Scruggs quits on Katrina cases

by John O'Brien |
Dec. 4, 2007, 8:00pm



OXFORD, Miss. - No longer will prominent trial lawyer Richard "Dickie" Scruggs represent his clients who have pending Hurricane Katrina-related lawsuits their insurance companies.

Remaining members of the Scruggs Katrina Group have written to those clients represented by the Scruggs Law Firm to inform them that Scruggs will be removing himself as counsel. Scruggs was indicted last week by a federal grand jury on charges that he conspired to attempt to bribe a state judge.

"As you may be aware, criminal charges have been brought against the Scruggs Law Firm in North Mississippi. These charges are unrelated to your claims and to litigation against your insurers," the letter says.

"The Scruggs Law firm has informed us that in the interest of its clients, it has withdrawn from the group of attorneys who represent your claims until these legal matters have been resolved and it is also withdrawing as counsel in your case if filed."

The firms that will continue to represent those clients are Nutt and McAlister, the Barrett Law Office and the Lovelace Law Firm. Don Barrett, of the Barrett Law Office, had written several federal judges Thursday, claiming Scruggs was withdrawing from Katrina cases.

In that letter, Barrett said he would become the new lead counsel for SKG. Scruggs later wrote those same judges to tell them there was a miscommunication, and that he would continue to pursue Katrina claims.

The three remaining firms say they have settled more than 1,300 cases. The letter says Scruggs is maintaining his innocence.

Barrett, like Scruggs, was hired as outside counsel to help the State of Mississippi bring lawsuits against tobacco manufacturers, culminating in 1998's Tobacco Master Settlement Agreement.

The MSA requires participating companies to make annual payments as compensation for the health care costs 46 states and six territories say they incur because of tobacco use. According to a report by the Competitive Enterprise Institute, trial lawyers hired to negotiate on behalf of the states earned $13 billion. The settlement was worth a total of $246 billion.

Scruggs allegedly attempted to bribe a state judge with $40,000 to compel arbitration in a dispute over $26.5 million in attorneys fees earned when Mississippi Attorney General Jim Hood settled part of his lawsuit against State Farm Insurance Cos.

The group stood to make another $20 million had federal judge L.T. Senter approved a settlement involving approximately 35,000 policyholders who had not sued their insurance companies but still could. He did not approve the settlement, though Hood, who received campaign contributions from Scruggs, sued State Farm again for not doing what it took to make the settlement work.

Also indicted in his firm were his son Zach and Sidney Backstrom, while Timothy Balducci and Steven Patterson of Balducci and Patterson.

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