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Scruggs' ethical lapses fail to stunt long career

By Steve Korris | Dec 6, 2007


OXFORD, Miss. - Dickie Scruggs, acting on behalf of three million Mississippians in the 1990s, smuggled stolen documents to Congress, cheated a professor out of millions, and withheld fees from a lawyer he fired, according to the apparent victims of his actions.

Last year Scruggs violated a court order in a Hurricane Katrina suit, and this year he represented a fake company in a forum shopping scheme.

Only when attorneys John Jones and Steven Funderburg of Jackson, Miss. set out to bring even dirtier deeds to light did Scruggs panic.

He allegedly bribed a judge to gain favorable rulings in a suit that Jones and Funderburg filed in March over a fee dispute.

Jones and Funderburg mustered the courage to sue Scruggs after a federal judge in Alabama referred him for criminal prosecution in the apparent theft of confidential documents from State Farm Insurance.

The judge's displeasure must have shocked Scruggs, for his previous venture into stolen documents had succeeded.

In 1995, while Mississippi and other states pursued suits against cigarette makers, members of Congress publicized internal reports of Brown and Williamson.

Brown and Williamson applied for subpoenas compelling the politicians to identify the source of the documents.

The politicians opposed the subpoenas on constitutional grounds, and the struggle headed to the U.S. Supreme Court.

Scruggs resolved the conflict by stepping forward and announcing that he gave the documents to Congress.

Attorney General Mike Moore had retained Scruggs as special assistant attorney general to pursue the state's claims.

With no further need for subpoenas, the Supreme Court declared the matter moot.

The cigarette makers settled Mississippi's claims, and a legion of lawyers shared more than $250 million in fees.

In 1998, Scruggs fired attorney Juliet Jowett and she filed a sex discrimination suit.

After a federal judge dismissed her suit, she sued Scruggs seeking recovery of millions in fees from asbestos cases.

Jackson County Chancery Court awarded Jowett $420,000. She appealed to increase the award, but the Court of Appeals denied her petition.

By then, professor Richard Daynard of Northeastern University in Boston had sued Scruggs and the South Carolina firm of Ness Motley in Suffolk County court in Boston.

Daynard alleged that Scruggs promised him 5 percent of fees from all settlements, in return for his research. Daynard claimed the firms would receive billions in fees.

Daynard claimed he bought himself out of his teaching job so he could work full time on tobacco research.

Scruggs removed the suit to federal court in Boston and moved to dismiss, challenging the court's personal jurisdiction over him.

A federal judge dismissed Scruggs, but the First Circuit Court of Appeals reversed the decision.

The First Circuit found that, "Scruggs says Daynard was a volunteer, but reasonable inferences support Daynard's version."

Scruggs petitioned the U.S. Supreme Court to overturn the First Circuit decision, but in 2002 the Supreme Court denied his petition.

Daynard and Scruggs immediately settled.

Last year, in a Hurricane Katrina case, Scruggs and attorneys for Allstate Insurance agreed on a scheduling order before U.S. District Judge L.T. Senter Jr.

Scruggs then filed an amended complaint, but Senter rejected it.

Senter wrote, "...it is clear that plaintiffs filed the second amended complaint on their own and contrary to the scheduling order deadline."

This April 25, Scruggs filed suit in federal court in Mississippi against Verizon Wireless, alleging infringement of a patent.

He sued on behalf of Greenville Communications, a Mississippi corporation.

This Aug. 27, U.S. District Judge Allen Pepper refused to hear the case.

He found that Greenville Communications was formed March 28, and that it received the rights to the patent by transfer from a New Jersey company on April 6.

He found that Greenville Communications kept a small office in Greenville, with no employees.

He ruled that more likely than not, the New Jersey business formed Greenville Communications to avoid New Jersey venue.

None of these actions dented Scruggs's reputation or resulted in any accountability.

In fact, the U.S. Court of Appeals, Fifth Circuit, granted Scruggs an enormous victory Nov. 19, even as Lafayette County judges recused themselves from the Jones case.

The Fifth Circuit upheld Senter in denying a motion of State Farm to disqualify the entire Scruggs Katrina Group from suits against it, due to the theft of documents.

State Farm waited too long to seek disqualification, Senter had ruled. He held that the insurer negotiated with the group while it knew the group possessed its documents.

The Fifth District declared itself "satisfied that Judge Senter has carefully weighed the balance between the need to ensure ethical conduct on the part of lawyers and other social interests, including litigants' right to choose their counsel."

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