Attorney: Scruggs indictment not looking good for AG Hood

By John O'Brien | Nov 29, 2007



Editor's note: This story is the first of two featuring the thoughts of David Rossmiller, an insurance attorney and partner at Dunn Carney in Portland, Ore., on the Wednesday indictment of trial lawyer Richard Scruggs.

JACKSON, Miss. - Where Richard "Dickie" Scruggs' name goes, Mississippi Attorney General Jim Hood's sometimes seems to follow -- and vice versa.

Now that Scruggs has been indicted for allegedly attempting to bribe a state judge, that might not be a good thing.

The prominent trial lawyer and subject of the 1999 film "The Insider" (starring Russell Crowe and Al Pacino), was charged with the crime Wednesday by a federal grand jury. He is alleged to have offered Lafayette County Circuit Court Judge $40,000 to enter an order compelling arbitration in a lawsuit between his firm and another.

"(Scruggs' indictment) is really embarrassing to Hood, as many things have been lately," said insurance attorney David Rossmiller, a partner at Dunn Carney in Portland, Ore., who has been analyzing the Gulf Coast's insurance situation for Legal Newsline.

The two sides were fighting over how to split up $26.5 million in attorneys fees that came when 640 Hurricane Katrina-related lawsuits were settled as part of an agreement between Hood and State Farm Insurance Cos. That class action suit was filed against five insurance companies alleged to have intentionally misrepresented the amount of damage caused by wind (covered by the policies) and water (covered by a federal flood program).

Hood has since been sued by State Farm, which argues he keeps threatening criminal prosecution against the company in order to force through another settlement that did not receive the approval of a federal judge. Scruggs stood to gain another $20 million had U.S. District Judge L.T. Senter signed off on the agreement.

"He's getting punched around like a bobo doll by State Farm, and a lot of the people who got indicted are associates of his," Rossmiller said. "It's kind of like one of those photos where all of a sudden you wish you could airbrush some of the people you are with out of the photo."

Also indicted were Scruggs' son Zack and Sidney Backstrom, both attorneys with the Scruggs Katrina Group, as well as Timothy Balducci and Steven Patterson of the firm Patterson and Balducci.

Both Dickie Scruggs and Balducci contributed to Hood's campaign in 2003. Balducci formerly worked at the Langston Law Firm, which is representing Scruggs and earned $7 million when it was hired by Hood as outside counsel when the State sued MCI for back taxes it allegedly owed.

Joey Langston, the son of firm founder Joe Ray Langston, also contributed to Hood's campaign in 2003, a fact that drew criticism from Republican challenger Al Hopkins, whom Hood soundly defeated in the general election held earlier this month.

Meanwhile, Patterson gave Hood $10,000 in 2007, which can be considered small potatoes when compared to Scruggs. Special prosecutors who indicted Scruggs for criminal contempt in Alabama say he has given Hood $44,000.

In that indictment, Scruggs is alleged to have defied a judge's order to return documents from a claims-handling company working with State Farm to the company's attorneys, instead handing them over to Hood. The prosecutors wrote that there existed a "remarkably close relationship" between Hood and Scruggs.

"I think there is a very good possibility that things may get more embarrassing for Hood," Rossmiller said. "I'm not implying that he's done anything wrong or crooked, but the lawsuits State Farm has going continue to bring out details that demand explanation from Hood."

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