Legal News

Spat Between Mississippi AG, Alabama Federal Judge Heats Up

By Ashby Jones

We haven’t waded into the Dickie Scruggs story in some time, partly because the bigtime drama has wrapped, as they say in Tinseltown. The famed plaintiffs lawyer pleaded guilty in March to crimes related to a judicial-bribery scheme. All that’s left is the sentencing, which was earlier this week moved up from July 2 to June 27 in order to accommodate a scheduling conflict of John Keker, Scruggs’s lawyer.

Still, some good drama is playing out down in Scruggs-land. Alabama federal judge William Acker on Thursday accused Mississippi Attorney General Jim Hood (pictured) of conspiring with Scruggs to skirt a court order, calling Hood a “so-called public official.” (Click here for the story from the Jackson Clarion-Ledger; here for Judge Acker’s opinion.)

On Friday, Hood made it clear he wouldn’t take Acker’s comments lying down. According to this report from Legal Newsline, Hood responded, “The rules of judicial performance do not allow a court to engage in unnecessary attacks on officers of the court, particularly when they are not even parties to the litigation.” Hood reportedly will move to ask Acker to “remove such derogatory allegations.”

Indulge us, LBers, if you will, in a bit of backstory. The case involves sisters, Cori Rigsby Moran and Kerri Rigsby, who were former employees of E.A. Renfroe, an insurance services-company hired by State Farm to evaluate Hurricane Katrina claims. The Rigsbys photocopied documents that they thought contained evidence of misconduct by State Farm in its dealings with its policyholders, according to court papers.

In February 2006, the sisters retained Scruggs to act as their lawyer and provided him with State Farm documents, according to court documents. At the time, Scruggs was pursuing litigation against State Farm and other insurers for denying Katrina claims. At the time, Jim Hood had also sued the insurers on behalf of the state.

In September of 2006, Renfroe sued the Rigsbys in Alabama federal court, alleging they violated their employment agreements and stole trade secrets. In December of 2006, Judge Acker ordered for all documents taken by the sisters to be handed over to the judge or returned to E.A. Renfroe.

But Scruggs gave the documents to Hood, who had sued five insurance companies — including State Farm — over their handling of Katrina claims. He also pursued a criminal case against State Farm. Judge Acker, unhappy with Scruggs’s maneuver, asked Alice Martin, the U.S. attorney for the Northern District of Alabama, to prosecute Scruggs. When she declined, Acker then made the unusual move of appointing three prosecutors to go after Scruggs. (Click here, here, here, here and here for Law Blog Background on the case and how it is that Judge Acker has the authority to do this.)

In February, a different federal judge, Roger Vinson, dismissed the indictment, largely for jurisdictional reasons. Vinson held further that Scruggs was protected by a “law enforcement exception” to the judge’s decree because he had, after all, given the documents to Hood, the Mississippi AG.

And that brings us to Acker’s latest ruling — a $65,000 penalty lodged against Scruggs for violating his December, 2006 order. Judge Acker clearly wasn’t buying the “law enforcement exception” argument. “Scruggs looked for a loophole, and, according to Judge Vinson, found it, that is, with the help of his friend, a so-called ‘law enforcement official.’”

Full post as published by Law Blog - WSJ.com on June 06, 2008 (boomark / email).