Scruggs Leaks Can't Save State Farm From Katrina FCA Suit

Law360, New York (June 18, 2012, 1:31 PM EDT) -- State Farm Fire & Casualty Co. must face a False Claims Act suit brought by two former contractors over Hurricane Katrina flood damage claims, despite allegedly improper press leaks by former plaintiffs' attorney and bribery convict Richard Scruggs, a Mississippi federal judge ruled Friday.

U.S. District Judge Halil S. Ozerden denied the insurer's Dec. 21 renewed motion to dismiss the complaint by Cori and Kerri Rigsby, two sisters who worked as claims managers for EA Renfroe & Co. Inc., an independent contractor for State Farm. The plaintiffs alleged that State Farm knowingly submitted a false $250,000 flood claim that was reimbursed...

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