Federal Judge Puts Part of State Farm Katrina Settlement on Hold

By Andrew G. Simpson, Jr.
January 27, 2007

The federal judge who must sign off on a proposed $50 million class action settlement involving State Farm's handling of Hurricane Katrina claims has said he needs lots more information before agreeing to the deal affecting as many as 35,000 policyholders.

U.S. District Judge L.T. Senter of the U.S. District Court of Southern Mississippi on Friday declined to approve the widely-reported settlement and did so "without prejudice," but he also made it clear that the parties have a lot of explaining to do.

"In the absence of substantially more information than I now have before me, I am unable to say, even preliminarily, that the proposed settlement establishes a procedure that is fair, just, balanced, or reasonable," wrote Judge Senter.

The ruling affects the proposed settlement of a class action on behalf of an estimated 35,000 State Farm claimants who did not sue the company. The agreement promises that their claims and any denials will be reconsidered.

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