Scruggs’ coalition running TV, newspaper ads against insurance commissioner

Published 6:30 pm Wednesday, May 30, 2007

Insurance Commissioner George Dale’s toughest opponent this year may not be another candidate but a band of attorneys that has launched newspaper and television ads criticizing him.

The Scruggs Katrina Group, a coalition of four law firms, is latching onto Dale’s greatest vulnerability: Gulf Coast residents who lost homes in Hurricane Katrina and feel duped by insurers who denied claims.

The attorneys, led by Oxford lawyer Dickie Scruggs, paint Dale as too chummy with insurers and attack the effectiveness of a mediation program that began after the August 2005 storm.

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On March 25, a newspaper ad depicted Dale as a pig covered with pink lipstick by State Farm Insurance executives and the caption “Lipstick On A Pig.”

Over the past year, television ads have run on the Gulf Coast blasting mediation and portraying Dale as too close to insurers he regulates.

Somber piano music plays as clients and consultants urge Mississippians to avoid the program.

One commercial, which accuses the insurance commissioner and insurance companies of shredding documents subpoenaed by a grand jury, ran in Jackson recently.

None of the commercials mentions Dale by name or urges viewers to vote against him.

Dale said the mediation program is a success with 83 percent of 3,546 cases closed. He strongly denies he or any of his employees destroyed documents.

“They don’t have to pay 30 to 40 percent of what they get to a lawyer,” he said.

Scruggs’ son, Zach, said the advertisements are a “public information campaign” and not political.

“George Dale is more concerned with the pocketbook of the insurance companies than the policyholders,” said Scruggs, an attorney with the Scruggs Katrina Group. “He’s a nice man, but he’s been there too long.”

He said the commercials were never intended to imply Dale destroyed documents or acted illegally.

The commercials play regularly on WLOX-Channel 13, a Biloxi station whose audience reach goes north of Hattiesburg.

“They’re very slickly done political ads,” said Joe Parker, University of Southern Mississippi political science professor. “They don’t mince words.”

One dramatic ad features a woman whose parents lost their home in Katrina and could not resolve the claim in mediation. She calls the program “humiliating.”

“I think they stack up about as good as any political ad I’ve seen,” he said.

The ads’ accomplishment is twofold: jab the insurance companies and Dale.

“George Dale is kind of thrown in as a lagniappe,” Parker said. “He’s kind of played into their hands by having an insurance lawyer.”

Dale, insurance commissioner since 1975, won a state court case to return to the Democratic primary ballot after the party removed him over concern about his loyalty. He publicly stated his support for GOP president George Bush in 2004.

His attorney in the case was Greg Copeland, a lobbyist for the American Insurance Association.

One of Dale’s opponents in the Aug. 7 Democratic primary is former state fiscal officer Gary Anderson. Anderson received a campaign donation of $1,000 from Don Barrett, a Lexington attorney in the Scruggs Katrina Group. Businessman Jim Rasberry of Laurel also is on the ballot.

State Farm and other insurers say their policies cover damage from a hurricane’s wind but not its rising water.

Hundreds on the Gulf Coast have sued their insurers for either refusing to cover damage from wind-driven water or blaming wind damage on floodwater.

Scruggs said he also does not trust an agreement reached between Dale and State Farm to reopen claims.

“Those policyholders are going in there, and it’s David and Goliath,” he said.

For those who have reached a settlement, “They’re just desperate, and they don’t see themselves getting a court date anytime soon,” he said.

More than 4,122 mediations have been requested since the program began with 620 impasses.

Participants disputing their claims bring attorneys, public adjusters and engineers to mediation, said Deputy Insurance Commissioner Lee Harrell.

Some individuals come with family members or alone, he said.

“We knew going in, it was not going to make everybody happy,” Harrell said.

He said he could not release the names of those who completed mediation for privacy reasons. He did not have information on the monetary amount of settlements.

He points to a move by U.S. District Judge L.T. Senter in Gulfport to order cases into the state’s meditation program as proof of its success.

Of 173 federal cases in mediation, 47 percent have been settled, Harrell said.

“What we’re looking at is trying to get Mississippians back on their feet,” he said.

One of Scruggs’ clients, Randy Barrett, could not resolve his claim through mediation. He is not related to attorney Don Barrett.

Randy Barrett’s 2,000-square-foot Gulfport home was near the beach and was destroyed in Katrina. The house, built in 1918, was elevated higher than the surge reached and was torn apart by wind, he said.

The insurer disagreed and denied the claim.

He said he presented elevation maps, storm surge details from government reports and other documents. Adjusters he spoke with along the way agreed wind took his house down, he said.

At mediation, the insurance firm denied the evidence, he said.

“When I came out of there, I thought it was a joke of a mediation,” said Barrett, an airline pilot who moved his family to Houston. “I was forced to hire an attorney.”

A trial date is set in December.