Scruggs Nation, Day 28

Just a short post for now, maybe more later today, maybe not. I saw this USA Today story by Donna Leinwand on the Scruggs scandal today.  The story is a fairly decent overview of what has gone on so far — there is only so much you can do in the space of a typical USA Today story. Basically you’ve heard it all before, but a couple points need to be commented on.  Here’s one excerpt from the story.  

Scruggs is innocent of the charges, his lead attorney, John Keker, says. Scruggs "didn’t know anything about (the alleged bribe)," he said. "The whole circumstances are slightly crazy."

. . . .

Balducci "did it on his own," Keker says. "Now he’s trying to spread the pain around."

I’ve said it before, but I’ll say it again.  This seems remarkably weak as a defense.  I keep waiting to see what else Keker has got in his magic act, and he keeps going back to the same dumb trick where he pulls a coin out of your ear.  If this is the best he has, I wonder if a plea agreement might be in the offing before the trial date.  We will have to wait and see what the evidence against Scruggs is, but in addition to Balducci’s testimony, it probably includes audio recordings of conversations with Balducci, particularly related to the "extra $10,000," and payments to Balducci that are going to be extraordinarily difficult to explain as payments for jury instructions and jury consulting, their supposed purpose.  In addition, the FBI "taint" team is continuing to look at the hard drives of the Scruggs law firm, and they may reveal even more. 

A corollary to this defense is that Balducci supposedly is the ne’er-do-well son trying to impress daddy by fixing, without his knowledge, some problem that has perplexed ol’ pops.  I’m sure you’ve seen this plot in a couple hundred movies and sitcoms — Dad’s Buick has some tricky fuel injectors and Junior borrows his wrench set, sneaks out to the garage in the middle of the night and gets busy under the hood — won’t the old man be surprised in the morning when his car fires right up!  Maybe he’ll be so pleased he will front the money for that spring break trip to Cancun.  It always ends the same, Dad walks out to the driveway in the morning and finds his entire engine scattered in pieces all over the concrete, and Junior fast asleep in the back seat.  As a storyline, it probably works better in Leave it to Beaver than the Scruggs case.

Here’s another excerpt from the story:

The indictment and the criminal contempt charge stem from Scruggs’ work on behalf of Katrina victims. Scruggs, who lost his Pascagoula home in the storm, gathered prominent trial attorneys to sue State Farm, saying it had shortchanged Gulf Coast residents who lost homes and businesses.

State Farm alleges in court papers related to those lawsuits that Scruggs colluded with Mississippi Attorney General Jim Hood to force Katrina case settlements by threatening a criminal investigation.

Hood did not return phone messages left at his office. In a letter to U.S. Attorney Alice Martin of the Northern District of Alabama, Hood wrote that Scruggs is a confidential informant for the state’s investigations into how insurers responded post-Katrina.

Scruggs introduced Hood to two sisters who had worked at State Farm and passed thousands of documents to Scruggs, court papers say. When U.S. District Court Judge William Acker ordered Scruggs to return the documents, Scruggs instead gave them to Hood, Acker wrote.

The judge asked Martin to prosecute Scruggs for criminal contempt of court. Hood asked Martin not to prosecute. When Martin declined to press charges, Acker appointed two special prosecutors. On Aug. 21, they charged Scruggs with criminal contempt.

Keker says Scruggs did not violate Acker’s order because Scruggs interpreted it to mean that he could give the documents to law enforcement.

I see a similar description of the events relating to Scruggs’ sending the documents to Hood in just about every news story  that mentions it, no matter which newspaper or magazine is doing the writing.  Often, journalists look at what some other journalist has written, and don’t see a lot of need to vary it, because the audience is not the same. Let me point out, however, that this description is inaccurate and misleading, because it fails to give the context that Hood had absolutely no need for the documents, because he already had copies.  This is often why readers of these stories fail to see what Scruggs did as a big deal — what’s wrong with sharing information with law enforcement?

However, it appears far different when you know Hood had had his own copies of the docs for a long time, that he and Scruggs spoke about what to do just after Acker’s order was entered, and that the only plausible explanation for sending the docs to Hood was to find a way not to comply with Acker’s order and get away with it.   Hood and Scruggs had done their thing for so long, I imagine both were shocked when Acker threw down on Scruggs and referred him for alleged criminal contempt of court.  You know, I’ve read Acker’s contempt order a number of times, and each time it strikes me that it appears if Acker thought he could have referred Hood for some charge as well, he would have done it. 



Filed under Industry Developments

19 Responses to Scruggs Nation, Day 28

  1. Silas

    I totally agree with the assessment about Hood. He SHOULD have been indicted at the very least as a co-conspirator. What’s the statute of limitations on that sort of charge coming out? If more information about Hoods involvement, (and Courtney Schloemer’s as well it looks like,) comes to light during the prosecution of these many cases, is it possible more charges are forthcoming? Did you read the WSJ Opinion piece about Mississippi and “Der Hoodmeister’s” thriving lawsuit business? It is called Mississippi Tort, Inc. and sums up the AG’s tort business activities to a T.

  2. Wes

    What other defense can Keker offer except Balducci was insane? Maybe Scruggs
    was insane to associate with this loser
    and that might be his defense.
    Either way, Balducci was lethal and for
    a man as smart as Scruggs not to pick up
    on it makes you wonder just how in the world did he make all this money?
    It’s also hard to believe that in 2007 someone could try to bribe a judge like
    Judge Lackey and then assume it’s business as usual……..pretty naive
    AND incredibly bold for street smart lawyers like Scruggs and Balducci.

  3. Bama Insurance

    Thanks David for the update. My question is, if “Hood had absolutely no need for the documents, because he already had copies” why does Dick give them to Hood? Why doesn’t he just return them to Acker?? there something else? Is it posturing by Hood? or maybe just arrogance?

  4. David Rossmiller

    Bama, the information in Judge Acker’s order, which is founded on testimony Scruggs gave in the Refroe v. Rigsby case and well as Judge Acker’s own conclusions from the evidence, is that Scruggs and Hood concurred that sending the documents to Renfroe’s attorneys was too big a risk — they feared that Renfroe lawyers would tell Renfroe and State Farm what the documents said, in violation of Acker’s protective order that they not reveal or discuss the contents with either. Acker’s assumption is that Scruggs and Hood did this because to reveal the contents of the documents at a time when critical negotiations were ongoing with State Farm would mean the game was up — State Farm would realize the documents contained nothing especially damaging beyond what had already been revealed in other lawsuits and possibly take a different attitutde toward settlement. Remember there existed a confluence of events that made State Farm willing to settle, including rulings that were partly adverse in the Tuepker and Leonard cases (Leonard was against Nationwide rather than State Farm but the legal and factual issues were similar).
    Wes, this responds to your point as well — when you consider the risk, both the documents fiasco and anything involving alleged bribery seem unaccepable. But that fails to consider the psychology of those involved in high-risk endeavors like mass litigation with heavy political overtones. What seems like a crazy risk to you or me may not sound so crazy when you are both a risk-seeking individual and already involved in something high risk.
    It very well may be to one in such a circumstance, actions where we see only the risk take on a hue of opportunity rather than risk, especially if one has previously pushed the envelope and not only suffered no adverse consequences but in fact reaped rewards.
    Let me again stress that both of this situations involve criminal charges, and we should presume the defendants are innocent. However, these are matters of high public interest and it is just and proper, within that framework of a presumption of innocence, that we try to make the best sense we can of allegations and charges against the defendants.

  5. m.williams

    I hesitate to conclude that there is an O.J. “glove” in the prosecutor’s wardrobe. There’s wisdom in repeated acts. I point to past practice as a means of discovery. In Minnasotta, the lawyer’s did their own “discovery”. They had a document-driven case, but it was basically a lot more in line with the “clean hands” theory. Moore’s Medicaid filing, Mississippi Ex Rel, was a document-driven case and without the documents, used as a threat, there would have been no Bennett Lebowe settlement with Barrett. When LeBowe broke the chain of defense, all fell down. It’s obvious to me that Hood’s “bio-cleanser” is the same kind used by Moore in the Brown and Williamson documents. Scruggs and Moore violated Kentucky’s Order. When Wigand was whisked from Kentucky, Scruggs and Moore again violated another Kentucky Order. When documents from Mr.Butts were put on the web, it was impossible to contain the logic of proper discovery. So if Hood’s the keeper of documents, there’s no difference. Wigand didn’t have a scent because it was clear that he was hyped to fit the imagine that the press liked. The Rigsbys are hyped to fit the image of Glamour magazine. This kind of stuff is promo. No mystery in the way Moore and Scruggs worked their special effects. I count about 4 violated Orders in the Medicaid case as early as June, 1994. The Alabama Order is just a continuation of a new kind of discovery that must be taught in law schools. The balance wheel for making a pot or a lump off clay out of Balducci is going to be to meaningfully depict the dramatic characters in the play, and if there’s no off-setting of who’s who in the program, and I mean by looking into the past practice, then my guess is Scruggs will be playing King Lear and Balducci will be playing Richard III. I could really direct this show, but lawyer’s have promo’s to keep ticket sales up and celebrity blockers to push off intruders and stuff that hurts their character. Honestly, Dickey looks good. He needs Dick Morris to shine him up. He needs a kind of Dick Morris to bash Balducci. The investigators usually play straight men/and women. Wonder if they’ll just keep it that way?

  6. Hasn’t there also been a document produced or testimony given whereby Ducky Struggs and Hood had agreed the records given to Hood would be returned to Struggs when everything “blew over”? In other words, Ducky said ” I have complied with the order by giving everything I had to AG Hood, the law enforcer (wink, wink, nod, nod)”. Then he hoped to go back to law enforcer Hood (wink, wink, nod, nod) a month or so later after Judge Acker had quieted down and ask for his purloined documents back.
    Seems no matter what story you see Hood, Struggs, et. al. in, they are behaving badly. Just like roaches, they hate the bright light of scrutiny and truth. Is the word malfeasance used in the Magnolia State?

  7. iwannaknow

    re the usa today piece. I guess keker didn’t read bigger’s order reminding attorneys not to discuss the case publicly. wouldn’t it be ironic if dickie and his lawyer were found in contempt of separate federal courts

  8. iwannaknow

    re sending documents to hood. it is obvious scruggs didn’t trust renfroe’s lawyers not to disclose to SF what documents scruggs had received. there is an additional reason to that suggested by david. any lawyer knows corporate defendants do not give up discovery of damning internal documents easily . it is not uncommon for critical internal documents not be produced. dickie is well aware of efforts of tobacco and asbestos companies to hide critical documents under the guise of attorney-client privilege, offshore companies and the like. if the documents are returned to renfroe there is a risk they will never be seen again. but SF is obviously less likely to play loose and fast with discovery if they are uncertain what dickie already had. and less likely to withhold documents if they are uncertain what Hood had. but this only gains the plaintiff leverage if SF did in fact have something to hide. if they dont it must be assumed all of the renfroe documents were discoverable anyway. be that as it may, I think david is spot on the evidence suggests scruggs deliberately attempted to avoid judge acker’s order


    BAMA: here’s the deal with the documents – Scruggs had the originals, including the yellow POST-IT notes written by Lecky. If the originals go back to Renfroe, then they get put on microfiche, the originals are destroyed, and the impact with the jury is minimized.

  10. Tim

    I know all of these individuals with the exception of Balducci whom I have met one time. I am shocked by the allegations but will await the evidence before I judge. I agree with many comments and analysis on here, except I would certainly believe that Renfoe and State Farm knew every document that was downloaded by the sisters, long before Ackers’ order. It’s a confusing and sad mess. Knowing these individuals as I do, I have a hard time believing it, but must confess it doesn’t look good, especially the payments for work on created files sent via email in similar amounts to the bribe. Even more puzzling, all of this was going on in the middle of the Paul Minor trial in which Dickie Scruggs testified. How could anyone be so brazen??????? Sad!!

  11. Ironic

    From USA Today:
    “Dale says Scruggs funded attack ads, including one full-page newspaper ad that depicted him as an insurance company puppet with a pig nose.
    Farese says.” I think it was the honorable and noble thing to do. That’s the kind of guy Dickie is.””
    For a person with the handle Ironic, I have to love the irony of these two statements being so close to each other at the end of the USA Today article.
    Read it again. It’s very funny, and quite ironic.

  12. m.williams

    Ironic: it’s purgation, and I get it the same way as you did. The line,”I think it was the honorable and noble thing to do,” indicates Dickie is a stand-up guy willing to opt out of his titular group, SKG, but did he not write to clients, asking them to hang on to him? Didn’t he squeel fowl when friend Don Barrett cut him? Was Dickie reformed and submissive and volunteering to vacate SKG?
    What was the time lapse between that letter to the judge(s) saying Barrett’s call was a misrepresentation? That letter to clients saying, in effect, please folks, I’m your neighbor, jes? What possibe motivate did Dickie Scruggs have “do the nobel thing”? It happened so fast, I don’t recall but as I think about it, he reversed himself as the leader of the band and went to the locker room for a power bar – why?
    I guess, “that’s the kind of guy that Dickie is,” won’t confuse a jury. I still believe when the history of the 20th century is re-written, the past is where to find the truth. I think Scruggs’ is just as clean now as he was when he manipulated the tobacco deal with Moore. And I believe, if he faces a jury, he is off the hook. He’s a bloody genius.
    And I don’t think it matters if he hires David Mamet to script another “tail” to wag another dog, or pay Willie for background. He’s that good.
    You can’t beat a guy like Scruggs. Already it’s been almost ten years and nobody knows what happened with Moore and Scruggs in the big heist in the tobacco deal. That’s genius.
    On the far side, if you’re looking for balance to the obvious innocence of this very idealistic man, maybe you should ring up Dick Daynard at Northeastern Law. Hey, that was just another fee dispute, so who cares about past practice. Daynard knows. Honor bites.

  13. Roger

    Cowbell 6:33: “Scruggs had the originals”
    Highly unlikely. The original paper docs were more likely destroyed after being scanned/imaged (complete with Post-it notes) as part of normal insurance processing. Remember, the Rigsby’s “data dump” was a printing/copying operation–not a taking of original paper. They also used their SF laptops to access the electronic “originals” in Scruggs’ office. Why do that if they already had the paper originals?
    My point: State Farm already had the electronic originals. And they also knew which files the Rigsbys had printed. So I still don’t understand why Scruggs didn’t return his paper copies directly to SF–unless it was a weak smokescreen trying to cover his extensive, prior collusion with Hood?

  14. Justus

    TIM, DAVID, or Anyone Else: Maybe you can help me out because I must have missed something. Above, Tim stated that “it doesn’t look good, especially the payments for work on created files sent via email in similar amounts to the bribe”.
    What were the “created files sent via email”, and FROM WHOM and TO WHOM were those files sent via email?

  15. Someone above made a comment about how hard it is to believe this kinda stuff goes on in 2007. It is mindboggling. The same goes for these guys manufacturing class action lead plaintiffs. Why do so many plaintiffs’ lawyers (and I’m one of them) who have the world in the palm of their hands put themselves at risk like this? It just makes zero sense. It absolutely blows me away.
    Ron Miller

  16. David Rossmiller

    Justus, in response to your question, I think the reference is to the alleged fake documentation that prosecutors claim Dickie Scruggs created to cover payments to Balducci. Prosecutors alleged the payments were for bribe money, but that the documents purport to be payments for “jury instuctions” and “jury consulting services” in some other case. In the indictment, it alleges Scruggs sent or caused these documents to be sent to Balducci by e-mail.


    Tim: the most brazen part about the bribe is this: remember when the Democrat(ic) Party booted George Dale b/c he openly supported Bush Light at the neshoba county fair? Well, Dale went to Judge Lackey to get back on the ballot. Then Scruggs put up $250,000 to oppose Dale. How brazen is it for Dickie to believe he could then bribe Lackey in a cut-and-dried fee dispute between 2 wealthy plaintiff’s lawyers?

  18. observer

    I keep hearing comments from people that they think it is strange that all these really rich lawyers, were so cavalier about trying to bribe a judge.
    I guess I have been around the block more than most people, because the idea of a bunch of rich lawyers trying to bribe a judge, doesn’t even make my top 1000 list of strange things I have seen.

  19. Tim

    The whole thing doesn’t make sense from
    Dickie’s standpoint that why we must wait till all the evidence is in before judging them. Balducci could have been acting on his on until caught red handed then sought to get Scruggs to make deal for himself. Its happened before, but I again voice my concern that the files were created to cover payments and emails. That’s difficult to explain. I am sure there is going to be substantial tape recorded evidence which will either be devastating or show Balduicci was leading them to help himself. Anyway I still think its a sad day for all of us in Mississippi that try to do things the right way. Its real frustrating.