State Farm wants to hear Scruggs' silence in person

John O'Brien Jan. 30, 2008, 4:13pm




HATTIESBURG, Miss. - State Farm Insurance Cos. is not on board with Mississippi Attorney General Jim Hood's reluctance to let indicted trial lawyer Richard "Dickie" Scruggs personally plead the fifth in a deposition.

In its suit against Hood, State Farm on Wednesday submitted a bench memorandum that criticizes Hood for his suggestion that the two sides should forego the Friday deposition of Scruggs, currently awaiting his judicial bribery trial, because Scruggs' counsel has advised him not to answer any questions.

"(Hood attorney J. Lawson Hester's) proposal that the Parties stipulate that Mr. Scruggs will not answer any questions by either side would produce a nearly worthless result that would deprive State Farm of any useful negative inference," the memo says. "This is because in order to draw a negative inference, there must be a specific question that the witness has declined to answer on Fifth Amendment grounds."

Hood sued State Farm and four other insurance companies weeks after 2005's Hurricane Katrina, arguing that they misrepresented the amount of damage covered by their policies was done by the storm. He also opened a criminal investigation.

The sides reached a settlement that was later disallowed by a federal judge, and State Farm claims Hood is attempting to reopen the criminal investigation he agreed to drop in order to force civil settlements.

Scruggs, meanwhile, has been in the middle of Katrina litigation. He formed the Scruggs Katrina Group with a handful of other firms, which made $26.5 million in attorneys fees in an approved settlement of State Farm cases.

Through a pair of sisters who worked for a claims-adjusting company, Scruggs came into possession of confidential documents that he says shows State Farm's guilt. When ordered by a federal judge to return the documents to State Farm's attorneys, he gave them to Hood.

For that, Scruggs, a campaign contributor to Hood, has been charged with criminal contempt in Alabama. He has also been charged with conspiring to bribe a state judge in a dispute over the Katrina attorneys fees and faces a maximum 75-year sentence.

His attorney, John Keker of San Francisco, says that Scruggs will not answer any questions during the Friday deposition because of his Fifth Amendment right not to incriminate himself, his Sixth Amendment right to be joined by his counsel (Keker is not able to be there) and because he did not have enough notice of the deposition, ordered last week.

"To date, Mr. Scruggs has made no filing in a Northern District alias proceeding seeking to stop or delay his deposition, even though he has known of the coming proceeding since at least last Thursday, Jan. 25, 2008," the memo says. "If Mr. Scruggs desires to stop or delay the deposition, he has every right to file a Northern District alias proceeding and an appropriate motion.

"The fact that Mr. Scruggs has not done so and that it is General Hood - not Mr. Scruggs - who is seeking to stop the deposition is very telling indeed. General Hood is clearly concerned that his co-conspirator will either tell the truth or invoke the Fifth Amendment on specific questions related to their extortion conspiracy.

"To avoid the adverse inferences the Court may draw from Mr. Scruggs' testimony, General Hood proposes a stipulation, from which no adverse inference likely will be drawn."

In a letter to U.S. District Magistrate Judge Michael Parker, Lawson laid out his suggestion. He claims it is pointless to undergo a costly deposition when Scruggs is not planning on saying anything.

"Yesterday, and before writing this letter, I proposed to Mr. (Barney) Robinson for State Farm that the parties should either stipulate (in an evidentiary stipulation) that Mr. Scruggs either (a) will not answer any questions from either side, either State Farm or the Attorney General, or (b) to stipulate to the specific questions each side would have asked at the deposition but which would not be answered by Mr. Scruggs -- all in lieu of incurring the expense of a deposition which is in reality to be a non-event due to the advice of Mr. Scruggs' counsel," the letter said.

Hood has drawn criticism in the state for his apparent decision to not prosecute Scruggs on the judicial bribery charges. Joey Langston and Timothy Balducci, former co-workers at The Langston Law Firm who were hired by Hood to represent the State in a lawsuit against MCI, have pleaded guilty to bribery charges.

Hood said he will not prosecute Langston because of a conflict of interest that exists because Langston performed state work. Langston's firm has contributed more than $100,000 to Hood's two campaigns.

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