Scruggs
OXFORD, Miss. - Special Judge William Coleman has granted himself authority to enter default judgment against attorney Dickie Scruggs for bribing a judge, but he wants proof before he will exercise his authority.
Coleman said Feb. 26 that he would hold a hearing on evidence that Scruggs conspired to bribe Lafayette County Circuit Judge Henry Lackey.
He held that under his authority to impose sanctions he could strike all of Scruggs's pleadings and grant default judgment to plaintiff John Jones.
Coleman ruled that he could strike the pleadings not only of Scruggs but also of defendants who don't face bribery charges.
Jones and the defendants belonged to the Scruggs Katrina Group, which represented hurricane victims in insurance disputes.
Jones sued Scruggs in Lafayette County circuit court last March, claiming he didn't receive fees he earned in settlements of lawsuits.
Grady Tollison of Oxford, representing Jones, claimed Scruggs followed a "modus operandi" of luring lawyers into cases and cheating them.
Jones also sued group members Don Barrett Law Office, the firm of Nutt and McAlister, and Lovelace Law Firm.
Larry Moffett of Oxford, representing Scruggs and the rest of the group, moved to compel arbitration.
The group agreement required arbitration of disputes, but Tollison answered that Jones demanded arbitration and Scruggs refused it.
Judge Lackey heard the motion in July but rendered no decision.
In November, grand jurors at U.S. district court in Oxford indicted Scruggs, his son Zach Scruggs, former state auditor Steve Patterson and attorneys Tim Balducci and Sidney Backstrom on bribery charges.
The jurors alleged that the conspirators gave Lackey $40,000 in exchange for a favorable ruling.
Lackey and two other local judges recused themselves, and the Mississippi Supreme Court appointed Coleman to preside over the case.
Moffett withdrew as Scruggs's lawyer, and Cal Mayo of Oxford replaced him.
Moffett continued as counsel for the other defendants.
Jones moved in February for "appropriately severe sanctions," calling on Coleman to strike pleadings and enter default judgment.
In response, Scruggs persisted in demanding arbitration.
At the courthouse on Feb. 26, Tollison urged Coleman to preserve the court's integrity and send a message to the public, lawyers and judges.
He said that among 7,000 licensed lawyers in Mississippi, more than half went to law school in Lafayette County.
Answering a defense argument that the bribe didn't harm Jones, he said, "The entire judicial system has been harmed."
He said he hadn't found a similar case and he added, "Thank goodness."
For Scruggs, Mayo told Coleman he couldn't withhold arbitration.
He said federal law expresses strong preference for arbitration.
For the other defendants, Moffett told Coleman he could impose sanctions but he couldn't deny arbitration.
"There is no basis for denying arbitration to my clients who have not been charged with anything," Moffett said.
Tollison said he needed discovery on the knowledge of all defendants about the bribe.
At the time of the bribe, he said, one firm represented all defendants.
In joint defense, he said, all defendants are responsible for all that happens.
"This court decides what is arbitrable," Tollison said.
Coleman said the right of arbitration had not attached to the suit.
"That point has not been reached," he said.
He said the American Arbitration Association handbook provides for court sanctions if abusive conduct occurs in the judicial arena.
At the time of the alleged misconduct, he said, a motion was pending before Judge Lackey.
"Thus the case was still in the judicial arena," he said.
To ignore that fact would allow a "win win result," he said.
If a bribe brought a favorable ruling the offender would win, he said, and if the court couldn't strike pleadings the offender again would win.
He said plaintiffs charged that misconduct of one applied to all, and defendants responded that plaintiffs cited no controlling authority.
"The court is of the opinion that the action of one is the action of all in this matter," he said.
If Coleman grants default judgment, the suit would proceed to calculation of the amounts that Scruggs and the others owe Jones.
Coleman said he would hold a hearing on bribery evidence after March 31, the scheduled date of Scruggs's criminal trial in federal court at Oxford.
Scruggs's son Zach Scruggs will stand trial with his father. So will attorney Sidney Backstrom.
Former state auditor Steve Patterson and attorney Tim Balducci have pleaded guilty to conspiracy charges and agreed to testify against Scruggs.