First 100 Policyholders Receive Checks In State Farm Katrina Settlement

About one-sixth of the 640 homeowners who sued, and settled, with State Farm have already been paid, and the rest should be by the end of next week, this AP story says

Remember, this settlement was for an estimated $80 million and includes almost all the Katrina lawsuits against State Farm in Mississippi.  When the settlement was agreed to, Attorney General Jim Hood also agreed to drop his criminal investigation in the insurer’s claims practices.  Another part of the settlement, with a putative class of perhaps 35,000 policyholders who had not filed suit and most of whose claims have been closed by payment or otherwise, was rejected by Senter.

Toward the bottom, this story has some fascinating detail about Senter’s views on what kind of class settlement he might accept:

In the meantime, Senter is soliciting ideas from other lawyers with Katrina lawsuits. In a letter Friday to 180 attorneys, Senter said he is looking for a broader approach to a settlement.

"While the proposed class action is currently limited to State Farm policyholders," Senter wrote, "any procedure the court approves as an alternative to litigation would likely serve as a de facto model that would apply to similar claims against the other major insurers, Allstate and Nationwide."

Senter said he is open to establishing an "arbitration alternative" to the binding arbitration procedure outlined in the proposed settlement, but he added, "Unless such a procedure offers substantial benefits for both parties, it will not succeed."

That last sentence is key.  In Senter’s January 26 ruling rejecting the class action settlement, he was disturbed by what he saw as unfairness in the claims and arbitration process that was to have been created. He especially appeared to dislike that this process was to take place under the auspices of the court, but would essentially have been run by State Farm with no court input.

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