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KLG taking advantage of Scruggs' contempt dismissal

By John O'Brien | Mar 4, 2008

Don Barrett


GULFPORT, Miss. - The remaining members of the former Scruggs Katrina Group are hoping a federal judge in Alabama has proven their point.

Those firms on Monday filed a Notice of Supplemental Authority, alerting U.S. District Judge L.T. Senter that the criminal contempt charges that high-profile trial lawyer Richard "Dickie" Scruggs was facing have been dropped.

State Farm Insurance Cos. and claims-handler E.A. Renfroe & Co. want the remaining SKG firms disqualified from all Katrina cases because of their associations with Scruggs.

The notice was filed in the civil lawsuit brought by Pamela and Thomas McIntosh against State Farm. They allege State Farm intentionally misrepresented the amount of damage caused by wind (covered by their policy) and water (covered by a federal program) after Hurricane Katrina.

The firms, now called the Katrina Litigation Group, say State Farm and Renfroe "extensively cited the record from that litigation and discussed Judge (William) Acker's request for a criminal contempt prosecution against Richard Scruggs as support for their MTDQs."

Acker's Dec. 2006 order told Scruggs to return insurance documents obtained through a pair of employees at Renfroe, Kerri Rigsby and Cori Rigsby Moran. The sisters have been sued by Renfroe.

Instead, Scruggs gave them to Mississippi Attorney General Jim Hood, who had sued five insurance companies -- including State Farm -- over their handling of Katrina 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.

Judge C. Roger Vinson ruled Friday that because Scruggs was not the Rigsbys' attorney-of-record on their case, the court had no jurisdiction over him. He added that a law enforcement exception in the order allowed Scruggs to give the documents to Hood.

"Also, Judge Vinson held that the Rigsbys did not violate Judge Acker's injunction and thus, that, Scruggs did not 'aid and abet' the Rigsbys in any such violation," the notice says.

Facing federal charges that he attempted to bribe a state judge in a dispute over at least $26.5 million in attorneys fees from Katrina settlements, Scruggs withdrew his Scruggs Law Firm from the SKG. That left Nutt & McAlister of Ridgeland, Miss., Barrett Law Offices of Lexington, Miss., and Lovelace Law Firm of Destin, Fla.

State Farm argues that Scruggs' decision to pay the Rigsbys $150,000 salaries as litigation consultants constitutes bribery, and that the other firms working with Scruggs are liable as accessories.

"State Farm's and its counsel's dishonest personal attacks on Plaintiffs' chosen attorneys have crossed the line that separates aggressive advocacy from improper and vexatious litigation tactics," wrote Dewitt Lovelace Jan. 28.

"State Farm's Counsel have abused their roles as Officers of the Court by cobbling together gossip, out-of-context quotes and innuendo to poison the jury pool, confuse, the facts and distort the law."

In a reply to one of the KLG's arguments, State Farm in February said much of its case rests on the group's connection to another insider, Brian Ford.

Ford is a former engineer at Forensic Analysis and Engineering Corp. who performed the analysis of the McIntoshes' home and kept a journal that has been submitted as an exhibit. Scruggs offered Ford indemnity, a $10,000 monthly retainer and a percentage of each settlement work for the SKG to become a "fact witness" and "consultant" on a case, State Farm alleges.

The KLG represents 1,100 Mississippi claims and more than 450 involving State Farm.

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