State court circus might match federal drama in Scruggs case

John O'Brien Jan. 17, 2008, 6:17pm


OXFORD, Miss. - Attorney Grady Tollison thinks that if things were any worse in Oxford, it would be really bad for his safety.

"I apologize if I'm being flippant, but other than murdering your opposition, I don't know if there's anything worse than judicial bribery in terms of litigation," said Tollison, who is representing John Jones in his case against indicted trial lawyer Richard "Dickie" Scruggs.

It is that case that has created the closely watched saga of Scruggs, scheduled to go on trial March 31 to defend himself against accusations that he and two other members of his Scruggs Law Firm (son Zach and attorney Sidney Backstrom) attempted to bribe the judge who formerly presided over Jones' case.

While the case being built by federal prosecutors who have already received guilty pleas from two alleged co-conspirators and Scruggs' former attorney Joey Langston, receives the bulk of attention from the media, Jones' case in Lafayette County Circuit Court may provide a capable sideshow.

Future possibilities include an evidentiary hearing on the federal charges against Scruggs, an examination of allegations made in a sexual harassment suit, sanctions against the defendants and a jury trial. Or the case could simply go to arbitration.

"This entire cause of action and the proceedings that have flowed therefrom have been forever tainted, infected by criminal allegations of corrupt acts of certain defendants or of their agents," Tollison wrote in a motion in December.

The firm of Jones, Funderburg, Sessums, Peterson & Lee was one of five that joined to create the Scruggs Katrina Group for the purpose of pooling resources to sue insurance companies after Hurricane Katrina. It had previously represented Scruggs in another attorneys fees dispute, one that led to the guilty plea of Langston.

Tollison says no real agreement was ever agreed upon with respect to dividing the fees. A mass settlement of 640 cases against State Farm yielded $26.5 million in fees.

With no agreement, Jones felt the fees should have been split evenly five ways. The firm Nutt & McAlister was essentially the bank for the group and expected 35 percent, and was one of four firms that voted to kick Jones' firm out of the SKG. They offered Jones 6 percent.

Federal prosecutors claim Scruggs and four others conspired to bribe Lafayette County Circuit Court Judge Henry Lackey with $40,000 to compel arbitration.

The first few months of the case were easily contained in a single file. After Scruggs was indicted Nov. 28, the motions began piling up to the point where the limits of a fourth folder are currently being tested. Clerks at the courthouse don't bother to put the folders back on the shelf.

Tollison's request for sanctions against the SKG will seemingly put a halt to the paper rush. Special Judge William Coleman wrote Tuesday that he would have compelled arbitration if not for the issue of sanctions.

Tollison wants the defendants' Motion to Stay Proceeding and Compel Arbitration removed from the pleadings. On Feb. 26, the two sides will argue if the Court has the ability to do so.

"If we prevail and the Court decides it does have the authority, we can have an evidentiary hearing the bribery attempt," Tollison said. "The Court can strike pleadings and dismiss the case as a sanction. It's done it for discovery issues, and it's done it for perjury issues.

"We don't have a particular case of bribery, but bribery is much worse than a discovery violation."

The defendants feel they don't even have a case of bribery on their hands, writing in their response to the motion that, "The criminal indictments of Mr. Scruggs and others are, of course, very serious allegations, and these defendants certainly trust that the indictment's allegations will prove to be unfounded."

Adding to the intrigue is a sexual harassment case filed in federal court against Nutt & McAlister. Though it details female employees being paid for sex acts performed in a closet and one worker photographing his genitalia and showing it to the plaintiff, Tollison was more interested in something else.

The complaint says Mary McAlister violated the order of a federal judge in Alabama who demanded that confidential documents from State Farm be returned to the company. They had been leaked to the SKG by a pair of sisters who formerly worked for a claims-handling company.

Scruggs has been charged with criminal contempt in the matter. Maria Brown says McAlister told her that the documents were saved on the firm's local Internet server, meaning they were part of the public domain and not subject to the order.

Tollison called it "conduct in direct violation of a U.S. District Judge in Alabama." He added that the entire group of defendants is responsible for the actions of the others.

Citing a state Supreme Court decision, he wrote, "If the partner acted within the course and scope of actual or apparent authority, then even liability for fraudulent wrongs can be imputed to the partnership. The other partners, though innocent without knowledge of the act or omission, can be vicariously liable."

All of this just to determine whether the matter will go before an arbitrator. Of course, there is a lot of money up for grabs -- more than the reported $26.5 million. The SKG reached at least four other settlements.

Nationwide Insurance has asked to intervene in the case in order to protect the confidentiality of its settlement.

If Tollison has his way, it will be a jury that decides how all that money is split.

"If clear and convincing evidence of the bribery attempt is presented, the Court should strike the defendants' motions to stay proceeding and compel arbitration and also the defendants' answer," he wrote.

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