Sen. Lott Sounds Off Over Katrina Claims, Insurers’ Antitrust Status

U.S. Sen. Trent Lott says he’s disappointed with the slow pace that hundreds of insurance lawsuits are being handled nearly a year after Hurricane Katrina.

Speaking in his hometown of Pascagoula last Thursday, Lott, R-Miss., said the tempo could be hindering reconstruction efforts across the Mississippi Gulf Coast.

The former Senate majority leader — who has his own lawsuit pending — also said he’s shocked that insurance companies are not covered by federal antitrust laws. He said companies now could “actually collude” with each other when handling claims.

“That has caused me a great deal of concern. I think we need to take a look at that,” Lott said during a news conference before a Republican women’s luncheon at Pascagoula’s LaFont Inn.

Lott’s beach-side home was destroyed by Katrina last Aug. 29, and he sued State Farm Insurance Co. over a claim dispute. His case is among the next group of lawsuits scheduled to be heard in federal court early next year.

“I’ll be OK if I don’t get a nickel, if I can in some way contribute to all these other people getting recovery,” Lott said.

Thousands of homeowners have sued their insurers in south Mississippi, and the first case went to trial last month.

U.S. District Judge L.T. Senter Jr. ruled in that case this week that a Pascagoula couple, Paul and Julie Leonard, cannot collect damages from storm surge caused by Katrina because Nationwide Mutual Insurance Co.’s policies do not cover wind-driven water damage.

Senter said the Leonards could be compensated for damage that they could prove was caused by high winds. The couple did not have flood insurance.

Lott said his own case will be substantially different from the Leonards because he had flood insurance. Lott, who has not started to rebuild, said his case is “more based on the claim that we had wind damage and water surge damage.”

Lott said before he was first elected to the U.S. House in 1972, he was a defense attorney for insurance companies, including State Farm. On Thursday, he said State Farm’s contention that his house had no wind damage in Katrina is “not credible.”

“The same company, State Farm, had paid me twice since 1984 for wind damage from hurricanes half the velocity of this one,” he said.

Lott said he was “infuriated” by the company’s handling of his Katrina claim.

Lott’s attorney in the insurance lawsuit is his brother-in-law, Richard “Dickie” Scruggs, who made millions by suing tobacco companies in the 1990s. Scruggs’ legal team represents about 3,000 policyholders on the Mississippi Gulf Coast in post-Katrina insurance lawsuits.

“I never thought I’d be a plaintiff, and I never thought my brother-in-law would be my lawyer,” said Lott, who in the past has publicly called for limits on lawsuits.

In 2002, Lott said he had discouraged the U.S. Chamber of Commerce from warning its members about doing business in Mississippi because of what the group said were large verdicts handed down by juries in civil trials. The chamber was pushing for “tort reform,” or limits on lawsuits.

Despite trying to dampen a public message he said could harm his state, Lott also said in 2002: “I’m among many Mississippi citizens who believe tort reform is needed.”