State Farm Wants Katrina Trial Moved, Claiming Jury Pool Bias in Miss.

The jury pool in south Mississippi has been tainted by “media propaganda” about the insurance industry’s handling of claims after Hurricane Katrina, a major insurer argued in a bid to move the trials for several lawsuits spawned by the storm.

State Farm Fire and Casualty Co. commissioned a survey of 3,600 registered voters in Mississippi that found a “substantial amount of bias against insurance companies” among Gulf Coast residents after Katrina.

The Bloomington, Ill.-based insurer claims the survey demonstrates that it can’t get a fair trial here for the lawsuits filed by policyholders whose homes were damaged or destroyed by last year’s storm.

State Farm is asking a federal judge in Gulfport, a coastal city devastated by Katrina, to move at least three trials more than 300 miles north to Oxford, Miss., where the survey found “much less bias” against insurance companies.

Moving the trials from Mississippi’s coast is “the only reasonable end to the pursuit of impartiality,” State Farm attorney John Scott Corlew wrote last month in court papers.

Hundreds of Gulf Coast homeowners are suing their insurance companies for refusing to cover damage from Katrina’s water, including wind-driven “storm surge.” State Farm is believed to be the first company seeking to move a Katrina insurance trial from one federal court to another.

In court papers, lawyers for the policyholders argue that State Farm hasn’t met the legal burden for showing that the case must be moved to ensure a fair trial.

On Friday, State Farm asked U.S. Magistrate Judge Robert Walker to hear testimony from Kent Tedin, a University of Houston political science professor who designed and analyzed the survey for State Farm. Walker did not immediately rule on the request.

Tedin has designed similar public opinion surveys for several high-profile cases, including the trial of Oklahoma City bomber Timothy McVeigh, which was moved to Denver.

His survey for State Farm posed questions to 400 registered voters who live in the Gulfport court’s jurisdiction. The survey, which was conducted by SRBI Inc. and has a margin of error of plus or minus 5 percent, found that:

• 54 percent said insurers should be required to pay for damage from hurricane flood waters. A federal judge in a different case already has ruled that a standard homeowner’s policy excludes flood damage from coverage.

• 55 percent said insurance companies have been unfair in settling claims after Katrina, 19 percent said the companies have been fair and 26 percent had no opinion.

• 49 percent agreed with a televised remark by U.S. Rep. Gene Taylor, D-Miss., that “there ought to be a national registry of child molesters and insurance company executives, because I hold them in the same, very low esteem.”

“I submit that if potential jurors roughly equate insurance executives to child molesters, insurance companies have no chance for a fair trial among those who hold that opinion,” Tedin wrote in his 23-page report.

Bias among voters in the Oxford area “pales” in comparison to the coast, where it is “acute to the point that a fair trial is almost certainly not possible,” Tedin wrote.

Corlew, the State Farm attorney, blames the disparity on biased coverage by local media outlets.

“This media propaganda will make it impossible for State Farm to receive a fair trial (on the coast), particularly against the background of the personal economic loss experienced by such a large number of citizens in this area,” he wrote.

The policyholders’ lawyers argue that Tedin shouldn’t be allowed to testify because State Farm hasn’t designated him as an expert witness. Jack Denton, one of those attorneys, declined to comment on State Farm’s motion to move the trial because Walker hasn’t ruled on it yet.

Zach Scruggs, an attorney whose firm also is suing State Farm on behalf of hundreds of policyholders, said it’s “disingenuous” for the company to complain about bad publicity while spending millions of dollars on “feel-good” television ads touting its response to Katrina.

“Nothing in this (survey) tells me that they can’t get a fair trial on the Gulf Coast,” Scruggs added.

In a related development Monday, State Farm asked Walker to seal court papers that include “highly sensitive” information that supports its efforts to block five of the company’s managers from being questioned under oath by Scruggs’ legal team.

In court papers, State Farm said the undisclosed information “deserves confidentiality in order to protect the legitimate privacy rights of non-parties to this action.”