Monthly Archives: February 2008

USA v. Scruggs (‘Bama version) is dismissed, case closed

Here’s a pdf of the judge’s order.  More when I have a minute to read it.

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UPDATE: I read it, and all I can say is thank goodness, it has been a long time coming — finally, a case where the criminal justice system doesn’t railroad a famous, rich, white guy!  Famous rich friends of Dickie Scruggs — it’s party time!

Although the judge did allow that it might have looked bad that Scruggs defied the terms of the injunction, Judge Vinson cited two reasons why the charge of criminal contempt could not stand against Scruggs:

First, the court had no jurisdiction because Scruggs was not active in the Renfroe v. Rigsby case — he was the Rigsby sisters’ lawyer in another capacity. 

Second, Scruggs did not violate the injunction because of its "law enforcement exception."

About the first reason, what a relief to know that one can escape any punishment merely by not being the attorney of record in a case — it is so much better to pay someone else to be the attorney of record, and sit back and actually pull the strings while taking none of the heat! 

About the second, this is also good to know — that an exception that allows the parties to cooperate with law enforcement, also will allow a guy the judge just said isn’t affiliated with the case or representing any party to "cooperate" with law enforcement by using the very documents that are the subject of the injunction to play keep-away.

All in all, a good day’s work, and a vindication of the principles of playing games with judicial orders.

One final thing — you remember how these documents were supposed to be sent to Hood under the "law enforcement exception" so they wouldn’t fall into the wrong hands and hurt Hood’s grand jury investigation?  How soon we forget.  Look at Hood’s press release from when the settlement with State Farm was announced in January 2007, the settlement where he agreed not to prosecute the insurer:

"After months of heated negotiations, I am happy to announce that our office has reached a settlement agreement with State Farm in our state court litigation,” said Attorney General Jim Hood.

Months of negotiations?  Let’s see, the documents were sent to Hood in mid-December 2006.  Well, then . . . I guess, just maybe, protecting the grand jury process wasn’t really the motive for sending the documents after all.  Why not?  For starters, let’s remember that we’ve heard some substantial evidence that, about this very time, Scruggs was pressuing Hood to drop the criminal investigation so State Farm would settle civil cases with Scruggs. 

 

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More on Hood interview on MPB

Is it just about over, the Jim Hood Self-Destruction Tour? I mean, we are all on his back to talk when he fell silent in the wake of the Scruggs indictment, but now it looks like Quiet Jim knew better than Chatty Jim.  This new strategy of talking to the media? Not working.  When is one of Hood’s people going to put an arm on his shoulder, take him aside and say, "Jimbo, we’re going need you to make some changes here.  What we’re picturing is kind of an immediate transition from this jabber-jaws thing where you keep on stepping in it out in public and hurting yourself and us, and going more to a kind of a deal where you go back to hiding in your office with the phone turned off and the curtains shut. "   

I listened to the MPB interview again a couple of times. Let’s take a closer look at some of Hood’s statements.  

"There was a problem with the element of proof, and there was no need to try and indict State Farm." 

A problem with the element of proof?  What was the problem with the proof, there wasn’t any?  Then Hood had no reason to begin his second grand jury investigation in July 2007, after he had signed the non-prosecution agreement (the violation of which, as you remember, resulted in the embarrassing debacle of the State Farm lawsuit and injunction against him, and a defeat so crushing it apparently goaded him to cease his silence and go on the comedy club circuit).

"State Farm was the snake in all this."

What is this, Aesop’s Fables?  If State Farm was the snake, what was Hood, Deputy Dawg?

"If my good friend Mike Moore, who I’ve known for years, was unable to influence me to sign off on this federal class action, then nobody else was  . . . ."

How did Moore try to influence him, and why did Moore care?

That decision not to prosecute them was made, as it should be, without any influence, without any regard to any civil cases . . . .  

I made their [State Farm’s] chief lawyer out of Bloomington meet me in Memphis is when we negotiated it . . . so for two, three weeks, maybe even a month in that time period, I wasn’t talking to any of them[Scruggs and his people]."

Wait a minute, the first quote says Hood didn’t make the decision to settle the criminal prosecution until he heard from his investigator at the grand jury  that there were no grounds for indictments.  So why was he involved in negotiations with State Farm before that time?

This interview was incredibly lame, a lot of unasked questions.  Like a simple one.  If what Hood says is true, why was he so upset when the federal class action didn’t go through? This, as you remember, has been cited by Hood again and again as a breach of the agreement with him that justified Hood’s own breach of the non-prosecution agreement.  If dropping the criminal prosecution was not an exchange for what Scruggs wanted — the settlement of 640 Katrina cases and the certification and immediate settlement of a class action — then why did Hood care when the class action didn’t happen after Judge Senter shot it down? 

I am a former professional journalist, and I’m a very good interviewer.  AG Hood, I issued this invitation once before and I’ll say it again, let’s do a comprehensive interview, I’ll have it recorded and put on this blog word for word.  Just give me a call to arrange it.

One final thing: did you notice he went the whole interview without mentioning once that Courtney Schloemer told him to do something? Also, have you noticed that Hood has had very little to nothing to say about the confidential settlement in the State Farm v. Hood case lately?  For a while, all Hood could do is talk about how he supposedly got the case thrown out and the allegations declared false — contrary to all reason and evidence — until that Sheila Birnbaum accidental e-mail that talked of trying to tag him with contempt of court.  Since then, seems like he’s recovered his balance on that subject. 

UPDATE: I thought this was a very good post on Y’all Politics on Hood.   Kind of walks you through Hood’s non-stop self-pummelling.  In other news, I hear Hood’s media escapades have led to a new unofficial policy in the Attorney General’s office — every Friday is now Fiasco Friday, where it’s OK to beclown yourself and make a complete shambles of everything you undertake.  A sort of a Fool For A Day policy.

 

    

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Hood interview on NPR about Scruggs, Balducci, State Farm

I listened to it, not much time right now to comment. But here’s the link. Listen for what he says about being influenced by Mike Moore and how the answers get pretty fuzzy when it comes to what Balducci and Patterson actually said to him. One thing though.  Here he talks about getting word from his folks with the state grand jury that there was insufficient evidence of a crime to indict State Farm.  Exactly when was that?  And why then did he start up another grand jury investigation in July 2007?

 

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Hood discusses meeting with Balducci, Patterson

In this AP story by Holbrook Mohr, does Jim Hood sound like he’s about had enough of being Attorney General of Mississippi?

A State Farm attorney suggested during a court hearing earlier this month that Scruggs dispatched Balducci and Patterson with a message for Hood: Scruggs, a political force with deep pockets, would support another candidate for attorney general if Hood charged State Farm with a crime.

Hood scoffed at the notion on Wednesday.

"I didn’t care who (Scruggs) supported. I wasn’t crazy about being attorney general anyway," Hood said, adding that he preferred being a district attorney.

You know, I watched Hood all through last year and part of the year before, including his Katrina testimony before Congress, and I detected no sign that he was having anything less than the time of his life. So I would suspect this last statement of being some sort of revisionist history — a person’s mind can play tricks on them that way.  But who knows. 

Hood also says in the story the following: 

Attorney General Jim Hood says he would not have met with two men now entangled in a judicial bribery case had he known they allegedly were promised $500,000 to try to influence his investigation of an insurance company’s handling of Hurricane Katrina claims.

"If I knew they were getting paid that much, I would have told them to get out of the office because it just didn’t smell right," Hood said Wednesday.  

An FBI document made public this week as part of one judicial bribery case alleges embattled plaintiffs attorney Richard "Dickie" Scruggs paid two associates to persuade Hood not to file criminal charges against State Farm Fire and Casualty Cos. Hood is not a party in the bribery investigation.

I know what he’s intending to say, but it sure didn’t come out right, did it? "If I knew they were getting paid that much."  I mean, a couple hundred K is all a job like that is worth, max! Right? That’s what it sounds like. 

Hood’s quote also makes it sound as if the meeting took place in his office.  The questioning on the stand by the State Farm lawyer mentioned above suggested the meeting took place in a restaurant in Jackson. Question: are we talking about the same meeting, or was there more than one? 

Another thing — in the transcript of the State Farm v. Hood hearing, it’s like a game of dodge ball.  Why is Hood now willing to talk about the meeting?

 

 

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Update on oral arguments in Landry, Sher cases before Louisiana Supreme Court

In my post from Monday, I neglected to mention that in addition to Landry v. Citizens Property, the Valued Policy Law case, the Louisiana Supreme Court was also to hear oral arguments Tuesday for Sher v. Lafayette, a case where the lower appellate court found a flood exclusion in a homeowners policy ambiguous.  I don’t know why I did, I’ve known Sher was coming up for oral argument for some time, but we all do dumb things.  Except Dickie Scruggs, that is, as his famous, rich friends like to point out. 

Forgetting to mention the case in the last post also means I missed a chance to rip into the decision in the Court of Appeals again, so I’ll have to make up for it here.  Here’s my analysis of the Sher opinion when it came out last year.  I note with some degree of nostalgia the date of the post, November 20, which is what I call P.I.O.S. (pre-indictment of Scruggs).  Life, and blogging, seemed somewhat simpler back then.  And should you need a reprise, here’s my post from Monday on Landry with a link to my analysis from last year on the Court of Appeals decision.

My chief beef with Sher was the title of the case, it should have been Sonny & Sher v. Lafayette — just joking.   My real chief beef with Sher is that it contains nothing that one could recognize as an explanation of the reasons the court declared the flood policy ambiguous.   The court, in a remarkably analysis-free analysis, said the policy failed to distinguish between natural and man-caused flooding.  In first-party insurance, the majority of courts — some say an overwhelming majority of courts — find earth movement exclusions ambiguous to the degree they don’t clearly exclude both natural and man-caused damage.  With flood exclusions, this is not so — the vast majority of courts extend the standard flood exclusion to all kinds of flooding.  This is something I will be dealing with in the chapter I’m writing on hurricane coverage for the Appleman treatise, and it is something I will discuss here on the blog when I have more time.  Now back to Sher: really, not an impressive job by the court, to say the least — one expects a better analysis or at least some citation to authority in cases like this, particularly when diverging from the mainstream.   

Here is an Associated Press story by Mike Kunzelman story about oral arguments in both cases.  An excerpt about the Sher case:

Lafayette and other insurers say their homeowner policies don’t cover damage from any type of flooding, including water from a levee breach.

"There is not a single case of record where a court has held that a flood exclusion didn’t apply because of a man-made act," Ralph Hubbard, lawyer for Lafayette, told the court.

Justice John Weimer asked Hubbard if it is true some insurers modified some policy language after Katrina to specifically exclude man-made flooding from coverage. Yes, Hubbard responded, but he insisted changing policy language is not an admission that earlier language was ambiguous.

James Garner, a lawyer for Sher, said insurers are to blame for writing policy language that confused policyholders and resulted in conflicting court opinions.

"Judges disagree on this," said Garner, who also accused Lafayette of acting in bad faith in adjusting his client’s claim.

I read the story looking for a clue as to how the court might rule, and saw this quote about the arguments in the Landry case: 

[T]he federal appeals court and several federal judges already have rejected similar arguments about the implications of the valued policy law. However, one of the high court judges hearing the case Tuesday indicated she would not be bound by the federal court cases.

"I’m not really interested in what the federal courts have to say about this, frankly," said Justice Catherine Kimball.

At first I thought, hmmmm, very harsh, must not like those cases.  Then I considered another alternative reading — because the interpretation of contracts under state law is entirely up to the Louisiana Supreme Court and not to federal courts, what is she supposed to say, "Oh, there are some federal cases?  Well, I guess our opinion can be boiled down to one word: Ditto."  I would be quite surprised if the court found for the policyholders in either case — I expect both to be reversed. 

This is not really something that the court should think about, but just as an aside — if the court found for the policyholders in both cases, it would have a rather severe impact on Louisiana’s insurance market, which is just now beginning to recover after Hurricanes Katrina and Rita in 2005.

Lastly, one more thing.  Here is a Rebecca Mowbray story in the New Orleans Times-Picayune on oral arguments. Now, the last graf of the story really caught my eye:

The Landry case was the first of two insurance cases from the 2005 storm season to hit the elegant Royal Street courthouse Tuesday in a blockbuster docket that drew insurance lawyers from around the country and forced people to line up on the steps of the marble building by 7:30 a.m.

Do you see that?  Do you see that?  It’s what I’ve been saying for years now, insurance is the new rock ‘n’ roll!  You see, I chose to interpret the word "people" a la Scruggs, which is a phrase I have coined to describe the act of ignoring all other possible interpretations of language except the one, no matter how strained, that produces the result you want.  So here, "people" means people as in Power to the People, We the People, Up with People, thousands of people, fool all of the people all of the time, etc. As evidence for my position, I call attention to the word "lawyers" in the sentence, who are said to have come from around the country. 

After the conjunctive "and," we learn that the subject of the sentence — the blockbuster docket — not only drew the lawyers, but "forced people to line up on the steps" early in the morning.  Clearly, lawyers are not "people" in any meaningful sense, so the two words must refer to separate classifications of humans.  Also, had it been lawyers who were forced to line up on the steps, the sentence would have read "forced them to line up on the steps,"  or maybe "forced the lawyers to stand in line for once like normal people."  Blockbuster docket, people lined up: this stuff is so fascinating, the public doesn’t care about an entertainment writers’ strike, not as long as they’ve got spellbinding insurance issues.  Case closed.

 

 

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More on yesterday’s ruling from Judge Biggers in USA v. Scruggs (Northern Mississippi edition)

I’ll have a few more things to say about yesterday’s orders by Judge Biggers, which are in this post from yesterday, when I have time to post, which will be over my lunch hour today.  Don’t want you to think I’ve forgotten about these. 

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What is striking to me about Judge Biggers’ orders denying defendants’ motions is how short the orders were — not much wringing of hands or fussing around.  The order denying defendants’ motion to suppress wiretap evidence, for example, was only five pages and from the looks of it, the actual number of words in it is substantially less than my average Scruggs Nation post.  

That order cuts right to the heart of the matter and refutes the defendants’ notion that the initial meeting between Tim Balducci and Judge Lackey did not involve "corrupt overtures."  As the judge points out, sending an attorney not involved in the case, unbeknownst to opposing counsel, to trade on his personal friendship with the objective of influencing the judge is certainly corrupt enough. As Judge Biggers wrote:

In the same meeting with Judge Lackey, Balducci offered Judge Lackey a job as "of counsel" in Balducci’s law firm when the judge chose to retire.  These actions are certainly a clear and gross violation of all known codes of ethics applicable to attorneys and judicial officers.

The judge’s order denying the motion to exclude evidence of prior related bad acts by Dickie and Zach Scruggs — their alleged involvement in a plot to influence Judge Bobby DeLaughter — was also a big blow to the defendants.  Biggers spent barely more than three pages on this order.

There is no question that the extrinsic evidence offered in the present case constitutes a similar alleged act within the meaning established by the aforementioned case law.  The 404(b) evidence reveals (1) the employing of a person not an attorney of record to approach a state court judge (2) with the intent to corrupt the state court judge in regard to (3) a fee dispute (4) involving two of the defendants herein as well as two others who have already entered guilty please in this case — all substantially the same elements as charged in the conspiracy count before the court in the present case.

Let’s also remember that, in addition to these charges, Scruggs faces potential charges in the DeLaughter matter.  Why is the government going to present this prior bad acts evidence of his alleged involvement but not charge him with a crime? It may be that the government wants to get this case out of the way, and a superseding indictment would lead to delay that is unacceptable to someone.    

Lastly, I want to address a recurrent theme I hear about this prosecution, the alleged plot to influence DeLaughter and the criminal contempt of court prosecution of Scruggs in Alabama.  That theme is that Scruggs is too smart and sophisticated to be involved in dumb stuff like this — it’s "too dumb for Dickie," in the words of one of his famous, rich friends

Scruggs undoubtedly was involved, in the Alabama case, in sending the Rigsby documents to Hood instead of returning them to the attorneys for the sisters’ former employers as ordered.  But even with that case, some presume he must have had some grand, sophisticated insight into the law, and that his non-compliance was either legally permissible or not worth bothering such a figure about.

This reasoning is a mystery to me for a couple reasons.  First, what evidence is there that smart people don’t do dumb things?  In my observation, other than the truly and incorrigibly stupid, no group of people is so prone to dumbness as smart people. Second, merely because something is not sophisticated does not mean it will not work well and work better than something complicated. We are so inured to complex schemes like Enron and hiding the source of campaign contributions that we forget — when it comes to being crooked, simpler is usually better, less risky and easier to remember.  Why involve some sheik from Saudi Arabia, a London solicitor living in his Mum’s basement and a couple former Congressmen to deliver a bushel of sweet potatoes? It’s better to keep it all in the family.  Think of Scruggs’ statement a few years ago about the Magic Jurisdictions in Mississippi, where it’s all just a put-on, where justice is just a puppet show for the foolish and the gullible.      

And people also ask why, why would he do it? To which I say, why does anyone do anything? Because you want to and you can.  

   

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Jones v. Scruggs update

I saw this story on my PDA yesterday but didn’t link to it because it was only a few paragraphs of a "breaking" story and I couldn’t tell what was going on, which makes commenting difficult.  I figured there would be a more complete story later, and I was right.

This story, by Steve Korris of Legal Newsline, talks about a ruling by Judge Coleman, the new judge in the fee dispute case that led to the alleged plot to bribe Judge Lackey, Jones, Funderburg v. Scruggs. Judge Coleman ruled yesterday that he has the authority to default Scruggs and issue a judgment against him if a later evidentiary hearing shows he tried to bribe Lackey.  What’s more, the ruling says that the other defendants, the other member firms of the former Scruggs Katrina Group (now known as "the new and improved Katrina Litigation Group: 100 percent Scruggs-free!") can be held vicariously liable for his conduct and also defaulted.  Hey, as the saying went in the Old West, ride with an outlaw, die with an outlaw.

A copy of the ruling is linked to in the story, but links to other sites don’t always stay good for a long time, so I’ll link to it here on my own server so it stays a part of our record. The evidentiary hearing will be held after Scruggs’ plea or trial.  If he pleads or is convicted, it won’t be much of a hearing.  If he is found innocent, it doesn’t necessarily determine the outcome of the hearing, however — the civil standard of proof is lower, although one would suspect for allegations of fraud on the court the standard should not be a mere preponderance but the heightened clear and convincing evidence standard.  My evidence professor at Michigan, the great John Reed, once quantified the difference between preponderance, clear and convincing and beyond a reasonable doubt as 51 percent, 85 percent and 95 percent certainty.  It was just an exercise to show the difference, I’m not sure he would want anyone to hold him to those figures, but it seems like an acceptable formulation. 

The arguments reported in the story against the position the judge eventually took appear to be that the case has to proceed to arbitration no matter what, because this is what the joint venture agreement said. This seems far-fetched.  Even if Scruggs and the SKG did not waive arbitration by refusing it, as Jones claims, if a judge can’t take the hickory to people who try to bribe the court, the court has no inherent powers and is not an arm of justice, it is nothing but a forum for hot air and sweet potatoes vendors.

   

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Scruggs Nation, February 27: the ‘Bama prosecution

I read the latest filing by the special prosecutors in USA v. Scruggs (Alabama edition) and they really slagged Scruggs big time in this one.  An excerpt:  

The Special Prosecutors have also learned of recent sworn testimony by Cori Rigsby Moran and/or Kerri Rigsby, in which it was acknowledged by one or both of these material witnesses, that the Defendant Scruggs knew of the planned "data dump" weekend in June 2006, before the data dump occurred, and that it was Scruggs who made pre-arrangements for the Attorney General’s office to pick up the documents on that Monday morning.  Other witnesses are expected to offer evidence that the weekend before the data dump . . . Scruggs arranged for a computer expert to assist Kerri Rigsby with her State Farm laptop.  This sworn testimony by colleagues, clients and employees of Scruggs, given under oath, contradicts not only their prior testimony, but Scruggs’ sworn testimony before this Court.  The truth is finally coming out — that it was Scruggs who helped arrange the "data dump" while suing State Farm, from whom the documents were taken . . . .

The government expects to show at trial, based upon recent facts discovered, that Scruggs provided cell phones to the Rigsby sisters, that were in the name of a relative of Scruggs’ legal assistant, in order to attempt to hide communications between Scruggs and the Rigsbys.  These furtive actions once again demonstrate the intent of the Defendants to avoid disclosure of their communications and true relationship.

Included in the attachments are excerpts from the recent court testimony of Attorney General Jim Hood in the Federal Court civil suit, State Farm v. Hood  . . . . Contrary to the testimony provided by Scruggs in the Renfroe v. Rigsby action, the testimony of Mr. Hood makes it clear that he learned of the court’s injunctive order while on his cell phone driving with his from from Jackson to Natchez for the weekend on Friday night, December 8th, when Scruggs called him. He had not seen the injunction prior to that call from his generous benefactor and it was Scruggs, rather than Attorney General Hood, who therefore made the interpretation that is now being used as a hypothetical excuse for the defiance of the court.  Indeed, Hood denies ever seeing or reading the injunction.  This is directly contrary to Scruggs’ testimony in this case in which he says it was the Attorney General’s interpretation of the order and he simply agreed with Hood.

Now, in fairness to Scruggs, I have read that transcript of Hood’s testimony word by word, and it seemed like Hood was so panicked on the stand he would have denied he was wearing pants, if anyone had asked him about it.  I mean, it was almost like he thought he was at an audition for a remake of Ernest: Scared Stupid.  My read of the transcript of the February 6 State Farm v. Hood hearing was that Jim Hood was busting a move for the tall grass and he would trample anyone, man, woman, child or pet, who got in this way.  

But be that as it may, the prosecutors have put together their best piece yet in this supplemental reply to a Scruggs motion that seeks to quash the prosecutors’ attempt to force him to produce documents.  

The prosecutors took a somewhat different approach than I expected in saying how Scruggs allegedly violated Judge William Acker’s injunction. Recall that the injunction required the Rigsby sisters and their agents to return copies of claims documents the sisters took from their employer, E.A. Renfroe. I’ll get to more about what the prosecutors said in this latest pleading in a moment.  But before then, so that we can all see it as we follow along, here is the language of Acker’s injunction and the accompanying protective order. Except for the sub-headings, which were in bold in the original, I’ve left it the same except to bold-face some of the body text to emphasize the important parts.

Preliminary Injunction

[D]efendants, Cori Rigsby Moran and Kerri Rigsby, and their agents, servants, employees, attorneys, and other persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise (with the express exception of law enforcement officials) are hereby MANDATORILY ENJOINED to deliver forthwith to counsel for plaintiffs all documents, whether originals or copies, of each document and tangible thing, in any form or medium, that either of the defendants or anyone acting in conjunction with or at the request or instruction of either of them, downloaded, copied took or transferred from the premises, files, records or systems of Renfroe or of any of its clients, including, but not limited to State Farm Insurance Company and which refer or relate to any insurance claims involving damages caused or alleged to have been caused by Hurricane Katrina in the State of Mississippi.

Defendants and their agents, servants, employees, attorneys, and other persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, are further ENJOINED not to further disclose, use or misappropriate any material described in the preceding paragraph unless to law enforcement officials at their request.

This injunction shall become effective upon the posting by plaintiff of an injunction bond in the amount of $50,000 for the payment of such costs and damages as may be suffered by defendants or any persons found to have been wrongfully enjoined. The said bond shall be in a form, and with a corporate surety, approved by the Clerk.

Protective Order

Because the documents and information in the possession or control of defendants and/or their agent or, or may be, relevant to an ongoing criminal investigation by the Attorney General of Mississippi, the court finds that there is a compelling interest in protecting the use and disclosures of those certain documents and information to anyone not needing that information for the criminal investigation or for preparation of the above-entitled case. Therefore, plaintiff’s counsel shall not disclose to State Farm or any of its agents, including E.A. Renfroe & Company, Inc., any of the material delivered to them pursuant to the mandatory injunction without first obtaining the express written approval of the court after in camera inspection. The documents shall be kept by counsel for plaintiff in a separate, locked location, and no copies shall be made and the contents thereof shall not be revealed without express authorization of the court.

Now, without even getting to what the prosecutors said, do you believe that the language of the first paragraph allows someone holding copies of the documents, with the exception of law enforcement, not to comply with the order to return them?  Any way you read that language, it says everyone who is an attorney or is acting in concert with the Rigsbys, save for law enforcement officials, must return the documents. It does not say anyone who has the documents does not need to return them if they give them to law enforcement officials instead, particularly when those law enforcement officials already have their own copies of the documents. There is no way you can read it that way unless you put in words that aren’t there.

Well, you say, what about the second paragraph — it says the documents can be further "disclosed" to law enforcement "at their request."  To which I say, if I give you a piece of paper with your name written on it, I have not disclosed anything to you. If I tell you the surprise ending of a book you own and which you just read, I have not disclosed anything to you.  Nor can you disclose documents or their contents to someone who already has the documents and has read their contents.  Also, disclosing something in this context does not mean you can defy the first part of the order to return the documents so that you can disclose.  And let’s remember another thing — the Court was fully aware as were all participants in this lawsuit that Hood had his own copies: it had been all over the news and it had also been discussed in pleadings before the court in the Renfroe v. Rigsby lawsuit.  So let’s face it — Scruggs’ continued word games with these provisions of the injunction are getting old and sounding more and more childish and desperate.

Now, with more evidence gathered, prosecutors are highlighting another part of the injunction: that Scruggs did not provide the documents "at their request." For evidence, they offer this December 13, 2006 e-mail to Scruggs from Courtney Schloemer, one of Hood’s assistant AGs.  The e-mail said, "Upon reviewing my letter, I see that I was not clear that I propose taking custody of your documents with the permission of Judge Acker.  I don’t want to thwart him and wind up in an Alabama jail."

Not clear is an understatement.  See if you can find any hint of seeking Acker’s permission in this letter she wrote to Scruggs the day before, asking him to send the documents because "I am not comfortable that the protective measures put in place by the Court will be effective in keeping these documents out of the grasp of State Farm."  Here’s another e-mail chain, where you can see Schloemer is being cautioned against taking the documents from Scruggs, as opposed to copies of them — (Why in the world would she need copies? She already had copies of the documents!) — because Hood’s office had intervened in the case and therefore had notice of the injunction.  So, Schloemer was cautioned in this December 15, 2006 e-mail, watch out because Acker will hit the roof.

So the special prosecutors can play it the way they feel it, and say all this adds up to that neither Hood nor Schloemer requested the documents from Scruggs.  I don’t believe that.  However you want to put it, if Scruggs asked Hood to ask Scruggs to send the documents, or whatever, here’s how it all played out: Hood and Scruggs talked about sending the documents after Acker issued the injunction, and then Scruggs sent them, and then Hood received them.  I don’t think it makes sense to claim the documents weren’t at Hood’s office at Hood’s request. 

Even if Hood and Schloemer requested the documents be sent — and look at that December 12 letter again — there is no credible reading of the injunction that says Scruggs, along with all other attorneys and others acting in concert with the Rigsbys except for law enforcement, can refuse to return the documents to the Renfroe lawyers.  

One more thing: the prosecutors are quite specific as to what they think Scruggs’ motive was to allegedly defy the injunction — he wanted to prevent any possibility the documents would be revealed to State Farm, despite the protective order preventing this, because he was in the middle of negotiating the settlement that brought $26.5 million in fees (and ironically, a fee dispute with the Jones firm that led to Scruggs’ indictment on bribery charges).  The theory is that Scruggs did not want State Farm to know there were no "smoking guns" in the documents. 

That doesn’t make total sense to me. Didn’t State Farm knew exactly what was in those documents because they had a forensic computer technician analyze what documents the Rigsbys downloaded from the State Farm system, because Scruggs later introduced some of the documents in the McIntosh case and the Rigsbys talked about them on the 20/20 TV "news" show in August 2006?  You think that State Farm wasn’t thinking to themselves, Scruggs wouldn’t hold back the worst stuff, if there was anything worse than what he used on 20/20, he would have used that instead.  So they knew a lot, but there was also some things they probably didn’t know — the Rigsbys could have made paper copies before the data dump.  And yet, the same logic applied — Scruggs would lead with his best stuff.  

I have considered a theory that what Scruggs wanted to do was use the mystery about the documents to keep the media believing they were a smoking gun, and to keep the heat on State Farm as a way of pumping up the rage and creating some more of those "Magic Jurisdictions" in Mississippi that Scruggs so famously spoke of.  If you don’t remember those days, Scruggs had a great thing going, he and his crew were like the Lords of Flatbush.  

Scruggs even had the AG’s office all worked up in a tizzy about these documents, convincing them he was some kind of confidential informant or some such tommyrot.  And he wanted them in a tizzy until such time as they needed to be de-tizzified: when State Farm demanded that the criminal investigation be dropped as part of any civil settlement with Scruggs.  And you might think that sounds like asking for a lot, but you know what, State Farm believed and still does believe that the criminal investigation was baseless and was nothing but an unethical, incestuous merger of politics, law and good old shotgun justice, an adjunct of the Scruggs lawsuits.  So demanding that it go away was no big deal, it would be like you expecting your neighbors to take their kids with them when they go home.

But to test this Media War theory as Scruggs’ motivation, let’s remember that under the terms of the injunction State Farm wasn’t supposed to see the returned documents.  Even if someone had violated the terms of the protective order and had leaked the contents to State Farm, it’s not as if State Farm was going to hold a press conference and show everyone that the documents were OK.

So Scruggs, one would conclude, must have believed either (a) the documents held a smoking gun, (b) the documents did not in fact contain a smoking gun, (c) the documents had a gun but it had never smoked due to public health awareness campaigns funded by Scruggs’ tobacco litigation, or (d) Scruggs like all other human beings commits mistakes in strategy and had some dumb internal calcuation that no longer makes sense, if it ever did.  It seems to me that (a) is unlikely, in that if one has damning evidence the best leverage is to show it.  However, (b), (c) and (d) all seem possible, and without additional information, about equally likely. 

Give me a better explanation and I’ll buy it. 

Finally, let me close by linking to another exhibit attached to the prosecutors’ brief, this January 18, 2007 letter from Don Barrett of the Scruggs Katrina Group to Sheila Birnbaum, of Skadden, Arps, lead counsel for State Farm.  I’m not even going to summarize it, it’s all so objectionable all I’d do is repeat the whole thing.  Just take two minutes to read it for yourself.  You know, I’ve seen this letter before, but every single time I read it, it just makes me nauseated all over again. How come this stuff never winds up in a Grisham book? 

 

    

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Scruggs Nation, February 26: the update

Judge Biggers’ orders are out on the defense motions in USA v. Scruggs (Northern Mississippi edition) — all denied.  We can talk more about these later, but here they are:

Order denying motion to suppress wiretap evidence.

Order denying motion to exclude extrinsic evidence of prior related acts.

Order denying motion to sever Zack Scruggs and Sid Backstrom trials from trial of Dickie Scruggs.

Order denying motion to dismiss indictment, motion to dismiss counts 2, 3, and 4, motion for change of venue. (This last bunch had already been denied in rulings from the bench last week, this document merely memorializes those decisions).  

 

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Scruggs Nation, February 26: what of the Balducci-Patterson-Hood meeting?

There was a large number of filings in the USA v. Scruggs case (Northern Mississippi edition) yesterday, but one thing from these documents stuck out like a sweet potatoes deliveryman in a judge’s chambers. Check out this passage from one of the exhibits attached to a supplemental Scruggs brief on the validity of the wiretaps in the bribery case.

[Balducci] further explained, prior to this March 2007 meeting [where the alleged conspirators allegedly hatched their alleged plot to allegedly bribe Judge Lackey] the [Scruggs Law Firm] was trying to settle some Katrina Insurance cases with the State Farm Insurance Company.  SLF and SFIC were near a settlement, however, [Dickie Scruggs] learned that the Mississippi State Attorney Generals office had threatened to indict SFIC due to some impasses between the Attorney Generals office and SFIC.  SFIC was not going to settle the civil cases with SLF, if the company was going to be indicted by the Attorney Generals office.  [Scruggs] asked [Steve Patterson] to speak with Attorney General Jim Hood since [Patterson] and Hood had a long standing relationship.  [Scruggs] offered to pay Patterson Balducci $500,000 if they could get Hood to relent on indicting SFIC. [Balducci] accompanied [Patterson] to a meeting with Hood and Hood later agreed not to indict SFIC. [Scruggs] eventually settled with SFIC and that settlement yielded approximately $26 million in attorney fees. [Scruggs] reneged on his pledge to pay Patterson Balducci $500,000, but later agreed to pay Patterson Balducci $100,000 a month over five months. [Scruggs] first paid Patterson Balducci $100,000 in March 2007 and eventually paid the entire $500,000.

Holy Cow!  This comes from Exhibit 5 to the Scruggs supplemental brief on the wiretaps, a November 12, 2007 report by FBI of information from Balducci.  Do you see what this says? It says that Scruggs paid Balducci and Patterson half a million dollars to get Hood to back off the State Farm grand jury investigation.  And it  implies Hood backed off because of the meeting with Balducci and Patterson.  Why he backed off, this does not say.  But remember at the February 6 hearing in State Farm v. Hood where State Farm’s lawyer, Jim Robie, asked Hood about these two threatening him on behalf of Scruggs, that Scruggs would fund a challenger in the Democratic primary if Hood didn’t back down and clear the way for Scruggs to collect his fees?  If you don’t, read this post I wrote about the hearing.

Seems to me that whole business needs to be explored some more, don’t you think? If this is true, doesn’t it qualify as some sort of improper influence of a public official? And what about Hood? Is  dropping a criminal investigation under such circumstances — again, if this is true — consistent with proper performance of the job of Attorney General?  I sure would like to know if this stuff is true, wouldn’t you?  Besides the information about Hood, this is a key document to read to understand the alleged plot to bribe Lackey.

It appears media reports last week on the hearing in this case weren’t exactly clear, because I got the impression the motion to suppress the wiretaps and information stemming from them had been decided.  This was not true — instead, Judge Biggers asked for supplemental briefing on that motion.  Here’s a Daily Journal story that says Judge Biggers is due to decide that motion today, and here’s all the documents filed yesterday since the last time I updated you on the docket. 

Minute order.

Defendants’ response to the government’s motion for an anonymous jury.

Government supplemental brief regarding motion to suppress wiretaps.

Scruggs supplemental brief regarding motion to suppress wiretaps.

Affidavit in support of Scruggs motion, and attached exhibits below: 

Exhibit 1.

Exhibit 2.

Exhibit 3.

Exhibit 4, transcript of May 29, 2007 recording of Balducci-Lackey call.

Exhibit 5.       

Exhibit 6.

Defendants’ request for a pre-trial conference.

 

 

 

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