Scruggs Nation, March 10

On Friday I linked to a post at Law and More that discussed a recent American Lawyer article on Dickie Scruggs.  I gave my quick take on Scruggs, without having read the article, but later that day I had a chance to read the story, by Susan Beck.  I thought this article was very well-done, but I think it rushes by some of the more significant hypotheses one can frame about Scruggs. (Here’s a direct link to the Law and More post, and here’s a link to the American Laywer article on Law.com).

I also read the long comment to my Friday post — and I know who this person is and that he knows Scruggs very well.  He believes Scruggs is a sharp businessman with a law license — not a great lawyer by any means — a guy whose interest in helping prosecute a suit against tobacco companies coincided with other interests on both sides.  As others, notably including Walter Olson, a senior fellow at the Manhattan Institute and author of the excellent book The Rule of Lawyers, have pointed out, state attorney generals and lawmakers liked the idea of what is in essence a big tax on tobacco companies that didn’t need to pass legislatures or Congress.  And the settlement benefitted Big Tobacco — it created barriers to entry of the market that protect existing companies against competition. As the comment said, "the industry wanted the deal for protection, and they have it." 

The Beck story does an excellent job of cataloging some of Scruggs’ failures, and it’s ultimate conclusion seems to be that Scruggs is an idealistic guy with often poor judgment in case selection who scored big because of a few lucky confluences of events.  If his reputation was ever deserved, the story seems to say, it is behind-the-times — sort of like an NFL lineman who keeps getting voted to the All-Pro team long after his skills have degraded to the point he is just an above average player.

Maybe.  But this theory fails to recognize that Scruggs was in large part responsible for creating a hostile legal climate for insurance companies in Katrina litigation, and it fails to account for his Katrina success long after his "prime" was supposedly over.  And I’m not sure I see Scruggs as idealistic as that term is commonly used — opportunistic might be a better word, opportunistic in looking for a good storyline and a good opening to make money.  Also, if Scruggs was in large part the product of luck and unique circumstances, that would place him in the same boat as the rest of humanity — whom could we look at and say this is not true?

I think this excerpt from the Beck story, however, is a significant insight into Scruggs:

Over the years, Scruggs has attempted to paint himself as a different breed of plaintiffs lawyer, one who is more principled and discerning. He has criticized lawyers who rush to file securities lawsuits after a company’s stock drops. "Those are piggyback cases, not primary kills," he told Chief Executive magazine in June 2002. "I try to take on companies that have successfully avoided liability but shouldn’t have. I don’t want to get there after the antelope has been brought down."

In addition to eschewing securities suits, Scruggs has also opted not to take a seat on the lucrative pharmaceutical litigation bandwagon. Scruggs, it seems, isn’t eager to join a case where he can’t be the leader. "I’m probably not the best person in the world to work with others on a coequal basis," Scruggs told The American Lawyer in 1996. "I like to make decisions and call the shots."

I think you can take this a step further and examine Scruggs’ career under the following hypothesis: did he have any legal success where he was not able to manipulate the rules? Some would say the entire field of tort liability that Scruggs plays in is about changing the rules or altering them to suit the social and policy goals of trial lawyers, but I do not mean "manipulate" in the broad context, I mean it in the context of the immediate case or cases at hand.  What success does Scruggs have where he was unable to manipulate the outcome through forum selection, publicity, and, shall we say, other means?

Don’t get me wrong, I don’t discount the Beck hypothesis totally.  I merely want to test it against other possible hypotheses.  In favor of the Beck theory, I would note that early on in the Katrina litigation, as noted in the Lee Harrell deposition I have often referred to, Scruggs spoke of Katrina cases in the same terms as tobacco litigation — he had "insiders" and was going to work the cases just like he and Mike Moore had worked the tobacco litigation.  A complex man, one whose story is difficult to tell, and one on whom the last word has certainly not been written, here and elsewhere.

 

 

 

14 Comments

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14 Responses to Scruggs Nation, March 10

  1. dixie68

    I really do not see how he could be called “idealistic”, when it is evident that all his present troubles stem from one thing, unmitigated greed.

  2. Nomisss

    I don’t see Scruggs as a complex man. He is a hungry wolf in a gentleman’s clothing. As you stated, his success has been the effect of manipulation of the rules, behind the scenes illegal activity, and secret operatives who provide a layer of protection between him and his criminality–the manipulation of the system and its people. He apparently sees all people as those he can manipulate—must be a great feeling of power.
    IMO, a most important aspect of Scruggs success is the climate that allowed Scruggs to proceed with this behavior and be rewarded by it. That appears to be where he is smart. He was able to ally himself with others who would accept and work with him in these activities. I suppose it was the money, as Balducci in his grand jury testimony stated was his case.
    Scruggs has for years found allies and an environment to succeed, so we must look at that environment also.

  3. Bama Insurance

    Good article David. I would also add…
    “Some would say the entire field of tort liability that Scruggs plays in is about changing the rules or altering them to suit the social and policy goals “…and FINANCIAL goals…’ of trial lawyers,”

  4. nolawyerme

    I don’t think he’s guilty of anything but being too trusting of that rat Balducci. Who would jeopardize his son’s career and freedom, not to mention his own? To me it’s incomprehensible that he would bribe a judge period. But, in exchange for a referral to arbitration, that just doesn’t make sense.
    I guess if you presume he’s guilty than you have to work backwards from that and
    attack his career,character and judgment. This is a 180 degree turnaround from every word that’s been written or spoken about him for the last decade.
    You see want you want to see and I see a defendant who hasn’t been proven guilty yet.

  5. Nolawyer,I see you are of the “Too Dumb For Dickie” school. Certainly we know that, as revealed in the consensual recording of November 1 made by Tim “the Rat” Balducci, Scruggs was reading an unsigned order from Judge Lackey, as if that were a totally unsurprising event in his day, like seeing junk e-mails on Nigerian fortunes. Whether that means he is guilty of what the government says, I do not know, but these facts are hard to explain away. As for whether it is Too Dumb For Dickie, smart people do a lot of dumb things, on average, in fact, more dumb things or at least worse dumb things than dumb people.

  6. dixie68

    Extreme greed and a giant ego have a way of causing many people to do things their friends would not expect.

  7. bellesouth

    “Scruggs was in large part responsible for creating a hostile legal climate for insurance companies in Katrina litigation.”
    I would say that the insurance companies created a hostile legal climate for themselves.

  8. observer

    The prisons are full of smart people who did dumb things. And, in fact, smart people often think that if you are smart enough about it, it is possible to commit the perfect crime, which it never really is.
    It seems Scruggs thought that putting several layers of people between him and the dirty deeds was some kind of protection or insulation from criminal exposure. Unfortunately, while cut-outs seems like a good idea in practice, in reality the government often ends up calling people like that as cooperating witnesses instead. Complex schemes can end up making a lot of witnesses that dumb ones don’t have.

  9. Oaege

    Belle, to continue your chain……. Insurers attempt to settle claims per the policy contract in a hostile legal environment created by …(fill in the blank here) ….as George Carlin has pointed out, CIVIL WAR is a bit of an oxymoron, isn’t it? Time to do-si-do, lawyers on the left, insurers on the right!

  10. bellesouth

    Yeah, tell Trent Lott that.

  11. Seacrest

    I think the big headline of today sort of makes the “smart people do dumb things” idea in a big, big, way.

  12. MORE COWBELL

    Oaege: if you put $100,000 in Trustmark National Bank, don’t you expect to get it back? If you have $100,000 heath insurance claim, don’t you expect to get it paid for? Same goes for any insurance contract. Why all the dancing?

  13. Entertained

    MoreCow — Really? You really have to ask “why all the dancing”? Could it partly be because, when people experience property damage to their homes, they just want to get it paid for, even if the insurance they agreed to buy doesn’t cover it? And could it possibly be that those same people, feeling indignant at having been reminded about the terms and conditions of their policies, go find lawyers who, with equal [even if feigned] indignance, go out into the world and to the courts, screaming “Corporate Greed!!” until the insurers agree to pay something just to make the lawyers go away? Those lawyers know darned good and well what the policies cover and what they don’t – but for them, “coverage” is a annoying detail. For them, it’s about making noise and making money, and the policyholders who stand to get something for their non-covered damages climb up onto the bandwagon in nothing flat. What do they have to lose? Sure, they’ll have to make up for it with future higher-than-would-be premiums, but that’s not the point. The point is, if you want to talk about greed, you have to look on both sides of the fence -even the side where the policyholders sit. Do you really want insurers to just blindly pay claims without questioning whether they’re covered? Do you have any idea what that would do to your own personal premiums? Sure, you do. But it’s a lot more fun to scream “Corporate Greed,” isn’t it?

  14. MORE COWBELL

    Entertainment: If the adjustor said it’s a total loss, and his manager said it’s a total loss, and the insurer’s highly paid engineer (p.e. in 4 states) said it’s a total loss, and the engineer’s supervisor said it’s a total loss, and my licensed contractor said it’s a total loss, and my engineer said it’s a total loss, and the insurer’s attorney said it’s a total loss, well, why did we settle just one week before my jury trial?