stations: Jackson’s WLBT, Hattiesburg’s WDAM and WLOX in Biloxi.

Jackson New Media says it should have free access rights under the First Amendment as a member of the press.

“Hundreds of thousands of Mississippians were adversely affected by Hurricane Katrina,” Jackson New Media attorney Andy Taggart said on the blog. “This was a watershed piece of litigation that tens of thousands of homeowners and all Mississippi taxpayers have a stake in. All we ask from the court is to allow the press and the public their First Amendment right to access relevant court materials and remove the lingering doubts as to what really happened in this matter.”

Jackson New Media also requested the court to require the original parties to appear “and show cause why the settlement agreement filed under seal in this matter should not be unsealed and made available for public review.”

Hood would not speculate on the information request, but promised to update media through the legal process: “We will respond in due time with any appropriate filings in court,” Hood told the Jackson Free Press.

Taggart also could not say what his client was looking for.

“We don’t know what the documents contain, as they have been under seal since the settlement agreement between State Farm and the Attorney General was reached,” Taggart said in a statement. “Jackson New Media’s interest is in learning the contents of the materials that are under being held under seal, and reporting on the contents to the public.”

Y'all Politics blogger Alan Lange threw suspicion on the settlement, pointing out in a blog entry that Hood and State Farm settled their dispute “hours after General Hood was questioned under oath.”

Hood sued the insurance company in September 2007, alleging that State Farm had violated the terms of its January 2007 settlement with the state over the company’s allegedly misleading customers with policy language in the aftermath of Hurricane Katrina in 2005, causing him to reinitiate his investigation.

State Farm promptly counter-sued Hood, claiming Hood violated a January 2007 non-prosecution agreement in Hinds County Chancery Court.

During the February 2008 hearing over the State Farm counter-suit, Hood told Federal Court Judge David Bramlette in Hattiesburg that he wished the judge “would take this bull by the horn” and force the company to adhere to their January 2007 settlement agreement.

Bramlette was unwilling to engage the request and responded, according to hearing transcriptions, that he’d “rather try to take a real bull by the horns than do that.”

State Farm attorneys implied at the February 2008 hearing that Hood had threatened criminal action against the company in order to muscle it into a premature settlement. State Farm attorney Jim Robie asked if Hood had threatened, in December of 2005, to “start indicting people all the way from (State Farm CEO) Ed Rust down” if the insurance company didn’t settle.

Hood responded, according to court documents, that he “never made” any such statement. He called the implication “an absolute untruth” and stated that he had witnesses available at the 2005 meeting who would back up his claim.

Robie then attempted to link Hood to convicted Mississippi Attorney Dickie Scruggs with allegations that Hood had asked State Farm attorneys to cave on another Katrina-related suit that Scruggs had filed against the insurance company, or face indictment of their employees.

“So you never told (State Farm attorney Jeff) Jackson that if he didn't pay money to Scruggs that you were going to indict State Farm employees” … and “that it would be very beneficial for State Farm’s position in the criminal case if you got some money to Scruggs by Christmas of 2006?” Robie asked Hood.

“No,” Hood responded, adding that Scruggs’ cases “had already been settled” the previous November.

“State Farm sent a letter saying sometime in November of ’06 that those cases … were already settled. So his cases were totally separate anyway,” Hood said.

Robie also tried to convince the court that Hood’s action against State Farm may have been for political reasons. The attorney suggested that Scruggs had sent his co-workers, Timothy Balducci and Steve Patterson—both of whom pled guilty to corruption last year—to meet with Hood at a Jackson restaurant to threaten him with political opposition during the next election if Hood did not settle the State Farm case.

“Did Mr. Patterson or Mr. Balducci have dinner with you and tell you that if you did not participate or assist Mr. Scruggs in settling that mass tort action … that he would fund an alternative candidate to run against you for attorney general?” Robie asked.

Hood admitted having dinner with the two, but said the meeting concerned the possibility of their leaving the Scruggs firm.

Robie, according to the hearing transcript, called no witness to counter Hood’s denials.

Bramlette dismissed the State Farm suit against Hood, Feb. 7, 2008 because the two parties settled on their own terms, although the judge’s opinion did not contain any of his thoughts regarding Robie’s allegations—which Bramlette called “inflammatory” during testimony.

Despite the seeming inability of the State Farm allegations to gain traction with the court, Hood agreed to settle the company’s dispute with him shortly after the February hearing in Hattiesburg. The court sealed the result of that settlement.

Hood settled his breach of contract suit against State Farm in August, 2008.