Insurance Law

Scruggs Nation, Day 45: the reckoning

By David Rossmiller

This thing in Mississippi is starting to rock around and bounce like a pressure cooker with no safety valve and the burner underneath turned up to flamethrower level.  Feels like it's about ready to blow up and spray strawberry preserves and shrapnel all over the kitchen.  They say if you can't stand the heat -- or the explosions -- get out of the kitchen.  But when the feds are the ones who invited you into the room, it's not like a movie, where if you don't like the show you get up and leave. They tend to get very -- what's the word I'm looking for here? -- upset if you try to check out without leaving a little something behind. Admission costs you nothing, but dang, that exit fee? It's pretty steep.  Your gut is full like you just dined on a heavy meal where the main courses were fear, terror and panic. If you got invited and you've got something to throw on the table, you empty your pockets to get out before that lid blows. If you left your chips in your other pants, or you're the feds' guest of honor, well . . . . You know what happens.

So, Citizens, put on your bomb disposal suits, and make sure your blast helmets are on tight for the next few days.  Let's peer out from our bunkers, through our reinforced Plexiglas face guards, and take a look at the landscape of the Scruggs Nation.

-- First let's look at this AP story on the federal grand jury.

JACKSON, Miss. -- The federal investigation in a judicial bribery case that entangled one of the nation's wealthiest plaintiffs attorneys appears to be expanding, with a grand jury considering at least one case dating back to 1994.  

Famed plaintiffs attorney Richard "Dickie" Scruggs, his son and several associates were indicted Nov. 28 on charges they conspired to bribe a judge for a favorable ruling in a dispute over $26.5 million in legal fees from a Hurricane Katrina settlement.  

On Thursday, sources close to the investigation told The Associated Press that a federal grand jury in Oxford has been asked to look at at least one other case Scruggs was involved in during his rise to the top of his profession.  

A 1994 lawsuit in which two of Scruggs' former associates, attorneys Alwyn Luckey and William Roberts Wilson Jr., sued Scruggs for a bigger cut of millions of dollars that the attorneys had won in asbestos litigation is one of the cases apparently being looked into by federal authorities.  

Hinds County Circuit Clerk Barbara Dunn said today that the 1994 file was not available because federal investigators took all 7,001 documents related to the case earlier this week.  

The judge who presided over the 1994 case was Circuit Judge Bobby DeLaughter, a former prosecutor renowned for successfully prosecuting Byron De La Beckwith in the 1990s for the 1963 murder of NAACP field secretary Medger Evers.  

During a telephone interview with the AP on today, DeLaughter said he could not comment on reports of the grand jury probe but challenged anyone who doubted his judicial integrity to read his ruling in the case.  

Numerous calls to U.S. Attorney Jim Greenlee's office in Oxford this week have not been returned. Attorneys for Scruggs have not responded to repeated requests for comment.

-- Judge Biggers lets no moss grow under his feet. Here is a copy of his order setting a hearing for 10 a.m. next Wednesday.

The court notes that in the motion and response thereto, not only are issues raised about whether some requested material is discoverable under the statutes and case law, but also whether some of the items requested have been furnished to the defendants. Counsel are advised that in the interest of judicial and attorney economy, counsel should carefully review Federal Rule of Criminal Procedure 16 and Title 18 U.S.C. § 3500, which address the bulk of the issues raised by the parties in the motion and response, and separate those materials which are clearly not discoverable from those that are.

Also, the government claims it has already furnished to the defendants some of the items requested by them prior to the date of the request. This issue should be resolved prior to the January 16 hearing through a conference between the government and defendants. The court does not wish to expend judicial resources on matters which could be so easily resolved by the parties outside of open court.

This is my favorite kind of judge.  Doesn't look like he's in the mood for anything that might be perceived as messing around. 

Incidentally, you might have noticed in the court docket on PACER that some time back Judge Biggers issued this order moving the date for plea agreements in this case from January 7 to February 11.  Just sayin'.

-- With the McIntosh v. State Farm trial deadline looming on February 25, I was wondering when one side or the other would come to the court and say it just isn't going to happen.  Preparing for a trial in federal court is a massive job in even a small to medium-size case, and this thing is big and nasty, and I'm talking nasty like a cross between Bad, Bad Leroy Brown and King Kong.  This case has the disposition of Chewbacca after you gave him a buzz cut. The motion practice alone on pre-trial motions will consume resources like a forest fire.

Now I see the former Scruggs(less) Katrina Group, now known as the Katrina Litigation Group, has moved to continue the case and re-set the trial date.  Here's a copy of the motion, and here's an excerpt:

1. Prior to their withdrawal from this case in December, the Scruggs Law Firm had handled the case almost exclusively and had done all of the trial preparation. Plaintiffs’ counsel who remain in this case have worked diligently to learn about the case and to prepare it for trial, but cannot be prepared for trial by February 25, 2008, and need an additional month to be able to fairly and adequately present the case for plaintiffs.

2. Outstanding discovery issues remain for both sides.

3. The undersigned [attorney Don Barrett] is, since the withdrawal of the Scruggs Katrina Group from this case, the lead trial counsel for the plaintiffs. Prior to the Scruggs’ withdrawal, a case pending in the Northern District of Mississippi before Judge Davidson was set for trial in Oxford beginning February 4, 2008. Counsel opposite in that case has estimated that this case will take longer than three weeks to try. Therefore, lead counsel for the McIntoshes will be unavailable if this trial setting is not continued from its current setting, and unavailable for the three critical weeks immediately preceding the trial.

4. This motion is not brought for purposes of delay, but to promote the ends of justice.Plaintiffs have not previously sought any continuance, and can be prepared to try this case with as little as four weeks additional time.

-- In a kind of odd sidelight to the Renfroe v. Rigsby case in Alabama, a dust-up ensued in the federal district for Northern Mississippi over subpoenas Renfroe issued to take the depositions of Dickie and Zach Scruggs.

For procedural and jurisdictional reasons, this resulted in the opening of a new case in Northern Mississippi to consider Scruggs' motion to quash, which was granted by the Magistrate Judge.  Renfroe asked for a de novo review [review of the whole thing, top to bottom, with the reviewing judge not being required to give any deference to the ruling] by the Article III judge assigned to the case. (For non-lawyers, unless parties consent to the jurisdiction of the U.S. Magistrate, his or her orders must be reviewed by a judge confirmed by the U.S. Senate if one of the parties requests -- Article III refers to the section of the U.S. Constitution that requires federal judges to be appointed by the president and confirmed by the Senate). In light of Judge Senter's decision in the McIntosh case that Dickie and Zach Scruggs can be deposed by State Farm, however, Chief Judge Michael Mills issued this order yesterday that in essence stays the case.  

On January 8, 2008, this court set for hearing on January 17, 2008, Scruggs’s motion to quash the subpoena issued against him in this case. On that same day, however, in McIntosh v. State Farm et al., 1:06cv1080 (S.D. Miss.), U.S. District Judge L.T. Senter issued an order affirming Magistrate Judge Walker’s order permitting Scruggs’s deposition in that Hurricane Katrina case. Judge Senter indicated in his order, however, that the status of the documents at issue therein was uncertain, and Judge Senter accordingly remanded the case to the Magistrate Judge for additional inquiries in that regard. Judge Senter appeared to be particularly concerned regarding Scruggs’s arguments that some or all of the documents in question were privileged, and he directed that Judge Walker address these privilege issues on remand.

It is thus apparent that another district judge has already addressed the issue of Scruggs’s deposition regarding the Rigsby documents. This court does not wish to interfere with Judge Senter’s resolution of these issues, and it appears that his resolution of identical issues will serve the interests of judicial economy. The proper course of action is to stay the matter of Scruggs’sdeposition in this case until concerns regarding the privileged documents have been resolved in McIntosh. The court presumes that the McIntosh analysis will prove conclusive in this matter.

In any event, the parties may file revised motions before this court seeking whatever relief they deem to be appropriate in this case. It is therefore ordered that the hearing previously set for January 17, 2008 in this case is continued until a date to be determined later.

Here's a post I wrote a couple weeks ago with more. The docket on PACER on this little case filled up fast, with such entries as Motion for De Novo Review of Order Quashing Subpoenas and a counter Motion to Quash Motion for De Novo Review.  If things kept going on the way they were, I was expecting to see entries like Motion To Leave Me the Hell Alone, I've Got Other Problems!, Motion To Shut Up and Face the Music and Motion To Stop Making More Motions, I'm Tired.

Isn't it remarkable all that is going on all over the place?  It's like Dickie Scruggs is made of fire right now, wherever his name appears, a conflagration breaks out.  Not sure even the Keker Brigade has enough hoses and water to put them out. We'll see.

-- I heard that AG Jim Hood, the Prisoner of High Street, was sworn in yesterday for his second term.  Got me to thinking.  It's odd that he hasn't rushed to start a state investigation of these Scruggs allegations, or at least demanded that the feds cut him in on a joint state-federal investigation.  Maybe I just haven't heard about it. 

UPDATE: I heard about the weird thing at the end of this post on this blog from a couple readers today.  It's not uncommon for people new to getting attention to let their egos start writing checks the Reality Bank ain't gonna cash.  Kind of weird and sad. I've been writing about Katrina litigation and Scruggs for a long time before this blog came along, and whatever the implication is supposed to be there, I don't get my information or documents from some blog, I get them from people who have them, the court clerk and from PACER. One reader pointed out I've linked to this blog in the past and said complimentary things -- it's something that folks did when I started blogging, helping out the newbie -- but I will have to rethink this. It's easy to get carried away with yourself, I know -- I remember back in the day I got a story on A-1 of my paper in Phoenix the second day I was working there and I thought I was the Duke of Earl.  Had a few hard lessons along the way from folks who disagreed. I've said it before and I'll say it again, I'm a busy practicing litigator, I hear from a lot of connected people every day, I form my own opinions from talking to them and reading documents they send me and I find myself, and I don't really pay attention on a daily basis to what other people on the internet are doing. 

Full post as published by Insurance Coverage Law Blog on January 11, 2008 (boomark / email).