State Farm Moves to Bar Judge from Ruling on Katrina Class Action

State Farm Fire and Casualty Co. is asking a federal judge to disqualify himself from hearing a bid to certify a class action lawsuit against the insurer over Hurricane Katrina damages.

In court papers filed Thursday, a State Farm lawyer questioned whether U.S. District Judge L.T. Senter, Jr., can be impartial in the case because a federal magistrate judge and a federal court clerk in Mississippi could be plaintiffs in a class action against the company.

Senter already has recused himself from hearing the individual lawsuits that U.S. Chief Magistrate Judge John Roper and Terri Brown, a clerk for U.S. District Judge Louis Guirola Jr., filed against State Farm.

Senter also should recuse himself from ruling on the bid for a class action to avoid “even an appearance of partiality” toward Roper or Brown, State Farm attorney William Reed wrote.

On Wednesday, Senter is scheduled to hear arguments from attorneys on whether to allow a class action against State Farm by policyholders whose homes were completely destroyed.

On the same day, Senter plans to hold a separate hearing on the terms of a proposed settlement that calls for State Farm to pay at least $50 million to roughly 36,000 policyholders whose claims can be reopened, reviewed and possibly paid. State Farm isn’t seeking to disqualify Senter from hearing that case.

Mississippi Attorney General Jim Hood filed a motion in federal court on Thursday to intervene in the settlement hearing in order to enforce the terms of his state court settlement with the insurer.

“The state court Settlement Agreement requires State Farm to establish an orderly, fair, and prompt administrative procedure to re-evaluate Hurricane Katrina claims in Harrison, Hancock, and Jackson counties based upon criteria and guidelines approved by this Court….” Hood’s motion said. “The proposed class settlement agreement submitted by State Farm to this Court does not satisfy this requirement.”

State Farm also is seeking to bar one of Senter’s clerks from working on any of the lawsuits that Gulf Coast homeowners filed against the company after Katrina because he sued a different insurer over storm damage to his own home.

A State Farm attorney said in court papers Wednesday that it creates an “appearance of impropriety” for the clerk, Jerry Read, to assist Senter in dealing with Katrina cases in Mississippi after Read sued Allstate Insurance Co. for denying part of his claim.

Senter recused himself from hearing his clerk’s suit, which was assigned to another federal judge before Read and Allstate settled the case out of court last month.

Senter didn’t immediately rule on State Farm’s requests.