Monthly Archives: March 2008

‘Esquire’ magazine

Holy Cow! What can the reasoning be behind this latest move by Dickie Scruggs, as reported by Anita Lee of the Sun Herald?

Attorneys for Dickie Scruggs are asking the state Supreme Court to dismiss a Mississippi Bar complaint that calls for his disbarment as the result of his guilty plea on one charge of conspiring to bribe a north Mississippi judge.

Scruggs’ attorneys argue that the formal complaint is premature because U.S. District Judge Neal B. Biggers Jr. has not yet accepted his plea. Scruggs is represented before the Supreme Court by Michael Martz, the Mississippi Bar’s former general counsel.

It is a small item at the bottom of this story, which is about the Mississippi Supreme Court formally suspending Judge Bobby DeLaughter, at the request of the state bar, pending investigation of his judicial conduct in a case where attorney Joey Langston has pleaded guilty to trying to influence him with suggestions of an appointment to the federal bench via then-Sen. Trent Lott. 

Premature? Scruggs pleaded guilty to a felony involving the subversion of the legal process. Why in the name of sweet potatoes should anyone wait for anything else? I mean, what is Scruggs worried about, becoming ineligible for his dental insurance through the county bar medical plan?  At least some others voluntarily surrendered their licenses — true, it was as part of a cooperation deal with the feds, but I’m trying to find something positive to say about these guys! Is Scruggs burning the midnight oil down there at the Scruggs Law Firm, working the phones, issuing legal advice and acting the generalissimo under the end?  Maybe getting in a few last licks on that False Claims Act case?  This is getting kind of weird, it’s kind of like a guy who doesn’t want to turn in his key to the office when he’s got caught heisting dough from the safe — or like two insurance company adjusters who steal documents from the company and picture some scenario where they are going to continue working there. 

Whether Biggers has accepted the plea or not, Scruggs admitted to participating in a conspiracy to bribe a judge.  If the state bar can’t make a move at that point, what good is a state bar, why not just have lawyer discipline enforced by Dickie’s Hallelujah Chorus (now seeking guest conductor, Maestro Jim Hood on leave of absence).

UPDATE: Just got a copy of Scruggs’ motion to dismiss the bar complaint.  Here it is.

‘The invincible man’

That’s the title of this very long, very good story by Anita Lee in Sunday’s Sun Herald. This is excellent, I hope we see more stories like this.  This story has an exquisite comparison between the fates of attorney Paul Minor, who was sentenced last year in a judicial bribery scandal, with Scruggs cooperating with prosecutors but not being charged — many think because of his connections to Trent Lott. 

The story begins with: 

Dickie Scruggs blinked back tears as he rushed from the federal courthouse in downtown Jackson.

He had just testified against a fellow attorney who was like a brother, Paul Minor.

It also mentions these details:

From the time charges were filed, Minor’s defense cried "selective prosecution." Scruggs’ brother-in-law is U.S. Sen. Trent Lott, who recommended Southern District U.S. Attorney Dunn Lampton for his job.

Mississippi’s chief law enforcement officer at the time, Mike Moore, was a close friend who steered lucrative tobacco litigation to Scruggs in the 1990s. Moore’s office also helped with the judicial bribery investigation.

Moore delivered Scruggs to the back door of the federal courthouse when he testified before the federal grand jury that indicted Minor two months later. Moore, whose black BMW SUV the media spotted, said he just happened to be on his way to work and had talked with Lampton about ensuring Scruggs reached the courthouse early.

Lampton questioned Scruggs, as a cooperating witness, before the grand jury.

Moore later claimed that he was not involved in aspects of the investigation that included Scruggs and Lampton removed himself from the case, acknowledging a conflict where Scruggs was concerned. The Justice Department’s Public Integrity Section took the lead at two trials, although assistant U.S. attorneys from Lampton’s office also represented the government.

The story points out some disparate treatment of the roles of Scruggs and Minor:

The jury did not consider an $80,000 loan Scruggs guaranteed for Diaz in 2000, or how Scruggs paid off the loan through a third party. During this time, appeals were pending before the Supreme Court in legal-fee disputes between Scruggs and other attorneys.

In one of those cases, Diaz joined a unanimous opinion in Scruggs’ favor. Rendered in December 2001, the decision sent the dispute back to Jackson County, where Scruggs wanted it. Even so, attorney Merkel of Clarksdale prevailed in the lower court.

At Minor’s 2007 trial, a second jury convicted him and the two lower court judges. Minor is serving 11 years in federal prison.

Seven years more than Scruggs will get, one could note. And apropos of the story’s beginning, near the end, it marks this moment in time:

Scruggs testified March 13, 2007, in the Minor case. On or about March 15, 2007, federal investigators learned, Scruggs and other attorneys started what became a conspiracy to bribe Circuit Court Judge Henry L. Lackey in North Mississippi.

So he left the courthouse in tears, but he’s tough, he got over it fast! He went back to the office and immediately began working on a recipe for Sweet Potato Succotash (this is a link to one such recipe, but note that in this dish, the corn is not on the ground).  Or excuse me, plans for Operation Earwig, if you prefer.  The story concludes with this observation by a former state Supreme Court justice, whom I believe, like Scruggs and Lott, was also from Pascagoula. 

One who stood by Minor was Chuck McRae, a former Supreme Court justice from Pascagoula who frequently attended both of Minor’s trials. McRae, a maverick who has his own history with the Judicial Performance Commission, remained in Jackson to practice law after he left the bench. He never liked Scruggs.

"He always had the mindset of ‘I’m going to beat you, crush you, but I also want to know in advance that I’m going to do it,’" McRae said

The way McRae sees it, Minor got more time for influence peddling than Scruggs could receive for an outright bribe. Scruggs pleaded guilty to conspiracy to commit fraud, which carries a maximum penalty of up to five years in prison and a $250,000 fine.

"There is a lot of irony. And he would have gotten away with it but for that attitude that he was Teflon with Trent. He lost that Teflon," said McRae, referring to Lott’s resignation two days before Scruggs was indicted.

"The irony is that he never thought he could be touched and he got touched." 

True enough.  Why would he think otherwise?  Here’s a guy who bragged openly about "magic jurisdictions" where the outcome was rigged, and about using the legal system as a form of media/political/public relations insurrectionist coup, and as far as many were concerned, Superman came up short in comparison.  He goes around with a Magic Jurisdiction Show and no one questions how the same card keeps turning up on top of the deck every single time.  What a coincidence, amazing! The question now is, how many other times did he get away with the same or similar conduct?  Another question: why did he get away with it?  And a third: if he did get away with other similar conduct, who looked the other way or just didn’t give a rip, and should they be held accountable now?

Oh, and I almost forgot the last question: if there is more, how many others were involved, and what were their names? Inquiring minds want to know.

Mississippi bound

Going to be flying down to Starkville Tuesday to speak at the Mississippi State Insurance Day on Wednesday at 3 p.m.  So I’ll do my best to blog, but don’t expect a lot from me this week. 

Hope to see all of you there who can make it, after I give my talk, I’ll be there for questions as long as people are there wanting to ask. 

UPDATE: I forgot to add this earlier — like a lot of other blogs, I have a spam filter that weeds out comments from robot blogs that have fake comments that are really just attempts to hawk some product, sometimes its insurance, sometimes its Viagra, a lot of it is porn.  The filter is usually pretty discerning, but occasionally real comments get filtered out, and because I don’t check the junk very often, I sometimes don’t see these to rescue them until days after they were sent.  Sometimes I don’t check the junk for quite a long time, and so I might never see the comments — they get purged automatically after a while.  A few frequent commenters and others not so frequent, for a reason I don’t quite know, have some comments filtered out, and some that show up in the regular comment box for me to approve and publish.  If your comment is not unsubstantiated personal gossip, some sick attack with no intellectual merit,  or some stream of guff and spewage that seems designed only to see how many words I will read before I hit the delete button, and you don’t see it published, this may be what happened to it.  I apologize for that, but there is only so much I can do with the filter or it won’t serve its purpose — you wouldn’t believe how many robot spammers there are out there. 

On the topic of comments in general, the overwhelming majority of commenters are responsible, and I certainly don’t mind opposing points of view and in fact I encourage them, but the type of thing I’m not a big fan of is some long stream of personal abuse about how I’m a hypocrite, corrupt, insane, a dictator, tyrant, stuff like that.  It’s my blog, not an outlet for someone to hone their version of Oceania’s Two-Minute Hate. Most of that snarky guff, I read about four words and poof it’s gone. 

The Rigsby sisters better hope that False Claims Act lawsuit pays off, they are just about out of meal tickets.

Here is a copy of the latest Cori Rigsby deposition.  It was taken in January 2008 in the Renfroe v. Rigsby lawsuit, and unfortunately a great many sections were removed — apparently these sections are sealed because the documents the sisters took from State Farm were being discussed.  So some of the really good stuff is missing, probably the stuff that got the prosecutors in the criminal contempt of court proceedings against Dickie Scruggs in Alabama so excited.

What is left, a lot of it we knew already.  But surprisingly to me, it appears she actually had a notion that she was going to funnel these documents to Scruggs, remain anonymous, and continue adjusting for State Farm for the rest of her life.  Wow.  This begs the question of why you would want to continue adjusting for a company you claim engaged in fraudulent practices, but that issue aside, if she believed she would not be found out, she was either naive or duped.

In reading the transcript, she confirms that the Scruggs(less) Katrina Group, now known as the Katrina Litigation Group, cut the Rigsby sisters loose from their $150,000 a year "consulting agreements," citing lack of money to pay them. (Could just be an excuse, some in the SKG were against hiring the sisters in the first place).  Scruggs, you remember, wanted them hired, allegedly to take care of them after people at State Farm and Renfroe began to figure out they were spies for Scruggs.  But, the transcript says, when the KLG said adios to the sisters, he didn’t step up and agree to continue paying them.  I wonder what they are going to do now — not much chance of getting back into claims adjusting.  I felt kind of sorry for Cori when, during the deposition, her phone rang and it was her realtor — she is selling her house. 

It was interesting that she continued to deny having spoken with Scruggs about taking documents from State Farm prior to February 2006.  The date is significant because in December of 2005, according to a deposition in the same case of Lee Harrell, Mississippi deputy commissioner of insurance, Scruggs had a meeting with then-Commissioner George Dale where Scruggs came in with some grandiose scheme that frankly sounds like Scruggs’ intellectual train had left the rails, wherein Dale was supposed to support Scruggs’ move to extort some $500 million from State Farm for a Katrina compensation fund over which Scruggs would preside, throwing out some shekels to the people while no doubt making a few dollars for himself.  Dale refused.  Think about this for a moment — Himself wanted to set himself up as some kind of autocrat, some Katrina Czar.  It just sounds so utterly — what’s the word I’m looking for here — nuts!

But also in that meeting, according to the Harrell deposition, Scruggs claimed to have insiders at State Farm that had access to documents, just like in the tobacco litigation.  Why did Scruggs say this if he had not talked to the Rigsby sisters until two months later?  We know Scruggs represented the sisters’ mother in her insurance claim, and it may be that based on conversations between the two, he had reason to believe he would have the sisters’ cooperation.  For example, their mother could have told him the sisters were extremely troubled by certain documents, and even related what the contents of those documents were. 

Go ahead and read through it yourself.  When I read these Rigsby sisters depositions, one thing sticks out time and time again, and that is the sheer audacity of hiring material witnesses, that were testifying in civil cases and before grand juries, as "consultants" of a law firm.  Being paid by someone doesn’t necessarily buy your testimony — if you work for a company and continue to draw your check, that doesn’t mean if you give testimony favorable to them it’s a bribe.  But you worked there already.  This is completely different. They take documents to support Scruggs’ litigation, quit the place where the took the documents from and then he hires them at a very high fee for jobs at which they have no set duties and no set hours, and at a time when they are to offer testimony against the party from whom they took the documents.

Looking back over this, I wonder, would they do it again? 

I was interviewed on MPB this morning by Karen Brown, who did a good interview about the Scruggs Scandal.  I’ll provide a link to the Web streaming of the program as soon as I can.

UPDATE: Here’s the link.

Florida insurance wars

I’ve likened Florida lawmakers and regulators to Wile E. Coyote — they persistently pursue failed strategies.  Every time that Acme rocket backpack blows up or runs them headlong into a cliff, they strap on another. They also are somewhat like a guy who is denied a promotion and then comes home and beats the stuffing out of his dog.  Everything about the state’s insurance mess is someone else’s fault — they never pause to consider whether the central-command regulatory regime they love might be making things worse, or be one of the actual causes of the problem.  Instead, they sound like some of the black helicopter conspiracy theorists, looking for evil everywhere.  And when you are emotionally invested in finding wrongdoing, you keep at it, no matter how many times that rocket explodes and singes your fur. 

While Scruggs was imploding, I didn’t have as much time as I’d like to follow this saga.  So I’ll offer a couple blog posts and news articles here to start back on track.  You may remember that Florida regulators barred Allstate from selling certain new policies in the state until they turned over documents regulators think will show collusion or defiance of the state’s Wishful Thinking Law — the Florida insurance "reform" package passed last year that, in contravention of all reality about the risk of insuring property in Florida, was supposed to set things right and make insurance affordable.        

Allstate turns over documents to Florida regulators.

Tampa Tribune story on McKinsey documents.

Allstate fined $25,000 a day in Missouri.

Book on McKinsey docs hits Amazon.

Louisiana insurance developments

Citizens Property, the state-run property insurer of last resort, which acquired a reputation for colossal incompetence, is back in the news. 

Suit accuses Citizens executives of racketeering.

The state has also, in place of the abolished ratings board, created a new consumer advocate office.

Scruggs

Dickie Scruggs’ name has now been turned into a buzz phrase, a symbol, shorthand for excesses that discredit his cause, although it’s disputed by some whether Scruggs had any cause other than Scruggs, human beings are complex and merely because one has other, undisclosed aims does not mean the goals one publicly professes are not sincere.  The latest example of how Scruggs’ place in the rogue’s gallery du jour is secured, I offer this editorial from the Wall Street Journal.  An excerpt:

March has been a rough month for the tort bar, and not only because two of its standard-bearers — Dickie Scruggs and Mel Weiss — have both copped to felonies. A judge in California has put a damper on the efforts of plaintiffs lawyers to drum up lawsuits abroad and have them tried in the U.S.

It’s not even about Scruggs, but these days, all you need to do to make your point is mention his name. I’ll prove it.  Scruggs! See what I mean?

See also these posts by Jane Genova and Walter Olson.  I’m still waiting for the release of the "Lawyers Gone Wild: Spring Break Edition" DVD.

In other Scruggs-related news, Hinds County Judge Bobby DeLaughter says he will not fight a temporary suspension while his conduct is probed in the Wilson fee dispute case involving Scruggs, according to this story by John O’Brien of Legal Newsline. 

I now know the time I’ll be speaking in Starkville: April 2 at 3 p.m.  I’ll provide the entire list of speakers soon, when it’s ready to release to the public.  That puts me as the last speaker of the day, so I hope everyone isn’t tired and surly by that point.  I’ll probably speak for about 40 minutes or so, and leave some time for questions. 

Lastly, here’s something that’s been on the LexisNexis Insurance Law Center for a while, those of you who have followed the Katrina Follies might be interested in it — a short profile of Judge L.T. Senter Jr. 

Here’s a link to a podcast interview of me by Chad Hemenway of A.M. Best about Sher, the flood-policy case and Landry, the Valued Policy Law case.  Both are before the Louisiana Supreme Court, which has heard oral arguments.  (The link is actually to the A.M. Best podcast menu, it’s the third one from the top as I write this. I will try to get a better, more permanent link to insert here). Chad did a good interview, I enjoyed it. 

I have to conserve my time and energy between now and April 2, when I’ll be speaking at the Mississippi State Insurance Day, because I need both to work on my speech.  Writing jokes is hard to do and takes a lot of time, I know people are expecting some new ones.  There is some more serious stuff in the speech, too. I won’t, however, be performing any of the songs from my musical-in-progress, "The Katrina Follies," not even from the showstopping third act, which has its own title, with a double meaning: "Scruggscapades on Ice."  So posts may be more limited this week.

—  This is excellent stuff.  The Wall Street Journal Law Blog is questioning whether it is ethical for a defense lawyer like John Keker to rave on about how his client is innocent and being set up by in a fraudulent prosecution, right up to the moment the guy pleads guilty to the fraudulent charges.  You might also remember that Keker wrote a letter to the Journal back around November 20, just before the Scruggs really hit the fan, demanding a retraction because the Journal said Scruggs convinced the Rigsby sisters to steal documents from State Farm.  Untrue on two accounts, said Keker — they decided to copy the documents all by themselves (I am not making this up) and they didn’t steal anything.  

Except that in this deposition from November 20 Kerri Rigsby herself agreed she had stolen the documents — or at least, neither she nor her lawyer quarreled with that description.  The Keker comments and the Law Blog post are also discussed on this blog sponsored by the Carnegie Legal Reporting @ Newhouse — which I’ve read before and which is a pretty decent site. 

I’m not sure of the ethics of it, myself.  I mean, in one way, I’ve come to expect that a great many lawyers will spew gushers of malarkey and tommyrot in the face of the most obvious contradictions and without regard for either what the truth is or whether they are making total jackasses out of themselves.  Doesn’t necessarily make it right, but I’ve never seen anyone do anything about it, either. But even though it’s a losing battle, I’m glad the Law Blog is taking a look at this.

— I appreciate the link from George Wallace at Declarations and Exclusions, but I am sorry to hear that my own blogging would lead to a lessening of anyone else’s output.  There are a lot of people who try to sell lawyers on blogging for various reasons, attracting new clients, building reputation, increased brand recognition.  And I say, sure, all that is true, if you do it right, but underlying all that, at the very heart of the matter, what it is about for me is freedom, freedom to break out of the insufferable banality of calcified prose and that lawyerish fake persona that robs you of your humanity.  Blogging for me is liberation, the ability to cast off the shackles placed by dead hands and soar through the sky — even without my own private plane!  As I wrote in the LexisNexis Insurance Law Center post George links to: Legal bloggers of the world unite! You have nothing to lose but your chains.

— I see NMC at folo came up with some pretty decent answers to the 10 unanswered Scruggs questions I posed yesterday. 

— Lastly, I had a reader comment in one of my posts from yesterday that seemed to question my ability to work a plug for ABBA into a blog post. No problem, I’ve done it before and I can do it again. And in light of the demise of the Scruggs Law Firm (three out of four lawyers in a recent survey said, "I’m guilty"), I thought this song, Waterloo, would be the most appropriate, with its prophetic first lines:

At Waterloo Napoleon did surrender/ And I have met my destiny in quite a similar way/ The history book on the shelf/ It’s always repeating itself.

I picked this version of the song because of two hilarious things about the video: their shocking costumes, especially that cape and the starburst guitar, and the fact that the performance is so totally mailed in and lipsynched.

Details are here in this post by Karen Yotis.

I was also on the Insurance Law Center’s March 21 podcast, talking about a bunch of stuff, including the Sher and Landry cases currently before the Louisiana Supreme Court, legal blogging and Scruggs.  Steve Berstler did a very good interview, these guys that have been on the radio, they have a skill that’s hard to master, but sure does sound good when it’s done right.  You can click here to listen.  (I’m a few minutes into the podcast).

Lexis also interviewed me about a whole lot of Katrina-related stuff, and I read this interview and thought it was done very well.  Anytime I get to use one of my favorite metaphors — Wile E. Coyote and his Acme rocket backpack — and this makes it into the interview, it makes me happy.  A preview of the interview is here, but the article itself is available only on the paid Lexis database. As you may know, I believe one problem with legal commentary is it is generally boring, with an off-putting pretentiousness, so I bring a different approach.    

As I’ve mentioned, I’m on the advisory board for the ILC, so I’m not disinterested in its success. But as I have a lot of places where I could choose to spend my time, I wouldn’t be doing it if I didn’t believe in the product and the people behind it.  Good people, people who get Web 2.0. Without good people — people of imagination and creativity, risk-takers — you can’t have good product.  

I kick myself for not thinking of Tom Withers as a resource earlier in this Scruggs mess, but it may not be over, so there’s still time.  Tom is a former Assistant U.S. Attorney for the Southern District of Georgia, and he has started a blog on federal criminal defense practice.  Here’s a new post by Tom on the Scruggs case with some good insights on the plea colloquies, the style of writing in the defense motions and other topics.  I tell you what, any lawyer who starts off his blogging career by sneaking in a T.S. Eliot quote and this line — "It has been said by one prosecutor that misprision is for girlfriends, but, apparently, that prosecutorial gift extends to sons as well" — is on the right track.  These are the kinds of posts the world needs more of.      

There are more than 10, of course, way more.  But these 10 will do for a starter.

1.  How likely do you think it was that a lawyer of the reputation of John Keker and a defendant of the wealth and notoriety of Dickie Scruggs failed to test their case before mock juries?  I would say it is very unlikely, and my guess is they used more than one. I would also take an educated guess that, if they did, the answers from the mock jury were unfavorable.

2.  Is the talk of the 50 sealed indictments just wishful thinking on the part of Mississippians, some deus ex machina that will come in and settle the plot?   And if they are real, what are the feds waiting for? One reason I’ve been skeptical of this is hardly anything is really a secret about the Scruggs case — I hear a lot more than I pass on, much of it credible or reliable — but I’ve not heard any of the names supposedly on this list.

3.  It seems evident that the government will seek an indictment against Scruggs for his alleged role in the Wilson case.  Why did they wait until the conclusion of the Lackey bribery case rather than going after a superseding indictment and rolling all the charges into one?   

4.  Where will Dickie Scruggs do his prison sentence?

5.  What exactly does the phrase mean that Balducci used with Judge Lackey, "lay the corn on the ground"?  

6.  Will Jim Hood continue to hand out multi-million dollar cases like a Pez dispenser? (Scroll down to the middle of the post).

7.  Will we ever find out what exactly P.L. Blake did for those millions?

8.  Returning to the issue of the Wilson case, was the timing of Joey Langston’s guilty plea anything other than a justification to use the evidence as prior bad act evidence against Scruggs?  Were there plans to roll up the Wilson case, but then these plans were scrapped?

9.  When and if all the information on the Wilson case comes out, I’m sure going to be curious to see the testimony about Trent Lott’s role in the call to Judge DeLaughter, aren’t you?  I mean, given that he had known Bobs Wilson for a long time, and given that Dickie Scruggs was his brother-in-law, is it possible that he could have been unaware that Judge DeLaughter had before him a case involving Wilson and Scruggs?  If he did know, how is that OK?  If he didn’t know, how is that OK?

10.  In thinking about this, it seems to me that when Mike Moore was brought on the Zach Scruggs’ defense team, this indicated a fighting strategy, a trial strategy.  If this is so, what happened to change this strategy and make Zach willing to take a plea agreement just a short time later?  

UPDATE: What do you think of this letter to the editor in the Wall Street Journal?  It was written by an attorney and takes John Keker to task for his statements about how weak and even fraudulent the case was against Dickie Scruggs, including right up to the time Scruggs pleaded guilty to these fraudulent charges.  An excerpt:

It was really nauseating, however, to read the absurd assertion by John Keker, his lawyer, that Mr. Scruggs was innocent and that the "prosecutors have concocted a ‘manufactured crime’ in which his client had no part". . . . So, according to Mr. Keker, the prosecutors could freely be accused of trying to frame an innocent man. . . .

One assumed that when Mr. Keker made factual assertions he was accurately reporting what Mr. Scruggs had told him, since he presumably knew Mr. Scruggs’s side of the story through lengthy interviews under the protection of the attorney-client privilege.

Then we learned, a few hours later, that Mr. Scruggs was guilty all along. Either Mr. Keker knew this or he was ignorant. . . .

Every day these lawyers appear on television and in the papers repeating the ridiculous alibis of their clients, not as their clients’ legal positions but as facts, only to be ultimately made foolish by a plea or a trial.

SECOND UPDATE: The phrasing in this New York Times story on the Zach Scruggs plea was interesting, I think, and an indication of the zeitgeist.  The lede called Dickie Scruggs "a recently disgraced trial lawyer." (For those who wonder why I spell "lede" this way, it’s the way journalists write it so it’s not confused with the word "lead," as in lead paint).  My first thought was no, he disgraced himself quite a long time ago, but then I thought again, they’re right. Although an act that results in disgracing might have occurred some time back, the disgracing itself connotes a public consensus and does not occur until the public knows the disgraceful facts.  Think about that phrase for a minute.  If last October anyone had told you that you would see that sentence in the Times or anywhere else in March, would you have thought they were nuts? I would have.