Insurance Coverage Blog

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.  

Delay is Dickie's friend. It looks like he won't have to admit making up the Third Man (or "talking out his arse," as the British are keen to say) until after his sentencing. Keker's smart. Do you think he orchestrated the appeal of Judge Walker's unassailable order for that purpose?

I'm just continually amazed.

Seems Judge Senter did not really appreciate being named in the brief as one of the parties who should have investigated Scruggs'payments. I am guessing that may be why he explained his reasoning for the initial refusal to grant to State Farm. Is it just me, or does it seem these attorneys repeatedly keep hitting their own thumb with their own hammer? All of their declarations and affidavits seem to generate a result which is harmful rather than beneficial. Since this decision isn't appealable, guess all that's left to say is "good bye"! At least Judge Senter has not done what I saw done in another case recently-sent a copy of the order to the state bar for follow-up. Whew! Look out thumbs!!!

David, by proceeding in the manner he has, hasn't Scruggs now forfeited his right to contend he "has no documents to produce"?

I'm going to miss the "hoodzpah"-esque behavior of the Trailer Lawyers.

I was amused that Judge Senter considered State Farm so intertwined with Scruggs that he wouldn't grant its motion to disqualify, but would grant Renfroe's. But I imagine State Farm's lawyers are not amused. Senter's clarification gives them some ethical exposure for failure to report what they knew to the MS Bar.

The Rigby sisters decided to steal property which didn't belong to them. They did so by hacking into the Sate Farm data base, and giving their unlawful gotten gains to Scruggs et al. During this thief of property, they were surrounded by lawyers. How is their conduct and actions, as well as the actions of the surrounding lawyers protected from criminal prosecution?

After all, suppose I walked into a bank with a gun and demanded money from a teller. During this robbery, I have an attorney accompany me. My attorney explains to the teller, that I'm only making an alternative form of withdrawal, prior to making an initial deposit, and that my actions will ultimately be approved by the Attorney General of the State of Mississippi.

How are the two actions different. One seemingly protected, the other obviously not?

Meanwhile, a court in Louisiana just awarded $21,000,000 for failure to pay an insurance claim, including some penalty money, and Anita Lee's coverage of the Lisanby lawsuit again reveals shoddy insurance practices. Three years after Flood Katrina, and the insurance industry still is beaten up when the case is called. Can't wait for McIntosh and the 17 State Farm attorneys show up to defend that run-of-the-mill suit.

Sam, by improperly utilizing their password, they committed a federal crime. It would require the US attorney to prosecute. That doesn't appear likely at the moment.

SAM: An indictment.

However, an officer of the Court, duly sworn to uphold the law, knows exactly what is and is not attorney-client privilege.

If your above notion is that the Rigsby Sisters are held to the same standard as a MS lawyer in good standing, you're wrong.

From the facts, at some time, "Rigsbys" were authorized by their employees to hold what you term "stolen propety". If that was "theft" by unlawful means, the theft belongs to the recipient. If there's privilege here, I can't imagine why, so that's the substance. But you rant and rave at the "Rigsbys".

What surprises me is that the blog lawyering here pre-supposes wrong-doing by the "Rigsbys" as disproportionate to that of lawyers.

It's possible to assume that "Rigsby's" did give information to lawyers (I don't know), but if all your standards apply equally to lawyers and non-lawyers who takes the gift? Which "steals"?

If "stolen" is the word, then the lawyers, who represent the Court of jurisdiction, are held to the standard of right or wrong, and must know the substantive value of "discovery" rules.

The "web" information is privileged per se, but if a lawyer "takes", with intent to examine, it's likely he knows he is bound by (at least) Federal Rules of discovery. The lawyers have no protection in privilege by "taking" and not returning.

Your analogy is specious. I assume your "lawyer" knew your intent to perform an unlawful act, that the lawyer is a co-conspirator, the "acts" are neither different nor distinct. One exception to "privilege" is fraud. Where's the fraud? Maybe Ole Miss law grads should take "the bar".

More Cowbell, one case does not a pattern of shoddy practices make. As for the McIntoshes they made it high profile, not run-of-the-mill, by signing on with Scruggs, which was as high profile as one could get. So don't try to characterize this as State Farm being the thugs. In fact, when all is said and done, State Farm may come out being exonerated in this case.

M Williams, the Rigsby sisters, by having signed a confidentiality agreement, unlawfully took information outside what was agreed upon bounds. In other words, the information was considered to be the property of State Farm's and not for external (outside of state Farm) use. So, yes, the Rigsby sisters can be considered to have stolen the files/information.

M. Williams:

Thank you for well thoughtout assessment. I appreciated your observations and comments. Although, I'm still not convinced that the "Rigsby" sisters authorized access to the State Farm data base was unlimited, and thereby allowed them to knowingly, intentionally, and secretly access confidential information about State Farm clients without their knowledge or consent. Especially, when you take into consideration that they did so for their own personal benefit.

You must agree that one of their motives for doing so, was based solely on their belief that they would be rewarded with a substantial financial gain.

Also, you surely must agree, that they recognized that such a financial windfall could only be realized if they provided to Team Scruggs with information, which all of the connected parties knew they were not entitled to receive in this manner.

Lastly, how is what the Rigsby sisters accomplished not a "theft" of information, when they provided what they had taken without the knowledge or permission from State Farm and Renfroe to Team Scruggs?

And what was Ma Lobrano's role? What was she doing in that trailer? Has her deposition been taken?

I think Rogerwilco has hit upon what I have been thinking and sometimes commenting - State Farm, along with the general population, knew of the payments to the Rigsbys. How can anyone be cited for a failure to report when everyone that reads a newspaper or watches television (I assume members of the Miss. Bar fall into this category) knew of the payments. I think the members of the bar should shoulder more of the guilt for not reporting because they know that you cannot pay a fact witness. I, being a lay person, and since the attorney general had no problem with it thought it was within bounds. Not talking about bribery here -just the payments to the sisters.

M. Williams:

You previously mentioned that, "one exception to privilege is fraud. Where's the fraud?"

In my opinion, there were multiple individual acts of fraud committed against State Farm and Renfroe. These acts were committed in the infamous Trailer by the Rigsby sisters.

All of the Team Scruggs lawyers present during this time, might have knowingly and intentionally aided and abetted the Rigsby sisters in their unlawful commission of stealing property (insurance claims information). Although, in the alternative, they may having been sleeping or playing cards with the owner of the property.

Simply stated, the Rigsby sisters were not authorized to access the State Farm data base, in order to provide Team Scruggs with insurance claims files.

The reason the Rigsby sisters committed mutiple acts of theft, is because Team Scruggs promised to pay each of them $150,000 annually for their collective acts.

It's not a complicated matter, the Rigsby sisters were rewarded by taking something of value, which they knew didn't belong to them. Having successfuly accomplished the theft of property, they then sold what they had stolen to Team Scruggs et al.

When it's all is said and done, it was nothing more then a common financial transaction regarding the sale of stolen property between a group of thieves.

Just guessing here, but the fact that the KC Lawyers and Scruggs were co-counsel in the case might have some bearing on the KC Lawyers duties. That and the fact the witnesses that Scruggs was unethically paying were the plaintiff's in the same case of which the attorneys were all co-counsel probably also has a lot of impact on the judge's decision.

Again, Judge Senter did not rule on the sister's sham consulting agreement until the Rigsbys stated in their depositions they were being paid $150,000 a year to not work. No one knew they were doing absolutely nothing to earn the "consulting" fees until they admitted they were doing nothing to earn them. The attorneys associated with Scruggs might have known, but do you think they were gonna do anything contrary to Dickie? Snake Farm probably knew the sisters were doing nothing, but the admission of such in both sister's depositions provided the legal proof necessary for Senter to disqualify them as witnesses. It isn't that anyone knew, care, or suspected they were being paid...it is the fact they were being paid to do absolutely nothing.

The sisters, Mommy and the qui tam attorneys would be far better off dropping the suit and attempting a return to some sense of normalcy. There are other shady deals regarding the sale of homes, Mommy's role and stuff on the sister's hard drives that will implicate certain persons of interest. Renfroe won't let it go because of the revenge motive, but others who want to sweep this matter under the rug (and I'm not necessarily speaking of the Snake) might cut them a break.

THICK:

Do you think Dickie Scruggs should be cut the same break as his cohorts?

What exactly was Ma Labrano doing in that trailer? What's her connection? I know her connection to the Twisted Sisters. Does she have a connection to the others in the trailer?

Sam,

It depends on your definition of "cohorts." If your definition includes Mel Weiss, Bill Lerach, Joey Langston, Sid Backstrom and Grey Goose Zach, then, yes I feel he deserves the same break.

If you are referring to the Rigsbys as cohorts, I think the more accurate definition is dupes. They were duped into performing nefarious duties for Dickie and are now paying for their actions. Do I think they deserve the same punishment? No. I think they were led down the primrose path by both Mommy and Dickie and were clueless toward the consequences.

Hood, Moore, Lott and Taylor are the "cohorts" escaping scrutiny. Hopefully, the release of the Rigsby documents will change all that, but I doubt it.

THICK:

I'm not certain I understood your previous response about the other cohorts. Correct me, but weren't they all attorneys, you know "Officer of the Court," what ever the Hell that suppose to mean anymore.

What are you trying to say? Do you mean to say that they should be forgiven because they were "duped." If so, then all they need to do is plead stupidity, in order to escape justice?

My definition of cohort, includes the Queen Mother of all chorts, the one and only Dickie Scruggs. Again, do you think that Dickie Scruggs should be granted the same breaks as the duped Rigsby sisters?

THICK:

Just because Dickie Scruggs convinced the Rigsby sisters to drive the get away harddrive for $150,00 in annual consideration, doesn't mean they were duped. Like all suspected criminals, they saw an opportunity to make a fast (protected from the IRS) buck.

I stand corrected, if Dickie Scruggs issue 1099's to the sisters for their services.