Scruggs contempt case dismissed

John O'Brien Feb. 29, 2008, 1:38pm



BIRMINGHAM, Ala. - A federal judge on Friday dismissed criminal contempt charges against troubled trial lawyer Richard "Dickie" Scruggs, who is still fighting federal charges that he attempted to bribe a state judge.

Federal judge C. Roger Vinson cited a lack of jurisdiction over Scruggs in dismissing the charge. Scruggs was alleged to have violated a judge's order concerning the return of confidential Hurricane Katrina-related documents to State Farm Insurance Cos.

Vinson also said Scruggs was permitted to deliver the documents to Mississippi Attorney General Jim Hood as part of a law enforcement exception contained in federal judge William Acker's Dec. 2006 injunction. He also wrote that there is "a cloud of suspicion" over Hood's request of the documents.

"The injunction specifically and precisely said the documents could be given 'to law enforcement officials at their request,'" Vinson wrote.

"Regardless of the subjective intent that Hood may have had when he requested the documents, the undisputed fact is that he did make such a request. The objective language of the injunction expressly authorized the law enforcement exception, and it must be recognized here.

"Criminal contempt under such circumstances cannot be supported under the law."

Acker's order told Scruggs to return insurance documents obtained through a pair of employees at E.A. Renfroe, Kerri Rigsby and Cori Rigsby Moran. The sisters had been sued by Renfroe.

Instead, Scruggs gave them to Hood, who had sued five insurance companies -- including State Farm -- over their handling of Katrina claims. Renfroe was working with State Farm on the claims.

Acker recommended to U.S. Attorney Alice Martin that Scruggs be prosecuted for contempt, but she declined. Hood had written Martin, urging her not to file charges because Scruggs was acting as a confidential informant for his office. Acker then appointed three special prosecutors to file an indictment.

"For jurisdictional purposes, the undisputed facts are that Scruggs was not a party, nor was he an attorney-of-record or at any time make an appearance in, the Renfroe case," Vinson wrote. "Subject to exceptions discussed infra, it is axiomatic that courts only have power and jurisdiction to enjoin parties before the court."

Vinson also ruled that because the Rigsbys did not attempt to violate the court order, the exception that exists to charge those who aid and abet a violation was not applicable.

"Indeed, Judge Acker held that they had not acted improperly with respect to the injunction; they had given all the documents to Scruggs more than five months before the injunction was entered," Vinson wrote. "An injunction, of course, does not reach backwards in time to action taken prior to the time it was issued.

"Moreover, Judge Acker found that the Rigsbys attempted (even if only halfheartedly) to comply with the injunction by seeking to get the documents back from Scruggs and Hood.

"Specifically, both sisters and their attorney, Greg Hawley, made several phone calls to Scruggs and the Attorney General's Office and requested that the documents be delivered to counsel for Renfroe. This, too, precludes a finding that Scruggs aided and abetted any violation of the injunction."

Of the prosecutors' argument that Scruggs is criminally liable because his delivering the documents to Hood, to whom Scruggs is a campaign contributor, was a "sham," Vinson seemed supportive but concluded there wasn't enough to prevent the dismissal of the case.

"I agree that there is a cloud of suspicion surrounding the agreement between Scruggs and Hood," Vinson wrote. "Scruggs claims that he and Hood believed the documents would be returned to Renfroe and State Farm in violation of the protective order, but he does not explain the basis for this concern.

"Moreover, even if the concern was well-founded in hindsight (as he now argues...), he does not explain how that disclosure to Renfroe would have, or did, impede the criminal investigation. He also does not explain why he did not take his concerns to Judge Acker instead of making after-hour and weekend agreements with Hood.

"The timing of these events and of Scruggs's other cases involving State Farm (one of which was settled just 10 days before the Attorney General returned the documents to counsel for Renfroe) is another reason to be suspicious, as is Hood's unusual letter to United States Attorney Martin, suggesting that Scruggs not be prosecuted for contempt because he was a 'confidential informant.'"

Scruggs is set for a March 31 trial in Oxford, Miss., as he defends himself against charges that he and two others from his Scruggs Law Firm (son Zach and Sidney Backstrom) attempted to bribe Lafayette County Circuit Judge Henry Lackey with $40,000 in exchange for a favorable ruling in a dispute over at least $26.5 million in attorneys fees earned in Katrina settlements.

Two of his alleged co-conspirators, attorney Timothy Balducci and former state Auditor Steven Patterson have pleaded guilty, as has prominent Booneville attorney Joey Langston in another case. Langston says he tried to bribe Hinds Circuit Judge Bobby DeLaughter when he represented Scruggs in another attorneys fees dispute.

Scruggs gained much of his fortune in asbestos and tobacco litigation. His work led to the 1998 Tobacco Master Settlement Agreement, which has an estimated worth of $246 billion for the 52 participating territories and states. Attorneys earned $1.4 billion in the settlement.

Vinson was appointed to Scruggs' contempt case after Scruggs' defense team successfully argued that all judges in the Northern District of Alabama should be disqualified from hearing it.

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