JACKSON, Miss. - The director of Mississippi Attorney General Jim Hood's Insurance Fraud Unit responded Friday to the thoughts of an insurance attorney who focuses his blog on Hurricane Katrina issues and has been quoted in several LegalNewsline.com stories.
Courtney Schloemer defended her choice to consult with the Scruggs Katrina Group over its decision to potentially hire former engineer Brian Ford, whom Schloemer wanted to use as a witness in Hood's criminal investigation of State Farm Insurance Cos.
David Rossmiller, a partner at Dunn Carney in Portland, Ore., who has been analyzing the Gulf Coast's insurance situation for LegalNewsline.com, said Schloemer's actions were "shocking beyond words" in a story Thursday.
"If I wanted to help the plaintiffs' bar, I'd just go on out and join them (and probably double my salary in the process)," Schloemer said. "Dickie Scruggs isn't exactly a charity case. He has his own plane. He obviously doesn't need my help making money."
The 19 pages of Ford's journal that were entered as an exhibit when State Farm moved to dismiss all members of the former Scruggs Katrina Group also contains an entry from Oct. 25, 2006, that may detail a conversation between Schloemer and SKG attorney Derek Wyatt. It reads, "Courtney talked to Derek. They agree that a criminal conviction could help civil cases."
It also says, "Courtney does not want Brian to be a paid consultant prior to testifying before grand jury."
Hood sued State Farm and four other insurance companies after Hurricane Katrina, alleging they shortchanged policyholders. He also initiated a criminal investigation that was later dropped.
"It's shocking beyond words," Rossmiler said Thursday.
"What's detailed in the Brian Ford notes are two very, very shocking allegations: That the assistant attorney general was manipulating testimony before a grand jury and discussing using criminal prosecution to benefit one party's civil litigation. It's absolutely outstanding."
Scruggs and two other members of the Scruggs Law Firm were indicted last month for allegedly attempting to bribe a state judge in a $26.5 million attorneys fees dispute, causing the firm to drop out of the SKG.
The group renamed itself the "Katrina Litigation Group" and now features the Barrett Law Firm, Nutt and McAlister and the Lovelace Law Firm. State Farm wants all of them to drop their Katrina cases.
Hood has remained mostly quiet in the time since the indictment of Scruggs. He refused comment on the motion Thursday.
State Farm has sued Hood for allegedly using the threat of reopening the criminal investigation to force a civil settlement to which was previously agreed by the two sides but not approved by a federal judge.
Schloemer called the comments by Rossmiller "a little like kicking someone who has their hands tied behind their back."
Rossmiller started his blog in January 2006. For the past year, it has focused almost exclusively on Katrina litigation. He has analyzed the briefs filed in various Katrina cases and followed the Scruggs saga closely.
"The Scruggs indictment just happened to happen," Rossmiller said. "Since a very large part of writing about case law and the case issues involved Dickie Scruggs, it was just logical that I'd talk about him. The interest is sky-high."
Since the Scruggs indictment, Rossmiller said he hasn't reached 10,000 visitors in a day but is consistently in the high four-digits, probably seven to eight times the amount of visitors his blog received before the indictment.
Schloemer e-mailed LegalNewsline.com on Friday with a message for Rossmiller:
"I don't expect this will ever make it into print, but I would appreciate if you would pass along to Mr. Rossmiller that he would be hard-pressed to find a prosecutor anywhere who considers it an advantage to have a witness testify while on someone else's payroll as a consultant. I had also spoken with the Scruggs Katrina Group and confirmed that Ford was not working for them at the time I interviewed him and they had no plans to hire him.
"If he had been on the payroll, I would have wanted to take that into account myself as well as make sure the grand jurors took it into account in evaluating his testimony. The situation is no different from one in which a victim in a rape case testifies while also suing the landlord for insufficient security, or having a victim who has a book deal in the works before trial. It can taint the testimony. It's a standard precaution I take with witnesses.
"Secondly, I happen to be a chauvinist for the criminal system and believe that criminal prosecutions are more important than any civil lawsuit. But it is a fact of life that when bad things happen, both the criminal justice system and private civil litigants will take an interest. My advice to all the plaintiffs' bar has been throughout to get out of the way and let us do our job.
"The burden of proof in the criminal system is the highest in the legal system. If we proved our case, the plaintiffs' bar would have plenty of time to make their own cases, and their burden would be much lighter than if the criminal cases had not taken place. That, again, is just a statement of fact. It does not mean that the criminal prosecution was designed to help the plaintiffs' bar.
"If I wanted to help the plaintiffs' bar, I'd just go on out and join them (and probably double my salary in the process). Dickie Scruggs isn't exactly a charity case. He has his own plane. He obviously doesn't need my help making money.
"This is all a little like kicking someone who has their hands tied behind their back. We can't disclose what we know from the grand jury, because there is an ongoing investigation, albeit temporarily enjoined by the federal courts. So while we may have information responsive to some of the points being discussed by people who do NOT have access to grand jury information, we are not at liberty to present the other side of the story.
"I am constantly surprised though at those who, without reviewing one document from the grand jury investigation, will swear on a stack that State Farm did no wrong. How do you know?
"If you would bother to check with our local insurance fraud community, they will tell you that my staff and I work very hard to lock up people who rip off insurance companies. We are just regular state employees doing our job. I sincerely hope the criminal defense bar here does not latch on to your comments and try to discredit my investigators and me in all of our pending cases in which insurance companies are the victim.
"Maybe Mr. Rossmiller considers me collateral damage, but I have three investigators working with me who participated in the State Farm investigation and they deserve better than this. If you want to go after the people who put their names on the ballot or make millions of dollars every year, then have at it, but I would appreciate it if you would at least try to get our side of the story before you drag ordinary people through the mud."