Insurance Coverage Blog

For those who remember the heady Katrina litigation days of the Ride of the Rigsbys -- appearing on ABC's 20/20, acclaimed as alleged whistleblowers -- these times are very different for the sisters. They've slipped in the celebrity rankings to a most unenviable category: forgotten but not gone.  The inevitable next stage?  Jointly occupying a corner box in the New, New Hollywood Squares, I suppose, hosted by John McEnroe or some such.

Contestant: I'll take the Rigsby Sisters for the block.

McEnroe: Kerri and Cori Rigsby. What famous tourist attraction features more than 200 kinds of reptiles?

Rigsby Sisters: Snake Farm!!

Contestant: I'm going to disagree.

McEnroe: The correct answer is the San Diego Zoo. Circle gets the square.  By the way, Rigsby Sisters, you've answered either "Snake Farm" or "State Fraud" to every question this week. 

I saw this Anita Lee story in the Sun Herald about the latest on the Rigsbys.  The case brought against them by E.A. Renfroe, a State Farm contractor who did claims adjusting for the insurer during Katrina, a case in which they were utterly routed, is nearing final settlement.  Have I gotten totally out of touch, or are the names under the Rigsbys' pictures reversed in the story? Not Anita's fault, someone else other than the reporter does that kind of stuff at a newspaper.  You know your status is in free fall when they put someone else's name under your picture.  In a month or two, folks won't even get the Rigsby part right, the cutline under the picture will have the name of some other former celebrity of yesteryear, like, say, Gary Coleman of Diff'rent Strokes. 

The story has some pdf's of stuff to do with the winding up of the Renfroe v. Rigsby case in Alabama federal court and an interesting filing from a few days ago in the False Claims Act case, Ex rel. Rigsby, in federal court in Mississippi, which to me appears to be tottering like a 90-year-old guy without his walker. Here's that pdf.  Looks like more of the same old to me, the usual blah blah about the Brian Ford engineering reports on the McIntosh property and so forth.  You may remember these reports from the unusual detail that the first one attributed all the damage to wind, and strangely enough, Kerri Rigsby herself later wound up greenlighting the flood payment to the McIntoshes.  So there would seem to be some inconsistency there. As Gary Coleman might say, "What you talkin' 'bout, Rigsbys?"

The filing seems to be a plea to be allowed to engage in discovery before a May 20 hearing on this case before Judge L.T. Senter Jr., and Judge Senter has already said this won't happen -- the basis for the case is supposed to be first-hand knowledge of the massive fraud the Rigsbys allege.  If you read the document, you can see the first-hand knowledge is pretty thin, just a couple of anecdotes. Didn't see anything in there about Kerri Rigsby approving the flood payment, maybe that will be covered in the next brief. Or maybe the brief will say Gary Coleman approved the flood payment.

All right, so that's it for this post, except for one more thing.  Let's finish it off with the newest song I've added to my work-in-progress musical, The Katrina Follies.  This song, Don't Ignore Rigsbys, as I posted about two days ago, appears in the second act, and is sung by the actors portraying Dickie Scruggs and Mississippi AG Jim Hood, to the tune of the Beatles' Eleanor Rigby.

Ah, look at those two whistleblowers

Ah, look at those two whistleblowers

Don't ignore Rigsbys

Picked out the fraud from the files where Snake Farm had it hid

That's what they did

Met in a trailer, accessed computers and lawyers were there

Just 'cause they dared

All the whistleblowers, where do they all come from?

All the whistleblowers, where do they all belong?

Posted By David Rossmiller In Industry Developments
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Nothing like giving the readers a lot of advance notice before an ultra-high stakes award like this is finalized, right? I'm a bit tardy on this, but hey, it's not like I'm on the advisory board of the Insurance Law Center and might have been expected to post on this more than a day before the contest ends . . . oh yeah, I am. 

Well, in any event, here is a link to the ILC's Insurance Person of the Year voting, with four big categories: policyholder lawyers, regulators, judges and insurer-side lawyers.  In the last category, I'm surprised no one nominated Dickie Scruggs -- he almost did more for State Farm and other insurers, in the long run, than they did for themselves. 

(By the way, I'm almost done writing my musical, The Katrina Follies. Here's one of the latest songs I've written, Don't Ignore Rigsbys, which is sung to the tune of the Beatles' Eleanor Rigby.  This song comes in early in the second act, sung by the actors portraying Dickie Scruggs and Mississippi AG Jim Hood). 

Ah, look at those two whistleblowers

Ah, look at those two whistleblowers

Don't ignore Rigsbys

Picked out the fraud from the files where Snake Farm had it hid

That's what they did

Met in a trailer, accessed computers and lawyers were there

Just 'cause they dared

All the whistleblowers, where do they all come from?

All the whistleblowers, where do they all belong?

Anyway, check out the link, if you care to.  You too can vote for your favorite!  As long as it's one of the finalists listed.  A veritable Insurance People's Choice Award.  And don't worry, you've got . . . well, almost two whole days left, until March 18, to get your vote or comment in.

Posted By David Rossmiller In Industry Developments
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Kodrin v. State Farm is one of the Katrina cases, which I wrote about previously here and here.  It was different from many Katrina cases in that, at least as far as what was presented to the jury, there was nothing to sort out about wind vs. water and what damage had been caused by each.  So this is not one of the cases where anti-concurrent cause language became an issue -- although as I repeatedly talk about, under the facts of Katrina damage, anti-concurrent cause language should never have been an issue, because the facts of Katrina damage do not support analysis of the damage as caused by concurrent causes. 

I never get tired of saying this: I will be saying it in my speeches at the PLRB conference in Seattle later this month, and I probably will still be saying it when I am a little old man sitting in a rocker in front of the TV complaining about how the neighbor kids are so loud I can't hear my programs and by the way, why doesn't the milk wagon come anymore? No set of facts I have looked at -- and I have looked at a lot of them -- shows that any Katrina damage was caused by anything other than single forces working independently.  A lot of you may have heard this before, so you can skip the rant and jump down to a further discussion of Kodrin, but I think it bears repeating because this point is so easily lost in time.  Homeowners policies insure against damage to property, property has various elements.  Unless multiple concurrent forces cause the same damage to the same element of property, that is, unless they worked together to cause that result and unless it would not have occurred except for the combination, concurrent causes were not at work.

Kodrin is the ultimate in single causation questions: that's all the jury heard, a dichotomy between the Kodrins' claim that wind alone destroyed their house, and State Farm's claim that flood alone destroyed their house.  This may sound like a strange set-up to you, until you look at the facts of the case: the whole neighborhood was hit by Katrina flooding, which washed the rest of the houses off their foundations and kind of pooled them in one location.  These homes, although severely damaged, were not utterly torn down and demolished.  The Kodrins' home, among all of them, was the only one obliterated. 

This led them to,  as the Fifth Circuit put it in their opinion from a few days ago, "speculate" that a tornado destroyed the house.  Their claim was belied by their acceptance of the policy limits of their flood insurance.  I don't say this to be a smart alec, but rather because I wonder about this flood payment in Kodrin and a number of other instances: did they give the flood money back or did they keep it? I ask this because the choice before the jury was all wind or all flood, and the jury found all wind. So what happened to the federal flood money?   

The jury, as the first link above shows, felt the Kodrins had been treated unfairly and awarded them the maximum amount under the policy plus punitive damages under Louisiana law.   I'm not sure if I'm adding it up correctly, but it looks like the punitive damages were about $135,000, plus about another $140,000 in statutory attorney fees and costs, not a huge amount in the scheme of things, but the precedent was important to State Farm, I imagine. 

The challenge to the verdict on the damage itself, as opposed to the punitive damage portion, was a steep climb uphill -- you have to show that the jury instructions were wrong and prejudicial, and stuff of that ilk.  Most of the time such challenges don't succeed, and this one was no different.  Even though it wasn't necessary for the court to parse out causes -- because whether you believed it was wind or water that caused the damage, it was presented to the jury as an instance of single force causation -- I was pleased to see the Fifth Circuit panel recognized that merely because flood destroys a house does not mean that covered wind damage didn't previously occur.  This is the example they used, in footnote 15 on page 7:

It is important to distinguish between this dispute over which force totally destroyed a home and cases in which the parties disagree as to the causes of various damaged elements of a home. Distinct elements of damage would have to be considered separately. Flood damaged carpets, for example, would not bar recovery for a wind-damaged roof.

Now, this gives me some hope that this panel gets it when it comes to an understanding of the proper analysis to differentiate between single and multiple force damage: first determine what the loss is.  The example used, flooded carpets and wind-damaged roof, was a fairly common scenario in Katrina damage, but it really doesn't present any analytical problems, only problems of proof.  The real test of understanding is the realization that the carpet itself, or the roof itself, could be damaged by two single forces that caused separate damage, one covered and one uncovered, and that this does not make them concurrent forces. 

A house is not a unitary phenomenon of property, it has constituent elements that themselves are property.  Constituent elements such as carpet, likewise, are not monolithic, but have various degrees of worth as property -- merely because wind tears some pages out of a book does not make the book worthless, although its value might be lessened considerably.  There is still some value there when the book is destroyed by flood -- the two forces worked separately to cause separate damage, and the damage from the first force still occurred and caused damage even though the second force would have taken all the value of the book away.  The key is would have: in the hypothetical I pose, that is not actually what happened, and so would have doesn't matter.  However, as I said, it wasn't necessary for the Fifth Circuit to consider that issue this time, and so they didn't, and this is just as well, because explanations from the Fifth Circuit of Katrina causation analysis usually haven't been that great.

Although the court left standing the jury verdict on property damage, it vacated the award of punitive damages.  The court said, in light of the evidence, there could be an honest dispute about what caused the damage to the Kodrin home.  Again here, I don't know what happened with the flood payment, whether that was returned or not, or the precise circumstances under which it was applied for, paid and accepted, but the very fact of a flood payment creates an idea in my mind that there could be an honest belief that flood caused the damage. 

Here's what  the court said about bad faith, when it exists and when it doesn't: 

State Farm declared that it determined flooding was the more likely cause of the damage to the home because (1) the Kodrins’ neighborhood was inundated when a levee was overtopped during Hurricane Katrina, (2) the Kodrins’ home was just one house away from that levee, and (3) many other houses in the area were lifted off their foundations and destroyed by the floodwaters. The Kodrins themselves acknowledged that their claimed wind damage to their home was unusual in their neighborhood, advancing that a tornado must have caused the damage as their speculation why their home was the only one in the area destroyed by wind, not flooding. On these facts, we perceive no probative evidence that State Farm acted in bad faith. State Farm’s refusal to pay was with reason, even if the jury ultimately rejected that reason. The Kodrins have failed to prove otherwise; they essentially ask this court to find bad faith any time an insurer denies coverage and a jury disagrees. This would unduly pressure insurers to pay out claims that they have reason to believe lie outside the scope of coverage, solely to avoid penalties later. Such a rule would pervert the presumption that insurers act in good faith unless the insured proves bad faith, and this is foreclosed by Louisiana law.

Posted By David Rossmiller In First Party Insurance , Industry Developments
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The Scruggs Nation has a fever, and the only prescription is more Scruggs. Well, OK, this news story is not about Dickie Scruggs, it's about Zach Scruggs, not the same, I know, but it will have to do.  Seems like whatever happened with his reporting from prison to the halfway house, it's not going to be a big deal.  

He was arrested in Oxford, Mississippi, after allegedly reporting late to the halfway house.  His lawyers say he was 15 minutes early instead, so there's a discrepancy.  According to the story:

The Bureau of Prisons initiated an investigation after people reported seeing Zach Scruggs around Oxford on Feb. 24, the day he was to report to Tupelo. His wife, Amy, had picked him up at the federal prison, and they stopped and had lunch on the Square.

The Bureau of Prisons investigated what route Scruggs took from the prison as well as what he did while on the trip.

If he wasn't late, it really doesn't matter what route he took or what he did while on the trip, I would think. Well, anyway, who's to say?  The world may never know.  The story says he was released from the Lafayette County jail on Monday and is now at the halfway house. 

Posted By David Rossmiller In Industry Developments
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I was looking through my Bloglines feedreader last night under my folder labeled "anti-concurrent cause," and saw this really good post from the Slabbed blog.   This is a fascinating discussion not only of Katrina damage, but of the theory of illusory insurance coverage.  It's old, now, the post, from the nostalgia file, but it is still worth talking about.  

Now, as many of you know, in the course of my work I represent both policyholders and insurance companies, so I really don't have a dog in the fight (apologies to Michael Vick, I know the metaphor might be a touchy subject), and I have no particular ideology when it comes to insurance.  I like insurance theory because it, in many ways, is like Plato's Allegory of the Cave, in his Republic: it is merely a metaphor for the human condition and the limits not only of attempts to order and describe human behavior according to the logos -- rational principles in harmony with the universe  -- but also of the limits of human understanding.  The concept of causation, of which anti-concurrent cause theory is a part, and of 'illusory' coverage are just some of the shadows on Plato's cave wall. 

I'm sure that if you go looking for illusory coverage you can find or think of some examples, but as it is discussed in most case law, illusory coverage seems to me a particularly hard-to-pin-down shadow on the wall.  In some ways, the theory of illusory coverage is itself illusory, in other words, and I have great confidence that whatever it is and wherever it is, it is not found in anti-concurrent cause language in insurance policies, at least the way I explain anti-concurrent cause.  So I can't agree with the premise presented, both by the author, nowdoucit, and quoted material from policyholder lawyer Chip Merlin, that anti-concurrent cause language is in any way ambiguous or illusory. 

The key to what I am saying here is that anti-concurrent cause is merely a causation analysis that is present in the contract and overturns the common law default analysis of efficient proximate cause, and another key is the realization that insurance policy language is full of special definitions and terms of art that are not necessarily the same as English.  This fact of life is because insurance policy drafters attempt to respond, in addition to the changes in the nature and amount of losses, to court decisions.  I don't see anti-concurrent cause as actually removing any coverage from a policy, but even if it did, this is not a startling idea -- exclusions do the same.  A causation analysis just defines the relationship between forces and coverage, it just tells how to apply the language and terms of the policy.   Anti-concurrent cause analysis may take some work to understand, but at it's heart, it exists to keep uncovered damage from being covered, not the other way around.  Once you accept that, and it is difficult for many to accept, it is a direct route to realizing that the words "concurrently or in sequence," as found in anti-concurrent cause clauses, are words that are not nearly as expansive as might be imagined on first blush, but instead are pretty limited in application. 

I could go on and on about this -- I have before and I will again.  I'm going to be speaking about Katrina damage, wind vs. water (in the Vegas line wind is currently a two-touchdown favorite for coverage) and anti-concurrent cause theory and application in Seattle later this month at the PLRB conference.  For reasons I don't fully understand, I am actually speaking twice, they tell me, on March 24 and 26, I think are the dates.  If you're there, come to one of the speeches and we can talk about these shadows on the cave wall. 

Posted By David Rossmiller In Industry Developments
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You might recall that one of the central talking points by certain people during the heyday of Katrina litigation was this: insurance companies committed massive fraud on policyholders and federal taxpayers by overstating flood damage that would be paid, up to $250,000, by federal flood policies, and understating wind damage that would be paid from the insurers' own pockets.

To me this point was like one of those tiny cars in the circus where, paradoxically, a large number of clowns keep coming out of it.  As we've since learned, this strategy of claiming this type of fraud was arrived on just after Katrina happened, long before claims had even been adjusted.  Among the chief proponents of this view were, of course, Mississippi AG Jim Hood and his confidential informant, Dickie Scruggs.  They, of course, had their hallelujah chorus of such as U.S. Rep. Gene Taylor, Sen. Trent Lott and many others, all singing the Katrina Fraud Theme Song (which is sung to the tune of The Beatles' Hello Goodbye):    

You say flood, I say wind

I say fraud, and you just grinned, grinned, grinned

Oh no! You say let's steal, and I say get real

Let's steal/get real

I don't know why you say let's steal, I say get real

Despite Congressional hearings and other such massive wastes of taxpayer money -- hearings that included an assortment of dingbats and moonbats, not the least of which were some of the people on the Congressional committees themselves --  nothing came of all this Wagnerian screeching.  

Now, it has always seemed pretty clear to me that this strategy of claiming fraud on the nation's taxpayers was simply a way to try to nationalize Katrina issues and put added pressure on insurers to pay more.  One of the legal offensives that supposedly would vindicate these accusations was a False Claims Act case filed by Dickie Scruggs and his "insiders," the Rigsby sisters.  You can ponder the words "False Claims Act" and decide for yourself what the false claims are in connection with this lawsuit: the insurers' conduct or the allegations themselves. 

This case is the one that people who deal with these Katrina cases all the time refer to as "the Qui Tam," which in Latin of course means "Who's Your Daddy?" I prefer to call it the False Claims Act case, because I hate to be ruled by the dead hand of Latin, or if I must use Latin, I call it by its name, Ex rel. Rigsby,  which sounds like a great name for a race horse.  This case, you may remember, featured secret meetings in beach trailers to access State Farm files from laptops, it featured the Trailer Lawyers -- Trailer Chip and Trailer Tony, Trailer Todd and Trailer Mary -- and it featured the flood payment in the McIntosh case, and for the quiz, all you really need to remember about that payment is this: Kerri Rigsby herself approved the flood payment. You heard that right. The only specific example cited in the lawsuit of fraudulent conduct is one where the supposedly fraudulent payment happened because of one of the plaintiffs, or as they call them in this type of lawsuit, "relators." Try to "relate" that fact to the overall allegations: Kerri Rigsby approved the federal flood payment to the McIntoshes.    

I was looking at the docket of this case, and there was an order by Judge L.T. Senter Jr. in mid-February, and here it is. This is a fascinating order, typically brief, well-written and to the point,  which to me appears a clear indication Senter may be getting ready to pull the chain on this thing. Here is what I saw as a key part of the opinion:

In their Amended Complaint, Relators identify two and only two specific instances in which they allege the submission of false flood damage claims: the McIntosh property situated at 2558 South Shore Drive, Biloxi, Mississippi; and the Mullins property situated at 6057 Pine Tree Drive, Kiln, Mississippi. The defendants assert that the Mullins property was not covered by a SFIP and that the SFIP payments made on the McIntosh property were fully justified in light of the flood damage there. McIntosh collected the statutory maximum SFIP coverage on his property, and the individual who supervised and approved this payment was one of the Relators.

My review of the material from the McIntosh case discloses that the McIntosh home was inundated with approximately six feet of water. The house was not reduced to a shell or left as a foundation only by the storm, so there was physical evidence from which the extent of flood damage could be reasonably estimated. Because this is a FCA case and because the McIntosh property is the only property covered by a SFIP and identified in the Amended Complaint, I believe it is appropriate to conduct a hearing on the pending motions to allow the parties to present evidence concerning the question whether the payment of the flood insurance limits in the McIntosh case was justified, as a matter of law.

The hearing will be equivalent to a summary judgment hearing, and the Rigsbys are not allowed to conduct discovery beforehand.  Instead, Judge Senter said he is interested to see what they know firsthand, because supposed firsthand knowledge of fraud by a whistleblower is at the root of False Claims Act lawsuits.   All in all, it looks like one of the last stars in the once glittering Scruggs/Katrina sky is ready to wink out. 

Posted By David Rossmiller In Industry Developments
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You might have seen how Zach Scruggs, whom this AP story describes as "the son of the once legendary civil lawsuit attorney" Dickie Scruggs, was released from prison early to go to a halfway house to  prepare "for a successful return to society." Whoops! Mission Unaccomplished. That successful return to society might have to wait a while.  

I might have edited the description in the first story to say "the disgraced son of the legendarily disgraced Dickie Scruggs," because, hey, The Scruggs is still legend, maybe more so than ever. I mean, let's face it, give the man his due, Dickie Scruggs is the guy who took down Dickie Scruggs! That's hard to do. When he was on top of the world, untouchable, he must have been tapped on the shoulder by an angel or something, because, well, you all know what happened -- he just up and Scruggsed himself. A public servant, is really what he was.  Against all expectations, he enlisted as a Commander in the Karma Corps, and as he looked down the ranks, there was Tim Balducci standing tall and proud, front and center, reporting for duty.  What I'm trying to say is, that's legend for you. Balducci and Scruggs, fixing their bayonets and charging toward their destiny.

But there will be more time to talk of Dickie.  You know the sun never sets on the Scruggs Nation -- gets eclipsed for a few months maybe, but it never sets.  Now is the time to talk of Zach.  There seems to be some confusion about what went on.  It seems he definitely was arrested by the Bureau of Prisons over some alleged irregularity over his reporting to a halfway house after being released from prison.  This story in the Hattiesburg American says:

Scruggs, 34, was arrested Friday by the Bureau of Prisons and placed in the Lafayette County jail after someone reported seeing him eating on the Oxford Square with his family Tuesday.

As best as I can understand it, the younger Scruggs didn't report directly from the prison to the halfway house, but instead went to the middle of Oxford, near the old Scruggs Law Office, and had lunch with his family.  Close family friend and former Mississippi AG Mike Moore was quoted in the story as saying  Zach stopped "to have lunch in his hometown and visiting his kids, then people started calling and blogging." Calling and blogging. Sure, it must have been startling, people might have thought they were having flashbacks to the old days, hallucinations, like you walk into a restaurant and you see Winston Churchill having a burger with Lizzie Borden, or something.  Must have had folks checking to see if someone laced their water with PCP. Folks probably didn't know what they'd see next, maybe Dickie himself bursting through the door in an Elvis get-up, with some fake Elvis hair piled up to the ceiling and gyrating his pelvis while singing Jailhouse Rock, just like in this unintentionally hilarious video, backed by a chorus of jailbirds. 

There seems to be some dispute about what happened.  Some officials say Zach was late reporting to the halfway house, but his lawyers say he was 15 minutes early.  Supposedly, there will be hearing later this week to determine his fate, and at this hearing, I guess we will see if this "15 minutes early" thing is yet another creative flight of lawyer language, the typical Scruggsian prose stylings like the fake and non-existent "insiders" Dickie Scruggs claimed to have in State Farm headquarters in Bloomington, Illinois.  (The fact Scruggs ever claimed this, which he did as a kind of head-fake psych-out strategy against State Farm, shows the danger of believing your own p.r.  It is little known, but about that same time, Scruggs also publicly boasted that he could stretch out his arms, spin them rapidly in a circle and fly like a helicopter).

The story doesn't contain a direct quote from Moore on this, but paraphrases him and another Scruggs lawyer as saying Zach "arrived 15 minutes before his deadline." Hmmmmm. Is there any wiggle room in that phrase, "his deadline"?  Let's look at a quote from his other lawyer:

Cal Mayo, another attorney for Scruggs, also said via e-mail, "Mr. Scruggs was released on Tuesday morning and given a time to report in Tupelo. I assume that (the) BOP expects an unescorted inmate on furlough from early morning to some time in the afternoon to have lunch, or at least this would seem reasonable."

Maybe the Scruggs version of a "deadline" includes assumptions of "reasonable" time for lunch and losing track of time.

Well, let's wrap this one up and wait to see what happens. A final word, the Hattiesburg American story says Scruggs "has landed a job as an office assistant in Oxford as part of the requirements of his release."  Reading that made me think, what became of the old Scruggs Law Office space on the square?  Is it now an FBI training center -- the Scruggs Center for Surveillance Studies, or some such? Inquiring minds want to know.      

Posted By David Rossmiller In Industry Developments
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Holy Cow! The McIntosh case, which I have referred to as the Verdun of insurance litigation, has been dismissed by the plaintiffs' own motion.  Given this litigation had long been the scene of intense trench warfare, consuming attorney fee dollars like five NFL offensive linemen chowing down on popcorn shrimp at an all-you-can-eat  buffet, it is surprising to see this turn of events.

If you remember, Thomas and Pamela McIntosh v. State Farm is the granddaddy of Katrina litigation, or perhaps more accurately, the Mother of All (Insurance) Battles.   This is the case where Kerri Rigsby of Rigsby sisters "whistleblower" fame approved the flood payment to the McIntoshes, and where, strangely enough, the original engineering report on the damage to the home said the damage was from wind, not flood.  Alexis "Lecky" King, a State Farm catastrophe team leader, found fault with the report and asked the engineers to re-evaluate.  The second report noted the presence of both wind and water damage.  Before we move on with the recap, remember that the first report was done by a man named Brian Ford, because his name will come up again. Ford did not work on the second report. 

Now, the McIntosh claims file was among those taken by the Rigsby sisters and fed to Dickie Scruggs for use in lawsuits he was bringing and planned to bring against State Farm.  This is the case that really started all the public uproar about changed engineering reports, insurer fraud, etc. etc.  Keep in mind that Kerri Rigsby and her sister, Cori, who like Kerri was another claims adjuster working with State Farm, both quit and went directly to work for Scruggs in what federal judge L.T. Senter called a "sham" consultant arrangement -- but not before they had performed a massive "data dump," where they and some friends spent the weekend copying State Farm claims files to give to Scruggs and his good friend, Mississippi AG Jim Hood.  (Don't forget Hood once called Scruggs his "confidential informant" and helped him play keep away with the documents the Rigsby sisters took. Jeez, talk about backing the wrong horse -- if you go to the track with Jim, use him as a reverse barometer.)

You may also remember that the Scruggs Katrina Group, besides "employing" the "whistleblower" Rigsby sisters, also discussed hiring Brian Ford as a consultant.  Ford wanted a similar deal to those of the Rigsby sisters, somewhere in the neighborhood of 10-Large per month.  Entrepreneurism at work, you say?  Maybe.  But of course, payments by a party to material witnesses they would be calling to support their case is frowned upon, and in the end, that led Judge Senter to disqualify the Rigsby sisters as witnesses and to disqualify the Scruggs Katrina Group itself as counsel for the McIntoshes. 

Their present counsel, the Merlin Law Group, went a different direction with this than Scruggs did.  Here's a copy of the motion, and here's part of what the motion says:   

After engaging in extensive discovery, the Plaintiffs have determined the following:

(a) the McIntosh dwelling was damaged as a result of Hurricane Katrina;

(b) the majority of the damage to the McIntosh dwelling was caused by flooding;

(c) the McIntosh dwelling sustained flood damage of at least $250,000 to the structure and $100,000 to its contents;

(d) State Farm promptly and properly paid Plaintiffs the full policy limits of their flood insurance policy; and

(e) State Farm promptly tendered payment to Plaintiffs for wind damage covered under their homeowners insurance policy prior to the time that the dwelling was inspected by an engineer.

This has got to the most surprising development since those German and English soldiers met on that World War I battlefield for a soccer game during a Christmas truce.

The motion, which was granted yesterday by Judge Senter, dismissed with prejudice all the punitive claims.  That left only the contract claims, and my understanding is that those were settled. 

I'll discuss this more later. 

Posted By David Rossmiller In Bad Faith , Duty to Indemnify , First Party Insurance , Industry Developments
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Q: How do you know you've hit rock bottom? 

A:  When even a politician doesn't want your money.  

This story says Delaware Sen. Joe Biden is donating some Scruggs campaign cash to charity, possibly to start offloading links to disreputable figures.  A sign that he's going to be looking to take up residence at the Naval Observatory come next year?  It's actually not just Dickie Dough, but money from the whole Scruggs Gang. 

You might remember this post I did last December on some of Scruggs' political outreach efforts -- the post quotes some news stories and mentions P.L. Blake's "relationship" with Biden.  Doesn't mean much by itself, I suppose, when you are a Senator everyone claims to have a relationship with you.  Heck, even I got yelled at by John McCain back in my reporter days, maybe that means I had a relationship with McCain. But hey, come to think of it, who hasn't been yelled at by McCain -- if you've spent any time at all around him, he's yelled at you.  Maybe there's more to the P.L. Blake-Biden thing,  maybe there's not.  Maybe Blake got $50 million to clip newspaper articles, maybe he didn't.  Just sayin'. 

I wonder, will Jim Hood follow Biden's lead and give back all those campaign contributions he got from Scruggs last year? 

Posted By David Rossmiller In Industry Developments
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UPDATE:  As a number of people have pointed out, this post is in error.  Zach Scruggs' sentence actually began on August 15.  Sorry for the error, that's what you get for trying to blog from a cyber cafe in 20 minutes while the clock is burning minutes faster than a lawyer burns through a retainer. 

---------------------------------  

This Sun Herald story by Anita Lee is a little old, but I'm just now getting back to some things I wanted to blog about before but didn't have the time for.  It says Zach Scruggs' prison sentence begins August 25 -- it had been scheduled to begin today -- and he will serve his time in a minimum-security federal prison in Fort Smith, Arkansas, the same place where Sid Backstrom will serve out his sentence.  

Just out of curiousity, I did some quick research on the Ashland, Kentucky prison where Dickie Scruggs is located.  Here is a link to a Bureau of Prisons website that talks about the difference between various prisons and their levels of security. Not tremendously informative, but since Ashland is a low-security facility, it indicates prisoners there are housed in dormitory-like settings.  I lived in a dormitory in college, where I was in a room with a roommate and there were communal showers and toilets, and I'm not sure whether this is what is meant by a dormitory, or if it is some barracks-like setting right out of Cool Hand Luke.  I also found this post on a website that discusses prison rules -- the most interesting thing about the site was that the post is by a state corrections officer whose fiance is a prisoner in a federal facility (hey, stick with what you know, I always says) --  but there is a little additional information about what conditions are like at the Ashland facility.

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This story by Patsy Brumfield of the Daily Journal says Dickie Scruggs has won a legal victory of sorts: the Mississippi Supreme Court has stayed proceedings in the Lafayette County lawsuit Jones v. Scruggs, and agreed to decide whether the case should be sent to arbitration. 

If you recall, this lawsuit was the origin of the "earwigging" of Judge Lackey that landed Scruggs, his son and Sid Backstrom in the pokey.  Earlier this year, the new judge presiding over the case, Judge Coleman, refused to send the case to arbitration and was considering whether and how much money sanctions should be assessed against Scruggs for unfairly tampering with the legal process.  Having the state Supreme Court agree to take up the matter is a victory of a sort, I guess, but is kind of like standing in the charred, smoking remains of your burned-up house and finding that the box with your award ribbons from sixth grade music camp made it unharmed. 

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I'm posting today from the Oregon Coast Cyber Cafe in Manzanita, Oregon, which, when I looked it up on my PDA, sounded like a cool place to have some vastly overpriced decaf coffee and listen to some piped in tunes while blogging.  No offense, but it turns out to be a tiny little house behind a local grocery store converted into an office-like setting with some VFW-hall-like tables and some computers, and where you pay big ransom money for wireless time.  To which I say . . .  OK, deal! Because it's not easy to find a place to blog in these small Oregon towns.  I've been camping with my family this week, which is one reason posting has been light, and this will have to do.  The local library has wireless, but it doesn't open until noon, and also doesn't allow power cords for your laptop, and I had an unfortunate battery shutdown yesterday.  So this is where it happens today.  If the blogging is no good, blame it on having to rush before my minutes are used up.

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It's hard to tell when Jim Hood comes out of nowhere with some bizarre escapade like last week's press conference whether such an event is an objective in itself or merely an attempt to deflect attention from something else that will come up later.

If you recall, last week Hood said he is:

• responsible for the additional State Farm Katrina settlements because he sued State Farm several months after they announced a deal with Mississippi Insurance Commissioner George Dale to reopen thousands of claims files;
• the strongest man in the South, and he would prove it by walking right through a brick wall in front of reporters' eyes, except there was no brick wall around; and
• probably the reincarnation of the Pharaoh Thutmose III of Egypt, circa 1500 B.C, or possibly P.T. Barnum, or both.  

Just kidding about the last two, but he actually did say the first one.  It's a hard one to figure, saying something so utterly refutable -- it is just natural Hoodism/Hoodzpah/Hoodwinking? Or is Jim trying to get out in front of some other news, you know, build up some positive press before something else heads south in the South?   

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Another wonderful day in Jim's neighborHood. Mississippi AG Jim Hood announced a settlement of the breach of contract lawsuit he filed in June 2007 against State Farm.  Insurance Commissioner Mike Chaney took issue with Hood's chest thumping, according to this story in the Sun Herald.

Insurance Commissioner Mike Chaney, who was on the Coast to speak to two different groups Wednesday, said after hearing about Hood's remarks: "I think he's crazy to call a press conference on a lawsuit claiming credit for something he didn't do."

Hood claimed credit for State Farm paying an additional $74 million of Katrina settlement money.  State Farm paid this money, following the collapse of a deal between State Farm and Dickie Scruggs, with Hood's approval, to certify and then settle a class action involving some 36,000 Mississippi homeowners.  The class action settlement was rejected by U.S. District Court Judge L.T. Senter, Jr., who was concerned, among other things, about procedural unfairness of the process set up under the agreement to settle claims, and about what exactly Scruggs would do to earn some $15 million due him under the settlement.  This failed class action was a backdrop to a settlement at about the same time of some 640 Katrina cases by Scruggs and State Farm (this settlement money, of course, is what led to the dispute within the Scruggs Katrina Group over allocation of the dough, leading to ejection of attorney John Jones from the group and a lawsuit by Jones, leading to Scruggs trying to grease with wheels of the lawsuit by bribing the judge over a procedural matter of sending the case to arbitration).

If you need or want a refresher on the Hood lawsuit, I wrote about it back in 2007, including in this post. Hood's lawsuit alleged State Farm breached its agreement to make additional payments to Mississippi homeowners, which as you can see, was part of the class action proposal.  Earth to Hood: one problem with this theory --(1)  when a federal judge steps on your agreement, you are relieved from performance of it, and (2) State Farm had already agreed, in a deal with then-Insurance Commissioner George Dale, to reopen the claims, which resulted in payments that probably were about equivalent to what they would have paid under the class action process, minus the dough to Scruggs. (The failure of Scruggs to get the money turned out to be an incredibly lucky thing for him. Hey, what's an extra $15 million to a guy who's already loaded, anyway? Besides, if Scruggs had gotten this money, it was just another opportunity for another dispute with his partners, another lawsuit and more earwigging temptations) 

Here's a post I wrote about the deal between State Farm and Dale.  You may want to note the date of it -- March 20, 2007.  Then you may want to note the date of Hood's lawsuit -- June 2007.  Then you may want to note that, in his press conference yesterday announcing the settlement of his lawsuit, Hood claimed credit for the results created by Dale.  Then you may want to note that Hood, in a second press conference yesterday, claimed credit for the following: 

• Brett Favre coming out of retirement.
• The peanut butter and jelly sandwich. 
• Invention of the word "Hi."  
• Nice weather.
• Affordable, but elegant silverware.
• Long pants.
• Smiling.
• Good health, for those who have it. (He blamed State Farm for those who are in bad health, and said he is considering suing the company over this and opening a grand jury investigation, possibly involving the Rigsby sisters as star witnesses).

 As the Sun Herald story noted, State Farm, like Chaney, wasn't buying Hood's line:

He [Hood] credited the lawsuit with forcing State Farm to pay policyholders an additional $74 million. However, Hood filed the lawsuit in June 2007, after State Farm had begun the re-evaluation process under the Mississippi Insurance Department's supervision. Hood's lawsuit accused the company of violating an agreement with his office that called for federal court supervision of the re-evaluation.

"We find it perplexing Attorney General Hood would claim full credit for a process he opposed from day one and was the foundation for his lawsuit against us, which he now has settled," State Farm spokesman Fraser Engerman said Wednesday. "Nonetheless, we are pleased the attorney general understands State Farm has met its obligations under the agreement made with his office in January 2007.

Yes, ladies and gentlemen, just another example of Jim's incredible Hoodzpah.  If I was George Dale, I'd be pretty ticked off. The earliest Hood started talking about his lawsuit was somewhere around May 2007, as you can see from this post I wrote from that time.  

Here, by the way, is a press release from Hood's office, which has a link in it so you can listen to the press conference, if you care to.  

Now look at this press release from Dale last December. In it, he says the figure for all settlement money because of his agreements with State Farm and Nationwide to re-evaluate claim totaled $110 million -- Nationwide paid out an additional $40 million, in addition to the State Farm dough. 

Oh, I almost forgot.  At that second press conference yesterday, Hood also claimed credit for the following: 

• The Nationwide payments of $40 million (even though he didn't sue Nationwide for breach of contract, he is sure they were scared into paying by the example he set with State Farm).
• Tax rebates.
• Friendly dogs and soft kitty cats.
• When the sun shines and the fish bite.

Now that Hood has emerged from the phone booth wearing a cape with a big S emblazoned on his chest, let's take a look at some other statements by Hood on this matter, some that were made under oath.

For example, here is some of his testimony from a hearing in Natchez earlier this year, which came as part of the lawsuit by State Farm against Hood -- yes, that's right, remember that State Farm successfully sued Hood to enjoin him from further criminal investigation of the insurer, which is kind of like an elk taking away a hunter's 30.06 and chasing him off with a spray of bullets. 

Q. Would it surprise you if State Farm has spent in excess of $70 million on reevaluated Hurricane Katrina claims on the coast? 
A. Probably, in that I don't know what State Farm's included  in that 70 million. It could be legal fees, all that type thing. They have had statistical -- we take questions about their statistics frequently when they name how many policyholders settled and so forth.

Check it out. It's on pages 73 and 74 of the transcript of that proceeding, and you can find the transcript as the top link in this post I wrote in February 2008. (I link to the post rather than just the transcript because I want you to read the first paragraph of the post, it's one I thought was pretty funny). 

Do you see what Hood said? He didn't know the first thing about the process, how much was paid, who was getting paid, and so forth. He even doubted State Farm had paid $70 million!  But when it comes time to settle the lawsuit, he covers his tail by claiming credit for the results he testified he didn't know a thing about.  If you read the seven or eight pages before the ones I cited, you will see I am correct.  Another amazing display of Hoodzpah.

Oh, and I almost forgot to mention it, but at that second press conference yesterday, Hood also claimed credit for:

• Making chocolate taste good.
• Straight teeth and good dental hygiene on the part of most Americans.
• Several sonnets and plays mistakenly attributed to Shakespeare.
• Throwing the winning touchdown pass for the New York Giants in the Super Bowl.
• Catching the winning touchdown pass for the New York Giants in the Super Bowl.
• Inventing the Super Bowl.
• Inventing the New York Giants.
• Inventing the National Football League.
• Inventing football.

Posted By David Rossmiller In Industry Developments
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I know I haven't been blogging enough where these two things happen in one day:

a.  My wife tells me I haven't been blogging enough; and 

b.  Dr. Ed Duett, of Mississippi State, tells me folks in Mississippi are complaining that I haven't been blogging enough. 

Ed is in Portland for some kind of academic risk management conference, and I had lunch with him Monday.  Good to see him again (I spoke at the Mississippi State Insurance Day in April).   So, workload permitting, I'm trying to catch up.  So here goes.

I got a chuckle out of the headline and lede of this Associated Press story: "Anti-tobacco lawyer Dickie Scruggs has reported to a federal prison in eastern Kentucky." 

Anti-tobacco lawyer?  Is that an apt description?  If anything, I think Scruggs would be described as pro-tobacco -- after all, without it, he wouldn't be pulling in his $50 million a year, or whatever his take is.  If those tobacco companies weren't around, Scruggs would be just another con trying to get large by lifting weights, instead of being the richest guy in the cell block.  Maybe "pro-money lawyer Dickie Scruggs" would have been more accurate, or more accurate yet, "pro-Dickie Scruggs lawyer Dickie Scruggs."  

No word yet on whether he has hatched any escape plans.  

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Only about 35 emails today from people wondering why I'm not blogging on the Scruggs news -- I'd love to, but I have doing deadline stuff for paying clients the past two days. Maybe later tonight I can get at some of the back log. You don't know how much you miss blogging till you don't have the time to do it anymore.  Like the song says . . . .  

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I grew up in a tough school with a lot of colorful characters who used a lot of colorful language, and consequently I have a wide repertoire of colorful expressions for a variety of situations in life, such as when stuff surprises or amazes me.  For public consumption, though, I censor most of these and translate them into one of several stock phrases, such as Holy Cow!  So in reading some depositions attached to the latest State Farm filings in Ex rel. Rigsby, the False Claims Act case where the Trailer Lawyers got kicked out, I had cause several times to say Holy Cow! 

Now, I have seen for some time that the Rigsby Sisters' story line that had been sold originally -- "Hero Sisters Aid Crusading Lawyer Scruggs In Stopping Insurance Company Fraud" -- was going to undergo a substantial makeover.  This really didn't require any great prescience, and the same observation could have been made by anyone who was paying a moderate degree of attention.  Obviously, Dickie Scruggs has totally discredited himself, so the demand for the original story line is somewhere up there with the demand for salmonella-laced tomatoes and new chapters of the Milli Vanilli fan club.  I mean, if someone was pitching this story to those two con men in The Producers today -- the ones looking for the worst play possible to stage, one that was sure to bomb -- they would pick the original Rigsby-Scruggs story over "Springtime for Hitler." 

So let's face it, we all knew a change had to come.  The only question is how big the change would be.  Well, the results from the precincts are beginning to come in, and it looks like the whole darn Rigsby story might come unglued like a letter held over a steaming tea kettle.   

OK, but we don't want to rush through all the details at once here.  First, we may want to acknowledge that there were some ridiculous elements to the story from the beginning, stuff that just never did add up.  I mean, it's a little like the song "Hang Fire," by the Rolling Stones -- I laugh every single time I think about this song, where the counterculture icon, party master Mick Jagger is berating his fellow Englishmen for being lazy slobs who won't work for a living.  (Although if you have ever seen Jagger in concert, you have to admit he is one hard working son of a gun -- thus, the source of his irritation). Here's one thing that stands out from this new brief, which talks about the Rigsbys' conversations with two fellow workers at the E.A. Renfroe Co., Dana Lee and Tammy Hardison. 

Sometime in March 2006, the Rigsbys told Ms. Lee that they were going to work for Dickie Scruggs by providing him with documents about his clients. (Lee Dp. at 59-60.) They tried to convince Ms. Lee and Ms. Hardison to assist them, saying: “You’ll be heroes. We are going to get a book deal. We’re going to make a movie. . . . We’re going to be famous.” (Lee Dp. at 63.)

When I'm reading this, I'm saying Holy Cow! to myself: Book deal? A movie? And I'm thinking: this is starting to read like a sequel to The Secret Life of Walter Mitty.    

Now there is so much good stuff here we could easily get ahead of ourselves, so we have to slow down a bit and talk just a little about what this brief is about.  It's part of the continuing fight over whether the Provost Umphrey firm can take the place of the disqualified Trailer Lawyers.  We all know, of course, that for sheer hilarity no one can take the place of the Trailer Lawyers, so on that ground they are a poor substitute.  I will grant you that there is a certain Dickensian cast to the firm name -- Provost Umphrey.  Sounds a bit like one of the great Dickens character names, like Uriah Heep (David Copperfield),  Uncle Pumblechook (Great Expectations) , Mr. McChoakumchild (Hard Times) or Paul Sweedlepipe (Martin Chuzzlewit).  But until I see evidence they've been in a trailer, I'm indifferent to whether they get to step into the case or not.  Here's a copy of the brief, by the way.

And the brief also contains this gem:

In fact, Ms. Lee and Ms. Hardison testified that they were at Cori Rigsby’s house in December 2005 and observed the Rigsbys watching the movie “The Insider,” a film based
upon Scruggs’ exploits in the tobacco litigation. While watching “The Insider,” the Rigsbys
were discussing who was going to play each of them in their future movie. (Lee Dp. at 71-72; Hardison Dp. at 40-41.)

A couple things about this passage are striking.  First, the name "The Insider" takes on new meaning with Dickie Scruggs soon to go inside a federal prison. Second, December 2005 is before the Rigsbys acknowledge hooking up with Scruggs -- but about the same time he went to then-Insurance Commissioner George Dale with a demand for Dale to support him in his quest to become a Katrina Czar overseeing a half-a-billion dollar fund he proposed to wring out of State Farm through the use of State Farm "insiders."  Third, if this is true -- and I have no idea whether it is or not, I merely note the implications of the new testimony -- it means the Rigsbys' testimony about the timeline of their involvement with Scruggs is inaccurate. Fourth, what actresses did they want to play them?  We don't learn this essential fact. UPDATE: A reader points out below in the comments that, in one of the depositions, Kerri Rigsby wanted Sandra Bullock to portray her in the movie.  Bullock is a fine actress, although I'm not sure she's demonstrated the range to depict the Machievellianism suggested by the depositions.  I mean, Kerri comes across in these depos as a cross between Ma Barker and Lucrezia Borgia.   I make no representation as to the accuracy of this testimony, I merely comment as to its appearance. 

Another interesting passage suggests Cori Rigsby had to be talked into participation in The Katrina Follies by her sister, Kerri, and mother, Pat Lobrano: 

Indeed, it now appears that Cori Rigsby was initially a reluctant participant. (Lee Dp. at 59-60; Hardison Dp. at 36-37.) The fact that she had to be convinced by her sister and mother to join forces with Scruggs evidences her awareness that what she was being asked to do was improper. [This next part originally was in a footnote to the preceding paragraph]. In contrast, Kerri and her mother appear to have immediately enjoyed the “cloak and dagger” aspect of Scruggs’ underhanded methods. (Hardison Dp. at 43-44.) For example, Ms. Lee and Ms. Hardison saw Kerri Rigsby again in May, 2006, when they traveled to Pensacola for Memorial Day weekend. (Lee Dp. at 77-78.) Ms. Rigsby told Ms. Lee that she could only stay for a couple of hours because she had received a call from Scruggs and had to take her computer to a hacker for Dickie. (Lee Dp. at 79; Hardison Dp. at 46-47.)

Everyone has been pretty patient so far, so let's get to the depositions.  Here is the deposition of Dana Lee, the one talked about in the brief. Some interesting things you will want to check out in it.  One is the supposed "shopping trip" the Rigsbys took to Texas in late 2005, which I heard about some time ago and wrote about back in April, and which some believe was merely a cover story for meeting Scruggs there (in support of this theory, you might note that Scruggs has demonstrated a fondness for out-of-jurisdiction meetings with witnesses and "insiders" over the years).  

Also, Lee testifies to Kerri Rigsby's supposed efforts to influence the adjusting of her mother's Katrina claim. And she talks about the supposed meeting Scruggs had with a State Farm "insider" in Bloomington, which he bragged about in a news story, and which turns out to be so much Scruggsian hot air -- he hired a guy to meet him at the airport and hand him an empty envelope to make it look like he was getting some top secret documents.  I guess he had no qualms about staging this phony baloney stunt and then claiming it as real to the media, but then again, that's not so hard to believe about a guy who would bribe a judge.   

Here is the deposition of Tammy Hardison.  This has a lot of the same information as the Lee deposition, but the testimony manages to portray Kerri Rigsby in an even poorer light, heavy on ruthless, two-faced conniving qualities but light on horsepower between the ears.  Here's an example:

Q. Tell me about that. 
A. Kerri came over to my camper and asked me if I would look through my files and -- any of my claimants and look and see if I saw anything that maybe looked kind of strange or something that maybe Dickie might want to, you know, have their name. And I told her no. 
Q. Okay. And did you ask her at any time why she was doing it? 
A. Well, yes. I was very upset that she was doing it. And she said, well, we'll never get caught. We'll never, you know, be found out. 

Kerri Rigsby thought she would never be found out? Holy Cow!  Did someone tell her that, or did she come up with that idea all on her own? Because, you know, that is simply absurd, on the one hand talking about being big movie star heroes, and on the other hand, no one will ever know.  Kind of like thinking no one will ever know if you go to work wearing pants made out of aluminum beer cans.  

Just so it's easier for you to compare what Lee and Hardison testified to what Kerri said to what Kerri said she said during her own deposition on April 30 and May 1, 2007, here is a copy of that Kerri Rigsby deposition. 

The import of all of this? The Ride of the Rigsbys is definitely over, finished, bye-bye, ancient history, kaput, ausgespielt. If I was in their shoes, I'd still be thinking about who would play me in the movie, but this time I'd be worried.

Posted By David Rossmiller In Industry Developments
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During the time in recent weeks I was preoccupied with other matters and couldn't spend much if any time blogging, it crossed my mind that perhaps when I was able to come back to blogging, I would find that the Trailer Lawyers -- Trailer Chip and Trailer Tony, Trailer Todd and Trailer Mary -- had found a way to get back into the Katrina spotlight.  Sadly, it appears they have not.  Which can mean only one thing: it's time for a mournful limerick. 

There once was a lawyer with a trailer,

Had a client named Rigsby, wouldn't fail her.

But he got kicked off the case,

He's gone with no trace.

Maybe he went to see Scruggs' jailer.

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Couldn't really think of a clever headline for this post, sorry. In working my way through the backlog after returning to active blog duty, I was interested in this post at the Merlin Law Blog, a tribute to Judge Senter, of Hurricane Katrina fame.  I certainly agree that Judge Senter has done a remarkable job.  He's moved through an incredible docket load, and has shown he has a mind that is adaptable and open to new information, something that cannot be said about every federal judge. He's shown firmness without being imperious -- most federal district court judges aren't, but a significant portion of them are, like all other judges, I guess.

I don't know Judge Senter except what I've read in his opinions and what people tell me about him, but one thing I can say, having followed his opinions and actions for a couple years, it has given me a new appreciation for how difficult it can be to be a judge -- he's handled some really tough issues, some really contentious, nasty lawsuits. His writing style is one of his best attributes -- short, simple and direct, no hiding the ball. I'm basically a guy who grew up on a farm in North Dakota, a state devoted to a radical form of egalitarianism, and consequently one thing that is revolting to me is pomposity and self-importance, in legal writing or otherwise.  None of that in Judge Senter's opinions, thankfully.  I haven't agreed with every decision, but at least his opinions are open and accessible enough that I can work my way through them and pinpoint what I disagree with and why.

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I'm a little late to comment on this one -- it's a couple days old -- but it's still worth talking about.  It's a foregone conclusion that it will happen: the Mississippi State Bar is moving to take away the law licenses of Dickie and Zach Scruggs. I guess Dickie Scruggs won't be able to claim to be a  "jailhouse lawyer."  Or to practice law in Cuba when he escapes.

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As I mentioned in an earlier post, due to escape concerns, Dickie Scruggs will not be going to prison in Pensacola, Florida, which unfortunately means he will not be nearby to consult with attorneys on lawsuits if a future hurricane strikes the area. Here is a story in the Sun Herald about how, as a second choice, he and Zach requested that they both serve time in a federal pen in Arkansas.   

But this was not to be either.  Scruggs seems to have lost all his pull -- where's P.L. Blake when you need him? Zach is going to Pensacola, Dickie to Ashland, Kentucky. Sid Backstrom, who got a sentence of 2.5 years out of the Scruggs Bribery Scandal, will serve time in the Arkansas prison. As you know, prison gangs are a big concern, so with these guys scattered, they won't be able to form a Scruggs Nation gang anywhere  . . . unless they each form their own Scruggs Nation chapter in each of the prisons.  Perhaps officials have unwittingly trebled the gang danger here.  Rumor has it that the official tattoo of the planned Scruggs Nation gang was going to be an S with a snake head on top, and then a line through the middle to make it a dollar $ign -- but remember, that is just a rumor and I am still checking it out.   

Incidentally, speaking of the Scruggs escape risk, a reader pointed out to me the story of Bart Chamberlain, an oilman who fled to Switzerland in his private plane to avoid paying a civil judgment.  I hadn't heard of Chamberlain before and read half a dozen stories on the guy, and strangely, I found myself liking him, possibly because the price control measure he was accused of violating was so stupid and counterproductive.  In the end, I think if Dickie wanted to escape, he'd do it right now before he reports to prison August 4.  However, Kentucky is a long way from the ocean, and harder to get overseas from, so I suppose it reduces the chance of successfully absconding. But if officials have that fear, why not just put him in a high-security prison? 

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OK, I said blogging would resume July 22.  More like July 23.  Sorry for the delay, but the workload that was interfering with blogging has now eased, for the time being, sufficiently to allow for life's necessities -- such as blogging -- to resume. 

This story from Patsy Brumfield -- I had a sixth-grade teacher named Michelle Brumfield, I wonder if they are related somehow (that's typical of someone from North Dakota, we had so few people we figured everyone was related somehow) -- on Dickie Scruggs' not being assigned to a prison in the Florida Panhandle.  Scruggs is a former Navy flyer and famously has his expensive Air Scruggs ride, and apparently officials don't assign people to the prison if they have or have had a pilot's license. (Rumor has it his ride is so nice it is being featured in an upcoming episode of a new reality TV series, "Pimp My Escape Plane"). 

Question: where's he gonna go? Cuba? Is the fear that all of a sudden we'll see Dickie Scruggs wearing fatigues and smoking a cigar on a podium next to Fidel and Raul? Actually, it might solve the question of who is to become Fidel's successor: with his dough, Scruggs could instantly energize the Cuban economy.  With his ego, Scruggs could also instantly fit in as the ruler of a country, and let's face it, even Scruggs is bound to be an improvement on the Castros.  His first act as El Presidente would certainly be to file a massive class action lawsuit in Miami against State Farm, the U.S. Attorney's Office and Tim Balducci.

Fortunately, prison officials have thought this all through, and have come to the conclusion that while a guy who can fly is a great escape risk -- he might walk away from his job hoeing peas and sweet potatoes and steal a plane from a nearby military base, I guess -- a guy who can merely ride in a plane, boat or car is no threat at all. I mean, they've probably got all kinds of statistics that show the vast majority of people who escape from prisons do so by getting behind the controls of a conveniently parked nearby escape plane. Come to think of it, you ever been to Alcatraz and taken the tour, where they talk about that famous escape by the three guys who were never found? Of course they weren't found! Everyone was looking for them in the water. Instead, based on this new information, I'm thinking it's likely they went air mail. 

Of course, this new data means we must come up with a theme song for Scruggs' prison sentence, and after some thought, I believe there is only one choice: the gospel standard "I'll Fly Away."  I mean, it's got to be, doesn't it: "Like a bird from these prison wall I'll fly, I'll fly away/ No more cold iron shackles on my feet, I'll fly away." 

Posted By David Rossmiller In Industry Developments
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Two questions.

Number 1.

Q:  How close is this whole Rigsby mess to unraveling, like a crow swooping down, grabbing a loose thread on your suit and flying off?

A: Apparently, pretty close.

Number 2.

Q: When is an agreement to indemnify someone's expense not an agreement to indemnify someone's expenses?

A: Apparently, when Dickie Scruggs is involved.

Take a look at this new lawsuit filed by Scruggs against one of the law firms that had been defending the Rigsby sisters, Kerri and Cori, in the Renfroe v. Rigsby case in federal court in Alabama.   Scruggs is suing for declaratory relief -- a declaration by the court interpreting, in this case, a contract -- to the effect that the Scruggs Law Firm doesn't owe some $1.7 million in fees to Zuckerman Spaeder, a D.C. law firm that, as I wrote about here, withdrew from representing the Rigsbys in March because of non-payment. 

You may remember that the Rigsbys have testified in the Renfroe case that Scruggs agreed to defend and indemnify them if they ran into legal problems for taking State Farm documents illicitly and giving them to Scruggs.  Unfortunately for them and others, this agreement is not in writing, so its exact contours are, like so many agreements Scruggs has been in, subject to conjecture. 

In this new lawsuit, Scruggs says he doesn't owe the fees -- the former Scruggs Katrina Group owes them, because he made the agreement with the Rigsbys and hired the Zuckerman firm under authority of the SKG.   Without going back to check on every detail, just off the top of my head, I would say I think Scruggs has at least a point here, and he may be correct. The SKG certainly knew the Rigsbys were retained for a "sham consultancy" -- in the words of Judge L.T. Senter Jr.  -- and I think also the funds for the Rigsbys' $150,000-per-year "salaries" were advanced by Scruggs but ultimately paid by the SKG. 

The bigger question is whether Scruggs asked the rest of the SKG about the defense and indemnity agreement beforehand, if he was authorized as a joint venturer to bind them to such an agreement, and if they subsequently ratified the agreement by part performance. 

Disputes about fees are always interesting, because it is the only time you will see a lawyer denounce high fees.  Normally, you bring up the subject of a fee being too large to a lawyer, and the reaction is like you suggested he could save money on suits by buying only the coat but no pants -- just totally crazy.  In this lawsuit, Scruggs is saying $1.7 million in fees is way too high. (I'm sure Himself would never charge or accept massive legal fees). That is a lot of money, but the Zuckerman firm's rates are probably pretty high, and this is something that would have been known in advance.  Also, they probably had to do a lot of work and had difficult conditions to do it in.  We'll see.  I'm inclined to be sympathetic to lawyers who get stiffed on fees. 

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Judge "Maximum Neal" Biggers today sentenced Zach Scruggs to 14 months in prison for his role in the Scruggs Bribery Scandal.  Actually, it was not the maximum he could have received -- three years was the max.  According to this Associated Press story by Holbrook Mohr, the younger Scruggs seemed surprised. 

Here is a transcript of Zach Scruggs' sentencing hearing, at the website of the Sun Herald, and you may note when you read it that Zach was represented by suspected Trailer Lawyer Todd Graves.  (Unconfirmed rumors were that Graves arrived at the courthouse in a single-wide pulled by a 1986 Jeep Cherokee with rust colorations, and was met by a State Farm band of pipers playing "Bye Bye Trailer Lawyer Pie."  I'm still checking this out).

Also present and representing Zach was former Mississippi AG Mike Moore, who at one point, to the apparent surprise of the judge, who said he was accustomed to only one lawyer speaking on behalf of a defendant, interjected some bunk about counseling Zach over the last year and how he's now very remorseful. 

Judge, the only thing I will say, because I 've known Zach since he was a little boy, what has occurred in this case is completely out of character for him. And I've counseled with him and worked with him over the last year, and I can promise the Court that he is very remorseful and very contrite and ashamed, ashamed of what has occurred.

Yeah, right, I can hear you now, what you're saying to yourself: "Moore was counseling him? That might be part of his problem right there." This is of course a very cynical view which I in no way endorse, I merely note that some may be thinking this.  The Moore statement apparently went over with the Court like a lead zeppelin, because as mentioned, the judge sentenced the younger Scruggs to 14 months, contrary to the recommendation of prosecutors for a sentence of probation. (You may recall, if you know your rock and roll history, that Keith Moon,  the fabled drummer of The Who, heard that Jimmy Page, Robert Plant, John Paul Jones and John Bonham were going to form a new band out of the debris of The Yardbirds, and Moon supposedly said that the new band "would go over like a lead zeppelin."  Thus the name of the band, Led Zeppelin -- the simplified spelling was, no doubt, so as not to confuse fans of heavy metal).   

Here's what Judge Biggers had to say about Scruggs' role in the bribery scandal, including a nice little exchange with Mike "Lead Zeppelin" Moore. 

All right. Well, as counsel and the Government both know, and as the Court pointed out at the plea, any pleas for leniency by the Government or anyone else are not binding on the Court. And the Court primarily is bound by the sentencing guidelines that are the law, regardless of what any individuals ask for.

Your case is a sad case, Mr. Scruggs, as your attorney eloquently stated. The primary actor in this case was your father. It would not have happened without him. And it makes it even sadder that you, his son, was brought into it. The evidence in this case shows that you were fully aware of this corruption - - attempted corruption of Judge Lackey. You took that order that Balducci brought up to your law office that - - the corrupt order that was attempted to be bought from Judge Lackey. And you made comments on it. You said where commas should be and what things should be said about it, what the order should say.

And based on some of those tapes that you - - that were played at the request of your attorney - - or your father' s attorney, Mr. Keker, and which I heard because they were produced, I just - - it was just clear that you not only knew what was going on, you were participating in what was going on. You helped write that order.

You shake your head, Mr. Moore; but I heard the tapes. He wrote - - he suggested what should be in that order, that corrupted order. Have you heard that?

MR . MOORE: Judge, I 've listened to every tape, interviewed every witness.

THE COURT: Well, then, you've heard that if you've listened to every tape.

MR . MOORE: I did Judge - -

THE COURT: He commented on it.

MR . MOORE: - - and I hope I get a chance to respond.

THE COURT: Well, you've had your chance to respond. Well, you can respond to that; you can respond to that. Go ahead.

MR . MOORE: Thank you, Your Honor. Zach Scruggs never had any knowledge whatsoever that there was any conspiracy to bribe a judge in this case. Zach Scruggs, on March 28th, was at a meeting about a - -

THE COURT: He' s not being sentenced for conspiracy to bribe a judge.

MR . MOORE: I understand, Judge.

THE COURT: He' s being sentenced for misprision of a felony. But the underlying offense is the corruption of Judge Lackey. He knew that Judge Lackey was being corrupted, and he had an order there that he was looking at that was part of - - that was an order that was being bought from Judge Lackey - - or being taken - - persuaded - - at the very least, that he - - you're saying he knew - - that I know he knew - - was that this order was the result of a corruption or attempted corruption of Judge Lackey.

MR . MOORE: Right. Your Honor, I - -

THE COURT: And whether it was for money or whatever else is really immaterial; it was a corrupt order.

MR . MOORE: The only difference - - and I don' t want to offend the Court. But the only difference is, is that the only thing Zach knew was that Tim Balducci went to have a conversation with Judge Lackey. He never knew that anybody conspired to bribe a judge or to do something untoward. The tape that you're talking about is a tape that occurred after Tim Balducci came to the Scruggs Law Firm on November the 1st, wired up, wearing a wire, walked up the stairs, saying he was there to meet with two individuals, Sid Backstrom and Dick Scruggs. Zach Scruggs, all the evidence would show, happened to walk in the room that day. He was never a part of that. And that' s the only evidence the Government ever had in this case. And that may be a distinction without a difference in Your Honor' s mind, but it' s a distinction in Zach' s mind.

THE COURT: Well, that' s something you can argue. Whether or not that' s true remains open. He hasn' t pled guilty to being part of the bribery. And he' s not being sentenced for part of the bribery. You know, when Mr. Backstrom - - who' s admitted he was part of the bribe - - and your client are as close as they were, they're up there in that office every day talking about their - - the legal projects of the firm - - and it' s hard to - - it' s kind of a stretch of credulity to believe that Backstrom never mentioned that money was being sent down to Judge Lackey. You can claim that; you can argue that. And as far as the law is concerned, I'm going to base the sentence on that. But whether or not I believe that is something else.

MR . MOORE: One thing I ' d say, Judge, is - - and I know you've listened to some of the tapes, but I 've listened to all of them. And if the Government has a different view, they can say it. With all of the conversations, hundreds of conversations, that were wiretapped and taped, there' s no mention of Zach Scruggs in this case anywhere. He just - -

THE COURT: I understand all of that. That' s not part of this hearing. What do you say, Mr. Dawson?

MR . DAWSON: I ' d have to disagree with that statement. Mr. Scruggs - - Zach Scruggs is mentioned on some of the tapes.

THE COURT: That was my recollection also. And another thing that impressed me negatively about this, frankly, is that when you, Mr. Scruggs, and Mr. Backstrom were talking with Mr. Balducci over this order that he had brought to you before it had been entered by Judge Lackey, it was an order that you were commenting on how it should read and what it
should say - - and you've told me that you have a great respect and love for the legal field, for the legal profession. And I ' m - - I ' m not questioning that. But you certainly had no great respect for the Circuit Court of Lafayette County or Judge Lackey, because the tapes show that you told Mr. Balducci and Mr. Backstrom that we need to hurry up and get this order signed before some other asshole gets the case. Now, that' s a total thumb in your nose at the Lafayette County Circuit Court. And it contradicts your statement to the Court that you have a great love and respect for the legal profession.

Based on these considerations, and based on the sentencing guidelines that have been furnished the Court, you have no criminal history. I ' m taking into consideration the Government' s plea bargain with you. Of course, I told you when the plea bargain was entered into it was not a binding plea agreement. If, really, the Government and defendants were serious on something that would bind the Court to a specific sentence, it would have been an 11( c ) ( 1 ) ( C ) plea agreement like Mr. Backstrom had which bound the Court.

MR . MOORE: Your Honor, we were informed by the Government on that matter - - we asked for a binding plea and the Government - -

THE COURT: You didn' t get it. You were here when he entered a plea of guilty. It was not an 11( c ) ( 1 ) ( C ) ; I told you it was not binding.

MR . MOORE: Judge, we know that. I just - -

THE COURT: Well, all right. Then, if I want you to say anymore, Mr. Moore, I 'll ask for it.

If you know anything about Mike Moore, you know, of course, that he kept right on talking, despite what the judge said, and even stepped on co-counsel Graves' lines in doing so.  In the end, the judge said he will consider allowing Zach to stay out of prison until after the birth of his third child in October.  He was fined $250,000.  Judge Biggers said he gave some weight to the prosectuors' recommendation of probation, and imposed the 14 months sentence instead of the 21 to 27 months the sentencing guidelines call for.   

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Judge "Maximum Neal" Biggers sentenced Dickie Scruggs to five years in prison, the most Scruggs could receive under his plea agreement.  According to this story in the Sun Herald, Scruggs finally came forward with an apology:

Before sentencing, Scruggs told the judge, "I could not be more ashamed to be where I am today. I realized I was getting mixed up in it and I will go to my grave wondering why. I have disappointed everyone in my life - my wife, family and friends here to support me today. I deeply regret my conduct. It is a scar and a stain on my soul."

Scruggs had asked for a sentence of only 30 months, but Biggers, solidifying his reputation as someone who is not to be messed with, called Scruggs out and knocked him around pretty good, as the story says:

He said, "There is no question in the court's mind that Mr. Scruggs, Mr. Richard Scruggs, was a leader and a planner (in the conspiracy). He has said he came into the scheme late. Regardless, he was the leader, he was the money man."

In fact, Biggers said Scruggs had entered into the scheme so easily that it made him wonder whether Scruggs had done such a thing before and indeed evidence indicates that he may have.

Biggers found that at least five people, including Scruggs' son Zach, participated in the conspiracy. He said Scruggs will have a chance to study a copy of the pre-sentencing report while he is in prison. He said one of the conspiracy participants, Timothy Balducci, "said you know where a lot of bodies are buried. It might do you some good to uncover some of those bodies."

That second paragraph, and the end of the third, are key.  At a time like this, where someone is facing the music, it's always tempting to say enough is enough, let's just forget about it and move on.  But what about all those buried bodies?  And what about what Maximum Neal Biggers said -- doesn't it appear from the casual way Scruggs participated in this bribery scheme, with as little moral struggle as if he was taking a drive to the grocery store, that it was a part of his existing psychological montage?

Legal Newsline also has a good story on the Scruggs sentencing.  Check out this excerpt: 

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

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

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

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

Hey, let's be fair here!  The justice system gave a lot to Scruggs, so maybe he just decided it was time to give some back!  In $40,000 increments, apparently. 

I'll be out of the office until Tuesday, but Marjory Morford will post updates as appropriate. 

UPDATE: Sid Backstrom gets less time.  Judge Biggers sentences him to two years and four months in prison and fined $250,000.  He is to report on August 1 also.   According to the Sun Herald:

Biggers said he was impressed that Backstrom seemed remorseful about his role in the case. He was ordered to report to prison on Aug. 4.

"I cannot say that I have seen that kind of remorse from your co-defendants," the judge said.

Zach Scruggs will be sentenced on July 2.

Posted By David Rossmiller In Industry Developments
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I've been reading some of the excerpts from the treasure trove of letters asking the Court for leniency in the Scruggs sentencing tomorrow.  And after reading them, I've had a change of heart.  You know what I say?  He's suffered enough, just let him go! I mean, lighten up a little here, let's not get all harsh, let's not go all Torquemada on the dude!  Just kidding.  And now back to reality.

Here's a link to the Sun Herald story with the excerpts -- you remember it was the Sun Herald who did the quick thinking and filed a motion with Judge Biggers asking to see the letters in the public interest. 

My overall impression: about what I expected.   Scruggs has done a lot of good things for certain people, I'm sure, although I don't find that very relevant to what is going on with his sentencing.  As with most folks with a lot of dough or power, it's not hard to find any number of people to swear what a great guy he is.  It's funny how that works.  When I started practicing law, one of the partners at the firm I was with told me how becoming a partner was a real self-improvement for him: he got more attractive, his jokes were funnier, he became wiser -- and the strange thing is that the longer he was a partner the more true this was!  He said he hated to go home sometimes, because for some strange reason they were out of step there and never laughed at his jokes and they never were amazed at his wisdom. A prophet is not without honor, except in his own country, I guess. 

About leniency for Scruggs, I would say this -- a five-year maximum sentence already seems pretty lenient, considering he participated in a scheme to bribe a judge, and that he is a lawyer.  You know, the cost of monitoring everybody is just too high, to a great degree the legal system or any system doesn't work unless people behave themselves, unless they are willing to accept that the system is more important than their individual needs or desires. Engaging in corruption of the legal system, the same system you use as a backdrop for your claims of great beneficence and altruism, isn't really excused by scattering checks along the way like a trail of bread crumbs for the birds to follow on the way to your sentencing.

I see that a number of people cited Scruggs' tobacco litigation as a reason to take it easy on him -- as if firmly entrenching a rent-seeking cigarette cartel that is impervious to competition or destruction as long as it pays its annual tax to attorneys general and plaintiffs' lawyers is some noble accomplishment.   There were some touching stories, such as the one about Scruggs paying funeral expenses.  Again, almost everyone has their good side, but Scruggs isn't being sentenced for the crime of being a monster, he's being sentenced for bribery.  Merely because he has done good for some doesn't mean the bribery or the danger that poses to the legal system goes away. 

As a Shakespeare fan, I took special interest in this excerpt from one of the letters: 

"Recall William Shakespeare's famous words in the play Julius Caesar: 'The evil that men do lives after them; the good is oft interred with their bones.' Nevertheless, Dick's failing does not change all the good he had done and the enormous credit he deserves for changing so many people's lives for the better."

Interesting.  This is taken from Mark Antony's funeral oration, of course, and Antony, although he said he came to bury Caesar, not to praise him, intended to do exactly the opposite of what he said.  The implication of the line is that the conspirators who killed Caesar buried a lot of good with him, and what's more, that this "evil that men do" may be the assassination of Caesar itself, not Caesar's illegal usurpation of power.  Is this line apropos in these circumstances?  Scruggs, at the max, only goes away for five years, and he's unlikely to be flogged daily and fed on thin gruel and weevil-infested bread.  And after he gets out, he still has all that dough to keep on doing all that good to make sure it isn't interred with his bones.  Also, there was no conspiracy to get Scruggs here -- he Scruggsed himself.  If ever one has gotten enormous credit for "changing so many people's lives for the better," it is Scruggs, the master of media manipulation.  It's not about whether Scruggs is an angel or a Hitler -- it's just about paying the piper.    

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As the world turns.  It had almost completely slipped my mind that Dickie Scruggs was to be sentenced this Friday, until I talked with Alan Lange of Y'All Politics yesterday.  With Katrina cases winding down and the Scruggster getting measured for a tailored orange jumpsuit, I admit my attention has begun to wander, but it's been difficult to find something as interesting to talk about.  Last time I had this feeling was when the Soviet Union fell.  You remember that?  Everyone was just standing around looking at each other.  They're gone? Dang, who do we oppose now?

Thanks to readers for sending along stories about the upcoming sentencing.  Sorry that my time has been so restricted, responding to emails has been hit and miss lately, I know.

As you might have heard, on Friday Judge Biggers granted the motion by the Sun Herald newspaper to get access to the pre-sentencing letters written by folks.  Not all were fan letters begging for leniency, I know.  One reader sent me a copy of a letter he wrote to the judge recommending harshness.  Here's a copy of the judge's order.  Just after the judge granted the order, Sid Backstrom, also to be sentenced in the Scruggs Earwigging Scandal, filed an objection/motion for reconsideration.  Always it's a good idea in federal court to file your objections before the judge decides, and the batting average for motions for reconsideration is -- this is just a rough estimate here you understand -- probably something like 0.0 percent.  Here's a copy of the motion for reconsideration, made on grounds that the contents of these letters may be intended to be private.  Private?  Who sends a letter to a federal judge in a high profile case and expects to remain anonymous?  I mean, what would be in these letters that someone would expect to remain private: "Judge, please don't pass this on to anyone else because it's a little embarrassing, but here's a little story I thought you mind find amusing and enlightening about Sid.  Well, one time in gym class in high school he was doing calisthenics, and some guys pantsed him . . . ."   Here's a copy of the motion.   

Judge Biggers, of course, denied the motion yesterday.

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Team Scruggs just can't catch a break these days.  Disappointingly, Judge Senter refused to overturn his disqualification of the Trailer Lawyers from the False Claims Act case (question: which side is it that's makes the false claims? Remind me).  This means an end to hilarious Trailer Lawyer briefs and antics, an end to angry Trailer Lawyer denunciations of "Snake" Farm, an end to alibis featuring Goofy and Minnie Mouse.  In short, this drains a lot of enjoyment out of this vale of tears, but we will soldier on nonetheless.  Farewell noble Trailer Lawyers, we will miss you, and we offer a complimentary bag of Doritos, a six-pack of Schlitz and an archive edition of The Weekly World News ("Pointed Hat Found Within Lincoln's Stovepipe: Abe Was A Witch!") as lovely parting gifts.  And so exit, stage right, the Trailer Lawyers Burlesque Show: a little song, a little dance, a little seltzer down your pants.

An interesting part of the ruling: Judge Senter says why he didn't disqualify Scruggs the first time he was asked to do so, and why he did the second time:

The first time I considered the issue of disqualification, that issue was presented by State Farm. By the time the issue was raised, State Farm and the SKG had had extensive involvement in the post-Katrina litigation and had at one point jointly presented the Court a proposed settlement of all the remaining State Farm cases. It appeared to me that in light of the extensive dealings that had gone on between the SKG and State Farm the issue of disqualification was being raised to gain an unfair tactical advantage. For this reason I determined that State Farm had waived its right to seek SKG’s disqualification. This was not the case with E. A. Renfroe, Inc. (Renfroe). I granted Renfroe’s motion to disqualify because Renfroe had not waived its right to seek SKG’s disqualification.

In other news, Judge Senter overruled Dickie Scruggs' objections to production of many records, including those involving the supposed "Third Man," a purported third State Farm insider, in Bloomington, whom Scruggs claimed fed him key company documents on the QT.  Question: did you ever hear anyone ever brag about litigation espionage this way before? Whatever was he thinking?  It will be fascinating to see what if anything these documents are.  My guess: a menu from the company cafeteria and some State Farm fridge magnets.   Scruggs will have to turn these documents over before he is deposed. Here's Judge Senter's opinion.  

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The Sun Herald of Biloxi, according to this story, has filed a motion in federal court to get copies of the letters people are writing to ask for leniency for Dickie Scruggs, Zach Scruggs and Sid Backstrom, at their upcoming sentencing.  This is a great idea, I wish I had thought of it myself.  Here's a copy of the motion.  I'm curious to see how many of the letters take a tone like "Hey, what's the big deal about a little earwigging?"

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A curious kerfuffle in the McIntosh v. State Farm case.  Yesterday Cori Rigsby filed an emergency motion seeking to have the Court modify its order dealing with production of certain of her computer records to State Farm. 

I read over the motion a couple times, and it's somewhat confusing, but apparently among the records to be produced are several things that have alarmed Cori Rigsby greatly, leading to this emergency motion.  What all these records are, one cannot tell from the motion, but the motion does say that among the records that should not be produced to State Farm are, evidently, some of the claims files that were illicitly taken in the Trailer Lawyer and Data Dump days.  Amusingly, the motion says production of these records to State Farm -- which are under an injunctive order by Judge Acker in Alabama federal court -- would cause Rigsby to violate Acker's injunction and protective order, which keeps State Farm from actually viewing these documents.

Here's a copy of the motion for you to read for yourself.  There are a few exhibits, none of which are new, but in the interest of a complete record, they are provided below.    

Exhibit A, Judge Acker's injunction.

Exhibit B, consent order.

Exhibit C, permission for Mississippi Department of Insurance to view documents subject to injunction.  

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The last strains of the song "Bye Bye Trailer Lawyer Pie" had not yet died out when the Trailer Lawyers filed a motion for reconsideration of their disqualification from Ex rel. Rigsby, the False Claims Act case that stemmed from various trailer summits and accessing of documents from a laptop in a trailer. 

State Farm has filed its response to that Trailer Lawyer motion, which seemed remarkably ill-tempered, while carefully avoiding use of the word "trailer" once again. (Remember, it's not a trailer! It's a temporary housing unit, a description, that come to think of it, also fits a thatched hut or a cardboard box.)  Here is the response, which characterizes the Trailer Lawyer motion for reconsideration as founded on false statements by the Trailer Lawyers and their clients, the Rigsby sisters.  It's a pretty good piece of work.  An excerpt:

3. Nor do the Rigsbys proffer any newly discovered evidence, focusing instead on known events that occurred long before disqualified Counsel filed their two opposition briefs to State Farm’s disqualification motion. In fact, the only “new” evidence provides additional confirmation that disqualified Counsel’s declarations contain false statements. In particular, disqualified Counsel’s assertion that they had “no involvement” in the policyholder cases is refuted by former Scruggs Katrina Group (“SKG”) attorney Derek Wyatt’s recent deposition testimony, which reveals that he and other SKG members met with a number of lawyers from Bartimus, Frickleton, Robertson & Gorny, PC (“BFRG”) for several hours to discuss “strategy” with regard to the “Hurricane Katrina cases.”

As the brief explains in a footnote, Wyatt was deposed in the Renfroe v. Rigsby case, and this deposition was under seal for a period of time.  This deposition is news to me, and I do not have and have not read the transcript.  The excerpts of the deposition contained in the brief suggest the transcript is a doozy.   

The brief also points out the mechanisms for reconsideration of a judge's decision, by that judge, are few and far between in federal court.  When I saw the Trailer Lawyer motion for reconsideration, I thought how I've never seen one of those in federal court before, although I used to see plenty of them in state court, where the rules are looser, before Oregon courts issued local rules clamping down on them.  In any event, the justification for a motion for reconsideration is much greater in a place like Oregon state court, where you rarely have a judge assigned to your case and your motion is heard by whatever harried jurist happens to get the motion by luck of the draw.  The judge likely has no research staff, no time to prepare and has never heard of your case before, completely unlike federal court. 

Anyway, thank goodness the Trailer Lawyers didn't decide to go gentle into that good night, or I wouldn't have an excuse to link once again to this post containing the lyrics to Bye Bye Trailer Lawyer Pie. All together now! One, two, three, four . . . Bye Bye Trailer Lawyer Pie, drove my trailer to the courthouse but the judge said bye bye . . . .

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I don't often write something that intentionally falls into the category of "Who Cares?" -- sometimes I do this by accident, I know -- but this is one of those things I have to mention, because I spent dough and effort pursuing it, and because it involves intellectual property rights in my blog, which if you have them you are supposed to let people know.  I now have a trademark on the Supplemental Register at the U.S. Patent and Trademark Office for Insurance Coverage Law Blog, with the intention of getting it on the Principal Register in short order. Many thanks to my colleague, Matt Wilmot, a great IP lawyer, for his invaluable help in getting the mark registered and working with the PTO.  

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Judge Senter's opinion is here.  The Provost Umphrey firm in Texas, which had been recommended to policyholders by the disqualified Katrina(less) Litigation(less) Group, will not itself be disqualified, providing that within 14 days they can say the following is true:

1. There is and will be no agreement between Provost Umphrey and any of the disqualified attorneys for a division of fees or any other arrangement of any kind for the payment of compensation to any of the disqualified attorneys for work performed after the date of my order of disqualification;

2. Neither Barrett nor any of the disqualified attorneys will participate, directly or indirectly, with Provost Umphrey in the future representation of these former clients; and

3. There is and will be no financial arrangement or understanding in connection with any Katrina case between Provost Umphrey and any of the disqualified attorneys for the payment of any sums other than expenses reasonably incurred before April 4, 2008, and for services rendered before April 4, 2008, on a quantum meruit basis, if a right of
recovery for these sums were asserted and established.

Hat tip: Phunk & Wagnalls, and several readers who sent me tips on these developments. 

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You may have heard about this.  State Farm, citing an oppressive legal climate in Mississippi fostered in large part by Attorney General Jim Hood, wants to hike rates in Mississippi by 13 percent and will drop coverage for homes within 1,000 feet of the coast.  Here is a good AP story on developments, with State Farm saying the political and legal climate in the state is "simply untenable."  Anita Lee of the Sun Herald also has a good story, with State Farm's letter to Insurance Commissioner Mike Chaney, whom I met when I was in Mississippi in April -- I got along with him a lot better than I'm sure I would have with the hand-picked Dickie Scruggs candidate for Insurance Commissioner. 

The AP story says Hood wants to review the letter before commenting.  What? That's not like Hood, where's that gunslinger mentality when you need it to juice up a post? Surely he won't be able to keep quiet about this -- maybe he will call State Farm "unprofessional," as he did Judge Acker, or perhaps he will borrow from the Trailer Lawyers and call them "Snake Farm."   Maybe a staffer will come up with a new term for Hood to spew, like "Sneak Farm," "Stink Farm" or "Spite Farm."

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If I was an adviser to Jim Hood, I would have counseled just letting Judge Acker's blast against the "so-called law enforcement official" go unanswered, or passing it off with a simple "I took the actions necessary to protect the people of Mississippi and protect the integrity of my office (chuckle), the allegations are false," or "he doesn't have his facts straight," or "he's not looking at all the facts and circumstances."   

The trouble with the latter is, of course, Judge Acker does know all the facts, and is possibly the only person who knows all the facts relating to the Rigsby sisters' illicit taking of State Farm claims files.  Nevertheless, there is no sense in calling more attention to what Acker said about Hood -- saying there was enough evidence for a jury to find he was an active abettor of improper behavior by Dickie "Magic Jurisdiction" Scruggs in playing keep-away with the documents in defiance of Acker's order. 

But Hood is Hood, and so that advice probably would have gone unheeded, because he prefers to make media statements such as the ones in this story sent to me yesterday by a reader.

U.S. District Judge William Acker ruled Thursday that Hood helped his "close confidant" Scruggs avoid handing over papers the trial lawyer wanted for Katrina-related lawsuits against State Farm Fire and Casualty Co.

"We will be filing with a federal judge to redact and take out the unnecessary criticism," Hood said. "It's unprofessional. This judge has a history of problems dating back to 1988."

Unprofessional? I mean, what do you say to that? It takes one to know one? 

And what is this thing he's going to file with a federal judge to excise stuff from Acker's opinion, which can be read in its full glory at this post?  Is this the promised Motion To Make A Fool Of Myself?  And who is this federal judge that he's going to file the motion with? Is it a U.S. federal judge? Or perhaps a magistrate of the United Federation of Planets? Maybe Captain Kirk can deliver the motion on his spaceship, or better yet, maybe Denny Crane can represent Hood in this action.  How would you like to be the staff person assigned to write this "motion"?

You know, this is an instance of picking a fight with the wrong guy, like these people in bars who for some reason want to get into altercations with huge professional NBA and NFL players. (Why is that?  You seldom hear about baseball or hockey players being challenged to fights in bars).  All this will do is give this story another media cycle, and you might notice, none of Hood's defenses have been substantive or respond to specifics. The 2008 Hood Self-Destruction Tour -- coming soon to a city near you.

UPDATE:  Thanks to a reader for sending me this link to a Wall Street Journal editorial about Hood's woodshedding by Judge Acker.  The Wall Street Journal Law Blog also continues its excellent posts about the Scruggsing of Scruggs, the Katrina Follies, the Mess in Mississippi and Hood's Hoodzpah, with this post.   

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Here's a case I've been meaning to get to for a few days -- Marketfare Annunciation, LLC v. United Fire & Casualty Ins. Co.  On June 6 a federal jury in the Eastern District of Louisiana, in New Orleans, handed down a $21 million against United Fire and in favor of Marketfare, a small local grocery store chain, over Katrina damage.

The insured claimed losses under its property insurance business interruption insurance because of covered wind damage, from what I can make out in the pleadings.  The insurer said the losses were due to uncovered flood, and it appears the insured accepted flood insurance payments of some $6 million.  A substantial part of the verdict, as I read the pleadings, was for business interruption insurance, but the insurer's position was that some of the chain's stores could have been up and running in a month, and that no money was owed for interruption from an uncovered cause like flood. The insured, in turn, said United Fire adjusted the loss in bad faith and put pressure on an engineer to alter his loss report. 

Unfortunately, I don't have a lot of time to look more closely at the pleadings -- I hope what I've written here is accurate, but someone may want to correct me or provide more information.  By my rough calculation, some $6 million of the award was for statutory bad faith damages. I see from the docket that the insurer is moving to appeal.

Here is a copy of the judgment, and here is a copy of the Pre-Trial Order.  Finally, here is an Associated Press story on the verdict, doesn't give a lot more information.  

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In reading Judge Acker's opinion of yesterday once again, it is striking how different this writing is from most judicial and legal writing -- one can actually understand it, and it is well-written and enjoyable to read.   I say "enjoyable" not merely because I agree with what it says, but because the judge made good use of the writer's storytelling tools.

One other thing: Judge Acker is perhaps the only person who knows all the facts that are known about the Rigsby sisters' illicit taking of State Farm claims documents.  He has seen the documents themselves -- they are under lock and key under a protective order in his courthouse under the injunction he issued in December 2006.  And I do not see in this opinion or his prior opinions any hint that these documents are blockbusters or that they have any explosive evidentiary value, or that they amount to anything at all. What is in the documents is not necessarily his concern in Renfroe v. Rigsby lawsuit before him, of course, but he knows what is in them.  And if that is true -- that these documents are just so much hype promulgated by Scruggs and the Rigsby sisters -- I wonder if that is one of the things driving his anger, in addition to the violation of his injunction.  There have been a number of depositions taken in the Renfroe case, including testimony submitted under seal, and he is undoubtedly aware of the evidence uncovered by special prosecutors appointed by him to go after Scruggs on a charge of criminal contempt, which was dismissed without an evidentiary hearing earlier this year.  So what there is to know about all this, Judge Acker knows it.  We don't exactly know what it is that constitutes all that Judge Acker knows, but we do know this -- what he does know has made him very upset. 

Before we go on, some brief context on what this is all about may be helpful.   Kerri and Cori Rigsby, working with Dickie Scruggs, took State Farm claims documents from their employer, E.A. Renfroe, a business hired by the insurer to adjust Katrina claims.  They did this in a massive "data dump" weekend in June 2006, but they also accessed State Farm databases, using a list of Scruggs' Katrina plaintiffs, in March and April 2006.  They did this in a trailer on Trent Lott's property near the Mississippi Coast. There is a dispute whether the Trailer Lawyers of Missouri were also there, or if they were present, how many were present and whether they were actively involved or merely on the couch watching All My Children.

Renfroe sued the Rigsbys for breach of their confidentiality agreement, and Renfroe got a summary judgment decision that they did breach.  During the course of this lawsuit, before the summary judgment, Renfroe asked for an injunction requiring the documents to be returned, and Judge Acker entered an injunction after he found a likelihood that Renfroe would be successful on the merits of its claims. This injunction was in December 2006.  It required the Rigsbys and all their "agents, servants, employees, attorneys, and other persons in active concert or participation with them who receive actual notice of this order, by personal service or otherwise (with the express exception of law enforcement officials)" to deliver the stolen documents to Renfroe's attorneys.  

We all know what happened next.  Scruggs and Jim Hood talked on the phone, and Scruggs sent his copies of the documents to Hood, who already had his own copies of the documents when he took special delivery of them from the Rigsbys during the data dump.  In the criminal contempt prosecution, Judge Vinson dismissed the charges, saying Scruggs met this law enforcement exception, although as Judge Acker points out, this doesn't make sense, because if that was the way to read the injunction, the Rigsbys themselves could have merely given the documents to Hood or even a passing off-duty cop to avoid giving them back. 

The "with the exception of law enforcement officials" is so obviously a qualifier of who needs to give the documents back, rather than an indication of where you can send the documents to avoid giving them back, that it hardly merits serious discussion.  But Judge Vinson saw it the other way, and he also said the court had no jurisdiction over Scruggs, and therefore he couldn't have violated the injunction because it didn't apply to him.  Vinson's jurisdiction finding, however, was based on the ground that Scruggs was not the attorney-of-record, rather than on any failure of the injunction to extend to persons in Mississippi (Judge Acker's court is in the District of Northern Alabama).  But, Judge Acker said, Scruggs was plainly an "agent" of the Rigsbys. and "if Scruggs was not subject to the injunction, nobody was." 

As he said:

Scruggs was the alter ego of the Rigsbys, and the Rigsbys were the alter egos of Scruggs.  They could not have been any more closely "identified" without obtaining a marriage license.  There were in bed together.

You get the idea -- Mr. and Mrs. and Mrs. Rigsby-Scruggs.

Judge Acker also ripped the Rigsbys' argument that they were allowed to take the documents in June 2006 in support of their False Claim Act case filed in April 2006.

Do they really argue that after filing the qui tam case, the Rigsbys were authorized by the False Claim Act and obligated to the taxpayers to steal Renfroe's records two months after the qui tam case was filed?

Along the way, he ripped up Mississippi Attorney General Jim Hood pretty good, calling him a "so-called 'law enforcement official' " and saying there was enough evidence for a jury to find he was a a co-conspirator and aider and abettor of Scruggs in the criminal contempt case.  Hood's reaction to these statements, in this Clarion-Ledger story, was typically comical and nonsensical:

Hood says he intends to file a motion requesting Acker revise the ruling because of its "derogatory conclusion." "The rules of judicial performance do not allow a court to engage in unnecessary attacks on officers of the court, particularly when they are not even parties to the litigation. This Judge interfered with a grand jury investigation and we believe that either he, an appellate court, or the Alabama Commission on Judicial Performance will remedy this situation." 

Who writes this material?  I ask, because this is really funny stuff.  I often listen to Channel 150 on XM radio, which features continuous excerpts from live comedy shows, and I can easily picture hearing Hood's routine on there some morning on the way to work.  Judge Acker interfered with the grand jury investigation?  How about Scruggs, who told him to shut it down so State Farm would settle Katrina cases with Scruggs and give him a pile of dough?  How about Hood, who is the one who actually shut down the grand jury without returning a single Katrina indictment? By Hood's own statement, he and Scruggs should be reported and investigated.  Also, who says the attacks on Hood are "unnecessary," and whoever said he was an "officer of the court" in a case where he was not a party and where his only involvement was to help Dickie Scruggs hide documents that a judge ordered returned?  Officer of the court? Better bust the general back to private, if that's the kind of officer he is. 

Now, it should be mentioned that earlier in the Renfroe case, much earlier, Judge Acker said the Rigsby were not in civil contempt. Obviously, because that is what he ruled Thursday, he changed his mind.  And what changed his mind, he said, was information that the Rigsby sisters:

copied State Farm documents using a list of Scruggs's clients, and that these documents were segregated by them in a plastic boot box.  They were never mentioned by the Rigsbys until recently, and they have never been returned, although copies may be randomly scattered among the papers returned to Renfroe's counsel and now stored under lock-and-key in the court's chambers.  The Rigsbys admit that they did not return the boot box documents, but say they do not have the box and do not know where it is.  This court is tempted to deduce a location for the boot box documents, but will proceed on the assumption, at this late stage, that the boot box and its contents will never be found.

Which location do you think he was thinking of, the Scruggs Law Firm or the lair of the Trailer Lawyers?  Maybe both?

In any event, he found both Scruggs and the Rigsbys were in civil contempt for failure to return all the documents that were taken -- he did not know about the trailer escapades until after his previous finding.

This court feels less reluctance to impose sanctions on the Rigsbys than it otherwise would feel because Scruggs is obligated as indemnitor to pay all monetary damages assessed in this case against the Rigsbys.

The amount of the sanctions, $65,000, representing Renfroe's attorney fees spent chasing down the documents, is barely a couple days bills for what Scruggs paid his criminal lawyer, John Keker, and I presume Scruggs can easily pay this out of his annual receipts of tobacco settlement money.  Remember that the indemnity agreement is not in writing, however, and you have to think about all the other folks who have trouble enforcing oral agreements with Scruggs.  However, the Rigsbys know stuff about Scruggs, and it might be the wisest policy not to give them any reason to become upset.

Here's an Associated Press story on Acker's ruling.  Interesting that it focused on what Acker said about Hood, not what he said about Scruggs and the Rigsbys. 

Here's an Anita Lee story in the Sun Herald, which talks about Scruggs and the Rigsbys in the lede, but also talks a lot about Hood.   Must have really stung, for Hood to come out and make crazy statements suggesting he somehow was going to intervene in the case and report the judge to ethics authorities.  The motion that Hood is going to file, what's it going to be called -- Motion To Make A Fool Of Myself? 

Lastly, so you don't have to go the prior post, here is a copy of Judge Acker's contempt order, and here is a copy of his opinion.  

Posted By David Rossmiller In Industry Developments
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Wow.  Judge Acker found Scruggs and the Rigsby sisters jointly and severally liable for civil contempt and a fine of $65,000 in the Renfroe v. Rigsby case, relating to failure to promptly return the stolen State Farm claims files to Renfroe's counsel.  Here's the order, and here's his opinion.  More comments to come later when the day job allows, but as for now, let me say this opinion is extremely well-written with the care and writing flair typical of Judge Acker's opinions -- plus, anyone who calls Jim Hood "a so-called 'law enforcement official' " is my kind of judge.    

Posted By David Rossmiller In Industry Developments
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Dickie Scruggs' sentencing hearing has been moved again.  Here's the story.  I wonder how that federal investigation of the Wilson case is doing. Walter Olson has some news, including links to a post on the folo blog and a story by Patsy Brumfield. 

-- In other matters, here's a story Anita Lee wrote in the Sun Herald about the Trailer Lawyers' attempt at a comeback tour, with a nice picture of the Rigsby sisters.  I still say it's too bad they ever got involved with Scruggs.  Just a guess on my part, but I bet they will feel the same one day, if they don't already.  You may recall the post I did earlier this week about the Trailer Lawyers' brief requesting Judge Senter reconsider his disqualification, a brief that suggests they have been quaffing some abundantly spiked Scruggsian Kool-Aid.

-- You might have seen the recent article by syndicated columnist David Ignatius on Scruggs, which contained these paragraphs: 

What destroyed [plaintiffs attorney  Melvyn] Weiss and Scruggs was a system in which the money just got too big. The two had helped spawn an industry of class-action mega-cases that was so lucrative, the plaintiffs couldn't afford to lose. So the "good guys" began to cut corners.

Weiss and Scruggs got in trouble in part because they were especially aggressive in representing people they believed had been wronged. "They were the Daniel Boones, who cut through the Cumberland Gap," argues Alex MacDonald, a prominent plaintiff's lawyer with the Boston firm MacDonald Rothweiler Eisenberg LLP. 

The system destroyed Scruggs? Wrong.  Scruggs destroyed Scruggs.  Scruggs got in trouble "in part because [he] was especially aggressive in representing people [he] believed had been wronged"? Like who, himself?  Is that why he participated in the bribery scheme, because he was especially aggressive in representing those wronged people?  That description makes it sound like he's a cop who got suspended for knocking over some shelves of canned peas while rescuing hostages in a grocery store.   

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A few weeks ago, it was Bye Bye Trailer Lawyer Pie. But the Trailer Lawyers, bless 'em, are not willing to haul their trailer off quietly into the sunset.    

The Trailer Lawyers have now filed an eight-page rant against State "Snake" Farm and, strangely enough, Judge L.T. Senter Jr., who disqualified them.  The rant is entitled Motion for Reconsideration, and it is based on such new and dynamic allegations and conclusions as  these:

• State Farm should be known as "Snake Farm" for its treacherousness, and its lawyers must themselves be disqualified because they knew of the Rigsby sisters' sham consultant arrangement.
• Reporter Anita Lee of the Sun Herald wrote a story in 2006 about the sisters' consultant arrangement with Dickie Scruggs and so she also must be disqualified.    
• Judge Senter imposed higher levels of scrutiny on the Trailer Lawyers than he had in some other instances, and this is very unfair, so he must be disqualified.
• Everybody who has been talking about the Trailer Lawyers has their facts all wrong and so everybody must be disqualified.
• The Trailer Lawyers should be un-disqualified because they are without blame, and because they merely entered the trailer to watch Dr. Phil, have a few brews and eat some Doritos.  Dr. Phil, however, must be disqualified.
• The word "trailer" must be disqualified and is not to be used, particularly in connection with the Trailer Lawyers.

I paraphrase and exaggerate for effect, of course, but that's the general tone, and remarkably, some of these exaggerated points are really what the Trailer Lawyers wrote.  If your intent was actually to get a federal judge to reconsider his ruling, there probably are better ways to do it than to call him out in an extended diatribe. 

Incidentally, this is as good an excuse as we may get for some time to reprise the Trailer Lawyer anthem: Bye Bye Trailer Lawyer Pie, the lyrics of which are available at this earlier post. 

Posted By David Rossmiller In Industry Developments
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The latest filings in the McIntosh case's latest flare-up over discovery issues includes this interesting question posed in State Farm's brief in response to Dickie and Zach Scruggs' objections to Judge Walker's order compelling production of certain documents:

Yet continuing their quest not to produce any documents, despite the substantial reduction in their scope, the Scruggses have filed another objection with this Court, thus causing one to wonder: What information could possibly be contained in those documents that the Scruggses so desperately want to keep from ever seeing the light of day?

The briefing for discovery fights in cases involving Scruggs and the former Scruggs Katrina Group provides some of the best details available as to Scruggs' methods of conducting litigation.  For example, read this passage from the same State Farm brief: 

Laboring under the misimpression that Judge Walker was required to address each and every ground asserted by the Scruggses – and, by extension, the Rigsbys and the Plaintiffs – they complain that Judge Walker did not address their argument that the subpoena implicates their Fifth Amendment right against self-incrimination. See Doc. 1201 at 8. Incredibly, the Scruggses go so far as to suggest that “[t]hese objections are even more compelling now in light of the Scruggses’ guilty pleas in the criminal matter pending in the Northern District, for which they still await sentencing.” Id. (emphasis added). Having already confessed guilt, it is difficult to comprehend how the mere production of documents in an unrelated civil matter somehow increases the risk that they will incriminate themselves. That they have already done – in open court.

The Scruggses’ speculation that producing the documents “may” subject them to some undefined outcome in the civil case pending before Judge Acker in Alabama or a more severe sentence in the Northern District for their roles in the bribery of a judge – as if that offense, which strikes at the heart of the judicial system, does not already carry a stiff penalty – does not demonstrate that Judge Walker’s ruling was clearly erroneous or contrary to law.

Yet one need not read too far between the lines to recognize the apparent subtext. Scruggs has already came perilously close to a contempt citation for failing to follow the Order of Chief Judge Mills in the Northern District of Mississippi, which denied Scruggs’ motion to quash State Farm’s subpoena for his deposition in State Farm v. Hood, No. 2:07-cv-188-DCB-MTP (S.D. Miss.). Judge Mills found that despite the fact that “the court’s intent [in its order] … should have been clear to all parties,” Scruggs “appears to have used” certain language in the order “for tactical purposes, to limit” State Farm’s rights – conduct which Judge Mills ruled “is clearly unacceptable, and the court will not tolerate any further attempts to violate its … order,” and that “[a]ny future non-compliance… will be dealt with as contempt.” See State Farm v. Hood, No. 3:08-cv-00012-MPM (N.D.Miss. Feb. 4, 2008) (Doc. 18); McIntosh Docs. 1131, 1131-2.

Sham consultant arrangements with the Rigsbys, discussions with material witness Brian Ford about a consultant agreement, "whistleblowers" illicitly taking records, playing keep away with documents with the assistance of state law enforcement officials, dubious assertions of attorney-client privilege to prevent question at depositions, all of these things happened, and more, during Katrina litigation.  I wonder what the answer is to the question posed above -- what might be in the documents requested? For instance, what would be revealed in the production of documents as to the identity of the supposed source in Bloomington feeding State Farm information to Scruggs? That there wasn't one?  Maybe.  Time will tell the story. 

Incidentally, here's a letter to Judge Walker from counsel for E.A. Renfroe, the Rigsby sisters' ex-employer, about these discovery disputes. 

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Dickie Scruggs, Zach Scruggs, and their former law partner Sid Backstrom are to be sentenced July 2 in the Scruggs bribery scandal.  John O'Brien at Legal Newsline has a story, and here is Judge Biggers' order setting the scheduling hearing.

Here's an excerpt from the judge's order:

The court has observed that the defendants have solicited numerous persons to write letters to the court requesting leniency for the defendants and making observations about the defendants’ character. The court will allow testimony from a maximum of three persons for each defendant in the defendant’s discretion at the sentencing hearing.  

How much time for rebuttal witnesses? 

Dickie Scruggs, as you may recall, is to receive five years in prison as part of his plea agreement, and Backstrom two-and-a-half, but Zach Scruggs' guilty plea came after what might loosely be termed the "open enrollment" period for plea bargains, and for plea bargains after the last date set from them before trial, the Court does not necessarily feel obligated to accept any terms worked out with prosecutors.  In return for Zach Scruggs' plea to misprision of a felony, prosecutors are recommending a sentence of probation.  We'll see if Judge Biggers goes with that or something harsher.  

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Some of the things that have been going on in the Scruggs Nation that past few weeks, not all of which I have had time to touch on yet.

-- A story from Anita Lee of the Sun Herald: E.A. Renfroe is asking for the dismissal of Ex rel. Rigsby, the False Claims Act case brought against Renfroe, State Farm and others by the purported "whistleblower" Rigsby sisters and their now disgraced lawyer and employer, Dickie "Magic Jurisdiction" Scruggs.  

-- I've mentioned this before, but only briefly.  In the McIntosh v. State Farm case, the Thunderdome of Katrina litigation, Scruggs was ordered earlier this month to turn over the following:

• All communications between Scruggs and Brian Ford, the guy who was interested in a $10,000 a month consulting job with the Scruggs Katrina Group ("Hey, why should be Rigsbys be the only ones to make some "consulting" dough off this thing!").  Ford, as you may recall, was the engineer who went to the McIntosh home and came back with a report that essentially overlooked flood damage -- a considerable oversight, in that Kerri Rigsby herself later authorized payment of flood insurance to the McIntoshes.
• Communications between Scruggs and the media about Hurricane Katrina, including ABC, which engaged in a brief spasm of "whistleblower" stories about the Rigsbys, including a big 20/20 piece, but which has been strangely silent of late.
• Any documents Scruggs picked up from a "highly placed source" at State Farm.  You may remember that the Scruggs claimed in a media interview that he picked up documents from such a source in Bloomington, Illinois, State Farm's headquarters.  I am skeptical this ever happened, unless whoever this supposedly was went through the trash or is someone who took complete leave of their senses and lost all instincts of self-preservation.  People will say all kinds of things to reporters that are half true or not remotely true. 
• All documents related to any financial interest Scruggs still has in Katrina litigation against State Farm.  This last one is interesting -- I've wondered myself what interest and/or control Scruggs still has in Katrina litigation.  Here's an Associated Press story on it from a while back.

-- How long do you figure it will be until Scruggs, the Rigsby sisters and possibly a whole lot of others get sued by State Farm and State Farm employees over their roles in Katrina litigation?  My guess? Not too long.

--  What in the world is that federal grand jury doing in the Southern District of Mississippi?  You know, that new grand jury that was impaneled earlier this year to replace the outgoing grand jury, in the investigation of alleged Katrina insurer fraud that has spent wheelbarrows of federal dough but returned results that can be summarized as follows: bupkis.

-- Scruggs to be unable to benefit by Lazarus Ruling -- at Law and More.

-- Someone from the website Slabbed has been incessantly trying to promote the site in the comments to this blog.  As you may or may not know, no comment appears on this blog unless I hit a button saying it will be published.  Sometimes when I'm too busy Marjory Morford fulfills this function.  Excessive self-promotion is one of the things that makes me hit the delete button on comments submitted. But in this instance I'm going to throw out a hat tip to Slabbed, if for no other reason than to stop the incessant spamming of my comments box, regarding a post on some developments yesterday in the McIntosh case, involving Scruggs saying he didn't receive notice of State Farm's discovery motion. 

 

Posted By David Rossmiller In Industry Developments
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I know, I know, citizens of the Scruggs Nation, I know.  You will see this post and be stricken with nostalgia for the days of the 20,000-word Scruggs Nation posts, the ones that took me five hours to write, the days when the feds were rattling, the Scruggs was battling and Dickie's friends were skedaddling.  Time moves on, however, and we deal with the world as it is. 

Yes, you say, but you should at least headline this post with the Scruggs Lite designation, as it is not a full-blown employment of creative powers, not a worthy successor to the Scruggs Nation line.  And to that I say this: I considered this, but thought the headline might be misinterpreted as applying to the quality of the New Yorker article on Scruggs that I am going to talk about today.  And it is a fine story, so I would not wish to give this impression.

As you may recall, this story came out about the time I was headed to Florida and also when I hit a particularly nightmarish patch of extreme busyness, which continues in full force.  So I did not read the New Yorker article until Dunn Carney's marketing director, Marjory Morford, left a copy on my chair one day last week.  Although I am a subscriber, I couldn't find that issue at home, which is not entirely surprising -- I have a 4-year-old daughter who likes those little subscription cards that fall out of the magazine when you open it, and she may have walked off with it and hidden it in her private library, wherever that happens to be at the time.

Here is a link to the story.  As yet, it is still only in abstract form on the website, so you can't read the full text at the link. My reaction? My first reaction was that it could have been called "Best of Dickie Scruggs," or "Scruggs' Greatest Hits."  I don't mean to imply it was pro-Scruggs, certainly not in the sense of the adoring press coverage Scruggs received a year or two ago -- it was an even-handed, fair story.  It was a very good overview, caught a lot of the great details.  (But I would have liked to see some more of the Falstaffian Jim Hood in there, and at least some mention of the Trailer Lawyers). However, despite the article's length, I did not learn much about the why of it all, I would have preferred an article that could have been called the Psychology of Pscruggs.   

The story also bought into the Balducci Wannabe theory, which has some attractive elements to it, but is one that I ultimately reject because it suggests Balducci, not Scruggs, was primarily to blame. If this theory has any validity, I think it comes only as a subtext to the main irony -- Balducci was not in fact the prime mover, he was merely an opportunistic agent operating under parameters and precedent that had been set by Scruggs.  The Wannabe theory tends to show Scruggs in the light of a victim, but he is not -- he is a victim only in the sense that someone who steps on his own landmine after forgetting where he buried it is a victim. 

Also, the story characterizes the Rigsby sisters as being fired.  This has been disputed in legal proceedings, but in my view, they in essence quit or fired themselves.  They did the data dump, illicitly copying thousands of pages of confidential documents, then walked in and announced it, hoping to provoke some big scene where they could look like martyrs.  Instead, they were treated quite courteously, apparently to their disappointment.  At that point, one should note, they had already come to an agreement where they would work for Pscruggs as "sham" consultants, as Judge Senter put it.  One of the story's biggest disappointments was that it gave short shrift to characters in the plot like Hood and the Rigsby sisters.  Looking more closely at them would have done a lot to explain more about how Dickie Scruggs' brain works.  In other words, my approach: the Katrina Follies.  It would have been better than the extensive quotes about him -- those are interesting, but they are merely what people say, and quickly the quotes started looking like this to me: "Blah blah blah blah blah blah blah blah." More showing, less telling would have been welcome.  

Still, I don't want to be too critical of the story.  Not everyone has followed the Pscruggs Psaga closely, and even a Greatest Hits type of story must come as quite a shocker to many first-time readers or casual observers.  But, I do have to say, the definitive Scruggs Story has yet to be written.

Also, one last point.  You know what the story really needed?  I know that you do.  A song!  The story even mentioned that dopey quote by Scruggs about how he was so poor growing up, if he wouldn't have been a boy he "wouldn't have had anything to play with."  This quote, of course, is the basis for one of the great numbers in my upcoming musical, The Katrina Follies, entitled "Dickie's Got A Magic Jurisdiction." 

Posted By David Rossmiller In Industry Developments
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It is with much sadness I report that the Trailer Lawyers -- Trailer Chip and Trailer Tony, Trailer Todd and Trailer Mary -- have been disqualified from Ex rel. Rigsby, the False Claims Act case often known by the incredibly ugly phrase "the Qui Tam," which of course is Latin for "Trailer Lawyer."

This is sad because the Trailer Lawyers have been a source of much enjoyable fodder for this and other blogs, and now, I fear, we will have to do without pleasant diversions such as making up Trailer Lawyer songs, like the following (sung to the tune of Don McLean's American Pie):

Bye bye Trailer Lawyer pie,

Drove my trailer to the courthouse but the judge said bye bye

Them Snake Farm boys was laughing while we cried

Singing this will be the day your case dies,

This will be the day your case dies. 

Now for five months, we've been on our own

Since Scruggs got knocked off his lawyer throne.

But that's not how it used to be.

When the Rigsbys sang for ABC,

With some quotes they borrowed from Dickie,

And some files that came from piracy.

And as we reached the motion stage, 

My hands were clenched in fists of rage,

No story we could tell,

Could break that Snake Farm spell.

And as our briefs climbed higher in the fight,  

We just couldn't seem to get it right, 

I saw bloggers laughing with delight,

The day the Qui Tam died.

And they were singing,

Bye bye Trailer Lawyer pie,

Drove my trailer to the courthouse but the judge said bye bye

Them Snake Farm boys was laughing while we cried

Singing this will be the day your case dies,

This will be the day your case dies. 

My oh my, is this end of the Trailer Lawyers? No more Trailer Lawyer songs!  Truly, the Day the Music Died.  

Almost forgot, here's Judge Senter's opinion. 

Posted By David Rossmiller In Industry Developments
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Time continues to be extremely limited, and blogging has been impossible.  However, if politics is the art of the possible, blogging is the art of the impossible.  I'll see if I can sneak a post in later this morning. 

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Time continues to be extraordinarily limited.  Thanks to readers for pointing out the article in the New Yorker on Dickie Scruggs.  I was called by one of the fact checkers for the magazine about the story, although I didn't have time to return the call before the story closed.  Although I am a subscriber of the magazine, I haven't had time to read the story, and there was no way to link to it yet on their website.  I'll comment in a few days, when I return from traveling to Florida to give a speech to the Mississippi Bankers Association. 

All I have time for today is this link to a recent Anita Lee story in the Sun Herald (thanks to Ted Frank of Overlawyered and Point of Law for the heads up) about the Renfroe v. Rigsby case.  Not much time to comment, but the story is pretty self-explanatory.  Also, there will be no post for tomorrow, I decided it is too much of a hassle to travel with a laptop through security.  I had my fill of security hassles when I returned from Mississippi last month -- got to the airport too late to check my bag and had to carry it through security, setting off numerous puzzled looks over the cheese, sweet potato and other paraphernalia I was presented with at Starkville.  Said one TSA employee after opening my bag: "I could have guessed the rest from the X-ray, but I never would have guessed the sweet potato." I said, "Blame it on Dickie Scruggs."  Now that I am laptop free, I will consider whether the next step is feasible: traveling without shoes.  Although I wouldn't have to take them off, it might invite a different form of scrutiny. 

While I'm gone, comments will be published by Marjory Morford.  She's sharp, so don't try to sneak anything by her.

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This recent Anita Lee story in the Sun Herald tells how hundreds of former clients of the disqualified Katrina(less) Litigation Group have migrated, at the suggestion of KLG lawyer Don Barrett, to the Texas tobacco litigation firm Umphrey-Provost.  You can see the Barrett letter to clients at this post I wrote earlier.  Some other former clients, as I mentioned recently, chose not to get new lawyers but instead to settle their claims.

Now, let's look at what is happening with Ex rel. Rigsby, also called the False Claims Act case, also called the Qui Tam, but which I like to call, simply, the Trailer Lawyer case.  Late last week State Farm (or in the lexicon of suspected Trailer Lawyer Chip Robertson, "Snake Farm") filed a rebuttal to the latest Trailer Lawyer filings.

These filings include a brief calling State Farm's attempt to disqualify the Trailer Lawyers the last desperate act of a desperate company (actually, it sounds more like the first act of the Katrina Follies, the musical I am writing: "If this trailer's rockin', don't come a-knockin', Trailer Lawyers are busy inside, tappin' on the keyboard with the Rigsby Sisters, surfin' through the claims files till their fingers blister").   These filings also included another brief that avoided the use of the word "trailer" like it was a gift basket of pit vipers ("Sir? Special delivery from Snake Farm. Sign please").  See this prior post for more information. 

State Farm's rebuttal brief contains these paragraphs, which seems a good excerpt to kind of sum up their position (boring legal citations omitted, and some explanatory information inserted):

The Rigsbys’ [Trailer Lawyers'] response and opposition briefs confirm even more clearly why all of their counsel must be disqualified. Counsel admit that they knew of the payments to the Rigsbys soon after they began, “either in late Summer or early Fall of 2006” and knew that any payment to the Rigsbys was improper on multiple levels and violated the ethical rules. Yet, for the next year and a half Counsel made no effort to stop these payments or to disassociate themselves from Richard F. Scruggs (“Scruggs”), his law firm, or the Rigsbys. As in McIntosh v. State Farm [the case where the KLG was first disqualified by Judge Senter], Counsel’s “failure to take timely and reasonable remedial steps or to object to this arrangement amounts to a ratification of Scruggs’s actions” and warrants disqualification.

. . .

In McIntosh, this Court disqualified the remaining SKG lawyers because they were in a joint venture with Scruggs and knew or should have known about his unethical conduct, but did
nothing to stop it. In this case, all Counsel were similarly in a joint venture with Scruggs, admittedly knew of his unethical conduct, and did nothing to stop it.

Further, Counsel’s ties to the SKG are much more significant than they disclose. Chip
Robertson has in fact not only entered an appearance and served as co-counsel with Scruggs and the SKG in the appeal of Tuepker v. State Farm Fire & Casualty Co., he actually argued the appeal before the Fifth Circuit. Similarly, BFRG [Robertson's firm] served as co-counsel with Scruggs and the SKG on behalf of the McIntoshes in In re State Farm Fire & Casualty Co. This representation is especially significant, as it pertained to State Farm’s Petition for a Writ of Mandamus from this Court’s denial of State Farm’s first disqualification motion. BFRG also served as co-counsel in Cori Rigsby & Kerri Rigsby v. Gene Renfroe & Jana Renfroe. 

Here's a copy of the State Farm brief, which includes a number of exhibits, 168 pages or so in all, that I've provided here as well.     

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California wildfires have provided some interesting battles between policyholders and insurers, chiefly over whether the insurer or the homeowner is responsible for the home being underinsured when it was destroyed. I wrote about a Bloomberg piece on that subject in this post last year. 

The California Court of Appeals, Fourth District, recently decided a case, Everett v. State Farm,  involving the destruction of a home during the October 2003 wildfires near Los Angeles.  Here's a copy of the opinion.   

In the case, homeowner Agnes Everett had a State Farm policy that, when she purchased insurance from the company in 1991, had guaranteed replacement cost.  However, in 1997 State Farm stopped including guaranteed replacement cost with its policies -- a number of other insurers did the same thing, also some still offer the coverage.  It appears State Farm sent a notice to Everett with the renewal of her policy that year and every year after that the coverage was not available and she was responsible for obtaining sufficient insurance to cover increased value of her home.  This did not happen, and the home was underinsured when it burned down.  If the opinion said how much the home was actually worth, I missed it, but it was more than the $138,000 in structural loss and $76,000 in contents loss that the insurer paid.  (Everett had purchased the home in 1991 for $99,000).

Everett sued State Farm and her insurance agent, alleging breach of contract, bad faith, negligence, reformation and fraud, based on two theories -- the policy actually did provide guaranteed replacement cost because it was ambiguous about the level of coverage, and State Farm failed to provide her with sufficient notice of changes in her policy.

The Court of Appeals upheld the trial court's grant of summary judgment in favor of the insurer, and said there was nothing ambiguous about the policy.  Everett's ambiguity argument had focused on the word "replace."  The presence of this word is not consistent with any result except actual replacement of what was destroyed, which means replacement of its entire value, Everett argued.  The court disagreed. Policies must be read as a whole, and ambiguity does not grow out of one word taken in isolation.  The court said the policy made it clear that no matter what was replaced, it would only be up to the limits stated on the declarations page.

The court also said the State Farm notices were consistent were what the Legislature required, and that they clearly said that, while State Farm included an estimate based on general home value information what a theoretical level of insurance might be, the homeowner must be the one to check this out with an appraiser or otherwise and make sure enough insurance was available.  The court also said the claims involving the agent could not stand -- the policy contained an integration clause that said the policy contained the entire agreement between the parties, meaning no oral agreement, even if an agent had made one, could supersede the written terms.

An interesting case, sent to me by a reader.  If you have a case you'd like me to look at, feel free to let me know about it.  Can't promise I'll write about it, of course, but odds are pretty good I will eventually.

Feels a little odd to be writing about non-Katrina cases again.  For those who only know me from Katrina, Scruggs, Hood, Trailer Lawyer coverage, this is what I used to do all the time on this blog, and I kind of like it.  Not as fun as writing about the Trailer Lawyers, of course, but we can't dance all the time.

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The effort to find lawyers for the McIntoshes, plaintiffs against State Farm in one of the signature and most bitterly fought Katrina cases, continues to run into snags.  You may remember Judge Senter's order of April 15 in which he clarified that his earlier disqualification order pertaining to the Scruggs(less) Katrina Group, aka the Katrina(less) Litigation Group, is broad and pertains to any law firm associated with the SKG-KLG. 

In my review of the docket of this case, it appears another Mississippi firm may run into problems trying to represent the McIntoshes.  The Lumpkin & Reeves firm, of Biloxi, has asked Judge Senter, in an abundance of caution, for clarification whether it can represent the plaintiffs. State Farm opposes the entry of the Biloxi firm into the case based on its participation in a deposition earlier in the case and, apparently, involvement in presenting arguments or information to the Court in conjunction with the disqualified lawyers.

Dickie Scruggs is viral right now, no doubt about it.  When he sneezed, a lot of lawyers caught a cold.  

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This is a relatively small article I wrote for the OADC magazine, the Oregon Association of Defense Counsel.  I'm not actually a member of that organization, but one of my partners is on the Board of Directors, so I like to help out when I can.  Some of the information was contained in the much larger anti-concurrent cause article I wrote for the recent New Appleman on Insurance: Critical Issues in Insurance Law, but this has more of a focus on Oregon's plain English insurance law.  Oregon, of course, is where I live.  If I had to write an article applying to all 50 states, I doubt much would change about my conclusions.  

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I've had a number of stories by Becky Mowbray of the New Orleans Times-Picayune sitting around in my feedreader waiting for me to find time to comment.  Between the day job and the Trailer Lawyers, it's been difficult, but I can sneak some of them in here. 

-- This Mowbray story is about federal regulation of insurance, as opposed to the current state system. It's interesting that opponents of federal regulation claim it would amount to deregulation, which of course by that they mostly mean deregulation of rates.    

Consumer advocates counter that "optional federal charter" is code for deregulation, and there's nothing in it for policyholders. In their lobbying, deep-pocketed insurers would make sure that a federal system would resemble the most deregulated state systems, such as Illinois. Allowing companies to choose between being regulated by the states or the federal government would create a race to the bottom on regulation as the two systems would compete to attract insurers. Strong consumer-protection laws in California would be dismantled, and Florida would be powerless in its stand against insurance companies.

"I'm not opposed to a federal role, but the OFC is a bad idea because it gives the option to the insurance companies," said Hunter, who will release a study this week on the effects of different regulatory systems on consumers. "If I'm a state and I want insurance companies to choose my system, I would lower my standard. It would decimate regulation."

The kicker, Hunter said, is that [Treasury Secretary Henry] Paulson's proposal is short on details about consumer protection, but states explicitly that there would be no regulation of homeowners and auto insurance rates. He's not kidding.

"While numerous arguments have been made to justify such rate regulation, they are unpersuasive," Paulson's proposal reads. "Insurers should neither be subject to rate regulation nor be required to use any particular rate, rating element or price."

I wonder why some always assume that lack of central planning will result in consumers getting hosed.  The history of deregulation -- increased competition, in other words -- is to the contrary.  Can't say that it matters much to me either way, but it's interesting to think about.

-- Louisiana's efforts to shrink the risk profile of the state-run property insurer are bearing fruit, with new companies moving in to buy up some policies held by Citizens Property.

-- Allstate's posting of 150,000 McKinsey documents to its website wasn't enough disclosure, some are claiming.  They also want to see documents relating to hurricane catastrophe claims adjusting.  Allstate says it is reviewing to see if there are more relevant documents.

-- FEMA says it wants to change the formula by which insurers get paid for flood adjusting -- it says the formula worked well before, but resulted in a windfall for insurers for adjusting claims from Hurricanes Katrina, Rita and Wilma. 

-- Even though this is non-Mowbray, I'm also going to sneak in one Trailer Lawyer comment here.  I have no idea what the Trailer Lawyers are like in real life, they may be great people, steady as a rock, unflappable, whatever. I only comment on what I see in their public fight with State Farm, and, I'm trying to say this in a way that is not completely unkind. They need some professional public relations help.

This bombastic, chest-thumping pose they strike in pleadings and interviews with friendly newspaper reporters is not the way to go.  It's got the smell of fear to it, desperation, evasiveness, running for the tall grass. Whereas this kind of thing calls for a certain touch of Cary Grant, of David Niven, a certain grace under pressure, kind of like the characters Will Smith plays in the movies, the Trailer Lawyers give off the aura of folks in a chair fight on the set of Jerry Springer, some cross between Woody Allen and Travis Bickle, Robert DeNiro's character in Taxi Driver. ("You talking to me?").

Their selective analysis, including that incredibly ill-advised pleading where they refused to use the word "trailer," tells you that they are getting their clocks cleaned public relationswise. 

Posted By David Rossmiller In Industry Developments
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A good way to finish out the week -- once again it's Trailer Time, where we catch up on another episode of the Trailer Lawyer News, with that beloved and familiar cast of characters: the Rigsby Sisters, Dickie Scruggs, Trailer Todd, Trailer Tony, Trailer Chip and Trailer Mary, and of course, Snake Farm. 

Remember Hemingway's saying that courage is grace under pressure? Well, I'm not sure what he would call these Trailer Lawyer briefs that have been filed in the False Claims Act case, Ex rel. Rigsby, but they do not appear to exhibit grace under fire.  The tone of these Trailer Lawyers briefs is a little too desperate, a little too florid, a little too tricky, a little too defensive, a little too offensive.

Here's the latest, wherein Trailer Todd Graves' firm blows its stack in print.  When you start reading one of their briefs, it's like Fibber McGee opening up that hall closet.  On this site, you can find a link to listen to a version of opening the closet from the old Fibber McGee and Molly radio show. I think I must have heard or seen 50 different versions of the closet door opening, and it still makes me laugh every single time, with all that junk spilling out.

Let's take a look at the most recent Trailer Talk:

Having made scurrilous and unsubstantiated accusations of wrongdoing against former United States Attorney Todd P. Graves and the law firm of Graves Bartle & Marcus LLC (“GBM”) in its recently-filed motion to disqualify, State Farm Fire and Casualty Company (“State Farm”) now seeks to preclude Mr. Graves from personally appearing before this court to defend himself. These are the desperate actions of a desperate company.

There is no basis for denying Mr. Graves pro hac vice admission to this Court. There is no basis for disqualifying Mr. Graves and GBM from continuing to represent the Government’s interests in this matter. There is not a wisp of evidence that Mr. Graves or any other GBM attorney violated the Mississippi Rules of Professional Conduct or any other ethical standards by which they may be judged. GBM did not access State Farm’s confidential databases, GBM did not make any improper payments to Cori and Kerri Rigsby, and GBM was not associated with the Scruggs Katrina Group or any successor entity.

Question: what interests of the government do they represent?  Hasn't the government declined to get involved in this lawsuit?

Look at the last thing to spill out of the closet, I mean, the last paragraph:

So this unfortunate side show can finally be brought to an end, Relators respectfully request that the Court convene a hearing on these matters. State Farm should be ordered to come forward with any evidence it possesses to show that Relators’ counsel engaged in any conduct warranting disqualification under the applicable ethical standards. If State Farm fails to come forward with such evidence, sanctions should be imposed on both the company and its attorneys Jeffrey A. Walker, Robert C. Galloway, E. Barney Robinson III and Benjamin M. Watson.

Bring it to an end? Come on, what are you trying to do, spoil our fun? 

Incidentally, what this is all about is Graves applied for pro hac vice admission in this case, and State Farm opposed it in this pleading. I left the explanation of the substance until last, because the entertainment value is what really matters here, for our purposes.  See you for the next episode of the Trailer Lawyer News, when it will be Trailer Time once more. In the meantime, don't open that closet door!

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Again, time is very limited today, so this will have to suffice.

-- I saw this story in the Insurance Journal that, following the Fifth Circuit's opinion in Broussard v. State Farm, the case has settled, so there won't be any new trial.    

-- This item from the Las Vegas Sun on a sudden increase in interest following an earthquake in Utah is interesting: 

Fuller said most people usually don't buy earthquake insurance because of its cost, the belief that an earthquake won't happen in Utah or that the federal government would help in an emergency.

But since Hurricane Katrina hit New Orleans in 2005, fewer people have been willing to rely on the belief in government help, Fuller said.

"I think before Katrina, people saw FEMA as the answer to getting a house rebuilt," he said. Fuller said the largest factor that keeps people from buying earthquake insurance, though, is its cost, which can double the price of homeowner insurance. Deductibles for earthquake insurance, usually set at 5 or 10 percent of the cost of rebuilding, are higher than normal home coverage

If you read the story, however, you'll see the actual numbers reported are tiny, certainly no indication of a trend. 

-- The Foti Albatross

Former Louisiana Attorney General Charles Foti is probably missed greatly by Mississippi AG Jim Hood -- Foti made him look super-competent in comparison. Another story here about cleaning up the debris of Foti. 

-- Recent anti-concurrent cause decision in federal court in Florida

My attention was called to a summary judgment opinion of the federal district court for the Northern District of Florida, in Empire Indemnity Ins. Co. v. Winsett. 

Florida uses a causation analysis in first-party property claims that is unusually precise and defined among the states, and also different from other states.  First, courts look at whether causes are independent -- such as earthquake and a lightning strike, or windstorm and wood rot -- or dependent, such as when an earthquake breaks a gas main that starts a fire. 

If the causes are dependent, the efficient proximate cause doctrine is used to determine which cause set the others in motion.  If this cause is covered, the damage will be covered. If the causes are independent, courts use what they call a concurrent cause analysis -- as long as one cause is covered, the damage is covered. 

Anti-concurrent cause language is upheld in Florida, but in this case, the court said it didn't preclude coverage. The anti-concurrent cause language was not contained as a "lead-in" to exclusions as one normally sees, but from what I can determine by reading the case, the provision was embedded in the mold exclusion itself.  The exclusion was for bodily injury or property damage due in whole or in part to fungi or bacteria in or within a building, "regardless of whether any other cause, event, material or product contributed concurrently or in any sequence to such injury or damage." 

The way the court analyzed this, the anti-concurrent cause language would apply only to truly concurrent causes -- those that are of independent origin. The allegations of the complaint, however, indicated dependent causes, according to the court: failure to install of vapor barrier set in motion mold growth, leading to damage to renters of property. Therefore, the court said, anti-concurrent cause language doesn't apply because the efficient proximate cause doctrine is used for dependent causes. Failure to install the vapor barrier, according to the court, was a covered cause and therefore the damage was covered.  The court also placed some significance on the fact the anti-concurrent cause language was embedded in the exclusion and was not a lead-in provision, although I fail to see why this would make a difference, and the court made no effort to explain this -- possibly because the explanation wouldn't make any sense. The significance of lead-in language is only that it applies to more than one exclusion.  One could just as well write anti-concurrent cause language into each exclusion, but it saves space to do it the other way. 

One glaring omission in the court's analysis -- what of the words "or in any sequence" in the anti-concurrent cause provision.  As those who have read my examinations of anti-concurrent cause language know, sequential damage is precisely what the court is talking about here: dependent causes that result in damage. The court gave no explanation for ignoring this policy language altogether.  Neither did the court attempt to figure out what the words meant, why they would be in the policy or what distinction was drawn with the words between concurrent and sequential damage.  The analysis could have been a lot better.

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Time is extraordinarily short today for posts of any kind -- just a heads up in case you were looking for a new one. Probably not going to happen.

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The Trailer Lawyers have been promising a devastating response to State Farm's motion to disqualify them in the False Claims Act case, Ex rel. Rigsby.  They filed two briefs yesterday in opposition, one by Chip Robertson's firm, loaded with euphemisms and which studiously avoids the word "trailer," and another by Todd Graves' firm. In the Robertson brief, here's the description of a Trailer Summit:    

The meeting was held in a temporary housing unit due to the damage caused to so many structures by Katrina.

Temporary housing unit? How about "prefabricated improvisational dwelling"? What of "non-self-propelled mobile abode"? "Non-permanent omni-directional quarters"?  The new brief goes to extreme and silly lengths to avoid calling things by their right names. How devastating can a response be when it's afraid of the word "trailer"?

Look at this statement in the Robertson brief: 

These are the facts: After the Rigsby’s completed the document protection exercise, they immediately informed State Farm that they had accessed the State Farm database and downloaded documents. They did not try to keep their actions secret. What is also true is that while the Rigsbys had access to the databases, they never improperly accessed or exceeded their access to these systems. Their counsel never used their computers or accessed their data base.

Let's take a look at this stuff.

"Immediately informed State Farm." it says. "Immediately" in this context does not refer to, as you might expect, immediately, but instead means "some months after they admittedly had begun engaging in covert spying on behalf of Dickie Scruggs." As the November 20, 2007 deposition of Kerri Rigsby shows (page 140), the sisters fessed up only after they were ready to quit, after they realized that State Farm had just about figured out they were covertly funneling documents to Scruggs, and they did this only after they did a final frenzied "data dump" over the weekend, inviting some friends over to help them copy thousands of pages of claims files.

"Document protection exercise." The Rigsbys agreed in testimony that they illicitly took the documents. Is it any use to try to come up with some Newspeak label?  Question: when someone doesn't dare call a trailer what it is, why should anyone buy this characterization of the Rigsbys' secret taking of documents?

"They did not try to keep their actions secret." Except up until the time they were going to be caught and then they took thousands of more pages secretly, staged a walk-out, and went over to Scruggs to be paid $150,000 a year.

"[T]hey never improperly accessed or exceeded their access to these systems." Notice the word "access." If you give me a key to your house to feed your fish while you're on vacation and I go in and take your TV, did I exceed my access? Technically, no.  

Let's apply this style to a familiar story, that of the Three Little Pigs, told by the wolf:  

I politely asked to be allowed entry, as I conveyed information that extreme wind conditions were expected momentarily.  Sudden violent gusts destroyed two semi-permanent structures. I paused briefly only to take nourishment to sustain me as I hurried to warn the occupant of a nearby permanent clay-based dwelling unit.  Regrettably, my warning was ignored, and as I tried to access via a vertical entrance to contact said occupant, I was attacked with heated liquids.

Apparently, though, we finally know who Trailer Todd is: Graves admits to being in the trailer, although the Trailer Lawyer filing denies they met with the Rigsbys in the temporary housing unit in March 2007.  The Trailer Lawyers say it was April.  This looks like it contradicts the testimony of their own clients, although it is possible both Rigsby sisters were messed up on dates, basic facts, when stuff happened, what they did, what other people did, etc.  You know, the whole story.  Odd that they were both were wrong the same way, though, isn't it?      

Here's a few more things filed by the other Trailer Lawyers: Trailer Chip, Trailer Tony and Trailer Mary. 

Robertson declaration.

DeWitt declaration.

Winter declaration.

All of this seems to say they didn't "instruct or encourage" the Rigsbys to do what they did.  Why, according to the Trailer Lawyers, they know nothing at all! (Lack of awareness -- not exactly the trait one looks for in a lawyer). They just happened to be passing through and sought shelter in the trailer, er mobile home, I mean, semi-stationary vehicular habitat, I mean, temporary housing unit -- well, you know what I mean -- because it was time for Days of Our Lives and they hoped to find a TV, a bag of Doritos and a six-pack of Schlitz for refreshment!  

Posted By David Rossmiller In Industry Developments
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Lots of e-mails from readers yesterday about this story by Anita Lee in the Sun Herald on Kerri and Cori Rigsby. The story is headlined "Under Pressure," which means we better cue up the You Tube video of the David Bowie song of the same name. The lyrics, in case you can't understand the words, include the following:

Pressure pushing down on me
Pressing down on you no man ask for
Under pressure
That burns a building down
Splits a family in two
Puts people on streets

. . . . .

Its the terror of knowing
What this world is about
Watching some good friends
Screaming let me out
Pray tomorrow takes me higher
Pressure on people

. . . . .

This is our last dance
This is our last dance
This is ourselves under pressure
Under pressure pressure

(I also link to this version with Bowie and Annie Lennox, not as spirited as the first one, but it's worth it to see these two great performers together).  A very good song, so good one could ask whether the lyrics rise to the level of poetry.  I say: certainly, if poetry expresses, in shorthand and without the conventions of expository prose, some truth about human experience.   "The terror of knowing what this world is about," is what it says.  Means different things to different people in different circumstances, but we've all been there, haven't we? Litigation is machinery that tears people's lives up, lawyers and litigants and witnesses, it can rip the soul right out of you if you're not careful. Pressure. Pressure on people. 

Before we look at the story, one more thought to brace us for the journey. Do you remember in Dickens' David Copperfield, the opening, those great, great words? "Whether I shall turn out to be the hero of my own story, or whether that station will be held by any one else, these pages must show."  Perfect beginning, perfect words. Aren't we all tempted to see ourselves as the hero of our own story? But as David Copperfield implies, this determination is not up to us -- it is something "these pages must show." There is also something ominous in those words: they foreshadow that the narrator will be both subject and object, a mere bit player in scenes of his own life.  Even  though we may write a page in the book of life, we delude ourselves by thinking we determine life's course.  Life mocks our attempts to control it, and we act as a Sorcerer's Apprentice, releasing forces whose power we only dimly realize.  And as the opening of Copperfield suggests, in your own story, in my story, in our story, we may turn out not to be the hero, and what's worse, our story may not necessarily be all about us.  We forget this, but we would do well not to forget it.   

Now let's look at the Sun Herald story.  First, let's look at this excerpt:

The sisters said they were naive in February 2006 when they first reported in a meeting with policyholders' attorney Dickie Scruggs what they called underhanded tactics at the State Farm Catastrophe Office.

"It was a tough decision, but we just needed help and needed somebody to stop what was going on," Kerri Rigsby said. "We didn't know what we were getting into at the time.

"I would do it again. I wouldn't recommend it to anybody else. We just definitely didn't know what to do. I guess, in my wildest fantasy, I thought that Dick (Scruggs) would just fix it."

As it turns out, they didn't know what they were getting into with Scruggs or State Farm.

With Scruggs, they unwittingly stepped into a political, legal and ethical minefield.

And let's note this later section of the story:

The Rigsbys hoped to remain anonymous when they went to Scruggs, taking with them records from State Farm files. They had begun saving and copying the records in the fall of 2005. As events unfolded, they say they realized anonymity would be impossible.

How plausible is this? The way the story says it, they first "reported" to Scruggs in February 2006. Yet the story also says they began saving and copying records in the fall of 2005.  Did they do this solely on their own?  Did Scruggs ask them to do so, directly or indirectly? These are important questions, for their testimony under oath has been they did not meet with and form an attorney-client relationship with Scruggs until February 2006.  Yet knowing how adverse almost all people are to "begin saving and copying records," one must inquire further about the reason they would go counter to this fundamental and recurrent feature of human psychology, especially since their conduct just happened to match with Scruggs' agenda and litigation plans, and they just happened to meet secretly with Scruggs and the Trailer Lawyers, and they just happened to illicitly access State Farm computer files in the exact order of a list of Scruggs' plaintiffs. 

These questions are not answered or addressed in the story, and the story does not tell us why they are not. In that these questions are central to the litigation mess the sisters find themselves in and about which they complain, one might expect these questions to be explored in the story, but again, they were not. 

Let's go forward just one more yard here, by taking a look at another piece of the story:

The sisters said they acted on their own when, over a weekend in June 2006, they downloaded thousands of pages of records from State Farm computers. They used a State Farm engineering roster and a Scruggs client list to decide what records to download.

"I knew that as soon as we did the data dump, we would lose our jobs," Cori Rigsby said. "I knew we would lose our careers."

The "acted on their own," is what it says. There is more than one connotation to this phrase.  We know some friends helped them out in the physical tasks of the data dump, so the statement is not literally true and therefore might be taken to mean they continue to claim they did not perform the data dump at the direction of Scruggs or others. But the phrase does not even quite say that.  We know AG Jim Hood's office sent someone to pick this stuff up right after it was copied.  How did he hear about it? But more than that, do you see the limiting perspective of the phrase "acted on their own"?  It stops short of addressing its own implications, and therefore does not reveal all that stuff that might be uncomfortable to talk about.  For example, the phrase can also be taken to mean merely that their conduct was volitional and that Scruggs was not physically involved in the tasks themselves.  It is quite difficult to picture a scenario where the Rigsbys decided, solely on their own, to copy thousands of pages of documents that were later used in litigation as purported support for their allegations.

Again, human nature is not to engage in a potentially fruitless frenzy of weekend activity involving playing with thousands of pages of paper.  This type of behavior is more typical of some larger plan. In that it has become manifest that a larger plan involving the Rigsbys had been activated some time prior to this, that this plan was carried on covertly, and that this activity has been found to create ethical problems justifying the disqualification of lawyers and the Rigsbys as witnesses, it is legitimate to inquire further as to the meaning and credibility of "acted on their own."  How does the data dump tie in to the accessing of the State Farm servers during the March 11 Trailer Summit, attendance at which is a point of hot contention at present? 

Also, staying on this point for the moment, what of the Lee Harrell deposition, in which he testified that Scruggs claimed, in a December 2005 meeting with Harrell and Insurance Commissioner George Dale, that he had corporate insiders at State Farm and was going to work this just like he and Mike Moore worked the tobacco litigation? The question, once again, is what of this testimony?

In that there is no apparent motive for Lee Harrell to make up this meeting or what was said in it, let us assume for purposes of argument that this testimony has credibility.  Who were these insiders? In the time since December 2005, no other State Farm "insiders" have surfaced, and we would surely have seen them by this point if there were any others.  So the logical inference is that Scruggs' reference was to the Rigsby sisters.  Remember two facts -- they say they began copying and keeping records in the fall of 2005, and they say they did not "report" to Scruggs until February 2006. There are several discrepancies here then that justify further inquiry.  I don't need to belabor it, you can see if for yourself.

Let's switch gears just a bit.  Although in this story the Rigsbys seem to be generally aligned with Scruggs, there is the germinating seed of a new narrative:

"I knew that as soon as we did the data dump, we would lose our jobs," Cori Rigsby said. "I knew we would lose our careers."

They told State Farm executives the following Monday what they had done and were soon out of work. Scruggs followed his tobacco playbook, offering them consulting salaries of $150,000 each to come to work for him on policyholder cases. He also planned to use them as witnesses in those cases.

The sisters had no familiarity with attorneys' rules of conduct. To pay witnesses is unethical.

Again, following his tobacco game plan, Scruggs took the Rigsbys to the media and pursued political options to pressure State Farm. 

Let's just accept this at face value, these statements, because our purpose is to examine them for an indication of where the Rigsby narrative will lead next.  They aren't quite making Scruggs the fall guy for their problems yet, but the door is open. They were "naive," they "had no familiarity with attorneys' rules of conduct," they didn't realize that "to pay witnesses is unethical." You will notice that the obverse side of the coin -- that in order for it to be unethical for lawyers to pay witnesses, it must be unethical for witnesses to accept money from lawyers -- is not addressed.  That seems to be the direction they are traveling -- maintaining that what they did was according to sincere belief, but that to the degree what they did was illegal or unethical, they were led into it by Scruggs and his "playbook."  I think, but I do not know for sure, that Scruggs is still paying for lawyers for the sisters.

This road has some bumps and twists and turns, because they have testified that, contrary to the implication of Scruggs' alleged statement to Harrell and Dale, they were not working with Scruggs before February 2006.  So there are some hard and fast facts they have testified to, and their own testimony under oath can't be blamed on Scruggs.  The fluidity of the narrative, in other words, has some limits which they themselves have prescribed.  Let me be clear: I make no judgment or representation as to the truth of their statements.  I merely note things that don't make sense as the facts are currently known. 

Let's look at another thing from the story, the last line, which says:

During countless hours of questions from corporate attorneys, Kerri Rigsby said at one point they produced an 8-by-10 photo of her dog, Payton, and asked about him.

Now, let's try to make sense of this.  The hours of the depositions in fact are not countless, because one could count them -- the time of beginning and concluding are noted in the transcript of the depositions.  But why the questions about the dog? Was this some frivolous harassment?  ("Who do you think would win in a fight between a T-Rex and King Kong? Who put the "Ram" in the Ramalama Ding Dong? Please, listen closely to my question and answer that question.") 

The questions about the dog appear to me to be aimed at the hypothesis explained below.  In the May 1, 2007 deposition of Kerri Rigsby, this questioning, beginning on page 36 and continuing to about page 46, appears designed to explore additional living expenses paid under the State Farm policy of the Rigsbys' mother, who was uprooted by Katrina damage.  To collect additional living expenses under the contract, you must have additional living expenses. And when living with a family member, you must provide a tax ID number or Social Security number of the family member.  Kerri, according to her testimony, executed a lease agreement with her mother for $2,800 a month so her mother could collect these expenses, and said: 

Absolutely. I wasn't going to let her live there for free. (Page 39, lines 21-22).

The money collected, however, appears from the testimony not to have gone directly to Kerri Rigsby but into an account for something called Payton Properties -- recall that Payton is the name of her dog, and recall also that there exists an 8 by 10 photo of the dog that was produced at the deposition.  The account, it seems, was not for the dog, however, despite the name of the company. It was, however, named after the dog, of this we can be sure.

Kerri testified this company did not have a tax ID number and was not registered with the state.  Kerri testified she did it this way because this was the advice of the lady at the bank -- "note to self, must resolve not to follow advice blindly from whomever offers it".  Kerri testified that Payton Properties was synonymous with Kerri and Kerri only.  Her state of being therefore was unique to the personhood of Kerri Rigsby herself and did not extend to members of the animal kingdom.  Again, the account was not set up for the benefit of the dog, although it was named for the dog.  The testimony does not reveal if the dog received incidental benefits from the use of its name, such as perhaps a Milk Bone, extra kibble or additional petting and kind words. But some things seem clear: the dog was not the actual holder of the account and the dog did not control or share in the money, nor did the dog exercise authority over the company bearing its name.  

Additionally, I suspect the point in asking about the taxpayer status of Payton Properties -- remember, named after but not controlled by the dog, so the dog cannot be blamed here, nor does it appear the dog provided advice in any respect -- and whether this sub rosa company's income was reported to the Internal Revenue Service and whether $2,800 per month was a fair market value for the lease. In other words, the hypothesis being explored was whether the insurance claim was inflated to channel money to Kerri Rigsby which was then not reported as income.  This much is apparent to me in reading the transcript, and would be to anyone else who cares to read it as well.  I don't know the truth of the hypothesis, but the existence of the hypothesis was the reason for the questions, not idle curiosity about the dog, whom you will remember, was named Payton, and of whom at least one 8 by 10 photograph exists.  

Now, when someone gives an interview, if they make it seem like big bad lawyers are picking on their puppy and this turns out not to be a complete version of events -- whoops, forgot to mention that unregistered company created to accept insurance dough -- one begins to suspect a few other things about the statements made in the interview as well.  Of course, the dog thing is just a line in the Sun Herald story, so we don't know exactly what Kerri Rigsby said about the dog or the questions that led to the statements.  The implication of the line in the story, however, is that Kerri Rigsby stated an outrageous example of the harassing character of deposition questioning. From the evidence of the transcript, I would have to disagree with that assessment. 

Incidentally, all the Rigsby depositions I have are available at this post.  For free, too.

Posted By David Rossmiller In Industry Developments
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Reading cases about insurance coverage for employee bad conduct is sometimes difficult -- not just the legal part of it, the facts are often pretty disturbing.  I mean, some of these folks? We're talking major league weirdos.  After I read some of these cases, I feel like going to wash my hands -- or not, considering they are often about some wacko using bathroom surveillance equipment.  You read these, you've got to watch The Sound of Music three or four times just to get your mind right again.

Randy Maniloff has done a service by taking a close look at some of these cases and how the coverage issues in them shake out.  Here's a copy of a good article he wrote on the subject for a recent edition of Mealey's.  Didn't ask him how many times he had to wash his hands during the course and scope of writing this piece.    

Posted By David Rossmiller In Industry Developments
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I've nominated this song as the official theme music for Trailer Lawyer posts.  A reader nominated this terrific song as the anti-Snake Farm, pro-Trailer Lawyer anthem.  There were other good suggestions from readers for theme music in the comments to this post, and more are welcome. We can't make these important decisions lightly.

Posted By David Rossmiller In Industry Developments
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Posting will be light, probably, for the next few days due to extreme day job demands.  I do want to mention, however, that I will be posting on Monday, April 28 the text of my new article on anti-concurrent cause and Fifth Circuit Katrina cases, being published this week in New Appleman on Insurance: Current Critical Issues in Insurance Law. In the course of examining the workings of anti-concurrent cause, this article puts a heavy emphasis on two things: a critique of the circuit court's decision in Leonard v. Nationwide and examination of the nature of ambiguity in insurance contracts. 

The second part was included for three reasons: it's fun to talk about, it was necessary to talk about, and it gives me an excuse to highlight once again the amazing work of Prof. Michelle Boardman in her article March 2006 article in the University of Michigan (Go Blue!) Law Review, Contra Proferentem: The Allure of Ambiguous Boilerplate. I've talked about this article before, and as I said in the Critical Issues piece, it is destined to become a classic on the subject, not just because of the insights presented but because it is uncommonly well-written.  

Because LexisNexis owns the copyright to my article, I am not free to do with it what I want, but my friends there have given me permission to post it on my blog, along with appropriate legal mumbo-jumbo about copyright ownership and so forth.  But it is embargoed until Monday, so the post has to wait. These things have a lengthy lead time, and I wrote it in January, so even though the article's nominal scope is all Katrina litigation before the Fifth Circuit, the Broussard case had not yet been decided so the treatment of this case is incomplete. The name of it is Katrina in the Fifth Dimension: Hurricane Katrina Cases in the Fifth Circuit Court of Appeals.

It's very difficult to write these things and keep them from becoming some boring string of legal indecipherability where the author quack-quack-quacks along as mindlessly as a duck.  The primary responsibility of the author is not to put words on paper or to try to look smart but to write something that fellow humans would find enjoyable and possibly enlightening to read. If the thing won't be read, it has no hope of being accepted. So a lot of thought has to go into organization, pacing and storytelling, using all of the writer's tools: plot, character development, foreshadowing, simile, metaphor and allegory, humor.  Intellectual discourse that lacks humor fights itself, it will only appeal to ideologues who are already convinced.  And it is not easy, believe me, to find humor that is both appropriate to the subject matter and works to tell the story, while maintaining intellectual standards. I have no use whatsoever for any kind of writing in which the author distances himself or herself from the reader, denying the humanity of both, where the author fails to do the work to anticipate the struggles and distractions of the readers and try to solve these problems in advance.  Humor is one such device that can be employed by the author, even in works of the utmost gravity, a point made most famously and most unforgettably by Thomas De Quincey in his essay, On the Knocking at the Gate in Macbeth.  One of the most remarkable things about this essay to me is its opening line, in which we come to understand that the author actually read or saw Macbeth as a boy -- imagine that. A reminder that, in addition to its other attractions,  Macbeth is a ripping good yarn.   

So, once again, the embargo is in place, but on Monday it is lifted and that's when I will post the article. In passing, I will also mention that I finished the chapter on Hurricane Law for the Appleman's treatise, and that will be published in the book at some point in the semi-near future, the exact timing of which I haven't inquired about because it was so exhausting to write I was sick of thinking anything about it by the time it was done. As you might expect, anti-concurrent cause is a prominent part of the chapter.

Posted By David Rossmiller In Industry Developments
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Better do a quick post this morning on this Anita Lee story in the Sun Herald on a motion for sanctions against Dickie Scruggs in the Wilson fee dispute case, the one in which Joey Langston pleaded guilty to trying to influence a judge. This paragraph seems explosive:

[Wilson attorney Vicki] Slater said she learned how the conspirators communicated. If Scruggs had something to relay to DeLaughter, Peters and Scruggs' attorneys met before Peters had lunch with DeLaughter. If DeLaughter had a message to pass along, he told Peters over lunch, then Peters met with Scruggs' attorneys.

If this is true, what are the feds doing about it? Seems the Wilson investigation fell into a crater since Scruggs pleaded guilty. 

Posted By David Rossmiller In Industry Developments
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You know the old saying -- if you can't stand the heat, stay out of the trailer. This story by Dan Margolies in today's Kansas City Star features angry denunciations by Chip Robertson and Todd Graves, suspected Trailer Lawyers, of State Farm:

“There’s a reason people call them ‘Snake Farm,’ ” Robertson said Monday.

OK, before we proceed, let's say something about this "Snake Farm" line.  As an insult, it's so-so, it's been said before, but I think the intent was for something more, a good satirical catch phrase to coalesce the storyline.  While I can appreciate the effort, this violates the first rule of satire -- it has to be funny. Like "Trailer Lawyers" is funny and catchy, it's fun to say, it's funny to think about a bunch of lawyers crammed into a trailer, probably the first trailer they've ever been in their lives ("try not to touch anything, you might catch something!").  The phrase is more than words, it gives you an image.  But "Snake Farm" is not funny, whether you agree with it or not.  It just sounds kind of unattractively bitter, like Great-Grandpa sittin' around complain' about how the milk wagon don't come no more, and them dang kids next door are so loud I can't watch my programs!!  

Let's take a look at a further excerpt from the story (I've added the words in brackets throughout this post for clarity in light of the Robertson statement): 

Although Graves and Robertson were not part of the Scruggs Katrina Group, State [Snake] Farm wants them off the whistleblower case. The insurer charges they were at meetings during which its computer data were illegally accessed.

That accusation met with angry denunciations this week by Graves and Robertson, who emphatically denied they had any role — as participants or observers — in the matter.

“They’re trying to cast these aspersions on us by saying that on March 11 (2006) we were with these girls in a trailer and got on the State [Snake] Farm Web site and viewed stuff,” Graves said. “The depositions State [Snake] Farm cites don’t say that.”

Graves acknowledged the Rigsbys might have given some of the downloaded information to Tony DeWitt, Robertson’s partner. But that, he said, “was not an ethical violation.”

“You’re not supposed to be able to go in court and just throw things up there,” Graves said. “Maybe in the blog world you can, but that’s not how you’re supposed to plead cases.”

Let's look at the Graves quote in the third paragraph of the excerpt. What do the depositions say?

Well, both Cori and Kerri Rigsby said, in their November 19 and November 20 depositions, that there were two trailer meetings.  Here's a link to a post with all the Rigsby depositions I have so you can do your own detective work, if you care to.

We know that State, sorry, Snake Farm was able, through a simple check of who accessed their server and when, to determine Cori Rigsby accessed the Sta-, Snake Farm claims records in virtually the same order they appeared on a list of Scruggs plaintiffs -- and in the January 2008 deposition she admitted she had such a list, although she said she didn't remember where she got it. This check of computer records has previously been submitted as evidence in the McIntosh case.

We also know that Cori Rigsby, on November 19, testified as follows:

Q. And when did you give Tony DeWitt your laptop? 
A. In April. 
Q. Did you also give him your password? 
A. I don't remember. 
Q. Well, it wouldn't do much good to have the laptop without the password, would it? 
A. Well, I was sitting right next to him. 
Q. All right. Did you boot it up for him? 
A. I don't remember. 
Q. What were you searching for? 
A. I'm not -- I'm not sure of the exact -- that we had a list. There were some documents that we were talking about. We were talking -- I'm not sure which documents he retrieved. I let  him in the computer, and I can't speak after that. 
Q. Where did this take place? 
A. It took place in Pascagoula. 
Q. Did you print documents as a result of that search? 
A. No, sir. 
Q. Did he read documents off your computer? 
A. I'm assuming he did. 
Q. Can you give me the date of this incident? 
A. I believe that this occurred in March. 
Q. March of '06? 
A. Yes, sir. 
Q. Can you be more specific by day? 
A. I can't. 
Q. Would your calendar refresh your  recollection? 
A. If I wrote it on there, it would have. 
Q. Do you know whether you did? 
A. I don't know. 
Q. Didn't you normally write appointments with your lawyers on your calendars? 
A. I normally did. 
Q. Did you -- is that a yes? 
A. Yes. 
Q. Did you go to his office? 
A. No. 
Q. He came to you? 
A. Yes. 
Q. He came to your house? 
A. No. We met in a trailer. 
Q. Pardon me? 
A. We met at a trailer. 
Q. Okay. Who else was there? 
A. Tony DeWitt. There were two meetings in this trailer, and I'm going to get confused as to  who was at which meeting. 
Q. Well, do your best. 
A. Okay. Tony DeWitt, Dick Scruggs, Zach 
Scruggs, Mary Winters, Chip -- 
Q. Chip who? 
A. I don't remember Chip's last name. Kerri, myself and my mother. 

* * * * *

Q. Once you logged in -- I assume you're following your counsel's instruction? 
A. Yes.

OK, this is Cori Rigsby's own testimony.  The date of the testimony, once again, is November 19, 2007. A fair inference from this testimony is that there were two trailer meetings, because that is what she said.  And at least at one of them, "Chip" and Mary Winters were present.  Coincidentally, Chip Robertson and Mary Winters, along with Tony DeWitt, are the names of the lawyers representing the Rigsbys in the False Claims Act "whistleblower" case, and Robertson is also of course the champion of the phrase "Snake Farm." A fair inference is that she gave her laptop to DeWitt in April, possibly at the second of the trailer meetings, perhaps at some other location.  But for sure at some point and at some place in April, she said, she did give the laptop itself to DeWitt.  She also testified that DeWitt was sitting right next to her at some point while she was accessing the computer, and at this meeting he might have viewed documents rather than accessing the computer itself, but it might also be that she "let him in the computer" and then doesn't know what he did.  This is not definitive one way or the other whether the computer was logged in to the server at that time.  It appears she said this occurred in March. 

Here is Kerri's testimony from the next day:

Q. And who did you meet with at the trailer? 
A. We met with several attorneys at that trailer. 
Q. Give me their names, please. 
A. Tony Dewitt, there was an attorney named Mary, Todd, and Chip. 
Q. Mary's last name? 
A. I don't recall her last name. 
Q. Is she an attorney? 
A. She is an attorney. She works with Tony Dewitt. 
Q. Does Tony Dewitt have a law firm name? 
A. It does, but I don't know what the name is. 
Q. How about Todd, is he an attorney? 
A. He's an attorney, but I don't believe he's in the same office. 
Q. Do you know what firm he's with? 
A. I don't. 
Q. And Chip, does he have a last name? 
A. He does, but I don't recall his last name. 
Q. Is he a lawyer? 
A. He's a lawyer. I believe he's the head of that firm that Tony works with.

* * * * *

Q. Well, my question is: Was there a situation that occurred on March 11, 2006, when you and your sister both accessed the McIntosh file through a State [Snake] Farm computer? 
A. It's possible, yes. 
Q. I don't want possibility. Is that likely to have occurred? 
A. Likely, yes.

Now, Kerri's testimony continued that day, November 20, 2007, as follows:

Q. Okay. Thank you. You talked earlier about a meeting that occurred on March 11th, 2006 in a trailer. And you listed several folks that were there, all attorneys except for your sister, I believe, and your mother -- 
A. Correct. 
Q. -- at that meeting. At that meeting -- 
MR. TAYLOR: I just want to be clear about one thing, Mrs. Lipsey. She has testified that there was a meeting. She did not provide the date. The date was provided by records from State [Snake] Farm's computers. 
MS. LIPSEY: Right. That's correct. That's correct. 
Q. But let's talk about -- you do remember that there was a meeting in spring, early spring, I guess, of 2006? 
A. Yes. 
Q. And at that meeting the attorneys that you listed earlier were present along with your  mother and your sister? 
A. Yes.

So from this we can see that Kerri Rigsby's belief was that the lawyers she named, Chip, Mary, Todd, Tony, were at the earlier of the trailer meetings, the one that occurred in March.  It's possible she was mistaken, of course. But that is the inference one must draw from her testimony.

What does this not tell us? It does not tell us who Trailer Todd was.  We know Todd Graves is one of the lawyers with his name on the lawsuit, but Trailer Todd might very well have been someone else named Todd. It does not tell us who looked at the computer while it was logged on to State Farm, excuse me, Snake Farm computers.  We know Cori Rigsby did, and Kerri Rigsby said it is likely she did as well.  Beyond that, the testimony is not complete. 

My question: does it matter whether lawyers looked at the documents on the server? What is the difference between looking at data that is on someone's server, and looking at that information after it has been illicitly downloaded from the server? Would you feel any better about me if you learned I was not the one who went into a house to take papers off someone's desk, but instead I had an arrangement with the household butler to take them, and then I read the papers only after he came outside and handed them to me? What about if I read them a month after he took them, would that be better? 

So let's return to the Graves quote from the Kansas City Star story:

“They’re trying to cast these aspersions on us by saying that on March 11 (2006) we were with these girls in a trailer and got on the State [Snake] Farm Web site and viewed stuff,” Graves said. “The depositions State [Snake] Farm cites don’t say that.”

A fair inference from the Kerri Rigsby testimony is that lawyers named Chip, Mary, Tony and Todd were in the trailer on March 11 -- a fair inference, for that is what she said.  Again, she could be mistaken, but since she was there and was the star of the show, her words carry some weight on this issue.  Neither of the Rigsbys said Chip, Mary and Todd watched as the information was downloaded, although neither said this did not happen, either. It does appear, however, that a fair reading of the Cori Rigsby deposition is that Tony DeWitt read documents off her computer on March 11, 2006, and possibly also that he was in control of her computer as well, doing what exactly we do not know for sure.  But we can say with some degree of assurance that he was not using the computer, for example, to get online and play chess against Shredder, because his purpose in being at the trailer had to have something to do with the False Claims Act case that was filed the next month. 

Whether this means Tony viewed the documents when they were on the server or after they were downloaded is not clear, but again, does that really matter? Even if Chip, Mary and Todd were not present at all on March 11, isn't the real question whether they viewed and made use of the documents knowing how they were obtained? And if Tony DeWitt was in the trailer on March 11, which appears to be the import of the testimony, are not the others charged with the knowledge of their colleague? Also, in the quote, who does "we" refer to?  

Just sayin'.

One thing I don't think I've seen to this point is a categorical denial that Robertson or Graves ever met with the Rigsbys in the trailer, nor have I seen a denial that they knew how the documents were obtained and viewed and made use of them anyway.  This latter element would be hard to deny, in my opinion, in that the lawsuit is based on the documents and the Rigsbys are the plaintiffs.    

Also, let's just focus ever so briefly on the last Graves quote from the story's excerpt:

“You’re not supposed to be able to go in court and just throw things up there,” Graves said. “Maybe in the blog world you can, but that’s not how you’re supposed to plead cases.”

I don't remember, in all the many stories that were done before about the "whistleblower" Rigsby sisters and this False Claims Act case, was there any peep from Graves or Robertson about how the publicity might unfairly affect the other side, or about how judges were too dumb to make up their own minds on the evidence?  In the story, Robertson also says, apparently speaking of State, er, Snake Farm, "I know they’re trying to sell a story, but it would be useful if they’d try to get the facts before trying to influence improperly any judge who might be reading the Internet." 

The other pro-Rigsby stories, it seems, would not confuse a judge who just happened to pick up the paper or sign on to the Internet, but Trailer Lawyer stories will.  Hmmm.  This is an interesting defense, not particularly persuasive in my opinion, that suggests judges cannot withstand the power of the Internet, and that Snake Farm is behind blog posts on this issue, at least insofar as it wrote a juicy storyline that will get bloggers stoked.  In case you want to look, here's a copy of the Snake Farm memorandum in support of its Motion to Disqualify Trailer Lawyers.  I know one thing Snake Farm is not responsible for, however, and that is the testimony of Cori and Kerri Rigsby -- and the Trailer Lawyer story comes from them. So whatever the truth is, these allegations originate with the lawyers' own clients. 

Incidentally, if we are going to keep talking about the Trailer Lawyers, we are going to need an official theme song.  Considering the first line of this song, I can't think of a better one. 

Posted By David Rossmiller In Industry Developments
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When Judge Senter issued his order disqualifying the Katrina(less) Litigation Group, was this letter from Don Barrett on behalf of the KLG what he had in mind?  Where the Katrina Litigation Group handpicks a successor and sends clients a contract to sign up with that firm?

Here's the key part of Judge Senter's order:

The payments made to the Rigsby sisters require the disqualification of the successors to the SKG and those whom they have added as associates from further participation in any litigation in this Court against State Farm and Renfroe arising from property damage attributable to Hurricane Katrina.  

Here's a link to the new firm Barrett recommends, including language welcoming the new Katrina clients.  And here is a link to a story about the new firm being sued over attorney fees in tobacco litigation.  Sound familiar?

Posted By David Rossmiller In Industry Developments
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Is Todd Graves denying he is a Trailer Lawyer? In this story, he says he was at Disney World on March 11, 2006, the day of the first Trailer Lawyer meeting with the Rigsby Sisters and Dickie Scruggs.  Someone named Todd apparently was there, though, according to the Kerri Rigsby November 20, 2007 deposition.

However, according to the Cori Rigsby deposition of November 19, 2007, page 67, there were two Trailer Summits. The second meeting occurred in April 2006-- it's confirmed on page 182 of the November 20 Kerri Rigsby deposition, although it's not clear to me who was there. 

Graves seems most concerned with showing he was not at the Trailer Summit before he left office as U.S. Attorney for the Western District of Missouri on March 24, 2006, although to me it doesn't seem that important -- more significant is did he review the documents and did he know they were gained illicitly?  Did he sign on to the lawsuit knowing what the score was, and did he stay signed on to the lawsuit knowing what the score was? I don't think Graves gets a pass merely because he didn't access the State Farm server, as he claims, or that he may not have been present at the trailer when the Rigsbys used their passwords to gain access to the claims system for purposes of engaging in Scruggspionage.  It does not appear to me that he has ever denied being at the trailer at all, perhaps at the second meeting, and it appears to me he has merely denied accessing documents on State Farm's server, not that he unaware where they came from or how they were obtained.

Doesn't this seem odd to you? A former chief justice of the Missouri Supreme Court (Chip Robertson) and a former U.S. Attorney (Graves), implicated in some kind of tawdry trailer tryst involving documents that federal Judge Acker, in Alabama, has found were wrongly taken -- "stolen" is the word he has used.  Now, is there any justification for this? Does anyone really believe that a False Claims Act case entitles the relators and their lawyers to do whatever they want, that the rules don't apply to them?  Considering that the purpose of the Act is to address wrongful behavior toward the government, it would be strange indeed if the remedy for this included further unlawful or unethical behavior.  However, the Trailer Lawyers are supposed to be the experts on False Claims Act cases, not me.  I guess we'll have to wait and see.

NOTE: I thought I published this early this morning, but apparently I hadn't.  It was sitting in my blog's admin basket until someone asked me if I intended to write anything for today.  

Posted By David Rossmiller In Industry Developments
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As I've said, work is the curse of the blogging class.  Day job demands come first, so I had difficulty grabbing some blogging time until late April 16/early April 17, when I wrote this post.  A couple must-blog-about things follow.

Trailer Lawyer News   

Terry Ganey of the Columbia (Missouri) Tribune has a Trailer Lawyer story, which appears to include fresh quotes from an interview with Todd Graves and Tony DeWitt.  As you may remember, there was some uncertainty over whether the "Todd" in the trailer with the Rigsby sisters -- they couldn't remember the last name during their depositions -- was in fact Todd Graves, a now former U.S. Attorney for the Western District of Missouri.  

This story, though, still leaves some uncertainty -- but from the quote attributed to Graves, it appears to me one inference is that he acknowledges he was in the trailer (or if that is too pejorative, "mobile home," if you prefer).

(Bracketed material in the excerpt that follows was inserted by me to give context):

Graves and Anthony DeWitt, an associate in [Chip] Robertson’s law firm [Robertson also apparently is one of the Trailer Lawyers], said they would be filing a substantial, formal answer to State Farm’s motion [to disqualify the Trailer Lawyers], which both said was inaccurate.

"I’ve never been around a computer that was on a State Farm database," Graves said. "The allegation is ridiculous. They don’t have a basis for it."

DeWitt said the law firms’ answer would be filed by Friday, unless the court granted an extension.

"The facts that are in the motion are all wrong," DeWitt added. "We never went onto their computer system. We never did the things we are alleged to have done. We have not violated any of the rules of professional conduct in Missouri or Mississippi." 

I don't know, the quote could still make sense if he is denying being the Todd in the trailer at all, but wouldn't he have said that? I mean, wouldn't the quote be: "I never was in that trailer, er, mobile home, with those women, the Rigsbys, and so I couldn't possibly have looked at any computer while they were hacking State Farm's system or whatever it is they supposedly did. Good Grief, it's hot in here, who turned on the furnace? Waiter, check please!!"   Question: can someone make me some bumper stickers that say "Who Is Trailer Todd?"  I'll hand them out as prizes to people who renew a two-year subscription to my blog.  Who is Trailer Todd -- inquiring minds want to know.

Let's step back just a bit to recall that Graves and Robertson, besides representing the Rigsbys in the False Claims Act case State Farm is trying to get them kicked off of, were brought in late in the game to represent Zach Scruggs, right along with Mike Moore, just before the younger Scruggs pleaded guilty to misprision of a felony in the Scruggs judicial bribery case - bad timing, no doubt. I should note this lawsuit is sometimes referred to, mostly by me, as Ex rel. Rigsby, which is its name and which I like because it sounds like a great name for a race horse -- "Trailer Lawyer leads Scruggs Guilty Plea by a neck down the stretch, but here comes Ex rel. Rigsby gaining on the outside!" Among those very familiar with the case, it is simply known as "the Qui Tam," a legal name for this type of lawsuit which I hate because it sounds like some kooky product sold on an all-night shopping network -- "the Qui Tam slices, dices, juices, peels, purees, grates, fries, bakes and broils, it refrigerates, freezes, toasts and cleans the dishes -- you can throw out every other appliance in your kitchen!" All right, now we can step forward again. 

Now here is an excellent post at a site called Fired Up! Missouri about the Tribune story and about the whole Trailer Lawyer bit (thanks for the shout out at the end of the post).  Here's a fun part of the post, making a point I've considered here:

Relying upon that testimony, State Farm's pleading then immediately makes an earth-shattering statement:

83. On information and belief, the “Todd” about whom Kerri Rigsby testified in the preceding paragraph is either Todd Graves or Todd A. Scott.

Why is the prospect that Todd Graves was at that first trailer meeting so potentially explosive?

Because on the date of the meeting, Graves was still in his post as United States Attorney for the Western District of Missouri. The meeting took place on March 11, 2006, just one day after Todd Graves announced that he would resign his post on March 24, 2006 --some two weeks later.

If indeed Todd Graves was present at the March 11, 2006 trailer meeting, he was not only present while the Rigsby sisters and other attorneys gained illicit access to State Farm files in preparation for litigation, but also present while still carrying a badge and wearing a title of law enforcement prestige from the Department of Justice. He would have been there while still an employee of the taxpayers of the United States. 

Now, I don't know who Todd A. Scott is and I didn't go back to read the State Farm pleading to see if that was explained.  I'm not saying Trailer Todd was either Todd Graves or Todd A. Scott -- it might have been Sweeney Todd for all I know.  But here's the really good analysis from the Fired Up post:

Note that Graves and DeWitt couch their denials very carefully. Both go to lengths to refute specifically the claim that they accessed State Farm's computer files, though nothing provided by Ganey indicates that either man denies having been present at the March 11, 2006 trailer meeting.

Immediate clarity is necessary on whether Todd Graves claims to have been present at or absent from the March 11, 2006 meeting. If Ganey explored this topic with Graves and did receive answers and simply chose not to publish them in this piece, I would hope he would make those responses available. If Ganey did not, perhaps some other reporter will put that query to the former U.S. Attorney.

If Graves was at the March 11, 2006 trailer meeting, an immediate accounting must be given to the people of Missouri, and of the United States, for why a sitting U.S. Attorney was in another state, effectively engaging the private practice of law before leaving office. And then the appropriate punishments should be assigned.

One can also say, based on the Ganey story, that neither man denies having seen the State Farm documents on the Rigsby laptop either, only that they deny having looked at the documents as the Rigsbys accessed them on the State Farm server.  Considering the flexibility of the English language, that still leaves plenty of room for looking at the docs right after they were downloaded, or later, or some such. 

Alan Lange at Y'all Politics -- one of the great blog names, by the way, much more creative than mine -- noted this same thing in regard to a footnoted disclaimer in a recent filing by the plaintiffs in the Qui Tam, I mean, in Ex rel. Rigsby ("by a nose at the wire!").  The footnote got him fairly perturbed, which you can see from reading his post.

Well, it's late as I write and this is starting to confuse me.  We'll await further developments on this Trailer/Mobile Home Lawyer story, add a piece here and a piece there, and see what the truth turns out to be.  As the saying goes, the truth will set you free. Or put you in jail. Or get you disqualified. Or whatever. The funny thing about the truth, though, is you never see anyone wearing a T-shirt that says "Truth Happens." Seems like you really have to dig to make it happen.  Everyone got their shovels?

More Moore

I heard about this Moore post at folo by NMC earlier in the evening and didn't have a chance to get to it for four hours, but it was worth waiting for. I mean, this deserves a Holy Cow!

You remember yesterday? Of course you remember yesterday, although it's been a long day and I'm not sure I do.  What I mean is, you remember yesterday where I asked a bunch of questions about that story where Mike Moore said he got a text message from Lon Stallings debunking Judge Lackey's testimony in the Jones v. Scruggs  hearing? (Look at the end of the post).

This is the testimony where Lackey said he didn't go to AG Jim Hood with concerns over Balducci's earwigging overtures because he heard from Stallings that Scruggs, through Moore, had pressured Hood to drop his criminal investigation of State Farm because the insurer was demanding it as a condition of settling 640 cases, the settlement of which resulted in beaucoup coin to the Scruggs Katrina Group -- $26.5 million in attorney fees to be exact (which they immediately began squabbling about with Jones, at that time a member of the SKG, which led to the Jones v. Scruggs fee dispute, which led to the Balducci earwigging, which led to sweet potato time, which led to jail time).    

OK, the relevant point of that portion of my post from yesterday is that Moore said Lackey either made it up or lost his marbles.  Here's the part of the Daily Journal story I excerpted:

"Judge Lackey either is very confused or he made up the story out of whole cloth," Moore said.

"Jim Hood is a very, very close friend - he worked for me, supported me in my first campaign. I encouraged him to take my place."

Moore, who represents Scruggs' son Zach on his criminal charges in the Lackey bribery attempt, said he had an investigator interview Stallings and he made no mention of the conversation with Lackey.

"On the contrary, he told Lackey to call the AG's office," Moore added.

He also showed the Daily Journal a text message he had just received from Stallings, which confirmed the story.

Was Moore surprised to hear Lackey's accusations from the stand Tuesday morning?

"Sure, I was appalled," he said.

Moore also noted he, as attorney general, had removed Patterson from office as state auditor and prosecuted him.

"I of all people would not have anything to do with Steve Patterson," he noted. 

Now, as I noted, some things about this seemed, well, something less than complete.  That brings us back to the NMC post.  It talks of a story by Alyssa Schnugg of the Oxford Eagle, which wasn't published yet as I wrote this, where she talked to Stallings and dude said he never text messaged Moore and doesn't even know how to text message! Whoops. Lesson: if you ID a guy as the man you saw running from the store with a gun and a bag of money after a stick-up, make sure you're not talking about a guy with no legs. 

Apparently, Stallings basically backs Lackey, said he was off on a few details, but that the judge was truthful. Plus, did I mention it? Dude said he never text messaged Moore and doesn't even know how to text message!  What's Moore got to say about this, I wonder? I mean, besides "Good Grief, it's hot in here, who turned on the furnace? Waiter, check please!!"

See what I mean?  That's why they don't sell those "Truth Happens" T-shirts. Lots of unanswered questions. Well, I'll make you a deal: you keep reading, and I'll keep asking. 

One final question: who was the text message from, the one Moore was showing off? Well, OK, two final questions: and what exactly did it say?

UPDATE: We know the answer to one of these questions: the message wasn't from Stallings -- dude said he never text messaged Moore and doesn't even know how to text message! -- it was from  "Moore associate Lee Martin," which I assume means an associate in Moore's private law offices.  What does it mean, though, that Moore said it "confirms his recollection of what his investigator told him about speaking with Stallings and his advice to Lackey."

What have we got here, some kind of sixth-hand information, some "investigator" talked to Stallings about what Lackey and Stallings said? What does it mean, "his investigator," Moore is in private practice now, no longer an AG, what does he do, walk around with a butler, a manicurist, a bodyguard and an investigator? Who has an investigator? 

Isn't this just amazing? Moore's evidence that he uses to call Lackey out as a liar is some "yes, boss" e-mail.  I can picture that e-exchange. Moore: "Didn't my investigator tell me while I was yelling at the butler that he anticipated Lackey would take the stand and so he asked Stallings what Stallings said to Lackey and Stallings denied what Lackey just said? Isn't that the way it happened?"

Response: "y-y-yessir, why, yessir, that's exactly what the truth is, what you just said, sir."

SECOND UPDATE: As a reader pointed out, there is one Lee Martin listed in the Mississippi Bar Roll, with an e-mail address at the Mike Moore Law Firm, but the physical address is listed as Office of the Attorney General.  Hmmmm, don't know what that means.  Lots of people get dragged into this stuff, names get splashed all over, it's too bad, really. I wouldn't mention it, except it was in the paper.  

Posted By David Rossmiller In Industry Developments
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The Shows case, the big RICO lawsuit filed with fanfare and hoopla last year by the Scruggs Katrina Group, now is plaintiff-lawyerless.  A federal judge, following in the footsteps of Judge Senter's disqualification of lawyers affiliated with Dickie Scruggs and the Rigsby sisters in the McIntosh case, has disqualified the Katrina(less) Litigation Group and associated counsel.  Here's a copy of the order.

Scruggs Disease is highly contagious, as you can see from this new order by Judge Senter stating that an Alabama firm cannot represent the plaintiffs in McIntosh because of the firm's previous links with the Scruggs Katrina Group. Here's the brief the firm wisely filed seeking clarification before jumping into the lawsuit.

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THIRD UPDATE:

Here is the scheduling order entered by Judge Coleman, allowing discovery on damages, and setting a hearing on that issue for November 12.

Also, here is a story from Holbrook Mohr of the Associated Press, where Jim Hood "denies his predecessor delivered a warning that a wealthy lawyer would fund an opponent in last year's election if Hood didn't cooperate in Hurricane Katrina litigation."  Not sure if that matches the headline: "AG denies being pressured in Katrina cases."  The way the story reads, Hood denies only that Moore delivered the message -- Hood does not say he received no pressure.      

Finally, I liked this post by Alan Lange over at Y'all Politics about Mike Moore's comments.

SECOND UPDATE:

Here's the order of default judgment as a sanction, done in the usual way, by striking the answer and all responsive pleadings. The order also allows plaintiffs' attorney fees since July 17, 2007, without prejudice to the main attorney fee claim contained in the complaint.

UPDATE:

Many thanks are due to the ICLB Irregulars, those who supply information without asking for public acknowledgment, indeed while preferring to remain anonymous while doing the people's work.   Such is ICLB's Oxford correspondent, with the latest dispatch from the courtroom -- a default judgment was entered against the defendants as a sanction for improper conduct in the Jones v. Scruggs litigation.

Findings of the Court:

Implication is drawn from Scruggs’s pleading of Fifth Amendment. Court finds that in March 2007 at the law offices of Scruggs Law Firm, Balducci and members of Scruggs Law Firm agreed to use Balducci’s friendship with Judge Lackey for a favorable decision in a pending suit. Balducci met with Judge Lackey and attempted to persuade him to enter summary judgment for defendants with the understanding that he would make Judge Lackey of counsel at his law firm upon retiring. Judge Lackey recognized this as improper and subsequently reported the incident to federal justice authorities.

Thereafter Judge Lackey worked with the FBI to aid the investigation and to gather evidence that the “attempt to influence” developed into a conspiracy of Richard Scruggs, Zach Scruggs, Sid Backstrom, Tim Balducci and Steve Patterson to bribe Judge Lackey was carried out.

Plaintiffs' motion for sanctions should be granted. Actions justify harsh sanctions. Pleadings and answer are stricken. Default entered in favor of the plaintiffs.

Hearing will be held in the future to determine amount of fees due plaintiff due under joint venture agreement. Damages will include attorney fees and expenses subsequent to hearing on July 17 (Okolona hearing) before Judge Lackey on defendants’ motion to enforce arbitration. Punitives will be considered

The judge asked if either side had questions. 

Grady Tollison, for plaintiffs, said that he had a scheduling order that they had drafted.

Cal Mayo, for defendants, asked for clarification about the punitives. The judge stated that he was entering a default on punitive damages for which he found a violation. He did not consider actions prior to the filing of the complaint. The punitives are for the finding of bribery and conspiracy to corruptly influence Judge Lackey. The default doesn’t extend to punitives on the face of the complaint, but the judge will allowed punitives to be argued at the hearing. The allegations in the complaint were not sufficient on their face to award general punitives.

Attorney fees limited to hearing date of Judge Lackey (I believe he was referencing the July 17 Okolona hearing) and after. Arbitration contract applied after the filing of complaint up until alleged improper action and that time period should not be applicable for the attorney fees.

The judge said that Percy, one of the attorneys for the plaintiff, had submitted an order that the court found acceptable with certain revisions. The plaintiff's attorneys conferred and accept as revised. Mayo had a couple of suggestions. The court will return at 10:30 to iron out details of the order.

Plaintiff John Jones told one reporter, “not about money… about the fact that penalties have to send a message to the entire bar, to the public, that you can't tamper with the integrity of our system of justice.” 

  

----------------------------------------------------------------------

Expecting word from the courtroom soon -- actually, I have word from the courtroom but want to make sure I understand what happened before passing it on.  

In the meantime, let's look at this update from Patsy Brumfield of the Daily Journal about yesterday's testimony by Judge Lackey, in which former Mississippi AG Mike Moore says he was "appalled" by what Lackey said.  If you remember, Lackey said he didn't go to AG Jim Hood with his qualms about the overtures by Tim Balducci because of what he heard about Scruggs putting heat on Hood, with Moore's involvement, so that Hood would help settle cases against State Farm.  Specifically, the heat purportedly was in the form of threatening to run a candidate against Hood in the primary if Hood didn't dance to the right tune. 

"Judge Lackey either is very confused or he made up the story out of whole cloth," Moore said.

"Jim Hood is a very, very close friend - he worked for me, supported me in my first campaign. I encouraged him to take my place."

Moore, who represents Scruggs' son Zach on his criminal charges in the Lackey bribery attempt, said he had an investigator interview Stallings and he made no mention of the conversation with Lackey.

"On the contrary, he told Lackey to call the AG's office," Moore added.

He also showed the Daily Journal a text message he had just received from Stallings, which confirmed the story.

Was Moore surprised to hear Lackey's accusations from the stand Tuesday morning?

"Sure, I was appalled," he said.

Moore also noted he, as attorney general, had removed Patterson from office as state auditor and prosecuted him.

"I of all people would not have anything to do with Steve Patterson," he noted.

Questions:

• What exactly did the text message say? 
• Will Moore be willing to share it with the public, say, by posting a copy of it on his law firm's website?  Did Moore get Stallings permission to show his text message to third parties?
• When it says "confirmed the story," what story was confirmed? According to Moore, Stallings said to contact the AG's office.  Does that mean that Stallings did not relate the story about Hood being pressured? Does it mean he did relate that story but said to contact the AG anyway? Does it mean that he related the story but did not claim any involvement by Moore?  Does it mean that Stallings said Lackey's testimony was entirely false? 
• If the text message confirmed something, why don't we know verbatim what the message said, and if a message from Moore to Stallings preceded it, why don't we have a verbatim accounting of what that message said?  Since Stallings is a Mississippi public official, these text messages should be accessible through a Public Records Law request. 
• Something about the Moore remarks strikes me as something less than a categorical denial that Hood received pressure from Scruggs to help settle the cases, or at the least, that Scruggs intended to or tried to assert such pressure. When Moore says he wouldn't have anything to do with Patterson, does that also mean he wouldn't have anything to do with Balducci?  If Scruggs wanted or intended to pressure Hood to bring about that result, even if Hood wasn't aware of it, was Moore aware of it in any way?
• Is it wise to call Lackey out as either confused or a liar? This was tried, with a distinct lack of success, by Scruggs' defense in the bribery case.  What motive would Lackey have to lie?
• If Lackey is confused, can Moore say with confidence the investigation would have turned out the same way had Lackey actually gone to the AG's office? I mean, Hood showed a draft of his own civil lawsuit against Katrina insurers to Scruggs for his input within days after Katrina hit, he worked closely with Scruggs on such matters as the Rigsby documents and considered Scruggs his confidential informant.  It's not like we lack evidence, outside of the evidence of Lackey's testimony yesterday, that Hood and Scruggs were tight.  Who will say with a straight face that Lackey's fears about going to the AG's office were delusional?  It would take a lot of Hoodzpah to make such a claim.     

Posted By David Rossmiller In Industry Developments
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It's not the first time this has happened to me during the Katrina Follies, that I have trouble believing what I'm hearing.  I think I am a hardened observer of these events and that nothing could shock me anymore, but then something else does.

Like the testimony by Judge Lackey yesterday about not being able to go to the Mississippi Attorney General's Office because, he was told, Jim Hood had buckled to pressure from Dickie Scruggs to cooperate in Scruggs' mass Katrina settlement with State Farm that netted the $26.5 million in fees at the core of the Jones v. Scruggs dispute.  One can draw two inferences from this: that Lackey believed Hood was compromised because of his role in bringing about the conditions that  led to the lawsuit, and two, that Lackey believed Hood was controlled by Scruggs, would rat out Lackey and quash an investigation.   Just set aside the question of whether these perceptions are accurate -- it is bad enough that he believed that it was unsafe and unwise to trust the state's attorney general to deal with a bribery investigation. 

Remember that Hood himself later said he would have a conflict of interest in going after people who had been commissioned to do selected work for the AG's office, like Joey Langston and Tim Balducci, and that it would be like going after family.  Remember also that he said Dickie Scruggs was one of his "confidential informants," so that would make Scruggs family too.  No wonder Scruggs had such faith in his Magic Jurisdiction theory -- it must have seemed he could do just about anything with impunity.  Do you remember Scruggs Primetime, the Ride of the Rigsbys, the first and second acts of the Katrina Follies?  All that malarkey that was said and done, and how very few questioned it?  But once Lackey blew away the magic dust, it all came undone in a hurry.

My ICLB Oxford correspondent will have another report from the courtroom as the hearing continues today.  I'll post an update here when I have one.

Posted By David Rossmiller In Industry Developments
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When Roger Parloff has weighed in with Scruggs coverage, he has done a tremendous job, and one that is quite difficult.  At this site, I assume that readers have a high degree of familiarity with the Scruggs Supernova.  If they don't, well, they can type in a search for "Dickie Scruggs" and study up to become naturalized citizens of the Scruggs Nation.  But when writing less frequently on a subject for a mass audience, it is quite a challenge to describe what is going on without losing the rich flavor of the context. In other words, it takes a lot of skill as a storyteller to keep your piece from becoming just some recitation, some boring, droning tale you hear from the guy on the bar stool next to you, with the particulars swallowing up any larger point, or conversely, with the point hammered at you without enough supporting details for you to believe in the point. 

Here's a follow up, on his blog, of a recent Scruggs piece that will appear in the print edition of Fortune.  In this follow up, he discusses some developments that didn't make the first story -- makes for some good reading.      

Posted By David Rossmiller In Industry Developments
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THIRD UPDATE:  Here's a story by Patsy Brumfield of the Daily Journal on the day's events.  Here is another story, by Alyssa Schnugg in the Oxford Eagle -- but this link might go bad right away, apparently the paper doesn't have permalinks on its main page.  I tried to pull this story from the archives, but if it isn't there when you follow the link, it's not my fault.

SECOND UPDATE: "The Monster Was Dickie Scruggs." 

Here's some great live blogging from NMC at folo.   

I'll try to find some time to comment more thoroughly on the day's events, but it won't be until tonight at the earliest. 

UPDATE: Finally got a moment to post, here's the report on the morning session from ICLB's Oxford correspondent.  We're out on the frontiers of verisimilitude here, and folks, this is as close as you're ever going to see to a guest blogger on this site: 

Motion for continuance.

Judge Coleman pointed out that the motion setting the hearing date was entered 4/3. All parties advised on Thursday before that date by e-mail that matter would be heard today. Counsel for both sides acknowledged receiving the e-mail. Judge was advised that the parties were available 4/14-18. The judge intend by tone of the email that he wanted matter to proceed.

The judge asked the defense: what witnesses would not be available to testify, intending, instead to assert their Fifth Amendment right?

Cal Mayo for Scruggs and Scruggs Law Firm -- Richard Scruggs, Zach Scruggs, and Sid Backstrom will be sentenced in the next 45 days. They have been advised by their criminal attorneys to assert the Fifth Amendment in response to questions today. May be available to testify after sentencing. Steve Patterson, whose the defense offered would be beneficial to the court on the matter of sanctions, had been advised by his counsel that he was not to testify. Mayo stated that they had not been able to find Balducci.

Motion for Sanctions.

Cal Mayo presented an order clarifying the scope of sanctions to the judge. The plaintiff consents. It was difficult to hear, but I believe the order limits the scope of sanctions to compensatory damages or stricken pleadings.

Grady Tollison, for the plaintiffs, informed the court that Judge Lackey had been subpoenaed by both sides, but was tied up in a jury trial. When available, his testimony would be taken, likely out of turn. Counsel for Dickie Scruggs indicated that Scruggs was across the street and would be retrieved for testimony first since Lackey not available.

Tollison offered into evidence the following documents, while we were waiting for Scruggs to arrive:

Ex 1 - certified copy of plea, transcript - Tim Balducci .
Ex 2 - certified copy of plea, transcript - Sid Backstrom
Ex 3 - certified copy of plea, transcript - Dickie Scruggs
Ex 4 - certified copy of plea, transcript - Zach Scruggs
Ex 5 - certified copy of plea, transcript - Steve Patterson
Ex 6 - interrogatory answers 1, 3, 11 - of Nutt & McAlister - $40,000 paid by SKG [I think this question involves the reimbursement of $40,000 by N&M to Scruggs for documentation presented]
Ex 7 - interrogatory answer from Barrett Law Office, P.A.. - substantially same as Nutt & McAlister
Ex 8 - interrogatory answer from Don Barrett individually - substantially same as Nutt & McAlister
Ex 9 - interrogatory answer - Lovelace
Ex 10 - interrogatory of Richard F. Scruggs - [Mayo: objection to these - no testimony in this, as Scruggs objected to each of the interrogatory requests]
Ex 11 - interrogatory of Scruggs law firm [Mayo: objection to these - no testimony in this, as Scruggs objected to each of the interrogatory requests]
Ex 12 - Requests admission by Nutt & McAllister

Dickie Scruggs and Backstrom arrived. Tollison called Dickie Scruggs to the stand.

Scruggs approached witness stand, sat and pulled out small index card.
Brooks Dooley introduced himself as representing Scruggs.

[below I attempted to capture the substance of the question. It was impossible to get a verbatim representation of the question given the speed with which these questions were asked and to which Scruggs responded. Provided interesting - albeit one-sided narrative]

Scruggs introduced himself for the record.
Tollison questioned the witness.
Q: You a member of Scruggs Law Firm?
A: Respectfully decline to answer… based on the advice of counsel, …5th amendment …. [prepared statement read from index card]
Q: Member of Scruggs Katrina Group?
A: Respectfully decline to answer… based on the advice of counsel, …5th amendment ….
Q: The finances of the Scruggs Katrina Group were handled by Nutt & McAlister?
A: Respectfully decline to answer… based on the advice of counsel, …5th amendment ….

At this point, Judge Coleman asked the witness to say “same reason” instead of reading the long, prepared statement asserting his Fifth Amendment rights. Scruggs’ attorney offered that that was acceptable so long as everyone understood “same reason” to be an assertion of Fifth Amendment rights, as described in the prepared statement.

Tollison resumed questioning. Scruggs responded “same reason” to each of the following: .
Q: You individually and Scruggs Law Firm are defendants in Jones, Funderberg…
Q: Other defendants in this case Nutt & McAlister, Don Barrett , Barrett Law Firm, Lovelace..?
Q: Case assigned to Judge Lackey?
Q: Up until ___ [date], defendants were represented by Daniel Coker?
Q Defendants filed motion to stay and compel arbitration?
Q: Tim Balducci not attorney of record for any of the attorneys in this case?
Q: Isn’t it a fact that Tim Balducci, Sid Backstrom and Steve Patterson ______ have all plead guilty to conspiring with you to corruptly influence Judge Lackey?
Q: You have pleaded guilty to count one of an indictment?
Q: In open court under oath admitted to conspiring?
Q: Admitted the government’s statement and statement of government’s facts under oath was correct?
Q: You knew that Sid Backstrom had conspired with Tim Balducci to bribe Judge Lackey?
Q: You knew that payment of $40,000 had been agreed to and paid by Tim Balducci?
Q: Order signed…?
Q: You prepared invoice to submit to Nutt & McAllister to be reimbursed for $40,000 payment?
Q: The invoice of payment to Balducci was ostensibly to do questions for voir dire?
Q: There were no questions for voir dire?
Q: Case that voir dire was to be done has never been tried?
Q: Balducci asked for another $10,000 to give to Judge Lackey after the $40,000?
Q: You gave Balducci the $10,000 and prepared documentation to show it was for jury instructions?
Q: No jury instructions prepared?
Q: Purpose of these jury instruction invoices and documents and voir dire was to be reimbursed by SKG for bribe money?
Q: Nutt & McAllister, a member of SKG, was on the pleading Linsey v. USAA?
Q: Case was ostensibly the case for the jury instructions and voir dire by Tim Balducci?

At this time, Tollison asked that judge infer that a question answered with the Fifth Amendment would be favorable to the plaintiffs.
Mayo: Asked the Court to wait until end of hearing to make inference.
Judge responded inaudibly.

Short recess.

Judge Lackey called by Tollison to the stand.
Substance of Judge Lackey’s testimony is a repeat of what we have already heard, but it is as follows.
Lackey was assigned to a case called Jones et al v. Scruggs, and had signed an order sealing before process was issued and before attorneys on either side. Sealed at the request of Tollison, although no conversation between Lackey and Tollison took place at that time about facts/merits of the case. Lackey knew only that it was a fee dispute between two groups of lawyers. When answers/pleadings filed, Daniel Coker initially represented all of the defendants.

On March 28, 2007, Tim Balducci called Judge Lackey and wanted to know if he could speak with him. The judge had known Tim for a long time and recognized that he was a young lawyer with great ability. When Balducci called, Lackey felt that whatever he was calling about was very important, and Lackey told him he could see Balducci that afternoon.
After exchanging pleasantries, Tim Balducci indicated the reason for his visit. [Defense objected with hearsay, which was overruled because the statement was part of a conspiracy]. Tim indicated that while practicing with Joey Langston, he had made some “mighty good friends and mighty good money.” He then explained the Katrina consortium of 5 law firms, how fees were divided. Balducci described “scurrilous allegations” that had been made by Grady Tollison against “his friends” - described as Judge Lackey to his recollection as “Mr. Scruggs and Mr. Barrett and Mr. Nutt and maybe someone else or two.” Balducci explained that his friends “were being mistreated and he only wanted them to be treated properly.” He suggested that a summary judgment motion would probably dispose of the worst allegations and those claims that remained could probably be handled in arbitration. At this point, Balducci also indicated to Judge Lackey that “when he got ready to lay the gavel down” there was a place for Lackey as of counsel at Balducci’s firm.

Lackey described going to the U.S. Attorney’s office and speaking with John Hailman, who asked him not to do anything or tell anyone until he heard from him.

He intended to recuse himself. Informed the Daniel Coker firm and Tollison law firm that he was going to recuse. Sent to judge Howorth and he signed. Before Judge Elliot signed (the other judge in the circuit district), Lackey withdrew the order and informed the attorneys he was back on .

First told Judge Howorth about the situation. Then went to DA office and spoke with Lon Stallings. Lackey said that he “knew he couldn’t go to the AG office because he knew that Mr. Scruggs through Mike Moore had told the AG that if he didn’t go along with it then they would fund a candidate against him and see that he was properly funded to defeat.” [Mike Moore, sitting in the gallery, looks down and shakes his head]

In May, Lackey had contacted TB and told him that Grady t wanted to have hearing on the matter and that he had not received his proposed motion for SJ. Tim Balducci advised that they had changed tactics and they thought they could take care of it in arbitration. Delay would assist because Mr. Jones having financial difficulty. If delayed would encourage Jones to settle. Judge Lackey stated that his perception of “they” was the four other firms with the Katrina Group. Judge Lackey’s perception was that the contact was on behalf all the law firms as defendants. The order applied to all the defendants.

Ultimately, Lackey, prefacing with “I don’t want this to sound improper,” indicated that he “was having some serious difficulty,” and “just could not bring myself to say bring me some money and I would do this but I ultimately did.” He stated that the US Attorney's office had been listening to the conversations were convinced, “much more than I,” that the intention of Balducci was to bribe the judge. Lackey stated that he was hoping that Balducci would say, “Judge, you misunderstood me.” Judge Lackey finally suggested $40,000. It was a figure that Lackey came up with, a “spontaneous suggestion.” He told Balducci that he “didn’t want any of his money, if it wasn’t Scruggs’ money [he] didn’t want it.” Balducci complied and the exchange was videotaped.

Tollison tendered the witness.

Counsel for Nutt, et al. questioned Judge Lackey [didn’t introduce himself, and I don’t know who he was].

His questions elicited responses from Lackey that he didn’t recall hearing David Nutt’s or Sparky Lovelace’s or Don Barrett’s names after the initial meeting where Balducci described the SKG. No SJ motion ever filed in this case. The lawyer asked if Balducci had told him that there were only three people that knew about the improper contact - Scruggs, Lackey and Balducci - to which Lackey responded “that’s right.”
Said that Tim Balducci never entered an appearance in this case, and that an Okolona hearing, where the defense presented orders to the judge, counsel for the plaintiffs was present.

Cal Mayo for Scruggs and Scruggs Law Firm then questioned Lackey:
Ultimately turned into exercise of walking through chronology - again - including many references to transcripts, details of meetings with the FBI, the U.S. Attorney’s office, Tim Balducci.

Only high points will be listed below.

Questioned Lackey about sealing case, and Lackey stated that he had never sealed a case before (had never been asked to), but that he “hated to hang out dirty wash” with the fee dispute between lawyers. Mayo asked Lackey if Tollison (who requested the case be sealed) told you if it involved any attorneys that practiced law in Oxford, that there was an arbitration agreement between the parties, or that settlement discussions were ongoing, all of which Lackey responded in the negative. Lackey said that Tollison or Tollison’s office prepared the order that was presented to him

Mayo questioned Judge Lackey about three interactions with Balducci that were “total fabrications” - when he told Balducci that there’d been improper ex parte contact by the other side, when he told Balducci that “Grady is putting some pressure on me to get this done,” and when he told him that Tollison had called, asking Judge Lackey not to enter an order until he got Tollison’s latest memorandum. Judge Lackey said he felt like “a lost ball in tall weeds, to tell you the truth” and “wanted to bring it to a close.” All of these “fabrications” were Judge Lackey’s idea.

Mayo went over the background relationship between Lackey and Balducci. Initial improper contact. Lackey’s contacting Howorth after the improper contact, and their discussion of Lackey’s obligation to report. He said it was one of hardest things he’s ever had to do. He considered “Tim Balducci friend but consider the law a friend, too.” He subsequently talked to John Hailman and then with Chief Justice Smith. They decided not to report to the Mississippi Bar because didn’t want to tip off any of the individuals being investigated.

At some point in the chronology, which seemed like an effort to tout the independence of Balducci, Tollison objected - noted that there are “already five guilty pleas already in evidence” and argued that this line of questioning was not relevant. Objection overruled.

After he had initially “recused” himself - he talked with the FBI. He realized “what a monster we were probably dealing with and the lives that he had probably destroyed and the young lawyers whose lives and their families that he had destroyed, I agreed to get back in it.” Mayo asked: “Who was ‘he’?” Lackey said, “Dickie Scruggs. It was evident what he has done. Don’t you think it is evident? I think that he has done more to destroy this profession than anything that has happened in my lifetime.”

Another of the reasons that he got back into the case was that he knew that Jim Hood had told Lon Stallings that if he didn’t go through with a settlement of State Farm cases and allow them to collect $26.5 mil in attorney fees that Scruggs would find a candidate that would run against and fund just like they were going to do the commissioner of insurance. [Moore’s jaw appears to tense whenever his name is mentioned.]

Lackey said, “If you could buy judge’s decision like buying can of coffee or sack of sugar, it absolutely infuriated me.”

Perhaps the highlight, and certainly the lightest moment of the hearing was when Cal Mayo approached Judge Lackey to refresh his recollection with a transcript of one of the recorded conversations between Judge Lackey and Balducci. While showing him transcript, Lackey said, "while I’m thinking about it, let me give you back your check. I was here anyhow.” Much laughter in gallery. Through laughter, Judge Lackey explained that it was for travel expenses. Judge Coleman told Lackey that he needed to ask Mayo if he was wearing a wire. More laughter.

After taking Judge Lackey through the end of September when Judge Lackey talked about how he came up with the $40,000 number - thinking that maybe he had “overpriced” himself -- Cal Mayo concluded the questioning. Throughout the questioning, Judge Lackey had trouble hearing Mayo and often responded to questions with commentary well beyond the scope of the question. Several times, Cal Mayo appeared to be bordering on frustration with his witness.

Tollison said he had one question: “From the time that you became judge in Feb 1993, have I ever one time ever discussed the substance of any case with you?”

Lackey: “You mean ex parte? No.”

At this time the plaintiff rested, but indicated that that he was going to request attorney fees. 

Well, that's it for this update.  I'll see if I can catch you up on the afternoon session later.  

_________________________________________________________________

I'm going to be on the road today, making blogging more challenging, but challenges exist to be overcome, and I will update this post later with a report from ICLB's secret Oxford correspondent on today's hearing.  As time is short this morning, let me refer you to this post by NMC at folo for further details on what the hearing is about.  

Posted By David Rossmiller In Industry Developments
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As you may have heard, following an adverse decision in the Florida Court of Appeal, First District, Allstate decided to release to the public the so-called McKinsey documents, which some plaintiff lawyers claim are a smoking gun showing Allstate bad faith toward bodily injury claimants.  The insurer has put some 150,000 pages of documents up on its website, after early furnishing them to the Florida Office of Insurance Regulation during an ongoing dispute with state regulators over Allstate's refusal to play along with their strategy to roll back property insurance premiums or at least keep increases low.

As part of its strategy to put the heat on insurers, almost all of which where not following the game plan that Charlie Crist has so prominently bellowed, the Office of Insurance Regulation began targeting selected big fish, including Allstate.    

Regulators scheduled a hearing where Allstate was to come to answer questions about its underwriting and pricing decisions, and a few other things.  They also issued subpoenas for a huge number of documents.  Whether this was reasonable or just some mau-mauing by officials scared witless by Sheriff Charlie, the insurer, in fact, came up pretty far short of complying, and rather than detail the entire list, perhaps it is best to refer you to pages 3-6 of this April 4 opinion by the Court of Appeal, First District.

After Allstate failed to comply with the subpoena, the Office of Insurance Regulation issued an Immediate Final Order, or IFO, suspending Allstate from writing new insurance business in the state until it complied with the subpoenas.   Allstate went to the appeals court, and on January 18 obtained a temporary stay of enforcement of the suspension until the merits of the case were decided.  They were decided, in the April 4 decision, but against Allstate -- the Court of Appeal said the Office of Insurance Regulation did not need to go to court to enforce its subpoenas under the circumstance and had the power to act as it did. 

However, the suspension still has not taken effect because the court gave Allstate 15 days to request a new hearing, and then moved the deadline up, and the insurer yesterday requested another hearing..  

The April 4 opinion is interesting, in part because it contains some inconsistent analysis.  For example, as the court says, an IFO is supposed to issue only upon a showing of danger to the public.  Remember, the purported reason regulators subpoenaed records was to see why -- they suspected some sort of collusion or price fixing -- Allstate had not lowered homeowners insurance rates as much as the state wanted or expected. 

Pop quiz! This expectation was --

A. Well-founded, because central command economies and state price controls have been proven effective time and time again and were in fact the economic success story of the 20th Century.

B. Entirely reasonable, because insurance companies steal so much they give piracy a bad name, which means, of course, that they would eagerly agree to take less.

C. A messianic delusion that occurred in the head of Charlie Crist after he pounded the table so hard his fist bounced back and knocked himself out. 

D. False doctrine akin to waiting for the Great Pumpkin to appear, in that it ignores the fact  insuring property in Florida is risky.

E. Not sure, let's check with former President David Palmer, the guy who does the Allstate TV commercials -- he was a good president and should know the answer.

So, as I was saying, the appellate court said the Office of Insurance Regulation had the right to issue an IFO because:

First, it alleged monetary loss to policy holders and beneficiaries. OIR received complaints regarding Allstate’s claims handling practices, and information indicating Allstate’s claims handling practices arbitrarily reduced bodily injury claim payments to its policyholders and beneficiaries by up to 20%. This allegation of widespread personal monetary loss is sufficient to meet the danger requirement of section 120.60, Florida Statutes. Second, the IFO alleged ongoing criminal activity. The Legislature made failure to cooperate with an OIR investigation a crime.   [Boring legal citations omitted].

OK, maybe, but that allegation about the 20 percent and the bodily injury and so forth is in relation to car accident claims, not homeowners insurance.  Also, if there was criminal activity, how come Charlie Crist didn't come knocking with a pair of cuffs?

I should qualify that it is only my understanding that the McKinsey documents relate to primarily to auto insurance and not homeowners policies, I haven't read the 150,000 pages and don't know that for a fact.  My understanding is they concern bodily injury claims by third parties, not policyholders -- so I suppose there is a small category of such claims that could derive from homeowners insurance, but not many.  You can look at that Miami Herald story again on the Allstate decision to unveil the McKinsey documents, and see some vagueness on the issue:  

[An Allstate official] noted that many attorneys misinterpreted the information from McKinsey that refers to how the company deals with claims from other parties, not from policyholders. Many of the sections often referred to by plaintiff attorneys refer to claims-handling practices for auto claims, but they were taken to be applied to homeowners policies as well.

"They were taken to be applied to homeowners policies as well." See what I'm saying? "They were taken"?  Who did the taking? The logical antecedent for this phrase is "plaintiff attorneys," but if so, one would think the sentence would say, "often referred to by plaintiff attorneys, who assert Allstate uses the strategy outlined in the documents not only for auto accident claims but for homeowners and other types of policies as well."  

All right, now where were we? Right, McKinsey documents. These have generated so much controversy over the years I have a special search on my feedreader just for stories and posts about them.  Some of the posts I've written about them are available here, here, here and here.

Some say these documents are a smoking gun, others say these people are blowing smoke.  Here's a sampling of recent opinion about these developments: policyholder attorney Chip Merlin; LaBovick Injury Law Blog; Victoria Pynchon (I'm a big fan of Victoria and her blog); Dennis Wall; Beach Blog; and Mike the Actuary.

By the way, here's the link to see all 150,000 documents: better plan to take a lunch.  

Posted By David Rossmiller In Industry Developments
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Another judge in the Southern District of Mississippi has cited Judge Senter's recent decision to disqualify the KLG in his case. Here's the opinion. The Rigsby sisters are also barred as witnesses, and all purloined documents excluded unless it can be shown they were obtained through normal discovery.  

NOTE: Originally I had written the judge was in Illinois, I'm not sure why I wrote that, I was in a hurry and somehow got that idea.  Then I looked back at the name and of course recognized Sul Ozerden as the judge who got the job that Bobby DeLaughter wanted -- allegedly Trent Lott called DeLaughter to talk to him about the job during the course of the Wilson v. Scruggs attorney fee litigation.  

Posted By David Rossmiller In Industry Developments
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The Trailer Lawyers yesterday filed an emergency motion for a stay of the "whistleblower" case, Ex rel. Rigsby.  Here it is.  They want things on hold -- probably so they don't have to waste any time on a case they may wave goodbye to -- until the motion to disqualify them is decided.  I liked this paragraph:

State Farm's disqualification motion is based upon the misguided premise that GBM and BFRG are vicariously responsible and can be disqualified for acts about which they had no or incomplete knowledge, and did not in any way direct.  The motion is over-brimming with innuendo ad [sic, I think it's supposed be "and" but I like it anyway] inflammatory rhetoric, and lacks any factual basis that GBM and BFRG are unqualified to continue this representation.  This motion is nothing more than a transparent attempt to focus attention away from the fraud State Farm perpetrated on its own policyholders and on the federal government, and create a side-show big enough to camouflage its own obvious wrongdoing.

A couple things: "had no or incomplete knowledge, and did not in any way direct." What does that mean?  That when Cori Rigsby fired up the laptop, they thought they were going to be taking an online survey about kitchen products? "Hey, this is the strangest looking ad for a blender I ever saw!" Think about it: "my knowledge that they were going to illegally access documents was incomplete because I didn't really know what was in the documents!" Consider the statement that they did not direct anything: "Hi, I'm Dickie Scruggs, welcome to the first meeting of what we'll call the Trailer Lawyer Katrina Group. Now, everyone look for the cardboard footprints with your name on them, and stand right there, put these blindfolds on and we're gonna have quite a surprise for you!!" 

Also, consider that last sentence -- if it's a side-show, I'd say the side-show is working, wouldn't you?  As you read the emergency motion, you can see they think there is a very real chance they will be disqualified.  As all this goes on and intensifies, I wonder how long until the Rigsby sisters figure enough is enough, that they've been led around long enough, and just spill their guts?  The day will come when they will talk. 

Here's State Farm's response to the motion to say proceedings. Two interesting things.  One, it claims the Trailer Lawyers are already disqualified under the terms of Judge Senter's order disqualifying the Katrina(less) Litigation Group.  Two, it doesn't oppose a stay, but says the motion to dismiss the case on jurisdiction grounds needs to be decided first. 

The fact that State Farm lawyers turned this brief around in a few hours tells me State Farm has learned a lot about controlling the news cycle and effectively promoting its position.  Compare that to 15 months ago, and it's like night and day.  Take a good look, ladies and gents, because what you are seeing, what you have seen the last nine or 10 months, is one of the most sophisticated and successful corporate litigation and public relations strategies you will see in your lifetime.  I mean, for a while Scruggs had it all goin' on with linking public relations with litigation, but this rivals any effort ever put out by Scruggs. 

UPDATE: Someone asked me why Todd Graves' name is not on the emergency motion, although the name of his firm is. I don't know.   

SECOND UPDATE: This is as good a place as any to scoop up all the pleadings that have been filed in recent days, not all of which I have linked to previously.  In addition to those above, here are: 

Motion to Dismiss for Lack of Jurisdiction

Memo in Support

Motion to Dismiss for Failure to State a Claim

Memo in Support

Summary Judgment Motion

Memo in Support

Motion to Disqualify Lawyers

Answer to Complaint and Counterclaims

The counterclaims are interesting to read, make sure to check them out -- civil conspiracy, breach of contract, trade secret theft, computer fraud, common law fraud.  Yikes.  I don't think the Rigsby sisters had any idea what they were getting into, that they were going to be in the middle of a Lawyer Riot.  They certainly wouldn't be the only ones of whom this could be said in the Katrina Follies, but ordinary people who get caught up in the machinery of litigation, it just grinds your bones to dust, till there's nothing left of you. 

Posted By David Rossmiller In Industry Developments
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This post really doesn't have the juice to deserve a Scruggs Nation title.  So as not to dilute the quality of my Scruggs Nation trademark, I'll use "Scruggs Lite" for stuff where I'm too tired/busy to hit the high notes.  

Knock, knock

-- This is almost past the point where I care anymore, but this Guilty but Innocent schtick of Zach Scruggs is starting to wear thin.  This is like hearing one too many knock-knock jokes from that neighbor kid -- I'm sorry, but I can't pretend it's cute anymore, it's just starting to get really annoying. Here's a story from Anita Lee of the Sun Herald about the most recent thing, where he says in a document filed with the Mississippi Supreme Court that, like his father, he won't fight the Bar's efforts to suspend him indefinitely. Here's the story's lede:

 Attorney Zach Scruggs apologized to the state Supreme Court and to his fellow attorneys and Mississippians for his role in a judicial bribery case, saying an earlier objection to disbarment was meant to give him time to straighten out his clients' affairs.

Wouldn't you love to know what clients' affairs had to be straightened out, such that with an open plea where Judge Biggers can wind up on him and drive him 450 feet with a Louisville Slugger if he cares to, he would risk looking foolish, arrogant , devious, manipulative, petulant, defiant and clueless all at the same time? Here's a copy of the document filed with the state Supreme Court.

Quote, unquote

-- I love this post at the Fraud Files.  Looks like others are adopting my quotation marks for the "whistleblower" Rigsby sisters.   

Ex rel. Rigsby: Trailer Lawyer lawsuit

-- This Rebecca Mowbray story in the Times-Picayune, about State Farm's motion to dismiss Ex rel. Rigsby or disqualify the Trailer Lawyers, has a great quote from attorney Allan Kanner near the end of the story:

With the problems in the Rigsby suit, the Branch Consultants, the former insurance adjusters who filed the New Orleans whistleblower suit, have asked the 5th U.S. Circuit Court of Appeals to reinstate their case.

Their attorney, Allan Kanner, said that State Farm is playing "musical chairs" with the judicial system in filing a motion to dismiss the Rigsby suit. Because State Farm and other insurers argued six months ago in New Orleans that the Branch suit shouldn't stand because the allegations about the flood program were covered in Mississippi, the company shouldn't now be allowed to argue that the Mississippi suit is deficient in supporting allegations about the flood program.

"This proves that Judge Beer should not have listened to State Farm in his court when they said, 'The Mississippi court will deal with this.' I think it's outrageous," Kanner said. "The headline should be, 'State Farm in favor of frivolous lawsuits when they provide corporate immunity.' " 

I like to see it where lawyers get how to deal with the media -- reporters don't have the space to print the blah blah blah attorneys pawn off on judges and each other, they need interesting quotes to sell stories.   

Coming Monday

A few people have been bugging me about putting all the Rigsby sisters' depositions in one easy to find and easy to access post.  Sitting around loading a bunch of e-files that I've already loaded in other posts is probably among my least favorite aspects of blogging, but I think this would indeed be a valuable thing for readers.  A few parts of the depositions, I may not have posted previously.  Be warned, Kerri's latest is under seal, so it won't be among them.

Posted By David Rossmiller In Industry Developments
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The jewel of the crumbling Scruggs Katrina Empire, the False Claims Act case Ex rel. Rigsby, is being attacked by State Farm, which says the case should be dismissed. Here's the memorandum in support of the motion to dismiss, which basically calls the Rigsby sisters parasitic late-comers to already public allegations who are attempting to cash in without having ever to ante up with anything real.  It's been crazy busy for me, but I had to stop and read the memo -- which, you know, for a memorandum about jurisdiction was a pretty good page-turner.

I'll follow up when I can and link to more docs, but in the meantime, here's one more thing to read, the memo in support of State Farm's summary judgment motion.  This document in essence says the Rigsbys have no claim for retaliatory discharge because they were engaged in illegal espionage -- you could call it Scruggspionage for short -- and you can get fired for doing illegal stuff.

More later. 

UPDATE:  This is the one I was waiting to see, just got filed on PACER -- a memorandum in support of State Farm's motion to disqualify the Trailer Lawyers -- Chip Robertson (former state supreme court justice), Todd Graves (former U.S. Attorney)  and others -- who, it looks like to me, met in that trailer down on the beach on Sen. Lott's property while the Rigsby sisters accessed the State Farm claims documents. They are the lawyers who represent the Rigsby sisters in the False Claims Act case.

I have tried to picture in my mind what was going on there: was everyone huddled around looking at claims files on a laptop, gazing with wide open eyes at the wonder of it all? Was everyone present at once?  Were some people off in a corner watching reruns of the Beverly Hillbillies, drinking a Pepsi and paging through Oprah's latest magazine? Did anyone say, "Hey, wait a minute here, can I say something? This is nuts what we're doing." Somehow this Trailer Summit sticks in my mind as a metaphor for the ridiculousness into which this thing devolved.  Or maybe it is less that this thing devolved, and more that it was always a mess, it's just more apparent to us now.

SECOND UPDATE: Here's the State Farm press release.  These two paragraphs are interesting:   

State Farm’s motion for summary judgment and counterclaim outlines actions undertaken by Cori and Kerri Rigsby and others to unlawfully obtain confidential policyholder information from State Farm to advance their own personal and financial goals and agendas.

No later than February 2006, and maybe as early as October 2005, the Rigsbys, together with attorneys Dickie Scruggs and others, schemed to abuse and exploit their access to State Farm’s confidential computer systems and policyholder records. State Farm has filed a counterclaim against the Rigsbys seeking damages for their admitted, unauthorized, theft of information from State Farm, in violation of the federal Computer Fraud and Abuse Act.

I think it will come out, probably not too far in the future, that they met in 2005.  I don't know if it was as early as October, but maybe it was. 

Posted By David Rossmiller In Industry Developments
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Regarding yesterday's news of the disqualification from Katrina cases of the Katrina Litigation Group, the entity derived from the former Scruggs Katrina Group and containing three of the original five firms, what will happen now?  It's hard to overstate how big a development in Katrina litigation this is.  Remember as we discuss this ruling that, in addition to disqualifying the remaining KLG firms from Katrina litigation in the Southern District of Mississippi, he barred the Rigsby sisters as witnesses and also barred the use of the documents taken from State Farm.  A huge development.  

One thing we should expect is a motion in the False Claims Act case, Ex rel. Rigsby, which is also in the Southern District.  That motion, I would expect, would be to dismiss the case entirely, because it is founded on the stolen documents -- in that the government has not intervened in the lawsuit, it is nothing more than an ordinary lawsuit, and the same arguments would apply to it as to the McIntosh case where Judge Senter issued the disqualification order.  If the Rigsby documents can't be used in any of the KLG cases in the Southern District, why should they be able to be used in the False Claims Act case? 

The motion, I would guess, would have an alternative request that, if the case is not dismissed, the lawyers should be disqualified. The lawyers are not the KLG lawyers, but rather Chip Robertson, Mary Winter, Todd Graves and so forth, the same people who represented Zach Scruggs in the criminal charges against him.  You may remember that Kerri and Cori Rigsby have testified to meeting in a trailer in Pascagoula with those lawyers and Dickie Scruggs on March 11, 2006.  Here is a copy of Kerri Rigsby's deposition from November 20, 2007, a deposition I have posted a number of times.  Read a few pages starting on page 21 of the transcript.  You will see that she acknowledges that she and Cori were both in the trailer around 2 p.m. that day, which is the time State Farm has determined, from a check of computer records, that Cori and/or Kerri began accessing from a laptop the claims files of policyholders, most of whom were clients of Scruggs, in virtually the same order they were listed on the McFarland complaint that incorporated the claims of a huge bunch of policyholders. By the way, here is a copy of Cori's deposition from November 19, 2007, I've also posted this before. 

Now, given the constituency in the trailer, you can see some potential issues with this, can't you? In that deposition, Sid Backstrom asserted attorney-client objections to almost all questions dealing with what happened in the trailer -- although actions themselves are seldom protected communications.  Did the attorneys present look at some of the files online?  Let's remember who some of the people in trailer were.  Chip Robertson, whose name appears as counsel of record on the False Claims Act complaint, was a former chief justice of the Missouri Supreme Court.  If Todd Graves, who also appears as counsel of record on the complaint, was the Todd in the trailer, he was at the time U.S. Attorney for the Western District of Missouri, and was until he left office on March 24, 2006.

We don't know, from the depositions, exactly what if anything they did or exactly when they were present in the trailer.  But if they were, does it strike you as odd, to put it mildly, that they would have wanted to have anything to do with a covert operation where claims adjusters were acting as undercover agents to surreptitiously gain access to documents in this manner? Does not this scene -- if in fact this is what happened -- strike you as both ludicrous and spectacularly questionable? It's hard to picture a more bizarre scene than high-powered lawyers meeting with two corporate spies in a trailer for these purposes.  And didn't anyone pause to think that of course the access to the computer files left a record like footprints across a freshly painted floor?  I would have trouble believing any of this if it were not in the depositions, and if there were not other evidence that has been supplied in exhibits to filings in McIntosh and other cases.  You lawyers out there, ask yourself, would you have been found in a trailer with the Rigsby sisters the same day they -- still employees of E.A. Renfroe in good stead and still active in Katrina adjusting and cases -- were accessing claims files?  Does it seem to you OK to obtain documents for litigation in this manner? 

Why has it taken this long to get to this point? Litigation has rules.  What good are they if this is what happens?

Remember also the Scruggs RICO suit filed in June 2007. (See this post for a copy of the complaint). Will State Farm now move against this lawsuit?  It is founded in essence on these now- barred Rigsby documents, and in a series of bizarre developments and excesses throughout the Katrina Follies, this lawsuit stands out as almost freakishly excessive.  Only in the perfect storm of media pro-Scruggs rah-rah, unhealthy cooperation and assistance from state and federal prosecutors, and passivity on the part of the courts and legal community, could this lawsuit fail to be denounced roundly. If you read the post linked above in this paragraph, you will see that at the time I did denounce it with satire. I do not mean to give myself much credit or imply any great act of courage on my part by saying this, I say it only to point out the otherwise deafening silence that prevailed.  You may also wish to note this lawsuit was filed just after Scruggs was referred by Judge Acker for prosecution of alleged criminal contempt of court. (A charge that has since been dismissed).  If it has any merit than as a distraction and as leverage against State Farm, this has escaped my attention.

Remark upon where we are compared to one year ago.  At that time, I was writing that State Farm should not be sitting back and accepting these developments, but should instead pursue an aggressive counter-strategy.  I do not intend to imply that what happened later was as a result of what I said, merely that it was obvious to me as an observer that things were happening that were seriously wrong. Katrina litigation had become, as Scruggs said it would months earlier, not a legal battle but a political and public relations battle.  He said it himself in a recorded interview.  But courts are not an episode of Boston Legal, no one should be able to write a script where one side is given super powers and the other side has to walk around with lead weights. 

Some lawyers in Mississippi, and these would be people with no love for State Farm or insurance companies whatsoever, have said to me that this type of conduct -- let's call it Scruggsism -- was an immense disservice to policyholders in the long run, an unwarranted seizing of the brand of policyholder litigation for Scruggs' own purposes, and one which has cast disrepute on worthy claims and on honorable policyholder lawyers. And in this view, Scruggs is anathema because he turned State Farm into a sympathetic figure.  Maybe.  I neither praise nor denounce State Farm, I only hold a mirror up to nature, and describe what I see as best I can.  And what I see is a stunning turnaround in fortunes, brought about by Scruggs' own excesses, that enabled a decisive counterattack, one that produced a complete rout. 

If I have time, I will comment more on the specifics of Judge Senter's ruling yesterday.  For now, one should ask what is different about the circumstances now and when Judge Senter denied the previous State Farm motion for disqualification of Scruggs in September 2007?  Here is a copy of the original memorandum in support of the motion to disqualify, filed in June 2007.   You can compare it to the later memorandum, the successful one, filed on January 3, 2008.   And here is a copy of Renfroe's memo in support, filed the next day.  

You can see from reading these memoranda that both times, State Farm based its motion for disqualification in part on the $150,000 annual payments to the Rigsby sisters for what Judge Senter said yesterday were "sham" consulting arrangements.  State Farm, both times, based its motion in part on Scruggs' use of the sisters as agents to take documents through non-conventional means while they were working for State Farm.  So what is different? You will remember that the previous motion was denied not because it had no merit -- Judge Senter specifically did not rule on that -- but because State Farm had known of the conduct for more than a year before bringing its motion, thereby waiving its objections.  Yet the second motion, of course, was filed even later than one year after much of the conduct was known.

In his opinion from yesterday, Judge Senter cited the more recent depositions of Cori and Kerri Rigsby, and it is true that these depositions contained more answers, and showed such a stark picture of improper conduct that it could not be overlooked.  I said the same in this post from December 2007 on the need to re-evaluate the role of the Rigsby sisters.  See also this post from a few days earlier (look near the bottom).  Much of the conduct was not as fully known last September as it is now, and although Judge Senter did not say so, objections to the conduct should not be waived, because the conduct is an ongoing and continuing course of affairs.  In other words, it happens again all over again every day.  The post-September depositions of the Rigsbys, of Brian Ford, and of Lee Harrell, make this more apparent.   All of these things, and more, by the way, are posted on my blog.  If you play around with the search feature and are willing to invest some time, you will find a lot of stuff. 

Again, I give myself no credit for seeing these things as they were or for pointing them out.  Anyone else could have done the same.  My only question -- why didn't they, particularly the media?

Oh, I do have one other question.  Can we finally either drop the mandatory use of the word "whistleblower" before every mention of the Rigsby sisters, or place it in quotes, as I have long done?

UPDATE: I forgot one additional question.  How much longer is the investigation by the U.S. Attorney for the Southern District of Mississippi into allegations of insurer fraud in relation to pushing wind payments onto federal flood insurance, which has accounted for millions of dollars in taxpayer expenditures and which has produced no absolutely no results, going to continue? A new grand jury is going to be impaneled this coming week, and my understanding is the office intends to keep pursuing its elephantine investigation.  You'd think folks there were scared to pull the plug for fear of what some, like Trent Lott and Gene Taylor, would think, and out of fear over who will take the hit for a costly investigation with no results. 

Posted By David Rossmiller In Industry Developments
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I'll comment more on this later, but wanted to get the decision up as soon as possible for you to review.  Here it is. 

Posted By David Rossmiller In Industry Developments
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Just a brief post again today, came back to Portland to a lot to do.

Did you see this story by Anita Lee in the Sun Herald this morning?  In a move calculated to give Jim Hood a run for the record for public self-beclownment, Zach Scruggs, like his father, is also fighting disbarment. 

Let's look at an excerpt:

The Mississippi Bar argues the Scruggses can and should be disbarred as a result of their guilty pleas. Both admitted they entered the pleas because they are, in fact, guilty.

Michael Martz of Brandon, an attorney representing both Scruggses in the disbarment proceedings, previously served as attorney for the Mississippi Bar.

Asked why the Scruggses have filed the motions objecting to disbarment, he said, "We want the bar and the court to follow the law."

To which the bar and the court respond, "Good idea, practice what you preach." Can you believe the effrontery of that spin?  Also, do you remember Zach Scruggs' letter that he was sending around asking people to write Judge Biggers and mention all the good stuff he has done in his life? The letter in which he said:

I wanted to give y'all an update on my situation. Last Friday I had to make the most difficult and painful decision of my life. As you already know, I was charged by indictment last November for conspiracy and bribery of a state court judge. I have always maintained my innocence with respect to those charges and continue to do so to this day. As a result, I was willing to face trial by myself on those charges, which carried up to 75 years in prison and $1.5 million in fines.

Late last week, the government prosecutors agreed to drop all of the original bribery charges and instead charge me with a different and separate offense of “misprision of a felony,” which carries a potential 3 year sentence, and to recommend probation.  I agreed to this.  Misprision of a felony essentially means that I had knowledge of a felony and failed to report it to authorities.  The particular felony I had knowledge of was that Tim Balducci, who was not our firm’s counsel of record, had improper ex parte conversations with a state court judge about our case in an effort to obtain a ruling in our favor. Although I was not aware of any money being paid to the judge, I was aware of Tim’s personal relationship with the judge and that he was using that relationship, in part, to influence the judge. I was aware of this and failed to report it or take any action to stop it. I deeply regret this failure and have taken full responsibility for my actions. I cannot comment any further on this, but you should feel free to contact my lawyers if you need a more detailed explanation of the charge.

Questions:

• What is all this, a plea of "Guilty but Innocent"? 
• Did Zach's lawyers look over and approve that "Say what a great guy I am" letter before he sent it out? Good Grief, I hope not, I can't picture any reason on Earth they would agree to allow such a thing. 
• Is anyone else going to send a letter around asking those with contrary points of view to write letters to Judge Biggers asking for for a stiff sentence?
• What are the odds the Scruggses will exit the public scene with any grace or class?
• Why is it so important to the Scruggses that they continue to point out that Tim Balducci was not counsel of record for the Scruggs Law Firm when he bribed Lackey?  All this talk about Balducci being a wannabe or an outsider, none of it matters, none of it is an adequate excuse or even any excuse at all.  Would it be any better if Balducci had his own private plane and was Scruggsian in wealth?  Would that make them feel any better?  Why point out Balducci traded on his friendship with Judge Lackey? Does that make it OK that Dickie Scruggs traded on his friendship with Tim Balducci?

Posted By David Rossmiller In Industry Developments
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The Mississippi State Bar, as I've mentioned, has responded to Dickie Scruggs' Motion to Stick Around with this Response, which in essence says Scruggs' guilty plea acknowledges in writing that he is, in fact, guilty of the crime to which he pleaded, and therefore this makes him unfit to be a lawyer in Mississippi.  The date on the document is April 1, although it would have been more fitting if Scruggs' opposition to disbarment had itself been filed on April Fool's Day.  Here also is a copy of the Bar's motion to indefinitely suspend Scruggs and strike him from the rolls of Mississippi lawyers, on the chance that the state Supreme Court buys Scruggs' motion.  Why Scruggs is indulging in this effort to stave off the inevitable is a question I don't know the answer to.

Very little time for blogging this morning, have a plane to catch back to Portland.  What a great visit, what a fantastic group of people I've met in Mississippi.  To tell the truth, I guess I had no idea of how closely people here have been following this blog, and the outpouring of support and interest I've seen has been a humbling and amazing experience.  I thank all the many people who have shown kindness to me here, especially those who spent time carting me around and making sure I was taken care of.  The hospitality I've seen here has been unlike any experience in my life, one I shall always remember.  Thanks to Dr. Ed Duett and Mississippi State for having me here, and thanks to all the people who came out for my speech.  I wish I had more time to speak with people here.  I've received many words of thanks since I arrived, but I really haven't done all that much.  If anyone is inclined to extend thanks, however, extend them to my wife, because all these blogging hours have come out of her time, and she has never once complained about it.

Thanks for the gifts I received, although at some point I suppose the sweet potato will go bad.  In the meantime, I'll keep it in my office until people complain about the smell.

Posted By David Rossmiller In Industry Developments
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A few preliminaries.  A fun trip so far, a few glitches.  My luggage didn't make the connection from Houston to Jackson, it finally caught up with me about midnight in Starkville. Everyone has been great, what a friendly place, wonderful people. A beautiful state. Really impressive program they put together here at Insurance Day.

Here's the latest on the Scruggs disbarment: according to this update in the Daily Journal, the State Bar is saying that even if Scruggs' challenge -- that the rules require a copy of a conviction to be attached, and there is none because he has not yet been sentenced -- even if this is true, he should be suspended pending sentencing.  Scruggs is represented by the immediate past general counsel  of the State Bar, which has caused many to wonder: hey, hasn't Scruggs had a pretty good amount of fee disputes and controversy before, and isn't it likely that someone filed bar complaints against him before? If so, what happened to the investigations of these complaints?

Also, why does Scruggs care? He has no hope of keeping his license as a convicted felon who admitted to conspiracy to bribe a judge, so what is this: an exercise in complaining about how the hangman's noose is too tight, or something else? Is there some reason Scruggs wants to keep his license an extra few months, such as some payment of fees requiring payment to his law firm? (Non-lawyers can't claim they have a law firm).

People stop being lawyers for all kinds of reasons, though, and I wouldn't think that payments that have been earned, such as tobacco money, could be made conditional on remaining a lawyer for life. This can't be true, because then he could say his agreement to take care of the Rigsby sisters after they got run out for purloining documents to support his litigation would only be effective while he was an attorney riding high, and we all know he wouldn't just cast these two out with no paycheck . . . well, OK, bad example! Maybe it has something to do with needing to assert continued control over some aspect of some litigation for the moment .  Or maybe it just has to do with the kind of thing where people are tarring and feathering you and you point out their grammar is imperfect.

Funny thing about the agreements with the Rigsbys.  Like a lot of Scruggs' fee agreements, they aren't in writing.  But hey, no problem, right? I mean, you don't need a piece of paper to pin Scruggs down, he's never been accused of trying to cheat someone on an oral contract! Oops, bad example again.

Speaking of the Rigsbys and Scruggs, you will recall how they all have claimed repeatedly that they never spoke prior to his becoming their attorney in February 2006.  Often they don't remember much else, but on that they are certain. (Note, however, that in the recent Cori Rigsby deposition I posted, she did admit for the first time that she accessed the State Farm records using a list of the plaintiffs in Scruggs' cases, although she wouldn't admit to Scruggs' having given it to her for that purpose -- and there is some plausibility to this, as crazy as it sounds -- after all, she has a history of taking documents without permission)!

What if, however, the reason the Mississippi Department of Insurance's market conduct survey of State Farm -- you remember that, they've been working on it for quite some time, to check out State Farm's conduct in Katrina adjusting -- what if the reason this is taking so long is that there is new evidence to check out about whether the stories hold up about when Scruggs and the Rigsbys first met? And possibly about Hood's role and when it began?

What if? Remember, Scruggs and the Rigsbys have made a lot of people mad, and people talk, and give up all kinds of information about when meetings took place and where.   Remember that Scruggs, according to the Lee Harrell deposition I have linked to so many times, said in December 2005 he had State Farm "insiders" at that time -- but under oath, he and the Rigsbys said February 2006. Wouldn't it be ironic if this market conduct survey creates more problems for Scruggs, the Rigsbys and Jim Hood than it does for State Farm?  But isn't that the way it goes? Once the center no longer holds, everything flies apart at the margins too.

Posted By David Rossmiller In Industry Developments
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I'm not sure what to think about Florida's possible decision to strip cash from the underfunded state-run insurer, as reported in the Miami Herald, and give it to start-up insurers that might blow away the first time a hurricane comes by.  Well, yes I am sure -- the governing classes have lost their minds.

Citizens Property was formerly the state insurer of last resort.  However, due to the fact that regulators and lawmakers impose price controls more successfully on Citizens than on private insurers, it has to provide coverage at actuarially unsound rates -- officials know, of course, that ultimately Citizens is backed by the wallets of all insurance purchasers in the state, who are in line for a special surcharge on insurance premiums if a bailout is needed.

Martin Grace has more at RiskProf.

Also, see this post by the Truck Insurance Extremist, which includes the following:

So weird has the Florida insurance market become that contrary to Governor Crist’s hopes that Citizens would foster competition, it has actually had the opposite effect. Private insurers treat Citizens with kit gloves and pray that it grows rich and strong. That’s the only hope for avoiding a gigantic assessment bill. As with Florida’s regulatory culture the assessment risk presented by Citizens only adds to the state’s unattractiveness.

With one exception: "Take Out" speculators love Florida. The speculators who form these thinly capitalized insurance companies do little more than bet on hurricanes. Here’s how the scheme works. You capitalize an insurance company in this state for $5,000,000. Simultaneously you start a management company to operate the insurance company. You then offer to take over (take out) a chunk of policies from Citizens Insurance Company. It is not uncommon to see these small take-out companies write $50 to $200 million in premium. You then pay your management company a fee of 10 to 15% of the premium income. The management company quickly recoups the initial $5,000,000 investment. Everything after that represents pure profit. A few years without a storm and you’ve made a fortune. Best of all, if a hurricane ever causes you to go bust; the state insurance guarantee fund picks up all the claims. For obvious reasons most of us would not regard speculation as a permanent solution to the state's insurance difficulties.

Posted By David Rossmiller In Industry Developments
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'Esquire' magazine

Holy Cow! What can the reasoning be behind this latest move by Dickie Scruggs, as reported by Anita Lee of the Sun Herald?

Attorneys for Dickie Scruggs are asking the state Supreme Court to dismiss a Mississippi Bar complaint that calls for his disbarment as the result of his guilty plea on one charge of conspiring to bribe a north Mississippi judge.

Scruggs' attorneys argue that the formal complaint is premature because U.S. District Judge Neal B. Biggers Jr. has not yet accepted his plea. Scruggs is represented before the Supreme Court by Michael Martz, the Mississippi Bar's former general counsel.

It is a small item at the bottom of this story, which is about the Mississippi Supreme Court formally suspending Judge Bobby DeLaughter, at the request of the state bar, pending investigation of his judicial conduct in a case where attorney Joey Langston has pleaded guilty to trying to influence him with suggestions of an appointment to the federal bench via then-Sen. Trent Lott. 

Premature? Scruggs pleaded guilty to a felony involving the subversion of the legal process. Why in the name of sweet potatoes should anyone wait for anything else? I mean, what is Scruggs worried about, becoming ineligible for his dental insurance through the county bar medical plan?  At least some others voluntarily surrendered their licenses -- true, it was as part of a cooperation deal with the feds, but I'm trying to find something positive to say about these guys! Is Scruggs burning the midnight oil down there at the Scruggs Law Firm, working the phones, issuing legal advice and acting the generalissimo under the end?  Maybe getting in a few last licks on that False Claims Act case?  This is getting kind of weird, it's kind of like a guy who doesn't want to turn in his key to the office when he's got caught heisting dough from the safe -- or like two insurance company adjusters who steal documents from the company and picture some scenario where they are going to continue working there. 

Whether Biggers has accepted the plea or not, Scruggs admitted to participating in a conspiracy to bribe a judge.  If the state bar can't make a move at that point, what good is a state bar, why not just have lawyer discipline enforced by Dickie's Hallelujah Chorus (now seeking guest conductor, Maestro Jim Hood on leave of absence).

UPDATE: Just got a copy of Scruggs' motion to dismiss the bar complaint.  Here it is.

'The invincible man'

That's the title of this very long, very good story by Anita Lee in Sunday's Sun Herald. This is excellent, I hope we see more stories like this.  This story has an exquisite comparison between the fates of attorney Paul Minor, who was sentenced last year in a judicial bribery scandal, with Scruggs cooperating with prosecutors but not being charged -- many think because of his connections to Trent Lott. 

The story begins with: 

Dickie Scruggs blinked back tears as he rushed from the federal courthouse in downtown Jackson.

He had just testified against a fellow attorney who was like a brother, Paul Minor.

It also mentions these details:

From the time charges were filed, Minor's defense cried "selective prosecution." Scruggs' brother-in-law is U.S. Sen. Trent Lott, who recommended Southern District U.S. Attorney Dunn Lampton for his job.

Mississippi's chief law enforcement officer at the time, Mike Moore, was a close friend who steered lucrative tobacco litigation to Scruggs in the 1990s. Moore's office also helped with the judicial bribery investigation.

Moore delivered Scruggs to the back door of the federal courthouse when he testified before the federal grand jury that indicted Minor two months later. Moore, whose black BMW SUV the media spotted, said he just happened to be on his way to work and had talked with Lampton about ensuring Scruggs reached the courthouse early.

Lampton questioned Scruggs, as a cooperating witness, before the grand jury.

Moore later claimed that he was not involved in aspects of the investigation that included Scruggs and Lampton removed himself from the case, acknowledging a conflict where Scruggs was concerned. The Justice Department's Public Integrity Section took the lead at two trials, although assistant U.S. attorneys from Lampton's office also represented the government.

The story points out some disparate treatment of the roles of Scruggs and Minor:

The jury did not consider an $80,000 loan Scruggs guaranteed for Diaz in 2000, or how Scruggs paid off the loan through a third party. During this time, appeals were pending before the Supreme Court in legal-fee disputes between Scruggs and other attorneys.

In one of those cases, Diaz joined a unanimous opinion in Scruggs' favor. Rendered in December 2001, the decision sent the dispute back to Jackson County, where Scruggs wanted it. Even so, attorney Merkel of Clarksdale prevailed in the lower court.

At Minor's 2007 trial, a second jury convicted him and the two lower court judges. Minor is serving 11 years in federal prison.

Seven years more than Scruggs will get, one could note. And apropos of the story's beginning, near the end, it marks this moment in time:

Scruggs testified March 13, 2007, in the Minor case. On or about March 15, 2007, federal investigators learned, Scruggs and other attorneys started what became a conspiracy to bribe Circuit Court Judge Henry L. Lackey in North Mississippi.

So he left the courthouse in tears, but he's tough, he got over it fast! He went back to the office and immediately began working on a recipe for Sweet Potato Succotash (this is a link to one such recipe, but note that in this dish, the corn is not on the ground).  Or excuse me, plans for Operation Earwig, if you prefer.  The story concludes with this observation by a former state Supreme Court justice, whom I believe, like Scruggs and Lott, was also from Pascagoula. 

One who stood by Minor was Chuck McRae, a former Supreme Court justice from Pascagoula who frequently attended both of Minor's trials. McRae, a maverick who has his own history with the Judicial Performance Commission, remained in Jackson to practice law after he left the bench. He never liked Scruggs.

"He always had the mindset of 'I'm going to beat you, crush you, but I also want to know in advance that I'm going to do it,'" McRae said

The way McRae sees it, Minor got more time for influence peddling than Scruggs could receive for an outright bribe. Scruggs pleaded guilty to conspiracy to commit fraud, which carries a maximum penalty of up to five years in prison and a $250,000 fine.

"There is a lot of irony. And he would have gotten away with it but for that attitude that he was Teflon with Trent. He lost that Teflon," said McRae, referring to Lott's resignation two days before Scruggs was indicted.

"The irony is that he never thought he could be touched and he got touched." 

True enough.  Why would he think otherwise?  Here's a guy who bragged openly about "magic jurisdictions" where the outcome was rigged, and about using the legal system as a form of media/political/public relations insurrectionist coup, and as far as many were concerned, Superman came up short in comparison.  He goes around with a Magic Jurisdiction Show and no one questions how the same card keeps turning up on top of the deck every single time.  What a coincidence, amazing! The question now is, how many other times did he get away with the same or similar conduct?  Another question: why did he get away with it?  And a third: if he did get away with other similar conduct, who looked the other way or just didn't give a rip, and should they be held accountable now?

Oh, and I almost forgot the last question: if there is more, how many others were involved, and what were their names? Inquiring minds want to know.

Mississippi bound

Going to be flying down to Starkville Tuesday to speak at the Mississippi State Insurance Day on Wednesday at 3 p.m.  So I'll do my best to blog, but don't expect a lot from me this week. 

Hope to see all of you there who can make it, after I give my talk, I'll be there for questions as long as people are there wanting to ask. 

UPDATE: I forgot to add this earlier -- like a lot of other blogs, I have a spam filter that weeds out comments from robot blogs that have fake comments that are really just attempts to hawk some product, sometimes its insurance, sometimes its Viagra, a lot of it is porn.  The filter is usually pretty discerning, but occasionally real comments get filtered out, and because I don't check the junk very often, I sometimes don't see these to rescue them until days after they were sent.  Sometimes I don't check the junk for quite a long time, and so I might never see the comments -- they get purged automatically after a while.  A few frequent commenters and others not so frequent, for a reason I don't quite know, have some comments filtered out, and some that show up in the regular comment box for me to approve and publish.  If your comment is not unsubstantiated personal gossip, some sick attack with no intellectual merit,  or some stream of guff and spewage that seems designed only to see how many words I will read before I hit the delete button, and you don't see it published, this may be what happened to it.  I apologize for that, but there is only so much I can do with the filter or it won't serve its purpose -- you wouldn't believe how many robot spammers there are out there. 

On the topic of comments in general, the overwhelming majority of commenters are responsible, and I certainly don't mind opposing points of view and in fact I encourage them, but the type of thing I'm not a big fan of is some long stream of personal abuse about how I'm a hypocrite, corrupt, insane, a dictator, tyrant, stuff like that.  It's my blog, not an outlet for someone to hone their version of Oceania's Two-Minute Hate. Most of that snarky guff, I read about four words and poof it's gone. 

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The Rigsby sisters better hope that False Claims Act lawsuit pays off, they are just about out of meal tickets.

Here is a copy of the latest Cori Rigsby deposition.  It was taken in January 2008 in the Renfroe v. Rigsby lawsuit, and unfortunately a great many sections were removed -- apparently these sections are sealed because the documents the sisters took from State Farm were being discussed.  So some of the really good stuff is missing, probably the stuff that got the prosecutors in the criminal contempt of court proceedings against Dickie Scruggs in Alabama so excited.

What is left, a lot of it we knew already.  But surprisingly to me, it appears she actually had a notion that she was going to funnel these documents to Scruggs, remain anonymous, and continue adjusting for State Farm for the rest of her life.  Wow.  This begs the question of why you would want to continue adjusting for a company you claim engaged in fraudulent practices, but that issue aside, if she believed she would not be found out, she was either naive or duped.

In reading the transcript, she confirms that the Scruggs(less) Katrina Group, now known as the Katrina Litigation Group, cut the Rigsby sisters loose from their $150,000 a year "consulting agreements," citing lack of money to pay them. (Could just be an excuse, some in the SKG were against hiring the sisters in the first place).  Scruggs, you remember, wanted them hired, allegedly to take care of them after people at State Farm and Renfroe began to figure out they were spies for Scruggs.  But, the transcript says, when the KLG said adios to the sisters, he didn't step up and agree to continue paying them.  I wonder what they are going to do now -- not much chance of getting back into claims adjusting.  I felt kind of sorry for Cori when, during the deposition, her phone rang and it was her realtor -- she is selling her house. 

It was interesting that she continued to deny having spoken with Scruggs about taking documents from State Farm prior to February 2006.  The date is significant because in December of 2005, according to a deposition in the same case of Lee Harrell, Mississippi deputy commissioner of insurance, Scruggs had a meeting with then-Commissioner George Dale where Scruggs came in with some grandiose scheme that frankly sounds like Scruggs' intellectual train had left the rails, wherein Dale was supposed to support Scruggs' move to extort some $500 million from State Farm for a Katrina compensation fund over which Scruggs would preside, throwing out some shekels to the people while no doubt making a few dollars for himself.  Dale refused.  Think about this for a moment -- Himself wanted to set himself up as some kind of autocrat, some Katrina Czar.  It just sounds so utterly -- what's the word I'm looking for here -- nuts!

But also in that meeting, according to the Harrell deposition, Scruggs claimed to have insiders at State Farm that had access to documents, just like in the tobacco litigation.  Why did Scruggs say this if he had not talked to the Rigsby sisters until two months later?  We know Scruggs represented the sisters' mother in her insurance claim, and it may be that based on conversations between the two, he had reason to believe he would have the sisters' cooperation.  For example, their mother could have told him the sisters were extremely troubled by certain documents, and even related what the contents of those documents were. 

Go ahead and read through it yourself.  When I read these Rigsby sisters depositions, one thing sticks out time and time again, and that is the sheer audacity of hiring material witnesses, that were testifying in civil cases and before grand juries, as "consultants" of a law firm.  Being paid by someone doesn't necessarily buy your testimony -- if you work for a company and continue to draw your check, that doesn't mean if you give testimony favorable to them it's a bribe.  But you worked there already.  This is completely different. They take documents to support Scruggs' litigation, quit the place where the took the documents from and then he hires them at a very high fee for jobs at which they have no set duties and no set hours, and at a time when they are to offer testimony against the party from whom they took the documents.

Looking back over this, I wonder, would they do it again? 

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I was interviewed on MPB this morning by Karen Brown, who did a good interview about the Scruggs Scandal.  I'll provide a link to the Web streaming of the program as soon as I can.

UPDATE: Here's the link.

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Florida insurance wars

I've likened Florida lawmakers and regulators to Wile E. Coyote -- they persistently pursue failed strategies.  Every time that Acme rocket backpack blows up or runs them headlong into a cliff, they strap on another. They also are somewhat like a guy who is denied a promotion and then comes home and beats the stuffing out of his dog.  Everything about the state's insurance mess is someone else's fault -- they never pause to consider whether the central-command regulatory regime they love might be making things worse, or be one of the actual causes of the problem.  Instead, they sound like some of the black helicopter conspiracy theorists, looking for evil everywhere.  And when you are emotionally invested in finding wrongdoing, you keep at it, no matter how many times that rocket explodes and singes your fur. 

While Scruggs was imploding, I didn't have as much time as I'd like to follow this saga.  So I'll offer a couple blog posts and news articles here to start back on track.  You may remember that Florida regulators barred Allstate from selling certain new policies in the state until they turned over documents regulators think will show collusion or defiance of the state's Wishful Thinking Law -- the Florida insurance "reform" package passed last year that, in contravention of all reality about the risk of insuring property in Florida, was supposed to set things right and make insurance affordable.        

Allstate turns over documents to Florida regulators.

Tampa Tribune story on McKinsey documents.

Allstate fined $25,000 a day in Missouri.

Book on McKinsey docs hits Amazon.

Louisiana insurance developments

Citizens Property, the state-run property insurer of last resort, which acquired a reputation for colossal incompetence, is back in the news. 

Suit accuses Citizens executives of racketeering.

The state has also, in place of the abolished ratings board, created a new consumer advocate office.

Scruggs

Dickie Scruggs' name has now been turned into a buzz phrase, a symbol, shorthand for excesses that discredit his cause, although it's disputed by some whether Scruggs had any cause other than Scruggs, human beings are complex and merely because one has other, undisclosed aims does not mean the goals one publicly professes are not sincere.  The latest example of how Scruggs' place in the rogue's gallery du jour is secured, I offer this editorial from the Wall Street Journal.  An excerpt:

March has been a rough month for the tort bar, and not only because two of its standard-bearers -- Dickie Scruggs and Mel Weiss -- have both copped to felonies. A judge in California has put a damper on the efforts of plaintiffs lawyers to drum up lawsuits abroad and have them tried in the U.S.

It's not even about Scruggs, but these days, all you need to do to make your point is mention his name. I'll prove it.  Scruggs! See what I mean?

See also these posts by Jane Genova and Walter Olson.  I'm still waiting for the release of the "Lawyers Gone Wild: Spring Break Edition" DVD.

In other Scruggs-related news, Hinds County Judge Bobby DeLaughter says he will not fight a temporary suspension while his conduct is probed in the Wilson fee dispute case involving Scruggs, according to this story by John O'Brien of Legal Newsline. 

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I now know the time I'll be speaking in Starkville: April 2 at 3 p.m.  I'll provide the entire list of speakers soon, when it's ready to release to the public.  That puts me as the last speaker of the day, so I hope everyone isn't tired and surly by that point.  I'll probably speak for about 40 minutes or so, and leave some time for questions. 

Lastly, here's something that's been on the LexisNexis Insurance Law Center for a while, those of you who have followed the Katrina Follies might be interested in it -- a short profile of Judge L.T. Senter Jr. 

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Here's a link to a podcast interview of me by Chad Hemenway of A.M. Best about Sher, the flood-policy case and Landry, the Valued Policy Law case.  Both are before the Louisiana Supreme Court, which has heard oral arguments.  (The link is actually to the A.M. Best podcast menu, it's the third one from the top as I write this. I will try to get a better, more permanent link to insert here). Chad did a good interview, I enjoyed it. 

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I have to conserve my time and energy between now and April 2, when I'll be speaking at the Mississippi State Insurance Day, because I need both to work on my speech.  Writing jokes is hard to do and takes a lot of time, I know people are expecting some new ones.  There is some more serious stuff in the speech, too. I won't, however, be performing any of the songs from my musical-in-progress, "The Katrina Follies," not even from the showstopping third act, which has its own title, with a double meaning: "Scruggscapades on Ice."  So posts may be more limited this week.

--  This is excellent stuff.  The Wall Street Journal Law Blog is questioning whether it is ethical for a defense lawyer like John Keker to rave on about how his client is innocent and being set up by in a fraudulent prosecution, right up to the moment the guy pleads guilty to the fraudulent charges.  You might also remember that Keker wrote a letter to the Journal back around November 20, just before the Scruggs really hit the fan, demanding a retraction because the Journal said Scruggs convinced the Rigsby sisters to steal documents from State Farm.  Untrue on two accounts, said Keker -- they decided to copy the documents all by themselves (I am not making this up) and they didn't steal anything.  

Except that in this deposition from November 20 Kerri Rigsby herself agreed she had stolen the documents -- or at least, neither she nor her lawyer quarreled with that description.  The Keker comments and the Law Blog post are also discussed on this blog sponsored by the Carnegie Legal Reporting @ Newhouse -- which I've read before and which is a pretty decent site. 

I'm not sure of the ethics of it, myself.  I mean, in one way, I've come to expect that a great many lawyers will spew gushers of malarkey and tommyrot in the face of the most obvious contradictions and without regard for either what the truth is or whether they are making total jackasses out of themselves.  Doesn't necessarily make it right, but I've never seen anyone do anything about it, either. But even though it's a losing battle, I'm glad the Law Blog is taking a look at this.

-- I appreciate the link from George Wallace at Declarations and Exclusions, but I am sorry to hear that my own blogging would lead to a lessening of anyone else's output.  There are a lot of people who try to sell lawyers on blogging for various reasons, attracting new clients, building reputation, increased brand recognition.  And I say, sure, all that is true, if you do it right, but underlying all that, at the very heart of the matter, what it is about for me is freedom, freedom to break out of the insufferable banality of calcified prose and that lawyerish fake persona that robs you of your humanity.  Blogging for me is liberation, the ability to cast off the shackles placed by dead hands and soar through the sky -- even without my own private plane!  As I wrote in the LexisNexis Insurance Law Center post George links to: Legal bloggers of the world unite! You have nothing to lose but your chains.

-- I see NMC at folo came up with some pretty decent answers to the 10 unanswered Scruggs questions I posed yesterday. 

-- Lastly, I had a reader comment in one of my posts from yesterday that seemed to question my ability to work a plug for ABBA into a blog post. No problem, I've done it before and I can do it again. And in light of the demise of the Scruggs Law Firm (three out of four lawyers in a recent survey said, "I'm guilty"), I thought this song, Waterloo, would be the most appropriate, with its prophetic first lines:

At Waterloo Napoleon did surrender/ And I have met my destiny in quite a similar way/ The history book on the shelf/ It's always repeating itself.

I picked this version of the song because of two hilarious things about the video: their shocking costumes, especially that cape and the starburst guitar, and the fact that the performance is so totally mailed in and lipsynched.

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Details are here in this post by Karen Yotis.

I was also on the Insurance Law Center's March 21 podcast, talking about a bunch of stuff, including the Sher and Landry cases currently before the Louisiana Supreme Court, legal blogging and Scruggs.  Steve Berstler did a very good interview, these guys that have been on the radio, they have a skill that's hard to master, but sure does sound good when it's done right.  You can click here to listen.  (I'm a few minutes into the podcast).

Lexis also interviewed me about a whole lot of Katrina-related stuff, and I read this interview and thought it was done very well.  Anytime I get to use one of my favorite metaphors -- Wile E. Coyote and his Acme rocket backpack -- and this makes it into the interview, it makes me happy.  A preview of the interview is here, but the article itself is available only on the paid Lexis database. As you may know, I believe one problem with legal commentary is it is generally boring, with an off-putting pretentiousness, so I bring a different approach.    

As I've mentioned, I'm on the advisory board for the ILC, so I'm not disinterested in its success. But as I have a lot of places where I could choose to spend my time, I wouldn't be doing it if I didn't believe in the product and the people behind it.  Good people, people who get Web 2.0. Without good people -- people of imagination and creativity, risk-takers -- you can't have good product.  

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There are more than 10, of course, way more.  But these 10 will do for a starter.

1.  How likely do you think it was that a lawyer of the reputation of John Keker and a defendant of the wealth and notoriety of Dickie Scruggs failed to test their case before mock juries?  I would say it is very unlikely, and my guess is they used more than one. I would also take an educated guess that, if they did, the answers from the mock jury were unfavorable.

2.  Is the talk of the 50 sealed indictments just wishful thinking on the part of Mississippians, some deus ex machina that will come in and settle the plot?   And if they are real, what are the feds waiting for? One reason I've been skeptical of this is hardly anything is really a secret about the Scruggs case -- I hear a lot more than I pass on, much of it credible or reliable -- but I've not heard any of the names supposedly on this list.

3.  It seems evident that the government will seek an indictment against Scruggs for his alleged role in the Wilson case.  Why did they wait until the conclusion of the Lackey bribery case rather than going after a superseding indictment and rolling all the charges into one?   

4.  Where will Dickie Scruggs do his prison sentence?

5.  What exactly does the phrase mean that Balducci used with Judge Lackey, "lay the corn on the ground"?  

6.  Will Jim Hood continue to hand out multi-million dollar cases like a Pez dispenser? (Scroll down to the middle of the post).

7.  Will we ever find out what exactly P.L. Blake did for those millions?

8.  Returning to the issue of the Wilson case, was the timing of Joey Langston's guilty plea anything other than a justification to use the evidence as prior bad act evidence against Scruggs?  Were there plans to roll up the Wilson case, but then these plans were scrapped?

9.  When and if all the information on the Wilson case comes out, I'm sure going to be curious to see the testimony about Trent Lott's role in the call to Judge DeLaughter, aren't you?  I mean, given that he had known Bobs Wilson for a long time, and given that Dickie Scruggs was his brother-in-law, is it possible that he could have been unaware that Judge DeLaughter had before him a case involving Wilson and Scruggs?  If he did know, how is that OK?  If he didn't know, how is that OK?

10.  In thinking about this, it seems to me that when Mike Moore was brought on the Zach Scruggs' defense team, this indicated a fighting strategy, a trial strategy.  If this is so, what happened to change this strategy and make Zach willing to take a plea agreement just a short time later?  

UPDATE: What do you think of this letter to the editor in the Wall Street Journal?  It was written by an attorney and takes John Keker to task for his statements about how weak and even fraudulent the case was against Dickie Scruggs, including right up to the time Scruggs pleaded guilty to these fraudulent charges.  An excerpt:

It was really nauseating, however, to read the absurd assertion by John Keker, his lawyer, that Mr. Scruggs was innocent and that the "prosecutors have concocted a 'manufactured crime' in which his client had no part". . . . So, according to Mr. Keker, the prosecutors could freely be accused of trying to frame an innocent man. . . .

One assumed that when Mr. Keker made factual assertions he was accurately reporting what Mr. Scruggs had told him, since he presumably knew Mr. Scruggs's side of the story through lengthy interviews under the protection of the attorney-client privilege.

Then we learned, a few hours later, that Mr. Scruggs was guilty all along. Either Mr. Keker knew this or he was ignorant. . . .

Every day these lawyers appear on television and in the papers repeating the ridiculous alibis of their clients, not as their clients' legal positions but as facts, only to be ultimately made foolish by a plea or a trial.

SECOND UPDATE: The phrasing in this New York Times story on the Zach Scruggs plea was interesting, I think, and an indication of the zeitgeist.  The lede called Dickie Scruggs "a recently disgraced trial lawyer." (For those who wonder why I spell "lede" this way, it's the way journalists write it so it's not confused with the word "lead," as in lead paint).  My first thought was no, he disgraced himself quite a long time ago, but then I thought again, they're right. Although an act that results in disgracing might have occurred some time back, the disgracing itself connotes a public consensus and does not occur until the public knows the disgraceful facts.  Think about that phrase for a minute.  If last October anyone had told you that you would see that sentence in the Times or anywhere else in March, would you have thought they were nuts? I would have.

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THIRD UPDATE: Here's a copy of the transcript of Zach Scruggs' plea agreement.  I heard it was available on folo and maybe other websites, but I had already ordered it by the time I heard that, so what the heck, the $21 cost of the transcript is on me.

SECOND UPDATE: Here are some of the documents from the plea.

Plea agreement.

Information.

Possible penalties for charge.

Factual basis for government charge.

Plea agreement accepted.

Since it's a felony, of course his law license is gone too.

And here's a story by Anita Lee of the Sun Herald.

FIRST UPDATE:  A few additional details from a follow-up phone interview I did with our correspondent --

Zach's mother, Diane, was in court.  She did not look nearly as frail as she did last week when Dickie pleaded, was holding up better. Dickie (wisely) was not present.

Our correspondent has seen Zach in court before, feels he exudes an aura of arrogance which was also manifest today.  Zach did not do himself any favors, our correspondent says, during his allocution.  Unlike Sid Backstrom last week, he did not break down or even come close, or really even give a sincere apology.  His speech talked of his love for the legal system and how he really didn't know what was going on.  Judge Biggers appeared chagrined that the deal included no time in prison for Zach, our correspondent believes that will not sit well with Biggers and he will sentence Zach to some time.    

Is it over now? Probably not.  There is the Wilson case.  There are the 50 sealed indictments out there, which I have heard about for months and about which I have been skeptical, but which some sophisticated people believe are real and not myth.    

ORIGINAL POST: Here is a report from ICLB's ever-dependable Oxford correspondent, whose identity remains confidential to readers but whom I vouch for.

Zach pleaded guilty to a one-count information for misprision of felony. He stood before Judge Biggers with his attorneys Mike Moore and Todd Graves. David Sanders represented the government.

The elements of the crime that he committed are as follows:

1. federal felony was committed.

2. he had knowledge of the felony

3. failure to notify authorities

4. committed an act to conceal the crime.

Max possible penalty is 3 years, $250,000 penalty, supervised release up to one year.

Zach waived indictment in exchange for dismissal of original indictment and not being charged with offenses related to the charge.

Government recommended probated sentence.

Judge pointed out that the sentence recommended was not binding on the court.  The judge asked Zach if anyone had made any prediction as to his sentence, to which Zach respoonded that no one had.

The charge stems from a meeting on 3/15/07 where Zach, Dickie Scruggs, Backstrom, Patterson and Balducci met and discussed Balducci's relationship with Judge Lackey and at the meeting it was decided that Balducci would speak to Judge Lackey about making a favorable ruling for defendants in Jones v. Scruggs.

The judge noted that the government was going from charging Zach to 6-count felony indictment to one count misprision of felony.  This observer got the impression that Zach was getting a sweet deal with his plea, and that Judge Biggers thought so as well.

Zach asked to address the court and noted that no one was "sorrier than I." He pointed out that he did not bribe or conspire to bribe Judge Lackey nor did he have knowledge of a bribe. He did, however, have knowledge of improper contacts by Balducci to Judge Lackey and had a duty to prevent these, in which he failed. He said he had a duty to prevent ex parte contact. Talked about the duty he owed to the legal profession and how he was truly sorry to the legal profession and how he loved the legal profession. Judge Biggers responded: the "legal profession that you say you love so much you will not be a part of for the rest of your life."

This was just filed  -- a waiver of indictment by Zach, allowing a charge of misprision of a felony to be brought through an information rather than an indictment. 

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A reader provided me with some outstanding research on Zach's defense team, including some stuff from my own blog.  Remember, the team now includes Mike Moore, Todd Graves, Chip Robertson and Mary Winter. 

Graves is the former U.S. Attorney for the Western District of Missouri, who, according to this press release, left resigned his office on March 24, 2006. Remember that date.

Here is the Kerri Rigsby deposition transcript I posted some months ago and referred to again just a few days ago.  Look again, starting on pages 16 and 17.  You will see, as I've mentioned before, Rigsby testifies to meeting in a trailer with Dickie Scruggs and some other lawyers: "Tony DeWitt, Mary, Todd and Chip."  Tony DeWitt and Mary Winter are former law clerks for Chip Robertson when he was on the Missouri Supreme Court, and worked for his firm.   But who is Todd? Rigsby testified this Trailer Summit took place sometime in March 2006, she wasn't specific as to the date.  According to the press release, Graves didn't leave office until March 24, which leaves seven days in March after he is out of office to meet with Rigsby.

We may assume the Todd mentioned is Todd Graves, because his name appears on the complaint of the Ex rel. Rigsby False Claims Act lawsuit filed the next month, along with Dickie Scruggs and Chip Robertson, Tony DeWitt and Mary Winter. (Look at the end of the lawsuit for the attorney signatures).  Someone of Graves' reputation would surely have worked on the case before it was filed, rather than just consenting to have his name added. 

Here is a press release from 2007 showing Robertson's previous involvement with the Scruggs firm on some kind of nursing home lawsuit (Sid Backstrom's name is also mentioned, you have to scroll down a bit to find it).

Robertson's connections with Scruggs go way back -- in fact, he resigned from the Missouri Supreme Court to get in on the tobacco litigation, according to this article in the Kansas City Business Journal.  His firm continues to represent the Rigsby sisters in the "whistleblower" lawsuit.  

Question: how did Graves get involved in all of this so early, considering he was a U.S. Attorney from another jurisdiction right before the False Claims Act was filed?

Interesting, isn't it, how Dickie Scruggs likes to keep it all in the family? And interesting how all these Rigsby sisters lawyers are now representing Zach. A Scruggs legal affair is like a Cohen brothers movie, the cast is always the same.

Now for something totally different, I'll close with this item: Is Jim Hood going to to get wiretap authority? Heavens! Quis custodiet ipsos custodes?

Also, hearing at 10 a.m. today in Oxford, Mississippi on Zach Scruggs' latest motions.  Here's the notice.

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In the Renfroe v. Rigsby case in Alabama, the Rigsby sisters have been represented by attorneys from three firms, two from Alabama and one from Washington, D.C., all paid for by Dickie Scruggs.  The D.C. lawyers have now filed a motion to withdraw from the case for the following reason (I inserted the boldface to highlight the really significant part):

This motion to withdraw is the result of the inability of the Rigsbys and others to pay Zuckerman Spaeder LLP's fees and expenses going forward, or to adequately satisfy existing fee and expense obligations.

"And others"?  That can only be Dickie Scruggs.  Is this criminal prosecution of Scruggs and his involvement in the Renfroe suit, the Rigsby False Claims Act lawsuit and other stuff tapping out even Scruggs' mighty wallet?  Mike Moore and that other passel of lawyers for Zach aren't cheap, I'm sure, and Scruggs himself is not out of the woods on the Wilson case. 

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You may have heard that Zach Scruggs, the last man standing in the Scruggs Supernova, has come out with new motions.

My favorite is this one, his motion to move the trial date, which should have contained a subhead reading "Delay: the Lawyer's Best Friend," and which contains this priceless paragraph:

Most significantly, based on the summonses the court sent out, members of the pool have been notified of their selection and they will, undoubtedly, have a heightened interest in this case. Many in the jury pool now know that Defendant’s co-defendants pleaded guilty in this case, making them susceptible to the inappropriate inference that the co-defendants’ pleas indicate guilt on the part of Defendant. This is particularly true for any potential jurors that read the inaccurate report in a March 14, 2008 article from Jackson’s Clarion-Ledger which indicated that Defendant agreed to surrender his law license as part of Richard F. Scruggs’s plea agreement. A continuance is warranted to give time for the media coverage in this matter to subside and the sensational and misleading stories in this case to fade from the selection landscape.

I'm not sure what exactly the C-L said because they yanked this from their website, whether they said he had agreed to surrender his law license or whether a deal would call for that or what.  But just because the deal didn't happen does not mean what the C-L said is untrue. Something else might have happened that blew the deal up. 

I also liked this:

A continuance is needed in this case to allow Defendant’s counsel to adequately prepare his defense in light of the recent pleas of his co-defendants. Until the end of last week, Defendant’s counsel were preparing the defense under the assumption that the trial would involve multiple defendants with varying levels of alleged culpability. Undersigned counsel entered their appearance only 8 weeks ago, and will now be responsible for carrying the full load of the trial. Moreover, the very recent pleas of codefendants have significantly changed the strategic and tactical realities for Defendant and his counsel, and additional time is needed to adequately prepare the defense in light of these new realities.

Come on now, we've got Mike Moore and these Rigsby sisters lawyers added to the team, isn't that enough bodies to pull the sled? Also, sounds like their job should be a lot easier now with all the other folks off the field.    

In addition, he wants a James hearing, which is not a karaoke party featuring James Brown music , but rather a determination of whether hearsay statements of co-conspirators should be admitted. Here's the motion.

Lastly -- and I cannot be sure, but this brief did not appear to be filed on a napkin -- the Zach Scruggs team wants to exclude prior bad acts evidence, namely anything to do with the Wilson case, in whi