JACKSON, Miss. (Legal Newsline) - Upset with a federal judge's criticism of his relationship with famed plaintiffs attorney and admitted felon Richard "Dickie" Scruggs, Mississippi Attorney General Jim Hood said Friday he is planning to fight back.
William Acker, an Alabama federal judge who on Thursday called for $65,000 in sanctions to be paid by Scruggs and a pair of sisters who stole confidential documents from State Farm Insurance Cos. after 2005's Hurricane Katrina, described Hood as Scruggs' "friend, associate and close confidant."
Scruggs escaped prosecution for not returning the documents to E.A. Renfroe & Co., which worked with State Farm on assessing damage done by the storm, by giving them to Hood, taking advantage of stipulation in Acker's Dec. 2006 injunction that allowed them to be turned over to law enforcement officials, according to another judge.
Acker called Hood a "so-called 'law enforcement official.'"
"We intend to file a motion asking the court to revise such uncalled-for derogatory conclusions," Hood said.
"The rules of judicial performance do not allow a court to engage in unnecessary attacks on officers of the court, particularly when they are not even parties to the litigation.
"This Judge interfered with a grand jury investigation and we believe that either he, an appellate court, or the Alabama Commission on Judicial Performance will remedy this situation."
Acker's Dec. 2006 order told Scruggs, who is awaiting sentencing after pleading guilty in March to bribing a Mississippi state judge, to return insurance documents obtained through a pair of employees at E.A. Renfroe, Kerri Rigsby and Cori Rigsby Moran. The sisters have been sued by Renfroe.
Instead, Scruggs gave them to Hood, who had sued five insurance companies -- including State Farm -- over their handling of Katrina claims. He also pursued a criminal case against State Farm, while campaign contributor Scruggs had formed his own business enterprise for the purpose of clustering Katrina clients, terming it the "Scruggs Katrina Group."
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.
Florida federal judge Roger Vinson dismissed the charge in February, citing a lack of jurisdiction over Scruggs because Scruggs was not the sisters' attorney. Had that not been the case, Vinson wrote he still would have dismissed the charge because of the law enforcement exception.
On Thursday, Acker found Scruggs in contempt, as well as the Rigsby sisters, disagreeing with Vinson's prior reasoning.
"Applying Judge Vinson's reasoning, if the Rigsbys had had possession of the illicitly acquired materials on Dec. 8, 2006, the date of the injunction, they could, with impunity, have deposited the materials with General Hood, like Scruggs did, in reliance upon the supposed 'law enforcement official' exception," Acker wrote.
"On that date, the Rigsbys still had some stolen materials in their possession. They were not as clever as Scruggs was. Instead of hiding the materials with General Hood, they quickly endeavored, if not with complete dedication or success, to comply with the clear mandate of the injunction.
"They had no problem understanding it. Scruggs looked for a loophole, and, according to Judge Vinson, found it, that is, with the help of his friend, a so-called 'law enforcement official.'
"Judge Vinson gave Scruggs the benefit of what, this court believes, was a manufactured doubt about the meaning of the injunction. Under the totality of the bizarre circumstances, this court shares with the general public its perception that what Scruggs did was too cute by half."
The $65,000 is to be paid to Renfroe's attorneys. Because of Scruggs' relationship with the Rigsbys (he gave them $150,000 per year consulting jobs after they left Renfroe), the remaining members of the SKG have been disqualified from all Katrina suits. State Farm likened the Scruggs/Rigsbys agreement to bribing a witness.
Scruggs first made a name for himself in asbestos cases, representing shipyard workers. After that, his work led to the 1998 Tobacco Master Settlement Agreement, which has an estimated worth of $246 billion for the 52 participating territories and states.
After 2005's Hurricane Katrina, he brought together a handful of law firms to create the SKG. The group represented insurance policyholders who believed their insurance providers were misrepresenting the amount of damage done to their properties by wind (covered by the policy) and water (covered by a federal program).
More than 600 cases were settled early in 2007, earning the SKG $26.5 million in attorneys fees. John Griffin Jones filed suit against Scruggs, claiming his firm was shortchanged when the money was divided.
Scruggs admitted that he gave the go-ahead for attorney Timothy Balducci to offer $50,000 to Lafayette County Circuit Court Judge Henry Lackey for a ruling that would have sent the dispute to an arbitration panel. Balducci pleaded guilty in November to the scheme, and his business partner Steven Patterson, a former state Auditor, soon followed.
Lackey contacted the FBI soon after Balducci's first mention of a bribe. Scruggs agreed to a maximum prison sentence of five years, pleading guilty to a conspiracy charge while the other five were dropped.
From Legal Newsline: Reach John O'Brien via e-mail firstname.lastname@example.org.