This is an impressive move, exactly the kind of bold strategy that appeals to me in litigation. State Farm lost no time following Judge William Acker’s referral on Friday of attorney Dickie Scruggs to the U.S. Attorney’s Office for prosecution of criminal contempt. Yesterday State Farm filed a motion to disqualify Scruggs in the McIntosh v. State Farm case in the Southern District of Mississippi. Not only that, State Farm wants all member lawyers and law firms of the Scruggs Katrina Group disqualified from the case.
The motion is not derived from Judge Acker’s contempt ruling per se, but the contempt ruling is mentioned repeatedly in the motion, and I doubt State Farm would have filed it if Acker had found no problem with Scruggs’ conduct. The motion seeks to disqualify Scruggs for numerous alleged ethical violations stemming from his dealings with the Rigsby sisters. You may recall that they were formerly employed by E.A. Renfroe, an organization hired by State Farm to assist with claims adjusting, and over the course of several months covertly took claims documents from files and gave copies to Scruggs to assist him in lawsuits against State Farm. Renfroe sued them for alleged violations of their confidentiality agreement.
According to the motion and supporting materials, the ethical violations include making ex parte contact with agents of State Farm who were assisting with claims that were either confidential or in litigation, wrongfully seeking protected work product of a party opponent, encouraging the Rigsbies to breach their confidentiality contract, and aiding the Rigsbies in injuring the rights of an opposing party and Renfroe. Another of the cited alleged violations is quite creative: Scruggs violated duties to his own clients by self-serving behavior in threatening to scuttle settlement negotiations with State Farm unless State Farm put the strong arm on Renfroe to make it drop the Rigsby lawsuit. The motion says Scruggs put his own personal well-being ahead of client welfare: he wanted the lawsuit dismissed to avoid potential citations for civil and criminal contempt. Another reason listed is also quite good: Scruggs may now be called as a witness in the McIntosh case. Here is a pdf of the motion.
Here is a pdf of the memorandum in support, which was written with a gusto and joie de vivre I have not often seen in State Farm’s Katrina briefing. No matter whether you agree with it or not, I think you will have to admit it really is a very well-written piece of work.
To show how serious it is, State Farm obtained a supporting declaration from retired Prof. Charles Wolfram, a one-time acting dean of Cornell Law School and a heavy hitter in the field of legal ethics. Here is a pdf of Wolfram’s declaration. It is dated June 14, before Judge Acker’s ruling, and it is of a length and quality — an A+ legal brief, really — that you don’t slap together in a day or two. This all had to be in the works for a long time. Obviously it takes a huge amount of time to retain Wolfram, have him read and analyze materials and write such a top-notch declaration. Here’s the declaration’s conclusion:
In summary, it is my considered expert opinion that Mr. Scruggs blatantly, seriously and repeatedly departed from the standard of conduct that would be followed by a lawyer of ordinary care and prudence in dealing with clearly confidential and privileged information possessed by the Rigsby Sisters as former confidential agents of State Farm. Mr. Scruggs’ course of conduct warrants his disqualification from further participation in this matter. Moreover, Mr. Scruggs’ extensive sharing of State Farm confidential documents and other information obtained from the Rigsby Sisters with all other members of the SKG requires that those other lawyers and their law firms also be disqualified.
Here, by the way, is a story on developments from the Sun Herald. In the story, Dickie Scruggs is quoted as saying the State Farm move is "desperate" and a measure of how successful he has been in kicking State Farm around.
I also see the Scruggs Katrina Group has announced it will unveil a "major development in legal action on behalf of Hurricane Katrina families" today at 3 p.m. Central time. It’s typically shrewd of Scruggs to make his own news instead of just reacting to the news of others.
UPDATE: Here is a link to the response of the Scruggs Katrina Group to State Farm’s motion to disqualify.