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Mississippi Whistleblowers Going to U.S. Supreme Court

Sisters Reported Abuse of Federal Flood Program by State Farm

Two sisters from Mississippi are headed to the U.S. Supreme Court to protect a verdict they won against insurance giant State Farm. Cori and Kerri Rigsby, who both worked as claims adjusters for the company in the aftermath of Hurricane Katrina, successfully demonstrated at trial that State Farm assessed a policy limit of $250,000 to the federal flood program while paying far less to settle a claim for one of its policyholders. It also appeared that State Farm sought reimbursement from the federal flood insurance program for losses that were caused by wind. The trial court assessed damages of $750,000, with 15% of the proceeds to be paid to the Rigsby sisters.

Attorneys for State Farm are not challenging the determination made by the court, but are asking that the whistleblower action be dismissed because attorneys for the Rigsbys told the media about the lawsuit while the lawsuit was still under seal. In a federal whistleblower action, the details of the lawsuit are under seal and not to be disclosed until federal prosecutors have been able to investigate and determine whether they want to handle the prosecution.

Though attorneys for the Rigsby sisters told the media about the lawsuit while it was still under seal, the sisters waited until the government opted not to get involved before they proceeded with their legal action. Attorneys for State Farm argued at trial that the wrongful disclosure had harmed State Farm and asked that the lawsuit be dismissed. The trial judge disagreed, and the U.S. Court of Appeals for the 5th Circuit affirmed the trial court decision.

When the case is argued before the U.S. Supreme Court, the nation’s highest court will look only at the issue of whether the early disclosure compromised the case.