State Farm Fire maintains that there is a suggestion of bad faith in Plaintiffs’ attempt to add State Farm Mutual, and that allowing Plaintiffs to amend their Complaint to add this Defendant would result in undue delay and would be futile…The Fifth Circuit has interpreted “futility” in the amended pleading context to mean that an amended complaint fails to state a claim upon which relief can be granted…
Clearly Judge Ozerden sees a distinction between State Farm Fire and State Farm Mutual. However, his collegue Judge Starrett has declared it a distinction without a difference:
General Hood made some effort to distinguish State Farm Mutual Automobile Company, a mutual insurance company, from State Farm Fire and Casualty Company, a stock insurance company. The Court believes this to be a distinction without a difference, since all of the stock in the stock company is in fact owned by the mutual company.
Judge Starrett’s opinion on the relationship between State Farm Mutual and State Farm Fire is found in his Order of recusal, entered in State Farm v Hood (October 10, 2007).
Hood’s position is understandable with a look at the settlement agreement at issue in the injunction State Farm obtained in Starrett’s court prior to his recusal.
Note the Settlement Agreement is specific to Hood’s case against defendant State Farm Fire!
A footnote on the first page of State Farm’s Compliant explains the Company’s position the inclusion of State Farm Mutual:
The Fourth Grand Jury Subpoena…was served on State Farm Fire and Casualty Company. However, the January 23,2007 non-prosecution agreement that is the subject of this lawsuit also provides that Attorney General Hood will not further investigate or prosecute State Farm Mutual Automobile Insurance Company, thus making it a proper Plaintiff to this action.
Take note that Shelia Birnbaum signed the Agreement as Attorney for State Farm Fire.
The mention of State Farm Mutual comes in a separate letter of agreement that refers to the two entities as one “State Farm”.
Unlike the position State Farm has taken in O’Keefe, the Company made no objection to Judge Starrett’s opinion holding the name of the company; i.e., Fire or Mutual was a distinction without a difference.
However, applied to O’Keefe versus State Farm, an allegation against the Company by either name is an allegation against both. In other words, Starrett’s opinion leaves Judge Ozerden without cause to deny O’Keefe’s motion to amend his complaint and name State Farm Mutual as a defendant.
…Plaintiffs’ theory for imposing liability on State Farm Mutual under an insurance policy to which State Farm Mutual was not a party has been consistently rejected. Nor does the proposed amendment state any other plausible claims against State Farm Mutual…Based on the foregoing, the Court is of the opinion that Plaintiffs’ Motion to Amend should be denied to the extent that it seeks to add State Farm Mutual as a Defendant.
Judge Ozerden errs in stating O’Keefe’s does not state plausible claims, however, because, the two entities are one in the same – collectively State Farm as the two companies are identified in the Letter of Agreement to the Settlement Agreement with Attorney General Hood.
One has only to look at the record established by the O’Keefe docket to see how deeply concerned State Farm is about the possibility Judge Ozerden will join Judge Starrett in seeing the distinction between State Farm Fire and State Farm Mutual as one without difference.
Most telling of that concern are the motions filed over the past month, starting with State Farm’s Motion for Protective Order to limit the scope of the deposition of Alexis “Lecky” King and four others.
Plaintiffs have requested the depositions of Mr. Saari, Ms. King, Mr. Llewellyn, Mr. Leotis, and Ms. Fisher. Each of these witnesses had certain – and, in most instances, very limited – involvement in handling Plaintiffs’ claims. Prior to the filing of this motion, State Farm communicated with Plaintiffs in a good faith effort to limit each witness’s deposition to his or her involvement in and knowledge of Plaintiffs’ claims…Plaintiffs rejected any such limitations and stated their intention to depose the witnesses about, among other things, “claims procedures utilized during Hurricane Katrina for similar claims” and whether Plaintiffs’ claims were handled consistently “with the handling of other similarly situated policy holder’s claims.”
Plaintiffs’ counsel, as expected, filed a Response in Opposition :
Plaintiffs would respectfully show that State Farm’s Motion is yet another attempt by State Farm to conceal the full measure of unfavorable facts regarding its fraudulent claims practices, and wrongful and bad faith denial of the Plaintiffs’ claims. State Farm’s Motion is nothing more than a cookie cutter motion file by State Farm without properly setting forth particular and specific facts that are required by law for entry of a protective order. Further, State Farm’s Motion attempts to prevent the Plaintiffs from discovering information regarding State Farm’s Affirmative Defenses to the claims of the Plaintiffs. State Farm’s Motion is improper and fatally defective, and Plaintiffs respectfully request this Court DENY the Instant Motion.
State Farm filed a second motion – one plaintiffs’ brief described as State Farm’s other Motion seeking to hide the truth – Defendant State Farm’s Motion for Protective Order to Limit Discovery re: Use of Engineers, Claims by Other Policyholders, State Farm’s Hurricane Deductible, “Windstorm” Coverage/Damage, Mississippi Department of Insurance Bulletins and Inflation Protection Provisions. With a title like that, you’d think there would be nothing left to say! What State Farm did say, however, would have been better left unsaid!
Defendant State Farm Fire and Casualty Company (“State Farm”) respectfully submits this motion for a protective order, pursuant to Fed. R. Civ. P. 26(c)(1)(A), (D), to forbid requests for discovery – particularly examination during depositions – concerning State Farm’s policies and practices regarding the use of engineers in adjusting claims under its policies and State Farm’s handling of individual claims other than those made by Plaintiffs. Requests for discovery concerning the Hurricane Deductible in State Farm’s policies, whether Plaintiffs’ home, business or personal property was damaged by a “windstorm” and whether such damage is covered under State Farm’s policies, Mississippi Department of Insurance bulletins, and the “inflation protection” provisions of State Farm’s policies should also be forbidden or restricted.
Starting with the first State Farm motion for a protective order limiting depositions, a total of 38 docket entries were made over the 22 day period that ended yesterday, the 20th of October and the deadline for complying with Judge Anderson’s Order:
Each party filed a supplemental brief in support of its position on the motions listed in Judge Anderson’s Order: State Farm Fire and Casualty Company’s Supplemental Joint Brief in Support of its motions for Protective Orders to Limit the Scope of Discovery and Depositions of Certain State Farm Personnel; and Supplemental Authority in Support of Plaintiff’s Response in Opposition to State Farms’ Motion for Protective Order to Limit Discovery…and for Protective Order re Certain Depositions.
Chris Van Cleave, counsel for the O’Keefe plaintiffs, understands the distinction without a difference at play – as well as the distinctions that make O’Keefe’s position different from other cases cited as justification by the Court for various decisions:
At the outset, Plaintiffs respectfully submit that rulings from other Katrina cases regarding the scope of discovery in those cases are not relevant to the discovery issues presently before this Court. Rather, the scope of discovery the Plaintiffs are permitted to explore – and more specifically State Farm’s entitlement to a protective order from this Court limiting the scope thereof, are governed by the Federal Rules of Civil Procedure…
Although the Rules also permit the Court to limit the scope of discovery under
certain circumstances, Plaintiffs’ prior pleadings clearly provide that a protective order such as that sought by State Farm may only be granted upon a showing of “good cause” by State Farm – and that State Farm may only demonstrate the requisite “good cause” by “a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.”
As set forth in Plaintiffs’ prior pleadings, State Farm failed to provide the Court with any “good cause” that meets the requisite standard.
To the extent that other Southern District opinions in Katrina cases may be deemed relevant by this Court, Plaintiffs direct the Court to Judge Senter’s opinion in Guice II, 2007 WL9 912120 (cited on pages 7-8 in State Farm’s  Memorandum) wherein Judge Senter denied class certification based upon his conclusion that the facts and discovery in each Katrina case will be unique to the claims in that specific case.
Van Cleave’s brief’s are always well written but “beach briefs” they are not. State Farm, however, gave him the break he needed to explain that Responses to State Farm’s Motions go into great detail about the specific content of the claims in Plaintiffs’ Amended Complaint – which was filed pursuant to leave of this Court, and the Affirmative Defenses asserted in State Farm’s Answer thereto. No doubt this understanding accounts for the clear and concise description of the O’Keefe’s position in this brief.
As previously argued by Plaintiffs, the claims and defenses in this case include claims of institutional fraud and a scheme of fraudulent claims practices, and related claims. These claims are easily distinguishable from the claims at issue in the Gagne case relied upon so heavily by State Farm – as the Court can see from a cursory review thereof…
Of course, the referenced conclusions of the Fifth Circuit (and apparently related free pass to State Farm to avoid discovery into claims of institutional, fraudulent claims practices) have now been reversed by the Mississippi Supreme Court in Corban vs. U.S.A.A., No. 2008-IA-00645-SCT. The Lagasse Order  cited by State Farm, which post-dated the Marion Order  cited by State Farm by approximately one (1) year, relied almost entirely on the (post- Leonard and Tuepker) Marion rulings cited by State Farm. As such, that discovery Order was likewise based upon a “context” of Katrina decisions that Judge Walker found “framed the issues in dispute” which is no longer valid in light of the Corban decision.
Many things lose their validity in a different light. State Farm Mutual hids in the shaddows of Katrina litigation to escape accountability, on one hand, and basks in the light of protection from legal action initiated by Mississippi’s Attorney General, on the other. That distinction does make a difference and the outcome is obvious – Mutual either faces O’Keefe or the Attorney General.