The Federal District Court for the Southern District of Mississippi recently unsealed the court record in a lawsuit filed by State Farm Fire and Casualty Company (“State Farm”) against the Attorney General of Mississippi, Jim Hood. State Farm Fire and Casualty Co. v. Jim Hood, Case No. 2:07cv188 KS-MTP (S.D. Miss. Sept. 23, 2007).

The lawsuit stems from a non-prosecution/settlement agreement previously entered into by Hood and State Farm. By the terms of the agreement, Hood was to terminate his criminal investigation into State Farm’s claims handling of Hurricane Katrina-related claims in exchange for State Farm reopening and investigating thousands of its policyholders’ claims. In addition, State Farm agreed to pay Hood the costs incurred during his investigation of State Farm.

While Hood alleges that State Farm subsequently failed to comply with certain requirements of the agreement, State Farm did pay some $5 million dollars of Hood’s investigation costs. Nonetheless, during the summer of 2007, Hood sued State Farm for failing to honor the agreement (click here for additional Hood/State Farm information). State Farm apparently then filed the previously-sealed lawsuit alleging that Hood’s filing of his lawsuit breached the agreement. State Farm’s First Amended Complaint, apparently filed on September 18, 2007, is attached here.

In its complaint, State Farm seeks a temporary restraining order and an injunction to stop Hood from continuing his investigation of the company. State Farm asserts that Hood is “pursuing his criminal investigation of State Farm in bad faith and for the purpose of harassment.” The complaint further alleges that Hood has been using the State Farm criminal investigation to coerce State Farm to settle various civil lawsuits.

We will continue to monitor this litigation and other Katrina-related developments and provide updates at InsureReinsure.com