Judge in former Scruggs fee case receives grand jury subpoena

UPDATE: Numerous readers have informed me that the description of the attorneys in the Luckey and Wilson cases is in error.  Jack Dunbar was original lead counsel in Luckey and Wilson. Dunbar brought Johnny Jones in specifically to handle the plantiff’s constructive trust claims related to the tobacco money.  Jones wound up working on everything in the cases and Steve Funderburg was also pulled into the cases because of the immense workload.  Joey Langston and Tim Balducci were involved in Luckey but not really in the Wilson case until special master Bobby Snead issued his recommendations.  At that point, Scruggs removed Dunbar as lead counsel and brought in Langston and Balducci on the Wilson case. Balducci and Funderburg drafted the proceedings and briefs although Langston would be lead counsel at trial.  Jones was no longer participating at that time because he was working full time on Katrina cases. 

So to clarify, Balducci and Langston’s involvement in the Luckey case began in January 2004-the trial was held in June 2005.  Following Luckey’s $17.5 million victory in the summer of 2005, Langston and Balducci got involved in the Wilson case for the last ninety days before the trial.

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This story by Jerry Mitchell in the Clarion-Ledger today says Judge Robert DeLaughter, who presided over the Wilson fee dispute case involving Dickie Scruggs several years ago, has received a grand jury subpoena in an investigation into potential judicial bribery.  I have heard many, many good things about Judge DeLaughter from lawyers in Mississippi.  In a prior story, DeLaughter told Mitchell he did not take a bribe.

One would assume that the investigation at this point is shaped to a large degree by information from Tim Balducci, whose plea agreement requires him to give truthful information or lose the benefit of the agreement, but even if Balducci didn’t supply information on the case, it might come in for scrutiny because DeLaughter rejected a special master’s finding that Scruggs’ opponent  was owed $15 million, and he settled for an amount that is undisclosed but appears likely to be peanuts.  In a similar fee dispute case in federal court in the same time period, the Luckey case, Scruggs was ordered to pay $17 million. Interestingly, Balducci was Scruggs’ attorney in the Luckey case but not in the Wilson case — his lawyers in that action were Johnny Jones and Steve Funderburg, who are suing Scruggs now in a fee dispute over division of Katrina settlement money.    

11 Comments

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11 Responses to Judge in former Scruggs fee case receives grand jury subpoena

  1. Christopher Alleva

    David,
    Your coverage of the Scruggs case is excellent. The analysis is concise and well written.
    This is the greatest case ever. The only real question, why did Dickie do it? Why would he throw away his life in a petty fee dispute? Why why? Well perhaps there is a natural justice in the world.

  2. Justa1/2Legal

    I haven’t the time to research, but I’d like to see the correlation between the “bodies buried” date and the presumed date Balducci was flipped. Surely Balducci was wired at the time?

  3. Billy

    There’s a rumor floating around North MS that Balducci was approached almost immediately after his “bodies buried” conversation with Judge Lackey. It’s a great story and made me want to be an FBI agent for one day just so I could’ve been the one to tell him how busted he was. However, as it’s still just a rumor, I’ll leave out the juicy non-corroborated details.

  4. Liz

    Are you sure that Balducci didn’t represent Scruggs in the Wilson case? Just from my read of the newspaper, I thought Scruggs fired Jack Dunbar as lead counsel in the Wilson case (after the release of Bobby Sneed’s special master’s report) and replaced him with Joey Langston, with whom Balducci was at that time associated. It was after Langston/Balducci came on board that Judge DeLaughter rejected most of the special master’s recommendations.
    Here’s how I thought the attorneys for Luckey/Wilson went:
    1. Luckey sues Scruggs in Hinds County in 1994. Wilson also ends up suing Scruggs. Charles Merkel represents both Luckey and Wilson. At some point, Scruggs hires Jack Dunbar as lead counsel to defend him. In 2004, as the cases near trial, Dunbar associates Jones and Funderburg to assist, presumably in both cases.
    2. The Luckey and Wilson cases are eventually severed. The parties consent to a judge-only trial for the Luckey case in Aberdeen. U.S. Magistrate Judge Jerry Davis rules for Luckey in 2005, and Luckey is awarded $17 million.
    3. Meanwhile, Wilson’s case is still in Hinds County, where Judge DeLaughter appoints Bobby Sneed as special master. Sneed’s report comes back pretty favorable to Wilson in January 2006, and Merkel requests $15 million on behalf of Wilson.
    4. Three days after the special master’s ruling in January 2006, Scruggs fires Jack Dunbar and hires Joey Langston as lead counsel; Balducci was at that time Langston’s associate.
    5. In February 2006, Judge DeLaughter rejected most of Sneed’s conclusions, and the case ultimately settled for an undisclosed amount that Merkel says was substantially less than the $15 million requested.
    The newspaper never says that Jones and Funderburg were fired, so I just assumed they were kept on after the lead counsel shuffle. So it would be Dunbar/Jones/Funderburg for the Luckey case and Langston/Balducci/Jones/Funderburg for the Wilson case. But this is the Clarion Ledger I’m reading, so I could be wrong!

  5. jim

    Liz,
    That is also the way I understand it.

  6. Wes

    David:
    Balducci has had his passport revoked
    according the the NEMSDJ.

  7. Rodney

    I’m enthralled by this story and thank you very much for your excellent coverage. As a non legal Brit (that doesn’t sound right) who, until a few weeks ago, thought that tort was what teachers did with children, I happened onto all of this when interested in the practice of “naked” shorting of stock.
    The Alice in Wonderland thread led from the Overstock/Wikipedia spat to Patrick Byrne to Bo Gritz to Ruby Ridge to Richard Barrett (a lawyer brother of whom y’all must be proud). He turned up with his flag and soapbox one day to helpfully advise Trent Lott to “stand firm” on Thurmond/segregation and wove a whole story on a web page (Skinheadz-R-Us.com or some such) that Trent’s daughter gave her blessing.
    Two great quotes came from this; Tyler claimed she didn’t know Barrett from “Adam’s housecat” and Uncle Dickie (who happened to be walking down the street at the same time) said “This son of a b—- has cut and pasted this in order to try and get media attention. Suing is my business, and business is good, and he’s going to end up on the wrong end of a lawsuit.”
    Presumably Tyler would have got family rates, but nothing happened, allowing Barrett to crow at Scruggs 366 days later “How come if you’re so rich you ain’t so smart?” A question on a lot more lips now.
    Finally, I mentioned all this to a old friend of mine from the Isle of Man (our local tax haven).
    “Scruggs? Baker used to give a sack of ’em for the pigs.”
    What?
    “Crusts, stale crusts.”
    And, blow me down, Websters has it (once removed); Scrug.n. “A hard outer layer that covers something. The trait of being rude and impertinent, inclined to take liberties.”
    Thanks again.

  8. apollo

    David, Wonderful coverage. In response to Liz’s query about counsel in the pandora’s box of fee disputes, I think you’re right in assuming most firms still retained in Wilson case as reported. Recall that John Jones had asked that they all consider using Dunbar for arbitration, too. Many many firms were involved through the years and employed by Scruggs in fee disputes. Some of Scruggs’ defense counsel through the years, in Wilson, you had Holcomb Dunbar, Langston firm, Bryan Nelson, Markow Walker, Jones Funderburg, and Jeffrey Reynolds, PA involved in reported cases. In Luckey, Dunbar, Langston, Mark Nelson et al. Don’t forget about the Scruggs v Merkel fee dispute case, Markow Walker and James Carroll, Myles Parker et al were involved in defense through 2005 decision. In Jones, recently you had Daniel Coker as defense counsel and anyone’s guess as to Tim Balducci’s part.
    Curious to what others think. If the FBI is pursuing leads per Tim B. presumably on the other “dead bodies” theory and if Delaughter might have been influenced in the Wilson case, does it make more sense that FBI would target Peters testimony in lieu of Delaughter’s, or both? Peters would be close to Delaughter, but Delaughter was the judge in the case.

  9. SBH

    Keeping with the movie tie-ins, Alec Baldwin played now-judge Bobby DeLaughter in Ghosts of Mississippi (1996) regarding the belated prosecution of Byron De La Beckwith for the 1963 murder of civil rights leader Medgar Evers.

  10. MSlawyer

    I always heard that Jack Dunbar fired Scruggs as a client, not that Scruggs fired Jack. Jack is an extremely honest and ethical attorney.

  11. jim

    This whole thing is both stinking and embarrassing!