JACKSON, Miss. - His decision to file another suit against State Farm Fire and Casualty Co. was "not about money or lawyers," Mississippi Attorney General Jim Hood stated Monday.

While Hood maintains his suit is about recovering damages for the victims of Hurricane Katrina, his words left State Farm wondering what it really is about.

Politics? Money for trial lawyer campaign contributors? Most likely both, the company figures.

"Sadly, it appears that Mississippi's attorney general is more interested in making headlines in an election year than in making headway for the people of Mississippi," said Mike Fernandez, State Farm's vice president of public affairs.

"You have to wonder what would motivate Attorney General Hood to disrupt an agreement that mirrors the one he was 'happy to announce' on Jan. 23 and asked other insurers to emulate as 'a step to recovery' two days later?"

Hood announced Monday his lawsuit against State Farm, alleging a bad faith breach of contract on its part for refusing to reconstruct a rejected January settlement between it and Hood's office. In the aftermath of 2005's Hurricane Katrina, Hood said the companies wrongfully represented the amount of water damage to some homes because flood damage, covered by the National Flood Insurance Program, is excluded from their policies.

The two sides appeared to have settled in January when State Farm agreed to terms that could have cost them at least $500 million, Hood estimated. However, U.S. District Judge L.T. Senter rejected parts of the settlement because he worried about the amount of control State Farm would possess during an arbitration process that started when a policyholder rejected the company's initial claim -- an automatic 50 percent of the structural value of the property according to the policy.

Because State Farm has not fixed the rejected settlement to conform to the federal court's guidelines, Hood says the company has breached its contract with the state.

State Farm, meanwhile, began revisiting claims as part of a deal reached with Insurance Commissioner George Dale. That deal, State Farm says, mirrors the one originally reached with Hood.

Oregon insurance attorney David Rossmiller, a partner at Dunn Carney who has been analyzing the Gulf Coast's insurance situation for Legal Newsline and feels Hood's most recent lawsuit has little chance of success, says politics have become a big part of the story. Nationally known trial lawyer Richard Scruggs took it to a new level when he published a political cartoon depicting Dale as a pig wearing lipstick.

"You have politics involved in all these cases. The overview is infused with politics," said Rossmiller, whose blog can be found here. "That's not necessarily a bad thing.

"I'm sure there is a competition between George Dale and Jim Hood in the sense they have different perspectives about what needs to be done and can be done. What Hood has done that is unusual is get actively involved in insurance cases. That's not normally the role of an attorney general."

Rossmiller says he doesn't doubt Hood's sincerity when he speaks about recovering money for those left homeless by Katrina, but there may be another motive.

"Whether you agree that this is the proper role of an attorney general or not, he's trying to regain some leverage," he said. "It probably doesn't hurt that he's up for election this year."

Dale, too, is up for re-election this year. Hood says his deal with State Farm has produced far too few new offers to policyholders, only 300.

Hood dismissed State Farm's decision earlier this year to stop offering new homeowners and commercial policies in the state as politically motivated. He also called it "childish" and "immature."

"We were uncertain how our contracts would be interpreted," said State Farm spokesperson Phil Supple, who reiterated that the state's legal and political climate had become too unpredictable. "I find it quite surprising that he would characterize it as 'immature' when it was anything but. It was a prudent and necessary business decision to protect our policyholders' dollars."

And dollars find a way to mix with politics. In fact, the three trial lawyers hired by Hood to help represent the state in the lawsuit were all contributors to his campaign in 2003.

Danny Cupit offered $1,000 to Hood, a Democrat, in July of that year, and William Liston of Liston/Lancaster ponied up $10,000.

Crymes G. Pittman, meanwhile, was the largest contributor. Between March 12, 2003-June 28, 2004, Pittman made five donations totaling $25,000. His fellow partners in his law firm (Robert Germany, Joseph Roberts Jr. and C. Victor Welsh III) combined for six donations equaling $33,500.

And the contributions don't stop there. Hood joined forces with Democratic Congressmen Rep. Bennie Thompson and Sen. Trent Lott to urge national insurance reform in Congress earlier this year.

Pittman has contributed $8,100 to Thompson since 2000, as well as $20,000 combined to the Democratic Congressional Campaign Committee and Democratic Senatorial Campaign Committee.

Liston has given $10,100 to Thompson since 1996 and pledged $5,000 to the Democratic Congressional Campaign Committee in 2004.

Cupit is also a Thompson contributor, handing over $5,100 since 1993 and $41,000 to the Democratic Congressional Campaign Committee.

Hood's office, Pittman and Liston did not return messages seeking comment.

Because they did not, it is also unclear what the bidding process entailed for the three attorneys' appointments. Also, it is not known if they are working on a contingency fee basis, though Hood did say Monday that the lawsuit has not cost the State a significant amount of money.

The rejected settlement provided $5 million for "investigative and legal expenses incurred," according to Hood's office. As a result of a 2005 settlement with MCI, Hood contributor Joey Langston's firm received $14 million, though he paid $7 million of that to a Louisiana firm.

One part of the State Farm agreement was accepted by Senter, resulting in the settling of 640 claims and $26 million to Scruggs, who also contributed to Hood's campaign.

A report from The Associated Press said Scruggs stood to make another $20 million if the second part of the settlement had been approved. It grouped together 35,000 policyholders who had not yet sued but still could.

Scruggs gave Hood $10,000 for his campaign in Sept. 2004.

It's all enough to make State Farm take notice. In a letter to Hood, Kim Brunner, the Executive Vice President, Secretary, and General Counsel for State Farm, wrote:

"As we discussed during our meeting, there is no proposal we can conceive of which would enhance our extensive efforts already under way to resolve outstanding claims, through such means as the outreach program now proceeding under the auspices of the Mississippi Insurance Department (MID), and our ongoing settlement discussions with plaintiffs' counsel in pending cases. While yet another class action, if it could be certified (a questionable proposition), may generate fees for lawyers, it will do little good for the people of Mississippi."

Hood offered his response Monday.

"Absolutely nothing that they can tell you they've done has the approval of the federal court," he said. "The only thing they understand is a judgment where they have to write a big check."



*Federal campaign contributions information from newsmeat.com
*State campaign contributions information from followthemoney.org