Former State Farm insiders Cori and Kerri Rigsby have been sued after blowing the whistle on what they say was "widespread" fraud at the insurance giant. E.A. Renfroe, the outside adjusting firm that assigned the Rigsbys to work at State Farm, has filed a lawsuit accusing the sisters of breaching their employment contracts and violating trade secret laws. According to Renfroe’s suit, one of the violations occurred when the sisters wore their State Farm-issued jackets "on their appearance on national television…on the 20/20 program." The 20/20 report detailed the Rigsbys’ claims that State Farm cheated many Mississippi policyholders whose homes were destroyed by Hurricane Katrina. The sisters turned over thousands of internal State Farm documents to criminal investigators and to attorney Richard Scruggs, who is suing State Farm on behalf of homeowners. THE BLOTTER RECOMMENDS Exclusive: Whistleblowers Say State Farm Cheated Katrina Victims Fraud Lawsuits Over Altered Katrina Damage Reports to Go to Trial Click Here for More of the Brian Ross Page In its suit, Renfroe says the Rigsbys’ employment agreements prohibited them from disclosing "any confidential information of Renfroe, its clients or their insureds." The suit seeks damages "in excess of $75,000" and the return of all documents and materials taken by the sisters.
Scruggs says the lawsuit is an attempt by Renfroe and State Farm to intimidate the Rigsbys and to discover exactly what documents were turned over to authorities. Scruggs, who represented famed tobacco industry whistleblower Jeffrey Wigand, says such lawsuits have the effect of "discouraging people…who are brave enough to stop fraud."