Full five for emotional, regretful Scruggs

By Victoria Johnson Hoggatt | Jun 27, 2008

Dickie Scruggs

The Scruggs Law Firm in downtown Oxford before Scruggs pleaded guilty

OXFORD, Miss. (Legal Newsline) - With his attorney's supportive arm around him and a federal prosecutor offering a chair, famed plaintiffs lawyer Richard "Dickie" Scruggs' knees buckled a bit Friday as a federal judge prepared to hand down his prison sentence.

The result was not what Scruggs, an admitted conspirator in an attempt to bribe a state judge, had hoped. The 62-year-old multi-millionaire whose work has been portrayed in movies will be going to prison for five years.

"I disappointed everyone in my life, my wife, family, son and friends," Scruggs told U.S. District Judge Neal Biggers. "I deeply regret my conduct."

With that, one chapter in the saga of Scruggs ended. He will be incarcerated Aug. 4.

The five-year sentence was the maximum allowed under Scruggs' plea deal with federal prosecutors, who first alleged in November that Scruggs attempted to bribe Lafayette County Circuit Court Judge Henry Lackey with $50,000 in exchange for a favorable ruling in a dispute with a former business partner over at least $26.5 million in attorneys fees.

Scruggs had asked for only a 2 1/2-year sentence, while federal prosecutors recommended all five years.

Biggers said he was "personally shocked" when he first heard of the case, a shock that was sustained when he first saw the Government's evidence.

The harshness of the sentence -- which includes a $250,000 fine, three years of supervised release and the price of his incarceration -- can be traced to Scruggs' motives. Biggers said there is a difference between a criminal stealing out of necessity and what Scruggs did.

A 2003 audit of Scruggs in an asbestos fees dispute showed a net worth of approximately $200 million.

"The justice system has made you a rich man," Biggers said.

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. The case, and Scruggs' work, was depicted in the Al Pacino/Russell Crowe film "The Insider."

After 2005's Hurricane Katrina, he grouped together a handful of law firms to create the Scruggs Katrina Group. The group represented insurance policyholders who believed their insurance companies 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 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.

Son Zach pleaded guilty misprision of a felony, meaning he knew about the scheme but did nothing to prevent it. Backstrom, who will be sentenced later Friday, faces a maximum sentence of three years, and the rest of the former SKG members have been disqualified from representing Katrina victims.

Biggers told Scruggs that he had turned his back on "the privilege of practicing law" and said he would consider Scruggs' request to be jailed in Pensacola, Fla.

In calculating the sentence, Biggers weighed the perceived benefit of the bribe. Scruggs attorney John Keker claimed only the $50,000 that was offered should be used, but federal prosecutors said Jones and Scruggs were more than $4 million apart on what each felt Jones was owed.

In the end, Biggers used a figure of $400,000. He did not take evidence of other crimes in Hinds County into account.

Hinds County Circuit Judge Bobby DeLaughter presided for years over a dispute between Scruggs and former partner William Roberts Wilson, Jr. The two had teamed up on asbestos cases and disagreed over the amount of fees Wilson was owed after he sold his interest in the enterprise.

A special master recommended DeLaughter rule Wilson was owed $15 million, but DeLaughter instead decided in 2006 that Wilson was already paid in full when Scruggs gave him $1.5 million.

Booneville attorney Joey Langston, who represented Scruggs in the latter part of the case and formerly employed Balducci, pleaded guilty to attempting to bribe DeLaughter with consideration for a federal judgeship. Scruggs' brother-in-law, then-Sen. Trent Lott, was able to make recommendations to President Bush.

Ultimately, after what has been described as a "courtesy call," Lott gave his support to another candidate.

Prosecutors in the Lafayette County case had planned to introduce evidence from the Hinds County case during Scruggs' trial under a federal rule that allowed for evidence of similar acts being presented.

"I could not be more ashamed," Scruggs said.

From Legal Newsline: John O'Brien contributed to this report. He can be reached by e-mail at john@legalnewsline.com.

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