Insurance

Total news: 75
Last news: March 20, 2008 00:46:19

News & Commentary on Specialty Insurance, Risk Management & Private Equity – with an emphasis on professional liability and entrepreneurship

Total news: 36
Last news: March 13, 2008 21:13:25

Dave Stratton's blog with a focus on civil litigation defense in the Washington, D.C. metropolitan area.

Total news: 16
Last news: September 19, 2007 16:32:46

Heres a copy of the Commissions petition to the Mississippi Supreme Court. This comes from ethics complaints filed against DeLaughter by attorneys for William Roberts Wilson in the fee dispute case against Dickie Scruggs.  Joey Langston, who represented Scruggs in the later stages of that investigation, has pleaded guilty to conspiracy to influence DeLaughter with the offer of a federal judgeship.  Ill update later.

Lets return for a moment to last week and the plea agreements of Dickie Scruggs and Sid Backstrom.  We can surmise from the fact that Scruggs and Backstrom made plea agreements that Zach Scruggs also discussed a plea agreement.

My working hypothesis was that one strong motivation for Dickie Scruggs to make a deal was to help get Zach out of this mess.  This was based not just on common sense but information I received about family pressures Scruggs was receiving.  Since then, I have also gotten quite a lot of information about what might have happened that led to no deal for Zach, and not all of this information is entirely consistent, or more accurately, it is consistent to a point but it is missing unanimity on the one key thing -- exactly why the deal fell apart. 

I believe that something close to what the Clarion-Ledger reported last Friday and then yanked from its website was being discussed -- Zach would walk but surrender his law license.  (It would be helpful if the CL would explain why the information was yanked -- because the source or sources turned out not to be credible, because the deal was only conceptual on one partys part and was not actually a serious possibility, or because the deal was set up and then fell apart because of some reason we dont know for sure).

It is also plausible, considering Zachs apparently lesser involvement as alleged by prosecutors, to assume that in any deal, even if he did not escape prison entirely, his time would have been minimal, say one year at the most. Now, as Ive mentioned, one sticking point could have been whether he would also walk on possible charges stemming from the Wilson case.  Another could have been whether he would have to cooperate with prosecutors in the Lackey bribery case and in Wilson, the latter of which could set him at odds with his fathers interests.

Let us suppose, just to examine these assumptions, that it is true that Dickie Scruggs was interested in making a deal that would also benefit his son.  Seeing as the deal fell apart, what other motives did Scruggs have to make the plea bargain he eventually did?  In other words, why did he not do what many predicted he would, walk into court with Kenny Rogers "The Gambler" blasting from his earphones?  We know, from a motion the government filed at that time, that the defense saw the "taint team" evidence -- the data pulled from the Scruggs Law Firm computer system -- the day before the plea bargains. 

Merely because one thing follows another does not mean the first caused the second. However, we also know, from review of court filings, that even without this taint team evidence, the governments case was strong -- the recordings showed Scruggs reviewing and editing Lackeys draft order, Balducci would testify against him and the government would introduce evidence of his involvement in an alleged conspiracy to bribe Judge DeLaughter in the Wilson case.  If the taint team evidence tended to solidify the governments case -- e-mails and the like that showed Scruggs knowledge and participation -- he likely would have received advice from his attorneys that he stood a high likelihood of being convicted on most or all the six counts against him and spending the rest of his life in prison.

With the deal he received, however, he will be free in five years (in theory only, because we dont know what will happen with the Wilson case).  In any event, a 100 percent chance of five years is better than an 80 percent chance of 75 years.  So he had motives of his own to settle, and he is not obligated under the agreement to cooperate with prosecutors.

A small item in the Wall Street Journal today by Ashby Jones says that even though Scruggs has pleaded guilty and could be called as a witness without Fifth Amendment problems, the government is unlikely to do so because of the risk of antagonizing the jury by having a father testify against his son. (Hat tip, Jane Genova). Not to mention, if you read the transcript of Dickies plea, you can see that hes not going to give it up easy.

About whether the passing of the March 17 plea deadline is real, or if Zach can still get a plea agreement, readers, in comments and in e-mails, said that after the plea deadline any plea is an "open" plea, essentially one in which the judge makes no assurances of willingness to accept terms worked out with prosecutors.  I looked up some federal case law and what I saw was in line with these statements -- a judge has the authority to set such a deadline to assist with trial management and is not bound to accept any agreement after that, except for good cause.  Normally, the mere fact that the deadline was missed is not good cause.  A judge can make exceptions, of course, but generally it appears they do not. 

In state courts, the law varies from state to state -- I found this interesting case from Illinois explaining the two different views of courts on how set-in-stone the plea agreement deadline is.  You might be interested.  

Lastly, readers pointed out something I didnt remember -- two new members of Zachs defense team, Chip Robertson and Mary Winter, are old hands with the Scruggs Circus.  Their firm represents the Rigsby sisters in the False Claim Act "whistleblower" case against State Farm, and as one enterprising reader found out in doing research on my blog, Robertston and Winter are mentioned in one of the Kerri Rigsby depositions Ive posted.  See beginning on page 17.  Also, here is the post in which I discussed other aspects of the deposition. 

Kerri Rigsby met them, according to her testimony, back in early 2006 in a trailer along with Dickie Scruggs (the trailer may have been the one set up on former Sen. Lotts property after Katrina in Pascagoula, but this is not clear from the transcript).  Apparently, Cori Rigsby brought her laptop and accessed the State Farm claims documents with her laptop and State Farm password. These claims documents, the value of which appears to be some mixture of hype and hope, were used by Scruggs in a variety of sensationalism ways to drum up publicity and to use as leverage -- the Rigsby sisters 20/20 interview, numerous uncritical press stories featuring Scruggs exaggerations, the False Claims Act case, several Katrina cases including McIntosh v. State Farm, grand jury investigations in conjunction with state and federal prosecutors, and of course, as a negotiating ploy in the settlement of the 640 Katrina cases against State Farm.  This last item, of course, led indirectly to  two prosecutions of Scruggs -- the first stemming from his game of keepaway with the help of AG Jim Hood with the documents in defiance of Judge Ackers order, the second as a result of the conspiracy to bribe Judge Lackey in the Jones v. Scruggs fee dispute that arose out of the settlement. 

When you see it written down that way, you can see how one thing led to another and brought us to where we are now.  So its only fitting that Robertson and Winter, who were there at or near the beginning, should be there at the end. 

Ive mentioned it before, and Ill mention it again. This long list of events culminating in Scruggs plunge makes me think of Grays Elegy Written in a Country Church-Yard.

The boast of heraldry, the pomp of power,
And all that beauty, all that wealth eer gave,
Awaits alike th inevitable hour:-
The paths of glory lead but to the grave. 

As I wrote in one of my posts yesterday, Judge Biggers order of yesterday afternoon made it clear that the deadline for plea agreements remained March 17.   Some people have asked me whether this is an absolute deadline -- for example, if Zach Scruggs wanted to enter into a plea agreement just before trial, would the judge reject this. 

The answer is that I dont know, this wasnt covered on any of the episodes of Boston Legal Ive seen. But having seen a little bit of Judge Biggers in action in this case, I suspect that when he says something he means it.  There are a lot of criminal defense attorneys and prosecutors reading who could give a better answer than I can, and maybe one of them will e-mail me or leave a public comment below.

You know by now, of course, that Mike Moore is now formally part of the Zach Scruggs defense team.  According to this post on the Wall Street Journal Law Blog, Zachs lead attorney, Todd Graves, said Moore has been an unofficial part of the team for some unspecified period of time.  

As you also know by now, two other attorneys filed appearances on behalf of Zach yesterday, Edward Robertson, Jr. and Mary Winter.  Robertson, according to his bio on his firms website, goes by "Chip" and is a former chief justice of the Missouri Supreme Court. I dont see criminal defense listed as one of the firms practice areas, but he certainly knows his way around a courtroom, as this other bio I found on the Web shows.     

So apparently there goes my hypothesis that Dickie Scruggs chief reason to plead guilty would be as part of a deal for Zach to walk away with minimal or no jail time.  Bringing in Moore, Robertson and Winter certainly looks like a move to get ready for trial. 

A couple questions: does Dickie Scruggs guilty plea mean that he cannot refuse to testify on Fifth Amendment grounds about this conspiracy if called to the stand? Would Scruggs want to testify, perhaps to say that his son had no clue what was going on?  

If Zach is indeed going to trial, this seems like a tremendous gamble on his part.  Makes me wonder about that report last Friday in the Clarion-Ledger -- I never found it myself but I saw it talked about on other blogs like Yall Politics and folo --  that a deal had been worked out with Zach where he would surrender his law license, and that was it.  If that was the deal on the table, I wonder if the sticking point was whether Zach would walk on possible charges stemming from the investigation of the Wilson case, the one where Joey Langston has pleaded guilty to conspiracy to bribe a judge.  Whomever was the source for the information, the paper hasnt mentioned that deal since, so if it existed, it fell through. 

I looked back at PACER to see if there are new developments, and two new lawyers are requesting pro hac vice admittance to represent Zach Scruggs.  

Here they are: Edward Robertson, Jr. and Mary Winter. Havent had much time to do any research on them, but here is a quick bio of Robertson.   

Also, this order filed by Judge Biggers makes clear that the extension granted on Friday to deal with remaining motions does not affect the plea agreement deadline of today.    

Not sure exactly what this means, but I just saw this on PACER. Mike Moore, for those who dont know, is the former AG of Mississippi and a close friend of Dickie Scruggs who worked with Scruggs on the tobacco litigation and has also had a hand in Katrina litigation.

If you missed my post from yesterday, go back and read it, its got a roundup of some of the Scruggs stories of note, some stuff about Jim Hood, some Katrina litigation stuff -- it took me some time to put it together, so I hope youll find something you like. Ill talk about a couple stories here that I didnt include in that earlier post. 

One is this story in the Clarion-Ledger [originally had the wrong link, now fixed] in which John Jones, formerly part of the Scruggs Katrina Group and whose attorney fee lawsuit against Scruggs and the SKG firms gave rise to the Scruggs bribery conspiracy, says he was completely shocked by Scruggs plea agreement.  I myself dont think it was very hard to see coming at all.

But this part of the story was curious to me, so much so that I read it twice:

Although he was a millionaire, Scruggs saw himself as a champion of the little people, Jones said. "Dickies emotions were all on the ends of the hairs of skin. He was the most sensitive guy about his own self-image."

As Scruggs once said in describing himself, he wanted to be one of the ones who killed the rhinoceros, "not just be one of the scavengers who ate the meat," Jones said.

In 1998, he bagged the biggest rhino of all, the tobacco industry, earning the largest civil settlement in U.S. history. Scruggs and that case were portrayed in the 1999 Russell Crowe-Al Pacino movie The Insider.

When two of Scruggs former law partners sued Scruggs, Jones became one of his defense attorneys.

"I became convinced he was a really good guy who was being shaken down by others," Jones said. "He was a great client and did everything we asked him to do."

In 2005, Scruggs went to trial in one of those lawsuits.

U.S. Magistrate Judge Jerry Davis awarded Alwyn Luckey $17 million for legal fees due from the asbestos litigation.

Jones viewed the ruling as a victory since he had successfully protected Scruggs interests with regard to any legal fees earned from the tobacco litigation. Luckey had argued in a second lawsuit that he was entitled to a portion of the tobacco fees because asbestos earnings helped fund the tobacco litigation.

Scruggs saw the defeat as a sour loss, Jones said. "He thought he couldnt trust the system."

From that point forward, Scruggs changed the way he operated, Jones said. "He always had to rely on some inside connection when he didnt need to."

Now, come on here, with all due respect, Scruggs "thought he couldnt trust the system"?  He got nailed in the Luckey lawsuit for holding back on a partner.  What does it mean, under those circumstances, to say "He thought he couldnt trust the system"? He lost a fair fight, so he decided -- as Joey Langston and Tim Balducci have testified -- to make his own unfair system?

And if so, how much different in concept is that from the way he conducted the tobacco litigation -- having P.L. Blake run around doing Lord knows what to earn his millions, making use of insiders stealing documents and mixing law and politics like a well-shaken martini?  Its time to take that standard profile of Scruggs and round-file it.  Lets admit that prior conceptions and explanations of the man were woefully wrong, lets admit that many or most of the people closest to him were the most wrong about him, and lets start again from scratch. Throw away all those newspaper and media stories sucking up to Scruggs, and lets start anew.  I dont say the man is all bad, far from it, I find many things about him to admire.  But now maybe both the good and the bad will get a hearing -- one where someone hasnt put the fix in. 

The second story is also from the Clarion-Ledger.  Im going to criticize this lede and second graf:

Dickie Scruggs, the Oxford attorney who grew up poor in Pascagoula, had it all - the opulent private jet, the shiny Bentley, the 120-ft. yacht, the vacation home in Key West, reputed legal fees earned of nearly $1 billion and a reputation as one of the most respected and most feared trials lawyers in the world.

But on Friday, Scruggs was reduced - apparently by his own inexplicable greed - to just another felon copping a plea bargain in front of a federal judge. Scruggs pleaded guilty before U.S. District Judge Neal Biggers of conspiring to bribe a state Circuit Court judge with $40,000 in cash in exchange for a favorable ruling in a case over disputed legal fees.

First, what private jet is not opulent by any normal definition of that word? I mean, maybe the private jet of a Saudi prince is markedly more well-appointed than some corporate private jet, but in any meaningful sense, isnt ownership of a private jet itself one of the indicia of an opulent lifestyle?

Second, the juxtaposition of the list of the Magnificence of Himself in the first paragraph with the guilty plea by Fallen Scruggs in the second appears designed to support a "why would he risk it all on something like this" storyline.  But what if all that stuff in the first paragraph came his way because of activities that bear many similarities to the activities in the second paragraph?  The story doesnt consider this.

Third, if Scruggs is indeed "one of the most respected and most feared trial lawyers in the world," why didnt the Clarion-Ledger devout more resources to covering the case against him? Sounds like a criminal charge against a big shot like that in a newspapers own back yard would be worth a heck of a lot more coverage than we saw.

On a somewhat different topic, I want to provide a description of the courtroom before the guilty plea from a reader who e-mailed me about it (dont freak out, all you e-mailers, I asked permission to use this):  

 It was quite a show. I found it remarkable that he was politicking and socializing with everyone just prior to the hearing.  Dick was on the prosecution side of the seating area shaking hands and speaking to folks like a politician.  Keker was in the seating on the defense side of the courtroom with Diane and called out to him "Dick" and motioned him back to his seat with his head rather firmly, in my opinion. He did not try to shake my hand thank goodness.  I doubt he knows who I am but chose to not make eye contact with him because I felt like that would bring him over. I had no clue what was about to happen and a chill ran down my spine when I heard the judge say that he had two plea agreements.

I find these first-person narratives of events so much more compelling than the typical inverted pyramid, dispassionate news story, dont you?  Im pledged not to say more about this persons identity, so well just leave it at that. 

Lastly, thanks to the citizens of the Scruggs Nation for keeping me company these past few months.  Thanks for the e-mails of support, and a special thanks to all those who provided information and tips.  Ive gotten to know a lot of people really well through this blog, I count many as friends.  Life never ceases to amaze me, how exactly I got in the middle of this, I dont think I could tell you.  To be honest, I didnt really want to do it, this Scruggs blogging, but Im the kind who believes in omens, and in a way I really havent been able to explain to myself, it seemed like this was the role that had fallen to me and it was what I had to do.  With all the people Ive met, Im glad I did it, and something tells me Im not quite done yet.

We began this post with a time-honored icon, the shamrock, and well close it with a new one, the sweet potato, forever to be remembered as the symbol of the Scruggs Nation.  Ill tell you what, I dont ask for much, but if any of you are good at sewing and could slap together a Scruggs Nation sweet potato flag, Id fly it proudly in my office for evermore. Im thinking the most appropriate background color would be green, the green of a $40,000 bribe.   

A roundup of stories about the Scruggs plea agreements, and a few comments:

Hood: you cant get there from here.

This Legal Newsline story by John OBrien about Mississippi Attorney General Jim Hoods reaction to the Scruggs plea is hilarious.  Lets look at a few excerpts (Ive boldfaced some particularly amazing parts):

In catching high-profile plaintiffs lawyer Richard "Dickie" Scruggs in a judicial bribery scheme, the federal governments methods of investigation worked perfectly, Mississippi Attorney General Jim Hood said Friday.

So well, in fact, that he wishes he could use the same, even though he has recently deferred prosecution of one federal judicial bribery case to the local district attorney and has shown no sign of filing charges against Scruggs.

"The federal government effectively used its wiretap authority to prosecute a rare judicial bribery case," Hood said. "It would be an effective deterrent in other white collar crime cases, if the Legislature would give wiretap authority to state prosecutors."

Hood has drawn criticism since the November indictment of Scruggs, a large campaign contributor whose relationship with Hood was described as "remarkably close" by federal prosecutors in Scruggs recently dismissed contempt case.

Editorials called for Hoods resignation because the second-term Democrat would not file state charges against Scruggs, any of his co-conspirators or attorney Joey Langston. Langston pleaded guilty to a judicial bribery scheme involving Scruggs in Hinds County. 

Could I be reading this right? Hood is blaming the lack of wiretap authority for his not investigating and prosecuting Scruggs and others? Isnt that a bit like a guy who every morning says he cant exercise on the stairmaster because he doesnt have nice enough sweat pants?

Also, I have another question: "rare judicial bribery case"? Whats rare, the judicial bribery or someone actually bringing a case because of it? 

Because [Joey] Langston was awarded state contracts by Hood to sue prescription drug-maker Eli Lilly and MCI, Hood said he could not prosecute him.

"Due to Mr. Langstons past representation of this office, it could create an appearance of impropriety for our office to participate in a potential state prosecution of this case. It will be up to the appropriate District Attorney(s) to handle any potential state case(s). The resources of my office will be available to them."

Can that possibly be true? Anyone who gets a contract from the AGs office is immune from the AGs authority? The AG is state governments lawyer -- how about others who contract with state government, is there also a conflict of interest for Hood to investigate them?  Remember how Hood earlier this year announced a big offensive -- in lieu of prosecuting Scruggs and others -- against makers of fake contact lenses and unsafe toys? Hey, all those toy makers have to do is sneak in and get a contract with the AGs office somehow and they are off the hook!  Look at Hoods statement again -- do you believe that if a special assistant AG appointed by Hood somehow wound up ripping off the state for millions that Hood couldnt prosecute him even regarding that same case? Of course you dont.  So why would we believe that Hood cant investigate the same person for completely separate, unrelated alleged wrongs?

What resources of Hoods office would be available which would also not cause a conflict of interest, the copy machine?  A box of legal pads and pens?

L.A. Times story.

Heres a story from Richard Fausset, Jenny Jarvie and Henry Weinstein of the L.A. Times on the Scruggs guilty plea (the story has a quote from me).  A pretty good story, comparing, at the beginning of the story, the downfall of Scruggs with the face plant of Eliot Spitzer.  Of course, the writers are using that just as a frame of reference, they are not suggesting an actual similarity, except perhaps in that they both thought they could get away with it.

But you remember what Tolstoy wrote at the beginning of Anna Karenina, dont you?

Happy families are all alike; every unhappy family is unhappy in its own way. 

True enough.  Each of these downfall stories is always unhappy in its own way. 

WSJ Stories.

This Wall Street Journal story by Paulo Prada and Ashby Jones appeared the morning of the Scruggs guilty plea and deserved better than to get lost in the days events.  It is an extremely good retrospective on Scruggs series of fee disputes.  The story asks the question everyone has been asking:

To many legal observers, the indictment raises a hard question: What could lead a lawyer who once earned nearly $1 billion on a single case, the tobacco litigation, to bribe a judge over a matter of a few million dollars? 

(The story also contains the obligatory spin from Scruggs lawyer about how he didnt do it, which was vitiated a short time later when that same lawyer stood up in court and had to poke Scruggs with a cattle prod to get him to follow through on allocuting his guilty plea).

You know my working hypothesis: Scruggs is not the gambler he has sometimes been portrayed as, he is a guy who likes to work things so the result is preordained, and as weve seen, he is surely not the only one.  I cite this portion of the story as further evidence in support of this hypothesis.

Around this time, another law-school classmate, Michael T. Lewis, says he gave Mr. Scruggs the idea that ultimately made him rich and famous: demanding that tobacco companies repay states for their Medicaid costs in caring for people sickened by smoking.

Mr. Scruggs was intrigued, but had drawn criticism over his asbestos litigation for the state. Detractors called it a gravy train for the attorney generals favored lawyers, who repaid the favor with campaign donations.

So Mr. Scruggs turned to another political pal: Pete Johnson, who says Mr. Scruggs asked him to help push through legislation clearly authorizing the attorney general to farm out lawsuits to private lawyers. Mr. Johnson, a former state auditor, says that at an airport restaurant in March 1994, Mr. Scruggs promised him 10% of his legal fees from the tobacco case if the bill passed and the litigation was successful.

With Mr. Johnson navigating behind the scenes, the bill passed. But after the tobacco settlement brought Mr. Scruggs nearly a billion dollars in legal fees, he said "he didnt owe me anything," Mr. Johnson says. Like Messrs. Luckey and Wilson, Mr. Johnson filed a suit for legal fees against Mr. Scruggs.

In 2001, with the suit unresolved, Mr. Johnson dropped it. He was a liver-transplant survivor, and "decided Id rather spend whatever time I have left alive at peace and not in court fighting for money," he says.

Mr. Scruggs then sent him a $100,000 check, via an intermediary and without explanation. Mr. Johnson saw it as "a way for him to tell my estate that I was paid for my work." 

Again, a really good story.  The Journal followed up the next day with this editorial.  The editorials answer to The Question is that Scruggs was supersaturated with hubris. Well . . . . I hate to get picky, but I dont think this goes very far as an explanation. 

The point I made with the Anna Karenina quote above is that comparing Scruggs to Spitzer, as the editorial does, focuses on surface similarities to the exclusion of underlying causes. If Scruggs had hubris, why, one needs to ask, did he have such hubris, and how did it manifest itself? Many people, after all, are arrogant -- lawyers, as a class, are plagued by a high percentage of people who are insufferably arrogant, vain and full of false notions about their own preeminence. Yet the overwhelming majority of lawyers, even the overwhelming majority of the smaller subset of Hubristic Attorneys, do not commit crimes.

So it wasnt just pride or arrogance, it also had something to do with the special conditions found in Mississippi.  As weve talked about before, not every legal endeavor Scruggs engaged in was successful.  We can ask ourselves -- has he had any successes at all, in fact, where he was not able to manipulate the results through the political process or, lets put it this way, other means? 

I myself dont see Scruggs as a particularly arrogant man.  I see him as a practical man, a man who well understood the use of ambient tools -- hed use whatever was at hand as an aid for his litigation. I see him, in fact, as having a particular genius for this kind of creative work that overcame his moral principles.  Maybe thats hubris, maybe it isnt.  But the explanation goes much, much deeper, and my understanding of it is still far from complete. 

Followup on Joe South story.

This AP story has updates on developments in the case of a man killed in an accident involving a client of Tim Balducci, Darron Lee Minor.  You may remember earlier stories about how the FBI surveillance tapes of Balduccis conversations with Judge Lackey captured Balducci offering Lackey a bribe to take certain actions in the trial of this client.  Not only that, it appears Balducci pried an extra $20,000 out of the defendants family that they shouldnt have had to pay -- they are not responsible to make Balducci whole because of a fee dispute he had with Joey Langston. [UPDATE: see the comment below from "some lawyer," who points out the transcript says Balducci wanted to get this extra money, not that he actually did].

Balducci said Minors family paid Langston $30,000 for his firm to represent Minor, but Balducci said that when he left the firm, the $30,000 was not paid to him. He told Lackey he planned on going back to Minors family and asking for another $20,000 since he never got paid by Langston.

He offers Lackey $10,000 to rule in his favor.

Balducci: "I think Ive got a good theory. I think I can get the legs cut out of this beforehand, gimme twenty grand to do it, and if he does, then I thought me and you could split it and we could, you know, we could get it taken care of."

Lackey, knowing hes being taped, agrees. Balducci asks Lackey to continue the case for him in November.

Balducci: "Wed put it off til February and then Ill file a motion to quash in the meantime after I get paid."

The case was continued, but Dist. Atty. Ben Creekmore said it wasnt because Lackey did what Balducci requested. Creekmore said Judge Andrew Howorth continued the trial in November until March 17.

"I thought Balducci had good arguments, obviously, because I granted the continuance," Howorth said this week in denying another continuance. "But now I see that a lot of that was a ruse to get out of the case because he knew he was going down."

Since Balducci was arrested a few days after the conversation, Minor was without representation and a new lawyer had to be appointed. Attorney Casey Lott entered an appearance for Minor but pulled out. Attorney David Hill took over as defense attorney about two weeks ago, Creekmore said.

Creekmore denied that the attempted bribery by Balducci caused any of the previous delays in Minors trial.

"To say that the Scruggs case delayed this trial would be fair but only from the November trial date until the March date," Creekmore said. "But this story is about what Darron has done. And hes going to be tried on that."

Question: how much of this kind of thing is going on in Mississippi?  

Battle of McIntosh continues.

Ive been meaning to comment on this John OBrien story for some time and never got around to it.  Its about the ongoing battle between the Scruggs(less) Katrina Group, now formally called the Katrina Litigation Group, and State Farm in the McIntosh v. State Farm case, a Verdun-like litigation hell consuming vast quantities of time, money and resources without any effect in breaking the stalemate.  

You may remember that Ive written extensively about this case and State Farms efforts to disqualify the KLG based on the sins of Dickie Scruggs, the KLGs vicarious liability for them and the KLGs supposed endorsement and participation in unethical conduct, not all of it involving Scruggs.  

Well, after Scruggs obtained a dismissal of Judge Ackers charge of criminal contempt of court against him a few weeks ago, the KLG filed supplemental authority with the court giving notice that the charge had been dismissed, you know, as partial refutation of State Farms charges of unethical behavior.

I wouldnt say Fridays guilty plea by Scruggs completely moots KLGs filing.  After all, the contempt charge grew directly out of the handling by Scruggs of claims filed stolen from State Farm (many of these documents were used by the entire KLG in litigation, and allegedly at least one other KLG firm retained copies of some of the documents instead of returning them as ordered by Judge Acker).   The bribery charges, however, were peripheral to Katrina litigation against State Farm -- the bribery occurred in a fee dispute between member firms of the Scruggs Katrina Group over money paid in settlement of 640 Katrina cases by State Farm.  So they arent the same animal. Nevertheless, the guilty plea does take the bloom off the rose.  I tell you what, if youve ever seen the person next to you sprayed by a skunk, you know some of the stink rubs off on you.

Ive considered whether the dismissal of the Alabama charges against Scruggs is equivalent to saying he did nothing unethical.  I dont think so.  The judge dismissed the case because of a supposed lack of jurisdiction over Scruggs, and also, in what to me is an amazingly myopic reading of the terms of Ackers injunction, because the "law enforcement exception" in the injunction allowed Scruggs to play keep-away with the documents with his close friend Jim Hood instead of returning them as ordered.

A lack of jurisdiction doesnt impact the issue of ethics at all, but what about the ruling on the law enforcement exception? Isnt that conclusive as to that issue, and doesnt it say Scruggs was legally able to do what he did? Is being legally able to do what he did equivalent to saying it was ethical?  As to the last question, remember that the case was dismissed not because the judge said there was insufficient evidence of his intent to defy the injunction, but that what the did was allowed under the injunction. So Id say the KLG filing has a point, and that it will be very difficult for anyone to argue the unethical nature of Scruggs actions in defying the injunction. However, that does not mean that all the other stuff he did -- working hand-in-glove with Hood, paying the material witnesses like the Rigsby sisters whopping salaries for doing little to nothing, or even his other uses of the documents -- is OK.  There is still plenty to talk about there, and my prediction is the talk has only just begun.

Well stay on this post all day and update. Look for the latest information at the top (I got chewed out by readers last time I did this for putting the new updates at the bottom).

Welcome L.A. Times readers!

TWELFTH UPDATE:  Ive read through the Scruggs plea transcript posted below, and he wasnt exactly brimming with remorse.  Heres what I mean:

THE COURT : Mr. Scruggs, you have heard the United States Attorney state what evidence he could present against you on this particular charge if the case were to go to trial. Do you agree with the prosecutor s summary of what you did?

MR . KEKER : Your Honor, could I interrupt to say that much of the prosecutor s summary - - we discussed it - - is based on discovery and information that we have learned during the process of preparing this case. We believe - - and I ve discussed with Mr. Scruggs - - that the prosecutors could prove what they say they are proving. Much of that is, as you know, based on testimony of people and under circumstances where Mr. Scruggs was not there and doesn t have firsthand knowledge of it. But we agree that that s what they can prove, and that that s an adequate factual basis for the plea.

THE COURT : All right. Mr. Scruggs, then, did you do what the prosecutor just said you did, as far as your acts in this charge are concerned?

THE DEFENDANT : I joined the conspiracy later in the game. It s not exactly as the prosecutor allocuted, in that there was no intent to bribe the judge; it was an intent to earwig the judge, Judge Lackey; and that that - - the earwigging idea was not originated by me or anyone in our firm, although we went along with it, at the beginning of - - sometime in March. 

THE COURT : Well - -

MR . KEKER : But then later - - what about later? You got to say something about later.

THE DEFENDANT : I did join the conspiracy after that.

THE COURT : So you agree - - are you telling me that you did join the conspiracy, and you did furnish some money to give to Judge Lackey in return for him issuing an order in your favor in this case? Is that what youre saying? Do you disagree with that?

THE DEFENDANT : That s what I m saying.

THE COURT : All right. The Court finds , then, that there is a factual basis for this defendant to plead guilty to this charge. Richard Scruggs, do you plead guilty or not guilty to Count 1 of this indictment?

THE DEFENDANT : I plead guilty, Your Honor.

Lots of new terms in the Scruggs matter -- sweet potatoes, earwigging, etc.  Earwigging means "To influence, or attempt to influence, by whispered insinuations or private talk," according to this online source. 

ELEVENTH UPDATE: A reader alerted me to the fact that the WSJ Law Blog had posted transcripts of the plea agreement proceedings today, but that the links were broken.  So I took a chance and called the court reporter, who was kind enough to send them to me.  A very nice lady.

Here are the transcripts, I want to get them up right away.  Ill comment when Ive read them.

Scruggs plea transcript.

Backstrom plea transcript.

Hearing on Zach Scruggs motion to dismiss.

TENTH UPDATE:  Ive seen a variation of the lede in this Clarion-Ledger story in several others today: "surprise plea agreements."  Surprise to whom? If youve been paying attention to the evidence as it was revealed, you saw that the governments evidence was very strong.  And if you knew that the government had huge leverage over Dickie Scruggs because his own son was indicted as an alleged co-conspirator, you would know as Ive been saying for quite a while, that Dickies choices were bleak, and swinging for the fences at trial could result in his son doing a lot of years of hard time, as well as ensuring he himself would never walk this Earth as a free man again.  I figured pleas would come either late today after the latest motions were turned down, or Monday, the last day to submit plea agreements to the court.  For quite a while Ive been saying to folks who e-mailed me about attending the trial that I doubted there would be one, so its no surprise to me or others who were watching closely. 

NINTH UPDATE: This motion was filed by the government today.  It asks the courts permission to turn over evidence gathered by the FBI "taint team" -- a team that separately analyzed data like computer files copied from the Scruggs Law Firm during the November FBI raid -- to the federal prosecutors in the Scruggs case.  From this motion, we learn that this information was turned over to the defense team just yesterday -- the timing of the pleas could have had something to do with the evidence.  

EIGHTH UPDATE: Roger Parloff of Fortunes Legal Pad

SEVENTH UPDATE: Check out Walter Olson at Overlawyered for more news and links.

SIXTH UPDATE:  This has got to be kind of like getting a paper cut after youve lost your legs, but in another matter, the 11th Circuit Court of Appeals turned down Scruggs petition for a writ of mandamus against Judge Acker, in the Renfroe v. Rigsby civil lawsuit in federal court in Alabama.  Scruggs sought to have Acker removed as a judge from the case, saying he was biased because he had referred Scruggs for criminal contempt of court in the case. 

Heres a copy of the 11th Circuits order.

FIFTH UPDATE: Just got a moment to link to the documents.

Dickie Scruggs plea agreement.

Backstroms plea agreement.

Factual basis for Scruggs plea agreement.

Factual basis for Backstroms plea agreement.

FOURTH UPDATE: A story by Richard Fausset of the L.A. Times, with an interesting quote from attorney James Robie.

"You know, Ive spent hundreds of hours letting that issue marinate, because it boggles my mind," said James Robie, a Los Angeles attorney who is representing dozens of Katrina-related cases Scruggs clients brought against State Farm Insurance. "I believe he became completely intoxicated by power. . . . And hes so avaricious that hed often tie in with it, How many millions can I rake in? Just because it was a game."

Fascintating, but I dont think Scruggs became intoxicated by power, as one would normally understand that phrase.  I think he -- contrary to the perception of him as a gambler -- was someone who showed a proclivity and a talent for arranging things, when he was able, so that it was a "heads I win, tails you lose" situation.  Sometimes he had enought juice to do that, sometimes he didnt. 

Also, I occasionally get people saying to me, stop kicking Scruggs, you dont kick a guy when hes down.  Two things.    First, if we cant collectively condemn judicial bribery and all its implications, and examine how far this pattern of conduct reaches, if we cant defend the institutions that protect us, we are not worthy of survival.  Second, unlike many, many others, I kicked Scruggs when he was up, too.  

THIRD UPDATE:  Heres a story from the ABA Journal, with a lot of good links, and unfortunately, a very good profile story that was superseded by events today.  But hey, Scruggs happens.

SECOND UPDATE: Heres the word from ICLBs confidential correspondent at the courthouse this morning:

Sentencing in 30-45 days.

Before the hearing, DS and Backstrom sitting in the gallery. DS hugging people who spoke, shaking hands, talking. DS sitting next to wife before hearing started. Backstrom did not have a wife at his side when sitting in the gallery waiting for proceedings to start (at which time both he and DS moved to the defense table). Sat with DS and DSs wife before moving to defense table.

Judge annouced that Backstrom and DS changing "not guilty" plea to "guilty" as to count 1 (conspiracy to attempt to bribe...)

Both Backstrom and DS plead guilty to count 1 of the indictment. Max sentence is 5 yrs. No recommendation for DSs sentence. Backstrom recommendation in his plea agreement that his sentence not exceed one-half of DSs sentence.

Counts 2-6 will be dismissed for each.

DS represented by Keker. Dawson for gov. DS was very stoic. Answered judges questions clearly; talked clearly, understandably, loudly; otherwise completely motionless. This plea has no effect on the Wilson investigation. DS pled first. then left the courtroom, glanced in direction of his wife. His wife followed and then returned for Backstroms plea.

Backstrom - represented by Tannehill and Trapp. Backstrom agreed that he did enter into a conspiracy but did not assist in "furnishing monies." He indicated (when asked by Biggers who provided the monies) that his law firm did. Trapp and gov quibbled a second or two about the word "corruptly" in front of "influence" - it was Trapps understanding that "corruptly" would be removed. The gov indicated that is had been removed from the first paragraph, only because the gov (Norman for gov) didnt feel it was worth arguing about. Biggers asked if he understood that the acts of one co-conspirator are attributed to all. He said he understood. Throughout, Backstrom was quiet, reserved. entered plea and then asked to say something. Said he apologized to the court, his family. Began sobbing. Stated that he had made some of the worst decisions of his life in this matter, and that he accepted responsibility. Biggers responded: "Your apology is on the record. No doubt you made some awful decisions."

Both DS and Backstrom remain on their original bond.

___________________________

UPDATE: Backstrom too. No word yet on Zach, I just heard from someone at the courthouse for the hearing on Zachs motion to dismiss, apparently as of this writing (9:25 a.m. Pacific time), the hearing is still going on.

_________________

I started hearing strong rumors of a plea agreement this morning, and it turns out to be true.  Heres a breaking story from Holbrook Mohr of the AP.  More to come later.  Also, let me be the first to point out -- apparently it wasnt Too Dumb For Dickie.   

Theres a hearing today in Oxford on the latest motions.  Someone in the comments yesterday asked what time -- 10 a.m. -- although if that pre-trial publicity was one-tenth as pervasive and inflammatory as the defense claims, I suspect he wouldnt have had to post a comment on a blog to find that out, he could have just listened to the people shouting in the street.  In any event, its 10 a.m. -- pack up the babies and grab the old ladies, bring along your PDA or laptop so you can catch all the latest pervasive and inflammatory news, and head on down to the courthouse. 

Speaking of pervasive, heres an affidavit that was filed in court on the 12th along with a motion I linked to in an earlier post, a motion for reconsideration of having the jury be anonymous.  The affidavit was another one of these "this publicity is killing me" things.  There were a number of exhibits, some of which I looked at, but most of which I didnt bother to download.  Because what they were is some press clippings -- looks like P.L. Blake is earning some of those millions Scruggs paid him!  You can look in the link above to the affidavit and see for yourself.  These exhibits were arranged by publication, you know, trying to make it look like there was a lot of them, a whole huge amount of prejudicial, inflammatory, mad dog, foaming-at-the-mouth-and-drooling-on-your-shoes press coverage.  But in truth, it was this stack that was pathetically thin. Im talking thin like some character in Oliver Twist begging for some more gruel.  I said to myself, is this all there is? Because dang, talk about indictments, that wafer-thin stack was an indictment of the media coverage, all right.  An indictment of the lack of it.  (As always, I note there are exceptions to the lack of coverage, and you folks know who you are).

Also filed was the government response to the latest motions, which was that rarest of things, a brief that literally was brief.  Basically said the motions were old news and there was no need to come up with a new response.

One of the exhibits to the affidavit above was this supplemental jury questionnaire that the defense is asking the court to use -- I intended to write a satire of this thing, when you read it you will see why, but I ran out of time, so youll have to make due on your own. 

Insurance agents may be surprised by a recent Ohio court ruling regarding the legal duties of an insurance agent to an insured. The decision and its implications are discussed in an American Agent & Broker article by Barry Zalma, a highly experienced consultant and attorney specializing in insurance. . The article (see here) describes a couple who claimed that they relied on their agent for the proper amount of insurance. The court decision stated that an insurance agent or broker... - [Read more]

USA v. Scruggs has had a flurry of motions in recent days that will be argued at a hearing tomorrow, and then you know what Monday is -- last day for plea bargains.  Here are the motions. 

Motion to sever. This motion, which is a second try at coming up with reasons why the trial of Sid Backstrom and Zach Scruggs (Zach also endorsed or joined in the motion) should be separate from that of Dickie Scruggs, contains this interesting passage:

The impaneling of an “anonymous jury” is seldom used in American trials. Any resident who pays attention to the various “trials of the century” that have garnered extensive media attention, or who watches “Court TV,” “Law and Order,” “Perry Mason,” or even “Boston Legal” knows it. Impaneling an anonymous jury denies Mr. Backstrom his right to a jury of known individuals.

I love this! Because I talk about Boston Legal all the time on this blog and how its my chief source of knowledge about criminal procedure -- which is why everything I know about criminal procedure is wrong.  For example, from watching that show, I would expect the trial to take roughly 35 minutes, and to feature substantial evidence of how global warming has led to a longer growing season for sweet potatoes, along with mandatory stupid closing rants about some politics du jour.

There also is a footnote about how blogs have gone with Scruggsurround Sound, and how this "incredible" level of publicity about Dickie Scruggs is endangering a fair trial for the other defendants, who -- I guess this would be the implication -- are allegedly much less allegedly involved.  Well, even with the number of readers way up, you have to keep some perspective -- the number is small compared to the population of Mississippi, many readers are not in Mississippi at all much less northern Mississippi and readers tend to be hard-core information seekers and those who in some way would never be picked for a jury in the first place because of some self-interest in these proceedings, because of who they work for or because they hold very strong opinions about what is going on.  As far as the level of publicity from mainstream media, with a few exceptions, its not very high or very aggressive.

One clarification in the footnote: my readership isnt up "15-20 more readers" as it says there, I estimated 15 to 20 times more.  I know, I know, its just a typo, no biggie, I make them all the time myself. Just sayin.  Anyway, I place no faith in numbers, could be more, could be less.  As you know, I was happy writing about Katrina litigation and insurance coverage issues, and Scruggs just happened to melt down on my watch.   

Motion to compel discovery.

Dooley Affidavit.

Exhibit A

Exhibit B

Exhibit C (partial transcript of the February 20 motion hearing, featuring testimony by Tim Balducci)

Exhibit D

Motion to reconsider anonymous jury. This motion has a long section about how inflammatory and pervasive the Scruggs coverage has been, and this section, with the exception of a few points I would agree with, is completely wrong. 

Let me put it to you this way: say a doctoral candidate in media studies wrote a dissertation on how the mainstream media in Mississippi has been super-aggressive, coming out with investigative stories every couple days on Scruggs, really blowing the coverage out.  Do you think this person could defend this malarkey against challenge?  Good Lord, wake up and smell the sweet potatoes!  Theres hardly been any coverage at all compared to what there should be.   

And that stuff about blog readership and the number of people reading the papers?  Come on, if you think any blog involved in the day to day Scruggs coverage has had 222,000 people reading it in the past few weeks, you need an intervention and a reintroduction to reality.  All those numbers cited? They are all fake.  You can measure stuff with any number of deceptive statistics -- blog sitemeters are notorious for inflating the traffic to make bloggers feel good about themselves. Same with newspaper circulation figures and online numbers. Thats why I pay no attention to those kinds of things.  

I will agree with one thing, however, and that is the disgusting nature of some online comments noted in the brief.  I wont publish garbage like that, and most of the idiots who would write something like that dont even try me anymore.  No matter what we think of what allegedly happened, we are still talking about our fellow human beings here, and lets remember -- each of us is capable of good and evil.  Thats why we punish evil -- to guard against our tendency to want to do it.

Im going to be speaking at Mississippi State Universitys Insurance Day -- Im not sure if Ill be speaking on April 1 or April 2, but Ill get back to you soon when I clarify that.  Heres a link to sign up to attend -- theres a list of the speakers. 

Its going to be about the time of the Scruggs trial, if there is one, so I might stop in Oxford to pay my respects.  Unfortunately from the standpoint of doing everything I would like to in Mississippi, this is a very crazy busy time for me at work, so I cant stay long.  Im sure Ill be back -- maybe to do interviews for that book Ive been talking about.

What am I going to talk about? Well, Ive been working on an hour-long speech about the nuances of anti-concurrent causation, including a really, really in-depth look at some case law from the 60s . . . . What are you kidding me, Im gonna talk about Scruggs, of course!! 

Scruggs, Scruggs and more Scruggs, a veritable Scruggs-o-rama, a Scruggs-a-thon, a Scruggstacular, a Scruggsation.  And Hood.  Oh yes, I am definitely gonna talk some Hood.  Jim Hood, if you show up there I can do that interview with you Ive been wanting to do -- I am gonna have a tape recorder with me!  And about Katrina litigation, yes indeed, I will talk about all that. 

Look, I like intellectual discourse as much as the next person, I like nuances, and mental challenges and all that, or I wouldnt be an insurance coverage litigator in the first place.  But lets face it, Im also the guy who came straight off the farm in North Dakota and went down to Phoenix to be a crime reporter, driving around with the Crips and the Bloods and all, and I even got yelled at by John McCain a time or two (that was after I left the crime beat, didnt see much of J-Mac in the projects). So what Im trying to say is I like excitement and sensationalism too -- wouldnt have been much of a crime reporter if I didnt -- and were gonna talk about the sensational stuff, the really good stuff.  Thats what were gonna talk about.  But if folks want to ask questions, I can leave time for that.  I have only one requirement -- dont make fun of my accent.

If you have a particular topic or event or issue youd like me to talk about, tell me in the comments or in an e-mail.  I cant promise anything, but I will consider requests. 

Read this AP story on Jim Hood saying he will offer the full resources of his office to local District Attorneys if they decide to investigate and prosecute those connected to the Scruggs scandal.  No one has any plans to do so, of course.  Question: does this seem at all to you like someone saying that, if their favorite song isnt the next one on the radio, it is a sign from above they dont need to get more exercise or put more in the collection plate in church?

One of my friends who follows this stuff more closely than I have been able to do since the Scruggs Supernova happened has been sending me copies of court decisions on property loss causation.  This is a subject I take a great deal of interest in, and Im going to comment on the causation analysis of two recent decisions, one from New Hampshire and one from Vermont.

The more recent case is Bates v. Phenix Mutual Fire Ins. Co., a February 13 decision by the New Hampshire Supreme Court.  A large rainstorm caused flooding behind a roadway, and a culvert under the road was inadequate to carry relieve the pressure of the built-up water, which burst through the roadway and flooded the policyholders real and personal property. 

Although the insureds homeowners policy contained an anti-concurrent cause provision, the parties did not argue that it was relevant and the court did not analyze it as relevant -- which is correct all around.  The loss here was not caused by flying rocks or debris from the roadway, it was caused by water.  If the damage had consisted of a rock thrown a great distance because of a spectacular eradication of the road, then it would have been correct to examine the anti-concurrent, anti-sequential cause provision, because this type of loss would be an example of sequential causation (forces acting like dominoes).

But even though the plaintiff argued for payment under a clause covering "explosion" -- the road kind of exploded in a manner of speaking when it was swept away -- there does not appear to have been a credible argument that the damage was caused by anything but water, which was uncovered because of the flood exclusion.   In this case, then, we are dealing only with single causation, and anti-concurrent, anti-sequential language is applicable only where multiple forces cause the same exact damage.  Bates presents a fairly simple causation analysis, but fairly simple analyses are not always handled well.  I should note that it is not clear from the opinion, but the "explosion" definition appeared to apply only to personal property coverage, not coverage for the structure itself.  The court, however, did not make such a distinction.

The other case I want to talk about is from late last year from the Vermont Supreme Court -- Sperling v. Allstate Indemnity Co.  Allstate policies, of course, do not have anti-concurrent causation language in them.  Instead, they have language mandating analysis under the "efficient proximate cause" standard -- if loss is due to multiple causes, one must determine which is the primary or dominant cause, and if that one is covered, the loss will be covered.  Under anti-concurrent cause language, however, even if a covered cause was dominant, as long as an uncovered cause was a "but for" reason for the damage, it is not covered.  A harsher rule, anti-concurrent cause, but one that was thought by insurers to be easier for courts to apply and less subject to judicial misunderstanding, flights of fancy or creativity. 

In Sperling, the insureds fell victim to an incredibly unlucky event -- a suitcase fell off a shelf in the basement and broke a valve on a heating oil tank, releasing 160 gallons of home heating oil into the basement.  The insureds homeowners policy had an exclusion for contamination and pollution, including language that said this type of damage was excluded where it was the predominant cause of loss.  This is usually considered the language of an efficient proximate cause analysis, but the court here gave a different interpretation of this language than I would have expected.

If I was arguing the insureds case, the choice to me was obvious -- say that the predominant or moving cause of loss, the one that set the other in motion, was not heating oil contamination but a falling suitcase, and the resulting loss is therefore covered.  That is in fact one of the arguments used by the insureds.

The court rejected the argument, however.  It said that the language that I would characterize as efficient proximate cause language in fact was not.  The court said the language states only that if contamination is the predominant cause of the loss, it is excluded.  But, the court said, the clause does not state the opposite -- that if the predominant cause is a covered cause but pollution is a secondary cause, then the loss is covered.  This seems like a strange reading of the language, one that turns it into a de facto anti-concurrent cause provision, when it obviously is not.  I would have expected the court to say that the language, by stating that a loss is uncovered when an uncovered cause is predominant, implies the reverse -- that the loss is covered when the uncovered cause is secondary.

Anyone have any other thoughts on these decisions?

Look, Im not saying this just because Im on the advisory board, and Im not saying this just because I have this post up about legal blogging, and I am not saying this just because I am as amazed as anyone that a behemoth like LexisNexis is beginning to understand the interactive possibilities of free internet content.  I am saying it because the Lexis Insurance Law Center is turning into a very good product, a primary source for insurance news, opinion and perspective.  Theres some pretty good stuff there, and its getting better all the time.  Its going to take some convincing on my part to get folks to turn loose and "let their freak flag fly," as the comment to my ILC post says, but I am nothing if not relentless. 

UPDATE:  Thanks to Walter Olson at Point of Law for the link to my ILC post, and to Kevin OKeefe at Lexblog for the same.