, one of five people indicted in the alleged Scruggs scheme to bribe a state court judge, has been circulating around Mississippi, and the authenticity of it appears to check out. The letter is by Stephen Livingston, the president of the Union County bar association, to the General Counsel of the Mississippi Bar, and raises issues of whether Patterson, a non-attorney, was wrongly representing himself to be a lawyer or practicing law without a license. Make sure you keep reading through the attachments. including further letters by Livingston, until you get to the letter by Tim Balducci to Livingston.
[UPDATE: A reader raised the question that, since page 3 of the nine pages of the fax is missing from the documents I have, and that this page would appear to be the page of the August 1 letter that bore the signature of the writer, that it may not be Balducci that wrote the letter, but rather Steve Patterson. I will try to check this out and get back to you].
From the dates of the letters and the time on the fax line on top of the documents, it would appear Balducci got word of the inquiry from the state bar and immediately fired back a letter to Livingston that was built around the sarcastic premise that some nut had stolen Livingston's letterhead. Check out this paragraph:
These letters are of particular concern to me personally as they clearly evidence the warped inner-workings of the mind of an obviously disturbed and confused individual, as I am sure you will agree. The references in the letters to the writer's scouring of the internet, phone books and newspapers about me and my firm strikes me as border-line stalking. Frankly, they make me wonder if the unidentified author of these letters might have a "man crush" on me or other members, colleagues. associates [add appropriate terminology to your satisfaction here to refer to same], of my firm.
(Emphasis in original).
Harsh! Did you see that? Balducci "man crushed" him! Now, I do not claim to be a psychologist (however, I have seen people play psychologists on TV!), but this kind of fighting spirit would not seem to me to be that of a man who, as of the date of the letter -- August 1 -- has been turned by the FBI and knows Patterson, himself and his whole firm are on the verge of far greater problems than allegedly causing confusion over whether Patterson is a lawyer. So this correspondence would tend to support a theory that Balducci did not begin cooperating with the FBI and prosecutors -- if in fact he did so prior to his recent plea agreement -- until after August 1.
As I have mentioned, the otherwise seemingly inexplicable "extra $10,000" payment that Balducci allegedly told Dickie Scruggs was needed to bribe the judge is evidence that Balducci was cooperating at that point (Balducci apparently never delivered the money to the judge -- what would be the point if he were cooperating, since both Balducci and the judge would have known the transaction was fake), and that Balducci went back to Scruggs to get additional incriminating evidence at the direction of prosecutors. But that was in early November. The Balducci "man crush" letter was three months earlier -- long after the bribery scheme allegedly began in March, but perhaps with an FBI confrontation of Balducci some time yet in the future.
[NOTE: I originally added this as an update to the Scruggs Nation post of today, but then thought this story deserves its own post so it doesn't get lost in a post many folks have already read.]
The sun never sets on the Scruggs Nation. Just when I thought my blog work for the week was done, I came across . Check out this excerpt:
Ten years after the Supreme Court of Mississippi turned the Attorney General's office into a mint cranking out easy money for lucky lawyers, the luckiest one of all has dragged the whole state down in disgrace.
Dickie Scruggs of Oxford arranged a $40,000 bribe for Lafayette County Circuit Court Judge Henry Lackey, according to an indictment from a federal grand jury.
Lackey reported the bribe to authorities and cooperated in an eight month investigation.
Scruggs apparently panicked when a lawyer who had defended him in a lawsuit sued him and set out to prove that he routinely cheated lawyers who worked with him.
The story goes into extensive details about the legal culture created when then-Mississippi AG Mike Moore started the practice of hiring lawyers as special assistant attorneys general -- continued under current AG Jim Hood -- to prosecute what was in essence private litigation.
The scandal stunned the state but it would not have surprised the late Kirk Fordice, former governor of Mississippi.
Fordice tried to keep Moore from hiring private lawyers to sue private companies, but in 1997 the Supreme Court ruled in Moore's favor.
The Court held that the Attorney General could seek to recover Medicaid funds from cigarette makers and other defendants, even if the governor had not asked him to do so.
Andy Taggart of Jackson, Fordice's chief of staff from 1992 to 1994, said Fordice felt that state agencies should initiate litigation.
"His belief was that as chief executive of the state he was the representative of the state as client and the Attorney General was the lawyer for the client," Taggart said.
He said, "He believed that it was inappropriate for the Attorney General to seek to set policy by litigation."
Fordice and Moore strongly disagreed about putting the strength of the people behind privately run civil litigation, he said.
"The wheels that were set in motion by this state driven private litigation can result in all manner of mischief even when people's motives are good," Taggart said.
And this e-mail exchange between Steve Funderburg and Scruggs is a must-read:
Jones claims that on March 2, at a meeting of the Scruggs Katrina Group, Barrett offered him six percent, about $1,500,000.
Jones claims he turned it down and asked again for arbitration.
His associate, Steve Funderburg, vented in a March 4 e-mail to Scruggs.
"I have looked in the mirror all weekend and tried to figure out how I could be so stupid," he wrote. "John and I DEFENDED you in fee dispute litigation for God's sake."
He wrote, "We DEFENDED you when people said you were greedy, or were a back stabber, or a liar, or anything else."
He wrote, "You have developed a good routine. It worked. But go to your grave knowing that you have shaken my belief in everything I hold dear."
He wrote, "I did not believe that people like you really existed. I am ashamed and will always be ashamed of having defended you and protected you."
Scruggs wrote back, "I respect and am grateful for the devoted efforts you and Johnny made in your representation of me and those in privity in the Wilson/Luckey matters."
Scruggs added that the group had become leery of working with them because they might seize upon a pretext to sue.
A great story, one of the best that has been done so far on the current Scruggs controversy. Read it all.
While waiting for the next big development in the Scruggs affair and Katrina litigation, now is a good time to do some clean up and deal with some loose ends. After the exhausting last nine days, I'm going to try to keep this post relatively short and get back to my regular posting schedule of basically one post a day, Monday through Friday. Oh yes, and one other thing -- I'll try to get some sleep. We shall see if events allow this or if I'm just dreaming.
Jones v. Scruggs attorney fee dispute
for court control of attorney fees of the Scruggs Katrina Group. A few other stories on this you may be interested in: and (thanks to Peter Lattman for the shout out).
Wall Street Journal story on Katrina litigation rulings
(subscription required) by Liam Pleven and Lattman on the changing landscape of Katrina litigation. Because the changing landscape of Katrina litigation has been more or less all I've written about here for a year, you know this is one of my favorite subjects in the world, and I can and have gone on at great lengths about this. Today, however, in the interests of brevity, let me just refer you to the story, which does a good job of summarizing where things stand. (Story also has a quote from me).
Well, I guess we both knew I couldn't really stop there, right? The story is written for a general audience about a general topic, so it doesn't go into specifics about the legal issues in the Katrina appellate cases. I'll have more to say about the specifics in the coming weeks. I have spent enormous amounts of time trying to master the core legal issues, and one of the trickiest and most difficult, and therefore the one that is closest to my heart, is the anti-concurrent cause provisions of Katrina policies. As you may or may not be aware, I suffered over and fought with anti-concurrent cause at length this summer and fall as I wrote a piece for Appleman's Critical Issues on the subject, . This was an extraordinarily difficult subject to present in a readable, entertaining fashion, but I'm pleased with the final product, and I'm working on a sequel for Appleman's regarding Katrina decisions at the Fifth Circuit level. I was astounded to hear from a reader in Connecticut that the anti-concurrent cause article is assigned as required reading in an LLM course on insurance law at the University of Connecticut. I realize not everyone agrees with my views on anti-concurrent cause, but I approached the topic as a scholar and not as an advocate, so I'm glad others find the article of use.
Reevaluation of Scruggs
This is a theme I will be developing over the coming weeks. For today, let's ponder a passage from a book and think about it's possible relevance to recent events.
The name of the book is Check out this passage from pages 266-67:
Even though Johnson’s stealthy maneuvering proved unnecessary, it indicates the lengths to which Scruggs was willing to go to pave the way for success. And throughout late 1993 and early 1994, he took other steps to defuse possible opposition to the Medicaid suit in political circles, holding discussions with various movers and shakers around the state to ensure they would not make any trouble. Sometimes it took more than a discussion. "There were [some] people who had political connections, that I’m not even at liberty to tell you who they are, that had to be touched, that had to be talked to, that had to be given a stake in [the litigation]," Scruggs says. He retained two or three of these mystery consultants to run political interference. "These guys have lots of friends and connections with the legislature," he explains. "These are people who are lobbyists, but they’re not really registered lobbyists. It’s really sort of the dark side of the force." Over the course of the litigation, Scruggs says, he paid these individuals well over $500,000.
Dark side of the force? Mama always said, when you play with fire you get burned.
LexisNexis Insurance Law Center
This has nothing to do with Scruggs or Katrina litigation, but I've been meaning to mention this for some time and now is as good a time as any. I've been asked to be on the advisory board for the LexisNexis Insurance Law Center, a new web site that corrals a lot of useful, timely information and insider perspective on insurance law. . We have lots of great plans for making the site even better, if you have ideas for what you'd like to see, please don't hesitate to e-mail me.
Thanks to readers for your e-mails
I get a high number of e-mails, I read each one, do my best to respond to each one. I treat each one as confidential unless you say otherwise. Through no plan of my own, I find myself in a unique position here of being at ground zero, and I take my responsibility seriously to hear all sides and be as fair as I can. Your perspectives are very valuable to me, so please always feel free to e-mail me at . My goal is to learn and understand, and to hold a mirror up to nature. As those who talk to me know, your thoughts do influence me, so if you have a view I should know about, tell me. I especially appreciate the advice from litigators on the scene -- I realize you know many things I do not.
Thanks for all the shout outs on the Web
Thank you to all who have linked to me. I see many of these links, but some I don't see until some time has passed or someone tells me about it. In the crush of work, family and blogging, I don't always get an opportunity to say thanks personally, but I really appreciate the acknowledgment.
Where in the World is Jim Hood?
AG Jim Hood continues his vow of silence -- John O'Brien of Legal Newsline is the latest reporter to get a no comment from Hood on events. . O'Brien writes:
As one of his special assistant attorneys general pleads guilty to a bribery charge and one of his largest campaign contributors prepares to defend himself against the same, Mississippi Attorney General Jim Hood has become uncharacteristically tight-lipped.
A couple days after the breaking of the Scruggs scandal, it occurred to me that the Jones, Funderburg firm might move to amend the complaint in Jones v. Scruggs to encompass the new judicial bribery allegations. And now I see they have. Plus more -- a motion for the court to take control of all attorney fees coming into the entity formerly known as the Scruggs Katrina Group.
of "all attorney fees brought into the Scruggs Katrina Group . . . before January 2007 and subsequent to January 2007."
.
.
I don't have time right now to give you a full run down on what all these say right now, but look for a new subhead in the complaint: "The Improper Conduct Reached New Heights -- Attempted Bribery of a Judge." Instead of alleging breach of contract as the first claim, the new complaint alleges the contract is void, and also alleges as a new claim that defendants intentionally interfered with the exercise of constitutional, statutory and common law rights. The other claims are still in there: tortious bad faith, breach of fiduciary duties, usurpation, conversion, interference with prospective business advantage, fraud, constructive trust, conspiracy, unconscionability, punitive damages. Everything except piracy on the high seas and RICO.
Yesterday I mentioned a term that has been in my lexicon for about a year but that I haven't previously used on the blog: "scruggsing," from the verb "to scruggs," meaning to go on the offensive in an all-out blitzkrieg fashion, employing all potential means against an adversary including media, politics, law, facts and psychology. I admit my conceptualization of the word did not include an alleged bribery scheme or other activities that are unethical and illegal, so if what prosecutors say is true, I may have suffered from a lack of imagination.
In any event, as I pointed out yesterday, one possible analysis of the events of the last few years is that Scruggs grew to be such a force, that his brand had such cachet, and that his tactics were so successful, that only Scruggs could bring down Scruggs, only Scruggs could scruggs Scruggs. In Katrina litigation, certainly, it appeared for a while that he was unstoppable as he marched side-by-side of Attorney General Jim Hood. With all that's gone on in the last eight days, it's time for a re-examination of the course of Katrina litigation and Scruggs' involvement in it. We can't do a complete review in just one post, but let's give it a start.
How much of the Scruggs position in Katrina litigation was real and how much was hype?
I ask this question for several reasons, one of them relating to the "whistleblower" Rigsby sisters and the State Farm claims documents they took from their employer E.A. Renfroe, a State Farm contractor. From what I can see, the claims of the Rigsby sisters and the 5,000 to 15,000 documents they took from Renfroe are mostly if not totally hype with little if any substantial value. Of the documents that they took, few have even been offered up as evidence of State Farm's supposed misdeeds -- those engineering report e-mails, the State Farm wind-water protocol and a few other documents are all that appear to have emerged from this "data dump" by the Rigsby sisters. [UPDATE: I'm informed by a knowledgeable and trusted source that I may have wrongly attributed the uncovering of the wind-water protocol to the Rigsby sisters, and that attorney Richard "Flip" Phillips of Batesville found this document in the case of Guice v. State Farm -- the Rigby sisters could have had this among the data dump too, but if they didn't, this would reinforce the point about them]. Were the documents themselves merely a prop, a Potemkin village, a bluff to increase State Farm's opinion of the threat posed by Scruggs? Read this passage from
The settlement [of 640 SKG cases, not announced until January] was reached in November 2006, according to a letter State Farm sent Scruggs.
In January, Jones e-mailed Scruggs and SKG partner Sidney A. Backstrom, according to copies State Farm has filed in a lawsuit to stop Hood's investigation.
In the first e-mail, Jones said his firm had lost $2 million in revenue alone on the insurance litigation until his firm was "excommunicated" from SKG in December 2006. "And what member of the joint venture committed to the work on the chance he would simply be made whole?" Jones said. "Certainly none I know of."
Backstrom fired back: "... the whistle-blowers came to Dick and they were the sole basis for Hood's interest which really was 80 percent of why SF wanted to settle; Trent Lott and Gene Taylor signed up with our office, as did (U.S.) Judge (Louis) Guirola - that mattered big time to SF too... "
In the next e-mail Jones thanked Backstrom for his candor and said he didn't want any of the SKG partners to be shortchanged. Jones closed with this prediction: "I want to avoid this as bad as I need to be paid for committing 2½ years of my law practice to what Dick has asked of me, but if that is where it is headed this is going to be awful for all of us."
So this e-mail above by Backstrom, a lawyer in the Scruggs Law Firm and one of the indicted alleged bribery conspirators, says that Hood's interest in the criminal investigation of State Farm was solely based on the "insider" Rigsby sisters -- who after doing a massive copy job of Renfroe documents quit and immediately went to work for Scruggs as consultants at annual salaries of $150,000 each, with no specified duties -- and that in Backstrom's opinion, which one could surmise reflected Dickie Scruggs' own opinion, Hood's criminal investigation was 80 percent of the reason State Farm settled. Do you see the implications of that? I'll examine the question of hype versus reality further in the coming days, but with the Backstrom e-mail fresh on our minds, this is an opportune time for the follow up below regarding Hood and Scruggs' involvement.
Where in the World is Jim Hood?
has started a feature called Where Is Jim Hood? I run an occasional item since the breaking of the Scruggs scandal called Where in the World is Jim Hood, after the annual Matt Lauer feature on the Today show. Hood sightings have been rare after the scandal broke, and this may be the longest consecutive period Jim Hood has ever gone without public comment. is about a stonewalled attempt to get comment from Hood on the Scruggs affair. Here's an excerpt:
The Sun Herald on Tuesday requested an interview with Hood, asking if he would at least respond to questions about how the Attorney General's Office views allegations of judicial bribery and its enforcement responsibilities.
An obvious question also is whether Scruggs, who has pleaded innocent, continues to play any role in Hood's criminal investigation.
Hood's press secretary, Jan Schaefer, e-mailed this comment from her boss Wednesday afternoon: "Your questions concern pending litigation and criminal investigation and therefore it would be inappropriate to comment."
Jeez, since when has Jim Hood shied away from public comment on pending litigation and criminal investigation, isn't speaking out on these things his trademark? The criminal investigation referred to in the question in the story is one that has been enjoined by a federal judge as a result of a lawsuit against Hood by State Farm. In that suit, State Farm alleges Hood breached the terms of a non-prosecution agreement that came out of January's big settlement involving the Scruggs Katrina Group plaintiffs and a proposed class action settlement that was disapproved by Judge Senter. It's not clear if the answer refers only to that investigation or also to the Scruggs indictment.
Considering that Hood is alleged to have used the power of his office and the threat of criminal prosecution to force settlements in civil litigation that would benefit Scruggs and others, you wouldn't think it would be to much to ask for Hood to respond to a few questions at this time, would you?
Do you remember when I wrote about the Halloween deposition in Katrina litigation of Assistant Insurance Commissioner Lee Harrell? , and here's part of what I wrote:
And in one of the most remarkable passages I have read in anything having to do with these Katrina cases, Harrell also testified to meetings in early 2007 with [former Mississippi AG Mike Moore and Hood, where Moore said he was assisting Hood with his criminal grand jury investigations at the same time Moore was working with the Scruggs Katrina Group in pursuing civil claims against insurers, and that Hood said this about the civil litigation:
"If they [State Farm] don't settle with us, I'm going to indict them all, from Ed Rust [State Farm's CEO] down."
So, do you see what Harrell's testimony says? That Hood worked with Scruggs and the Rigsby sisters to take documents from State Farm, without a warrant, for use in a criminal investigation and to assist Scruggs in his civil lawsuits, and then he not only worked on criminal investigations with a man who was also working for the Scruggs Katrina Group, he used the threat of criminal indictments that would culminate from this process as a means of coercing settlements in the civil cases he had help create. I think I did well to hang on to the red Yellowstone mug. I encourage you to read this deposition, it is quite short.
Just as an afterthought, and at the risk of turning this post into the Anita Lee edition, here's something from yet another , about the new name for the Scruggs(less) Katrina Group (the new name is the Katrina Litigation Group). I found this part of the story intriguing:
Former Mississippi Attorney General Mike Moore is associated on at least one case against State Farm but is not a member of KLG.
Interesting, isn't it? Can anyone recommend a publisher for my book?
Lastly, just as I was ready to publish this post, I saw that continues Walter's excellent round-ups of Scruggs news and opinion. A ton of good information there, check it out.
With the continuing drama of the Scruggs scandal unfolding daily, sometimes hourly, I almost forgot to blog about the Katrina case that I have written about perhaps more than any other -- Broussard v. State Farm. , oral arguments were held before the Fifth Circuit in New Orleans on State Farm's appeal of the $1 million punitive damage award -- reduced by Judge L.T. Senter Jr. from $2.5 million awarded by the jury.
Broussard is not about the anti-concurrent cause provisions of policies, as some of the other well-known cases have been, it is about who is allocated the burden of proof of damages, and it is about whether bad faith punitive damages are justified when an insurer fails to pay when some small amount of covered damage may have occurred, but the insurer believes the evidence indicates that almost all if not all the damage was caused by an excluded force. As I mentioned, I have written a great deal about the case, and if you have more interest you can go to my blog's search bar on the right, type "Broussard" and hit the enter key. (Frequent readers may tire of me explaining how to do this, but this is far and away the number one question I get asked -- how do I find something on your blog).
The Broussards were Mississippi Gulf Coast residents whose home was destroyed by Katrina, one of the so-called "slab" cases where nothing was left. State Farm was their homeowners insurer, and at the time of trial had paid nothing, saying there was substantial evidence of flood destruction and that the Broussards had failed to present sufficient evidence of wind damage (their expert said the home was destroyed by a tornado). In case you are wondering, the Broussards were represented by William Walker, not the Scruggs Katrina Group.
In the case, Judge Senter directed a bad faith verdict against State Farm, saying no reasonable juror could have found otherwise. He based his decision on the fact that State Farm's expert testified that there was a 75 percent chance there was zero to 35 percent damage to the Broussard's roof. With all due respect to Judge Senter, I'm skeptical that this means the verdict must be directed. Why couldn't the jury have been allowed to decide? When you multiply a 75 percent chance times zero, you still get zero damage, so in my mind a reasonable juror could have decided State Farm was correct. They could also have decided the other way.
Most of the time with other big Katrina cases, I would have already read the briefs at this point. But to tell the truth, Broussard slipped right out of my mind on Scruggs Nation: Day One, and even if I had remembered, I wouldn't have had any time to read the briefs. However, reading the tea leaves of the Fifth Circuit's recent Katrina decisions, seeing who is on the judicial panel (notably, Edith Jones) tand seeing some of the comments by Judge Jones in the story, I'd say there is a pretty good chance this one will be reversed. See what you think after reading this excerpt from the story:
State Farm attorney Clarke Holland said Senter made "numerous errors" in evaluating evidence in the case and shouldn't have allowed jurors to weigh punitive damages.
"There was clearly an arguable basis for State Farm's position regarding coverage," Holland told Judges Edith Jones, Jacques Wiener Jr. and Edith Brown Clement.
William Walker, a lawyer for the Broussards, defended Senter's rulings.
"He viewed this in a very rational and careful way," Walker said.
Senter concluded State Farm acted in a "grossly negligent way" by denying the Broussards' claim. The judge also said the company denied policyholders' Katrina claims based on a new "wind-water" protocol that is "at odds with other express terms of the insurance contract."
State Farm claims Senter erred when he ruled the company had to prove that the Broussards' home didn't sustain any wind damage or that it had to segregate wind and water damage to the residence.
Jones, the 5th Circuit's chief judge, questioned why Senter didn't let a jury decide whether Katrina's wind or water was responsible for destroying the Broussards' home.
"All (State Farm) had to prove is that storm surge was a cause, and then a jury had to prove how much was storm surge and how much was wind," Jones said while questioning Walker.
The exchange between Jones and Walker grew testy, as the judge accused the lawyer of "playing with words."
When Walker punctuated one of his points by saying, "I don't mean to be flip," Jones responded by saying, "Most of your argument has been flip."
"Thank you, ma'am," Walker said. "I hope it was sincere."
"It was sincere," the judge said.
State Farm also argues that Senter shouldn't have allowed jurors to consider punitive damages and that he abused his discretion in refusing to transfer the case from Gulfport, Miss., to northern Mississippi.
State Farm's lawyers say the company couldn't get a fair and impartial jury on the Gulf Coast due to "pervasive and extreme negative publicity regarding Katrina insurance claims."
State Farm is asking the 5th Circuit to throw out the verdict and either rule in the company's favor or order a new trial, preferably in north Mississippi.
I'm not sure if I follow the nuances of the flip/sincere dichotomy posited here. Can one be flip, yet still sincere? I would have thought not -- for example, I have never heard the phrase, "he was flipply sincere," nor have I heard "he was sincerely flip" -- but apparently William Walker and Judge Jones disagree with me.
The suspense about whether Tim Balducci is cooperating with prosecutors in the Scruggs scandal is over. He is. Balducci changed his plea from not guilty to guilty last night (note the date of the filing, although this was not on PACER when I checked it late last night -- interesting timing, coming just hours after his arraignment at 1:50 p.m. December 4 where he pleaded not guilty).
You may also want to note that the arraignment was not held in Oxford before Magistrate Judge Allan Alexander, like the other defendants, but rather in Aberdeen before Magistrate Judge Jerry Davis -- perhaps Alexander was busy, perhaps there is another explanation why the arraignment was held in a place . [UPDATE: I'm told by one who was at the arraignment that the PACER documents are misleading in listing the place of the arraignment -- Balducci actually was at the courthouse in Oxford, while Judge Davis was in Aberdeen and appeared via a video link].
SECOND UPDATE: on the guilty plea and the arraignment.
Some aspects of the plea agreement:
He pleaded guilty to conspiracy to commit bribery of an elected state official, which carries a possible penalty of five years in prison and a $250,000 fine.
He agrees to cooperate with the United States in the prosecution of the other alleged conspirators.
The government acknowledges "the fact that the defendant has already substantially assisted the government."
He agrees to submit to a polygraph exam.
There is no agreement as to the sentence to be imposed, although the government agrees to file a motion asking for a departure from the mandatory sentencing guidelines.
The plea agreement, of course, must be approved by the court.
As you now know, Timothy Balducci has been arraigned -- he represented himself at the hearing -- and released on his own recognizance. As you also now know, the dueling letters campaign has stopped, and the Scruggs(less) Katrina Group speaks with one voice once more. And that voice says: "Dickie is out." The three remaining SKG firms are in. The Scruggs firm has also begun filing motions to withdraw from all the remaining SKG Katrina cases. The original documents that show these things can be seen , but I am reproducing a copy of the letter below anyway so we can read it together and ponder what an utterly remarkable development this is in light of the state of Katrina litigation one year ago, where Hood and Scruggs were tearing up the pea patch, barrelling through all obstacles in their path like a monster truck over a row of parked Yugos.
As you may be aware, criminal charges have been brought against the Scruggs Law Firm in North Mississippi. These charges are unrelated to your claims and to litigation against your insurers.
The Scruggs Law firm has informed us that in the interest of its clients, it has withdrawn from the group of attorneys who represent your claims until these legal matters have been resolved and it is also withdrawing as counsel in your case if filed. Members of the Scruggs Law Firm have assured us that they engaged in no wrongdoing and we are confident they will be cleared of the charges.
Barrett Law Office, P.A., Nutt & McAlister, PLLC and Lovelace Law Firm, P.A. are committed to the same level of performance and professional expertise that have to date provided settlements to over 1,300 Katrina clients. We will continue to pursue relief to you and the other clients who have been shortchanged by their insurers.
Our immediate focus will be the pending claims and related litigation. We will contact you shortly with more information.
Sincerely,
Don Barrett, Barrett Law Office, P.A. David H. Nutt, Nutt & McAlister, P.L.L.C Dewitt Lovelace, Lovelace Law Firm, P.A.
UPDATE: I knew about but forget to mention that Balducci has resigned his license to practice law. As the WSJ Law Blog reported yesterday:
Anyway, what we do know is that Balducci probably won’t be practicing law anytime soon. The Mississippi state bar heard from Balducci on Saturday evening, as it turns out. Balducci (or someone on his behalf) faxed a letter to Jackson indicating he intended to withdraw his license to practice law. The letter allegedly refers not only to his license in Mississippi, but to other jurisdictions as well: Texas, Alabama, Tennessee, and Washington, D.C.
Now, let's consider a few things, as follows:
Judge Lackey and other Lafayette County judges recused themselves from the Jones v. Scruggs case 10 days before the Scruggs indictments.
I got an e-news flash from Legal Newsline yesterday afternoon with a story by John O'Brien stating this:
OXFORD, Miss. - A little more than a week before a federal grand jury indicted prominent Mississippi trial lawyer Richard "Dickie" Scruggs, the state judge he allegedly attempted to bribe and two others recused themselves from presiding over the case from which the indictment sprung.
On Nov. 19, circuit judges Henry Lackey, Robert Elliott and Andrew Howorth all told the state Supreme Court they would "awate" the appointment of a special judge to take on the case, Jones v. Scruggs.
Nine days later, Scruggs and two others from his firm, son Zack and Sidney Backstrom, along with Timothy Balducci and Steven Patterson of Balducci and Patterson by the federal government.
The five allegedly offered Lackey $40,000 to compel arbitration in Jones, a case filed by fellow Scruggs Katrina Group member John Jones. He said Scruggs was attempting to take more than his share of $26.5 million in attorneys fees from the settling of 640 Hurricane Katrina-related cases against State Farm Insurance Cos.
Chosen to replace Lackey was William F. Coleman Jr. of Jackson, a senior status judge retired from Hinds County Circuit Court. He was not immediately available for comment.
"All three of the trial court judges in Lafayette County Circuit Court recused themselves on the matter of Jones v. Scruggs," state Supreme Court public information office Beverly Kraft said, "and submitted a request to the Mississippi Supreme Court for appointment of a special judge."
The judges did not offer an explanation for their request in the one-page motion. Lackey could not be reached for comment.
UPDATE: [Legal Newsline now . You can to see a copy of the recusal papers, and see that they were signed on November 19, but not filed until November 29, the day after the indictment -- I'm told the papers may have been mailed between the three signing judges during the intervening time, something that, since clerks and others could conceivably see these papers, seems like somewhat of a gamble that no one would innocently mention the recusal to someone, who would repeat it to the alleged conspirators . But maybe the judges sent the document by personal and confidential mail. I'm also told the unusual spelling of "awate" above was simply a typo in the writing of the story and not a suggestion that the judges don't know how to spell.] I can't seem to find the story on itself, but it may just be a glitch in posting. You may remember I linked to yesterday. In that story attorney we learned this interesting news:
In April, [John] Jones says, Lackey recused himself from hearing Jones’s case without explanation. But then in May, on his own motion, Lackey suddenly “unrecused” himself, Jones says — again without explanation. Jones now surmises that Lackey had, by May, brought the FBI into the picture, and was now prepared to wear a wire and help it prove the crime.
Was the latter recusal also known to the litigants? One ordinarily would think so, there is not much point in a recusal if the parties to a lawsuit don't know about it. Recall that the indictment was filed November 28. The litigants, including the alleged conspirators, would have wondered what was going on. However, the fact that Jones did not mention this in the interview with Parloff, and that this information hasn't previously been noted -- as well as the fact that this seems like something that could tip the alleged conspirators off that something was afoot, argues against public knowledge. What do you make of this?
Scruggs did to himself what State Farm could not.
You may recall State Farm put a huge effort into disqualifying Scruggs from Katrina cases earlier this year on ethics grounds. Judge Senter ruled against them, saying they had waited too long to bring these objections and therefore waived them, and State Farm's request to the Fifth Circuit for a writ of mandamus to force Senter to reverse himself failed in mid-November.
Throughout the year, in conversation I had taken to using the word "Scruggs" as a verb, as in "to scruggs someone," meaning to unleash a multi-pronged attack against an opposing party, implying heavy use of creative alternatives such as use of media pressure and different types of legal actions to up the psychological, legal and public pressure on the opposing party to unbearable risk levels, while achieving a result one might not have obtained by merely prosecuting the lawsuit without these other methods. Here, however, one could say that Scruggs scruggsed himself, with the result that he disqualified himself. And it may be that this reverse scruggsing has just begun.
The apparent Scruggs defense strategy to portray Balducci as a wayward youngster acting on his own won't sell.
Let's again check out one of the paragraphs from the WSJ story on the big Scruggs party December 1, which I talked about yesterday:
"This is a clear case of a young man wanting to endear himself to Dickie Scruggs in hopes that he might one day have a chair at his table," says Lowry Lomax, a close friend of Mr. Scruggs who is also an Oxford plaintiffs lawyer and was the co-host of Saturday's Christmas party.
Is that going to be the line? Balducci is 40 years old, for pete's sake, and was accomplished enough as a lawyer to be named as a special assistant attorney general by AG Jim Hood and to represent the state in the big MCI litigation. Not to mention that the FBI apparently has documents from Scruggs purporting to hire Balducci for $50,000 to prepare jury instructions -- guy must be one hell of a jury instruction writer for that price -- (prosecutors say this was a cover for transfer of attempted bribe money). Sounds like he had a seat at the table, and was on his third helping, too. But there's another reason this story is implausible. Let's remember that Scruggs has consistently portrayed himself as the brains and the mastermind behind Katrina litigation -- he came up with the "whistleblower" Rigsby sisters, he put together the framework for the Katrina litigation and he was the brand name. All right. On the one hand he's the all-seeing, the all-knowing. But on the other hand, when it comes to knowing what Balducci was doing, suddenly he's a figurehead, people going rogue on him, just sitting around watching Days of Our Lives and drinking a Pepsi, not a clue.
UPDATE: Here are the available documents from PACER.
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SECOND UPDATE: The Scruggs Law Firm, citing the pending criminal charges, has withdrawn from Katrina cases. to clients on the Scruggs Katrina Group website.
THIRD UPDATE: Motions by the Scruggs firm to withdraw from Katrina cases are already showing up. to see one such motion is a well-known case, McIntosh v. State Farm.
Ashby Jones of the Journal interviewed me about my blog and the result is . I'm always self-conscious about being interviewed, all my life I've been the one asking the questions, but Ashby is a really good interviewer, made it easy on me. Thanks to the WSJ for their interest.