Scruggs Nation, Day 8: the scruggsing of Scruggs

Yesterday I mentioned a term that has been in my lexicon for about a year but that I haven’t previously used on the blog: "scruggsing," from the verb "to scruggs," meaning to go on the offensive in an all-out blitzkrieg fashion, employing all potential means against an adversary including media, politics, law, facts and psychology.  I admit my conceptualization of the word did not include an alleged bribery scheme or other activities that are unethical and illegal, so if what prosecutors say is true, I may have suffered from a lack of imagination.

In any event, as I pointed out yesterday, one possible analysis of the events of the last few years is that Scruggs grew to be such a force, that his brand had such cachet, and that his tactics were so successful, that only Scruggs could bring down Scruggs, only Scruggs could scruggs Scruggs.  In Katrina litigation, certainly, it appeared for a while that he was unstoppable as he marched side-by-side as the confidential informant of Attorney General Jim Hood.  With all that’s gone on in the last eight days, it’s time for a re-examination of the course of Katrina litigation and Scruggs’ involvement in  it.  We can’t do a complete review in just one post, but let’s give it a start.

How much of the Scruggs position in Katrina litigation was real and how much was hype?    

I ask this question for several reasons, one of them relating to the "whistleblower" Rigsby sisters and the State Farm claims documents they took from their employer E.A. Renfroe, a State Farm contractor.  From what I can see, the claims of the Rigsby sisters and the 5,000 to 15,000 documents they took from Renfroe are mostly if not totally hype with little if any substantial value.  Of the documents that they took, few have even been offered up as evidence of State Farm’s supposed misdeeds — those engineering report e-mails, the State Farm wind-water protocol and a few other documents are all that appear to have emerged from this "data dump" by the Rigsby sisters. [UPDATE: I’m informed by a knowledgeable and trusted source that I may have wrongly attributed the uncovering of the wind-water protocol to the Rigsby sisters, and that attorney Richard "Flip" Phillips of Batesville found this document in the case of Guice v. State Farm — the Rigby sisters could have had this among the data dump too, but if they didn’t, this would reinforce the point about them]. Were the documents themselves merely a prop, a Potemkin village, a bluff to increase State Farm’s opinion of the threat posed by Scruggs? Read this passage from this recent Anita Lee story about the Jones v. Scruggs lawsuit.    

The settlement [of 640 SKG cases, not announced until January] was reached in November 2006, according to a letter State Farm sent Scruggs.

In January, Jones e-mailed Scruggs and SKG partner Sidney A. Backstrom, according to copies State Farm has filed in a lawsuit to stop Hood’s investigation.

In the first e-mail, Jones said his firm had lost $2 million in revenue alone on the insurance litigation until his firm was "excommunicated" from SKG in December 2006. "And what member of the joint venture committed to the work on the chance he would simply be made whole?" Jones said. "Certainly none I know of."

Backstrom fired back: "… the whistle-blowers came to Dick and they were the sole basis for Hood’s interest which really was 80 percent of why SF wanted to settle; Trent Lott and Gene Taylor signed up with our office, as did (U.S.) Judge (Louis) Guirola – that mattered big time to SF too… "

In the next e-mail Jones thanked Backstrom for his candor and said he didn’t want any of the SKG partners to be shortchanged. Jones closed with this prediction: "I want to avoid this as bad as I need to be paid for committing 2½ years of my law practice to what Dick has asked of me, but if that is where it is headed this is going to be awful for all of us."

So this e-mail above by Backstrom, a lawyer in the Scruggs Law Firm and one of the indicted alleged bribery conspirators, says that Hood’s interest in the criminal investigation of State Farm was solely based on the "insider" Rigsby sisters — who after doing a massive copy job of Renfroe documents quit and immediately went to work for Scruggs as consultants at annual salaries of $150,000 each, with no specified duties — and that in Backstrom’s opinion, which one could surmise reflected Dickie Scruggs’ own opinion, Hood’s criminal investigation was 80 percent of the reason State Farm settled.  Do you see the implications of that? I’ll examine the question of hype versus reality further in the coming days, but with the Backstrom e-mail fresh on our minds, this is an opportune time for the follow up below regarding Hood and Scruggs’ involvement.   

Where in the World is Jim Hood?

Alan Lange over at Y’all Politics has started a feature called Where Is Jim Hood?  I run an occasional item since the breaking of the Scruggs scandal called Where in the World is Jim Hood, after the annual Matt Lauer feature on the Today show.  Hood sightings have been rare after the  scandal broke, and this may be the longest consecutive period Jim Hood has ever gone without public comment.  This story by Anita Lee from today’s Sun Herald is about a stonewalled attempt to get comment from Hood on the Scruggs affair.  Here’s an excerpt:

The Sun Herald on Tuesday requested an interview with Hood, asking if he would at least respond to questions about how the Attorney General’s Office views allegations of judicial bribery and its enforcement responsibilities.

An obvious question also is whether Scruggs, who has pleaded innocent, continues to play any role in Hood’s criminal investigation.

Hood’s press secretary, Jan Schaefer, e-mailed this comment from her boss Wednesday afternoon: "Your questions concern pending litigation and criminal investigation and therefore it would be inappropriate to comment."

Jeez, since when has Jim Hood shied away from public comment on pending litigation and criminal investigation, isn’t speaking out on these things his trademark? The criminal investigation referred to in the question in the story is one that has been enjoined by a federal judge as a result of a lawsuit against Hood by State Farm.  In that suit, State Farm alleges Hood breached the terms of a non-prosecution agreement that came out of January’s big settlement involving the Scruggs Katrina Group plaintiffs and a proposed class action settlement that was disapproved by Judge Senter. It’s not clear if the answer refers only to that investigation or also to the Scruggs indictment. 

Considering that Hood is alleged to have used the power of his office and the threat of criminal prosecution to force settlements in civil litigation that would benefit Scruggs and others, you wouldn’t think it would be to much to ask for Hood to respond to a few questions at this time, would you?

Do you remember when I wrote about the Halloween deposition in Katrina litigation of Assistant Insurance Commissioner Lee Harrell? Here’s the post, and here’s part of what I wrote: 

And in one of the most remarkable passages I have read in anything having to do with these Katrina cases, Harrell also testified to meetings in early 2007 with [former Mississippi AG Mike Moore and Hood, where Moore said he was assisting Hood with his criminal grand jury investigations at the same time Moore  was working with the Scruggs Katrina Group in pursuing civil claims against insurers, and that Hood said this about the civil litigation:

"If they [State Farm] don’t settle with us, I’m going to indict them all, from Ed Rust [State Farm’s CEO] down."

So, do you see what Harrell’s testimony says? That Hood worked with Scruggs and the Rigsby sisters to take documents from State Farm, without a warrant, for use in a criminal investigation and to assist Scruggs in his civil lawsuits, and then he not only worked on criminal investigations with a man who was also working for the Scruggs Katrina Group, he used the threat of criminal indictments that would culminate from this process as a means of coercing settlements in the civil cases he had help create. I think I did well to hang on to the red Yellowstone mug. I encourage you to read this deposition, it is quite short.

Just as an afterthought, and at the risk of turning this post into the Anita Lee edition, here’s something from yet another story in the Sun Herald by Anita Lee, about the new name for the Scruggs(less) Katrina Group (the new name is the Katrina Litigation Group).  I found this part of the story intriguing:

Former Mississippi Attorney General Mike Moore is associated on at least one case against State Farm but is not a member of KLG.

Interesting, isn’t it?  Can anyone recommend a publisher for my book? 

Lastly, just as I was ready to publish this post, I saw this Walter Olson post at Overlawyered that continues Walter’s excellent round-ups of Scruggs news and opinion.  A ton of good information there, check it out. 


Filed under Industry Developments

6 Responses to Scruggs Nation, Day 8: the scruggsing of Scruggs

  1. Great work, as usual. Remember that Former AG Mike Moore appears to be the “swing man” between SKG (as “resolution counsel” who would get, according to Harrell, paid “at the end of the day”) and AG Jim Hood (who was “was helping
    Jim Hood with the Grand Jury process”).

  2. Scruggs indictment VI

    Plenty of news today, and some links to commentary: As part of Timothy Balducci’s guilty plea, the feds confirm that Balducci has been “substantially” assisting them in their case against the other defendants. Per the…

  3. insurjustice

    Why don’t you report on other parts of Harrell’s deposition, like where it talks about the fact that George Dale’s campaign finance reports show that many many of the donations he got from individuals who listed their occupations as unknown were actually insurance executives.
    Why do you pretend to be impartial when you clearly show bias?
    Why don’t you come down to talk to the families affected in Mississippi and see ravaged Gulf Coast for yourself?
    Maybe then you might think about whom you are advocating for.

  4. Why would I want to talk about George Dale, didn’t Scruggs say he was “political toast”? Scruggs pointed this out during the campaign, the voters have spoken, it’s old news. I’d love to visit the foks in Mississippi, all over the state, seem like really great people. I’ll see if I can swing it, my day job keeps me pretty busy.

  5. Lauren

    Have you considered that the indictment against Scruggs was a set up by State Farm? I’m sure State Farm wanted and needed Scruggs to go away.

  6. Beau

    Now that it is a known fact that Timothy Balducci has been cooperating with the feds, and after reading the plea agreement, what are the odds that state charges will be brought against him for something pertaining to all of this. Seems like Dickie’s good pal is the “#1 law enforcement” person in that state, and does anyone think it’s been discussed between them, the possibility of Hood going after Balducci. Seems like the plea agreement doesn’t bar anything like that. I would venture to guess that Dickie and Balducci won’t be exchanging christmas cards with each other this year.