BLOOMINGTON - A bloc of Mississippi attorneys brought the battle over Hurricane Katrina damage to State Farm Insurance Cos.' backyard.

The Scruggs Katrina Group, which is involved in numerous lawsuits against insurers, purchased ad space along Veterans Parkway that reads "Katrina only destroyed homes. Big insurance has destroyed hope."

State Farm spokesman Fraser Engerman called the ad a public relations stunt from a law firm stinging from the loss of a multimillion-dollar settlement.

The digital billboard, which displays a changing rotation of ads, is located near William Marken Jewelers, 713 IAA Drive, Bloomington, and is visible to motorists driving north on Veterans Parkway.

"State Farm has spent hundreds of thousands of dollars advertising on TV and radio along the Gulf Coast say-ing they're a good neighbor and they're willing to rebuild," said attorney Zach Scruggs. "We're trying to show State Farm what's really going on. Thousands of policyholders are still living in trailers because State Farm refuses to pay."

At the heart of the legal debate is whether Katrina damages were caused by wind, which is covered, or flood, which is not.

Right now, Scruggs' law firm is not running the ads at the headquarters of other insurers but may in the future, he said.

"State Farm is the biggest insurer in Mississippi … They've been the most active at spinning their role," Scruggs said.

The law firm previously settled with State Farm on a case involving nearly 640 policyholders, but Scruggs said more lawsuits are coming.

The firm rejected a more recent settlement offer from State Farm, which agreed to reopen "slab" claims in the Gulf Coast and reevaluate settled claims if policyholders chose to do so. That agreement guaranteed $50 million in payouts to policyholders, Engerman said.

The Mississippi attorneys declined the settlement, so State Farm took the deal to Mississippi Insurance Commissioner George Dale, who accepted the offer.

"(Scruggs is) clearly upset his law firm is missing out on a multimillion-dollar payday," Engerman said, calling the local billboard a PR stunt. "(Scruggs) would have collected about $20 million in fees as a result of that settlement."

"We're interested in moving forward and rebuilding, helping people put this behind them," Engerman added.

Showing displeasure over the settlement, Scruggs ran a paid political cartoon in southern newspapers depicting State Farm Chairman and Chief Executive Officer Ed Rust Jr. putting lipstick on a pig portrayed as Dale, imply-ing the two parties have a cozy relationship.

"State Farm took a watered-down version of our agreement to their friendly insurance commissioner," Scruggs said. "It won't bring as much money to policyholders."

Scruggs Katrina Group has been a vocal opponent of insurers following Hurricane Katrina's destruction along the Gulf Coast in 2005. The group is led by Zach Scruggs' father and law partner, Richard "Dickie" Scruggs, best known for a multibillion-dollar settlement with the tobacco industry in the mid-1990s.

The law firm is currently running advertisements in the Gulf Coast, asking policyholders to reject the settlement offer from State Farm and join Scruggs' fight.

Its clients include Sen. Trent Lott, R-Miss., and Rep. Gene Taylor, D-Miss.

Meanwhile, ads on the Twin City billboard cost $2,250 to $3,500 per month, depending on the length of the con-tract, said Eric Worden, of Louisiana-based Lamar Digital Display, which owns the sign.

Scruggs' ad will run through mid-July, said Worden, general manager of the company's Central Illinois office in Decatur.