Insurance Law

Scruggs Nation, the Reckoning: Dickie Scruggs pleads guilty

By David Rossmiller

We'll stay on this post all day and update. Look for the latest information at the top (I got chewed out by readers last time I did this for putting the new updates at the bottom).

NINTH UPDATE: This motion was filed by the government today.  It asks the court's permission to turn over evidence gathered by the FBI "taint team" -- a team that separately analyzed data like computer files copied from the Scruggs Law Firm during the November FBI raid -- to the federal prosecutors in the Scruggs case.  From this motion, we learn that this information was turned over to the defense team just yesterday -- the timing of the pleas could have had something to do with the evidence.  

EIGHTH UPDATE: Roger Parloff of Fortune's Legal Pad

SEVENTH UPDATE: Check out Walter Olson at Overlawyered for more news and links.

SIXTH UPDATE:  This has got to be kind of like getting a paper cut after you've lost your legs, but in another matter, the 11th Circuit Court of Appeals turned down Scruggs' petition for a writ of mandamus against Judge Acker, in the Renfroe v. Rigsby civil lawsuit in federal court in Alabama.  Scruggs sought to have Acker removed as a judge from the case, saying he was biased because he had referred Scruggs for criminal contempt of court in the case. 

Here's a copy of the 11th Circuit's order.

FIFTH UPDATE: Just got a moment to link to the documents.

Dickie Scruggs' plea agreement.

Backstrom's plea agreement.

Factual basis for Scruggs' plea agreement.

Factual basis for Backstrom's plea agreement.

FOURTH UPDATE: A story by Richard Fausset of the L.A. Times, with an interesting quote from attorney James Robie.

"You know, I've spent hundreds of hours letting that issue marinate, because it boggles my mind," said James Robie, a Los Angeles attorney who is representing dozens of Katrina-related cases Scruggs' clients brought against State Farm Insurance. "I believe he became completely intoxicated by power. . . . And he's so avaricious that he'd often tie in with it, 'How many millions can I rake in?' Just because it was a game."

Fascintating, but I don't think Scruggs became intoxicated by power, as one would normally understand that phrase.  I think he -- contrary to the perception of him as a gambler -- was someone who showed a proclivity and a talent for arranging things, when he was able, so that it was a "heads I win, tails you lose" situation.  Sometimes he had enought juice to do that, sometimes he didn't. 

Also, I occasionally get people saying to me, stop kicking Scruggs, you don't kick a guy when he's down.  Two things.    First, if we can't collectively condemn judicial bribery and all its implications, and examine how far this pattern of conduct reaches, if we can't defend the institutions that protect us, we are not worthy of survival.  Second, unlike many, many others, I kicked Scruggs when he was up, too.  

THIRD UPDATE:  Here's a story from the ABA Journal, with a lot of good links, and unfortunately, a very good profile story that was superseded by events today.  But hey, Scruggs happens.

SECOND UPDATE: Here's the word from ICLB's confidential correspondent at the courthouse this morning:

Sentencing in 30-45 days.

Before the hearing, DS and Backstrom sitting in the gallery. DS hugging people who spoke, shaking hands, talking. DS sitting next to wife before hearing started. Backstrom did not have a wife at his side when sitting in the gallery waiting for proceedings to start (at which time both he and DS moved to the defense table). Sat with DS and DS's wife before moving to defense table.

Judge annouced that Backstrom and DS changing "not guilty" plea to "guilty" as to count 1 (conspiracy to attempt to bribe...)

Both Backstrom and DS plead guilty to count 1 of the indictment. Max sentence is 5 yrs. No recommendation for DS's sentence. Backstrom recommendation in his plea agreement that his sentence not exceed one-half of DS's sentence.

Counts 2-6 will be dismissed for each.

DS represented by Keker. Dawson for gov. DS was very stoic. Answered judge's questions clearly; talked clearly, understandably, loudly; otherwise completely motionless. This plea has no effect on the Wilson investigation. DS pled first. then left the courtroom, glanced in direction of his wife. His wife followed and then returned for Backstrom's plea.

Backstrom - represented by Tannehill and Trapp. Backstrom agreed that he did enter into a conspiracy but did not assist in "furnishing monies." He indicated (when asked by Biggers who provided the monies) that his law firm did. Trapp and gov quibbled a second or two about the word "corruptly" in front of "influence" - it was Trapp's understanding that "corruptly" would be removed. The gov indicated that is had been removed from the first paragraph, only because the gov (Norman for gov) didn't feel it was worth arguing about. Biggers asked if he understood that the acts of one co-conspirator are attributed to all. He said he understood. Throughout, Backstrom was quiet, reserved. entered plea and then asked to say something. Said he apologized to the court, his family. Began sobbing. Stated that he had made some of the worst decisions of his life in this matter, and that he accepted responsibility. Biggers responded: "Your apology is on the record. No doubt you made some awful decisions."

Both DS and Backstrom remain on their original bond.

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UPDATE: Backstrom too. No word yet on Zach, I just heard from someone at the courthouse for the hearing on Zach's motion to dismiss, apparently as of this writing (9:25 a.m. Pacific time), the hearing is still going on.

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I started hearing strong rumors of a plea agreement this morning, and it turns out to be true.  Here's a breaking story from Holbrook Mohr of the AP.  More to come later.  Also, let me be the first to point out -- apparently it wasn't Too Dumb For Dickie.   

Full post as published by Insurance Coverage Law Blog on March 14, 2008 (boomark / email).