Back in July, I wrote about the treasure-trove of documents released when public-relations firm The Rendon Group was compelled to respond to a subpoena from Katrina-related litigation involving State Farm. This upcoming Friday, I’ll be participating in a WLF-sponsored webinar on public-relations tactics in class actions. To provide some background for my remarks, I thought I’d go into a little more depth on the story of how the Rendon documents came to be produced. (For the full case, see 2010 U.S. DIST. LEXIS 60138)
The "complicated story" (the court’s words) began when sisters Kerry and Cori Rigsby (both of whom were claims adjusters for a State Farm subcontractor) claimed to have found documents related to what they alleged were fraudulent denials of claims related to Hurricane Katrina. The Rigsby sisters, represented by then-lawer Richard Scruggs, filed a qui tam action in Mississippi; their documents also served as the foundation for class-action litigation filed against State Farm. Much of this litigation collapsed after the Rigsby sisters were disqualified from testifying and the Scruggs-founded Katrina Litigation Group was disqualified from prosecuting the cases, because of what federal trial Judge L.T. Senter, Jr. referred to as "ethical misconduct" and "conflicts of interest." The qui tam action remained, but the court winnowed it down to claims regarding a single denial of coverage.
At that point, State Farm filed a counterclaim for misappropriation of confidential documents, and served a subpoena on the Rendon Group seeking documents related to its use of the Rigsby documents. The Rendon Group moved to quash the subpeona, because it was overbroad and complying would violate the attorney-client privilege. The court granted the motion in part and denied it in part, reasoning:
TRG seeks to quash the subpoena duces tecum first on the grounds that the records may be protected by the attorney-client privilege. TRG cannot, however, assert this claim; no one is claiming that there was ever an attorney-client privilege between TRG and the Mississippi firms. The firms’ clients were, one supposes, State Farm insureds who sued State Farm or who were once relators in the qui tam action. The Rigsby sisters were only the latter. Those persons might or might not have grounds to claim an attorney-client privilege for information in the possession of their lawyers that reflects a confidential communication between them for the purpose of seeking legal advice or securing legal services. Had such a claim been asserted by such persons, it would then be pertinent to explore whether the lawyers’ transmittal of privileged information to a public relations firm was or was not a communication that vitiated or forfeited the privilege.
(Emphasis added, internal record citations omitted.)
Ultimately, the court compelled production of two categories of documents:
1. All documents concerning the Relators, Ms. Cori (Moran Rigsby) and Ms. Kerri Rigsby.
2. All documents concerning the False Claims Act action filed by the Relators.
What tactical insights can we derive from this case? For specifics, please tune in to the webcast on Friday. Until then, let’s just say that–despite the many challenges they do face–defendants are not helpless in PR battles over class-action litigation.