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Not so fast: Judge Senter puts the brakes on State Farm Katrina settlement

Wouldn't you know it, Dickie Scruggs and Attorney General Jim Hood were looking for the headline and (in Scruggs's case) the payday, and are told that the settlement doesn't justify dissolving the claims and rights of unnamed class members who have not sued. Senter also criticizes the $10 million minimum payday for Scruggs for the class settlement. (WSJ; David Rossmiller has more details and a link to the opinion). State Farm will have no interest in settling the claims of Scruggs's clients if those who haven't sued yet can also sue. The settlement, on cursory glance, appears to favor named plaintiffs over unnamed plaintiffs: it's doubtful that State Farm would agree to that favorable treatment classwide, and it's also doubtful that Scruggs can justify the disparity to a conscientous court. (Moreover, it's far from clear that there is a certifiable class, given the individualized nature of the claims.) Which means that State Farm might get justice after all if it can withstand the publicity long enough for the Fifth Circuit to correct Senter's earlier mistakes—or it might mean that Hood is able to extort State Farm into giving up billions instead of hundreds of millions.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.