Scruggs Nation, Day 17: Jones v. Scruggs revisited

While there is a lull in the FBI raids, let's take this time to regroup and look back on a few of the themes we have touched on earlier.  One is this: if what prosecutors say is true -- and let us remember we have only heard one side of the story so far -- what went on with the Jones v. Scruggs lawsuit such that a man at the very pinnacle of success would risk disgrace and jail?

Walter Olson addresses this question in this article in today's Wall Street Journal. (A quote from me suggesting that Scruggs' entire career will now be reappraised, which appeared in a recent Los Angeles Times story, appears at the end of the article).  Here's an excerpt:

"It just boggles the mind," said one Mississippi trial lawyer quoted in the Los Angeles Times about the indictment of tort lawyer Richard "Dickie" Scruggs last week on charges of backing the attempted bribery of a state judge. "Here is a man who has had an enormous amount of success, who reached a level very few attorneys, if any, have reached. Why would he risk everything over a legal dispute over attorneys' fees?"

Why indeed? Mr. Scruggs, a prime mover in the $246 billion tobacco settlement with the states, is arguably the most formidable plaintiffs lawyer in history. Why risk a long prison term just to add more millions to a fortune already too vast to spend in one lifetime? While it is too early to tell -- and Mr. Scruggs deserves a presumption of innocence -- hints at possible motives are by no means lacking.

Let's explore this question by looking at some of the pleadings filed in Jones v. Scruggs, the fee dispute case in Lafayette County between Jones, Funderburg and the rest of the then-Scruggs Katrina Group. (After the indictment of Scruggs and four others, the group first announced the Scruggs firm would withdraw from Katrina litigation, then Scruggs counter-announced that he would not, then according to sources John W. "Don" Barrett, an old friend of Scruggs whose Barrett Law Office was part of the Scruggs Katrina Group, went to Scruggs office for a meeting, and after that the group once again announced Scruggs was withdrawing from Katrina cases and Scruggs filed withdrawal motions in the remaining cases.  The group has been renamed the Katrina Litigation Group). 

Below are some significant pleadings in the case. Of these, I have linked before only to the complaint.  I have read every page of these, and they are well worth the time it takes.

One of the most interesting parts of these pleadings are the exhibits to the defendants' reply, the last item in the sequence above.  I have looked at these several times wondering if the documents I received from the court in Lafayette County were out of order somehow -- this is possible -- because why the defendants would have included these documents as exhibits is a mystery to me.  They appear particularly unhelpful to the defendants and especially Dickie Scruggs.  For example, remember that Johnny Jones and Steve Funderburg, the plaintiffs in this case, earlier represented Dickie Scruggs in the Luckey case, another fee dispute. A number of readers have communicated with me raising questions about how Jones can seek to establish a pattern and practice of Scruggs cheating other lawyers out of attorney fees when this effort would involve, in part, discussing a case in which Jones had an attorney-client relationship with Scruggs.  It is debated whether the work product privilege belongs to the lawyer or the client, but everyone agrees that the attorney client privilege belongs solely to the client, and only the client can waive it. 

One way in which waiver can occur is where the client places the privileged communications or the relationship "at issue."  Courts have various explanations of the at-issue doctrine -- some would find the fact that the communications are a necessary part of deciding the dispute at hand to satisfy the doctrine -- but almost any court can find a waiver where the client himself explores or reveals the communications. So if indeed it was the defendants who placed at issue the Steve Funderburg e-mail of March 4, 2007 to Dickie Scruggs (page 18 of the exhibit in the last document linked to above), doing so does not make sense to me. In the e-mail, Funderburg blasts Scruggs as follows:

John and I DEFENDED you in fee dispute litigation, for God's sake.  We DEFENDED you  when people said you were greedy, or were a back-stabber, or a liar, or anything else.  Good Lord we trust you as a friend.  Well . . . good job.  You have developed a routine.  It worked.  But go to your grave knowing that you have shaken my belief in everything I hold dear.  I did not believe that people like you really existed.  I am ashamed and will always be ashamed of having defended and protected you.  You are a man without honor and you should know that about yourself.

Of course, there are exceptions to the attorney client privilege, such as the crime-fraud exception, where legal advice is sought to advance a criminal or fraudulent purpose, but generally one's own attorney is not the one who seeks resort to this exception. I don't know how this will all play out -- the at-issue doctrine can be broad or narrow, depending on the circumstances and the court.  Readers may have their own take on this, but I wanted to raise the question and see what others think.

But back to the central point of today: why would he do it? What Jones and Funderburg appear to be driving at is that acting in this way is a habit, a method of doing business.  Seen in this light, the alleged bribery scheme is just an extension of this ruthless business method. Even if that is true, another question remains. Why try bribery to get the case into arbitration when Jones, it is evident from looking at the documents, had repeatedly demanded arbitration pursuant to the joint venture contract before filing suit?  Jones' answer in the pleadings is that once the lawsuit was filed -- perhaps Scruggs and the others did not truly believe Jones would file suit and instead believed he would back down and take either the original $1 million offered, the lesser $600,000 offered later, or perhaps even less -- the potential for bad publicity and punitive damages from the tort claims in the lawsuit led to a re-evaluation.  This re-evaluation must have been relatively quick, because the lawsuit was filed March 15, 2007, and the defendants filed a motion to compel arbitration April 10.  In addition, prosecutors have alleged the purported bribery scheme involving Scruggs began around March 28. Another possible explanation is this: what if Scruggs thought that Jones, not a member of the inner circle of the SKG (good grief, he didn't even have his own private jet!) just needed to be taught a lesson about power and who is fit to wield it in this world? What if? Under such a view, the alleged bribery might be seen as an expedient, perhaps regrettable, perhaps not, to support and re-inforce the natural order, a kind of historical determinism in which the little things like alleged bribes are all subsumed in inevitability. What if?       

There are other points worth exploring that are touched on by the Jones v. Scruggs pleadings, including a re-evaluation of the supposed "whistleblower" Rigsby sisters.  We can talk about that in greater depth at a later time, but since, included in the pleadings, is Judge Acker's order finding Scruggs in contempt and recommending him for prosecution in the Renfroe v. Rigsby, let me just recommend that you read it again closely in light of the Jones lawsuit, and ask yourself this.  It is apparent that Jones and possibly other members of SKG were troubled by hiring material witnesses as litigation consultants, and also with paying them with SKG funds. What if -- just what if -- when the protective order is finally lifted on the State Farm claims documents the Rigsby sisters took from Renfroe, they are found to match up virtually one for one with the policyholder lawsuits Scruggs and SKG had already filed? What would that say about their whistleblower status? What would it say about Jim Hood's involvement with the Rigsby sisters, his grand jury investigation of State Farm and his suggestion that Scruggs (according to Scruggs' testimony) send the documents to him, Hood, rather than comply with Acker's injunction, at a time where Hood's criminal and civil pressure played a big part in State Farm's willingness to settle with Scruggs? Again, what if, and what would this say? 

 

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Written By:Ironic On December 15, 2007 4:49 PM

What if? What a powerful question you ask David. For, if this scenario were to somehow play out, then the fingers of RICO would point squarely at Scruggs, Hood, and the Rigsby sisters, among others. Possibly Moore too? Under this scenario, Scruggs may end up in jail for a long, long time, and every case he's touched in the past would be tainted.

To me, these explosive charges would make the MS Katrina case the largest of this young century, and would be talked about for the next 100 years.

What if?

Ironic

Written By:Justus On December 15, 2007 6:24 PM

A couple of points gleaned from the pleadings.

First, it seems pretty clear that Jones and his firm did the bulk of the real "lawyering" up until the time of the freezout. It sounds like Scruggs, Nutt and Barrett directed their efforts to signing up clients, talking to witnesses and talking settlement. It's a total shame when the efforts of real "lawyers" for real "lawyering" gets minimized. I may be wrong, but I don't think that it takes a law degree to get clients to sign a contract, or to talk to witnesses, or to talk settlement with the other side.

Second, on December 15, 2006, Sparky Lovelace stated in an email that he, just like John Jones, couldn't decide how the legal fees should be decided. Therefore, at that time, there was not agreement among 4 of the 5 on splitting the fees. More important, about that same time John Jones was requesting everyone's consent to arbitration. And, Jones' request for arbitration "preceded" the later vote in March of 2007 in which 4 of the 5 finally agreed to distribute the legal fees. Seems to me that an earlier request for arbitration on the issue of the split and distribution of legal fees would "stay" any subsequent attempt to reach agreement of 4 of the 5 joint venturers.

One more thing. Jones has filed an "Amended Complaint" that I don't think is linked above.

Justus

Written By:Roger On December 15, 2007 8:35 PM

Regarding why a high-paid and -powered lawyer would be such a tightwad in splitting fees--to the point of bribing a judge in the case...

If Scruggs still owes P.L. Blake $40 million over the next decade or so, he's no doubt concerned with every million here or there...

Written By:Fred On December 16, 2007 8:05 AM

Two major new stories on the Scruggs matter in Sunday papers in MS:

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20071216/NEWS/712160382/1001/news

http://www.sunherald.com/278/story/250341.html

Written By:Beau On December 16, 2007 8:11 AM

As to the question of why Dickie would do the things that he is accused of (that is if they are proven to be true), has anyone considered the possibility that he just didn't want to take a chance of losing a case? Some people have egos as such that the money isn't so much an issue as getting the score in the W column vs the L column. I'm not saying that Dickie has such an ego as I don't know the man, but I am wondering if maybe he wasn't counting on good lawyer skills to win the Jones case. If this all proves be to true on the bribery issue, one cannot help but wonder if he really was successful on prior cases he was involved in due to good lawyer skills, or if other methods helped him be successful in those cases.

Written By:anonymous On December 16, 2007 9:21 AM

Well, Beau, I've known Dickie since the late 1970s, when he lived in Jackson. He has a huge ego and is utterly ruthless. He can't stand to lose,no matter how small the stakes. I am not prejudging his guilt on the bribery charges, just commenting on his personality.

Written By:David Rossmiller On December 16, 2007 9:53 AM

Justus, I linked to the amended complaint in a post last week, check that out. I should have provided the link in this post, thanks for the reminder.

Written By:An-Insider On December 17, 2007 9:02 PM

Written By:Roger On December 15, 2007 8:35 PM

[If Scruggs still owes P.L. Blake $40 million over the next decade or so, he's no doubt concerned with every million here or there...]
He won 1 (B)illion in his earlier cases. 40 million is a drop in the bucket.

Written By:m.williams On December 19, 2007 2:54 PM

There is a way in which a Plaintiff's attorney reaches a point of his ability to perform legal business in the confines of legal ethics, and I know that the idea of the "Lewis theory", spawned by an elected Official, i.e., Mike Moore, was not sheep leading a flock of lamb to the houses of evil tort feasing, particularly in the matter of coming upon the modern concept of whistleblowers. I've been recently in an unsolicited dialogue with one of the most famous "whisleblowers" in the United States, Daniel Elsberg, who revealed, after long consideration (5 or more years), what it took to come forth, approach the conceptual ideal of civil dissobedience and blow a whistle to save our country from distruction. I came to understand his view. I failed, however, to reckon his prolonged, often tangled, decisiveness to "produce" what the act of blowing a whistle would do - destroy him. I finally came to understand him. He waited for a propitious moment in history. But in waiting, I think, he should regret how much of humanity suffered in the time of his "civil disobedience", perhaps 50 thousand US lives lost. He regrets that. But he came forth, perhaps the ONLY whistleblower I know, and his failure to act sooner, is no less a simple decision to gather cumulative theories rather than wool to make a final offer of proof. I accept that. We are a nation of idealism and idealist. But, within the confines of the law, there are matters of greed and hurt that overreach the advise and consent of our liberties -the law is unfortunate, and a lamb of it's own sort. I often think of Billy Budd's fate - something so small vs something far more right and, failing all logic and reason, becomes the death of his "truth". When the "whistle" is a likely outcome of greeed, it's hot air; Scruggs has maintained, through his lawfully elected officials, more than three times, that, whatever makes the case seem important, and what he may design to augument to importance of, what may become dramatic, is truly more valued than his skill as a good man who uses his legal talent for the right reasons. He might have wanted an Elsberg for all his great battles, all his wins - but it is not his choice to create either the whistle or the blowing. It must, like Elsberg, devolve from a principal, and evolve into a dangerous action. Proudly, think of what must be such fallability in Scruggs'methods of the Rigsbys, for them, and for others...There is great thought given into the decision to cross a line, to take idealism into battle, but it has little to do with profiteering, I think, and nothing to do with Elected Officials collecting on pay-offs and the pretense of good. Look back in anger - take a picture of those who lost, those who won, and how much businessmen love the law because, in the main, some lawyers are mere businessmen who just happen to have a license to practice law...

Written By:m.williams On December 19, 2007 3:03 PM

There is a way in which a Plaintiff's attorney reaches a point of his ability to perform legal business in the confines of legal ethics, and I know that the idea of the "Lewis theory", spawned by an elected Official, i.e., Mike Moore, was not sheep leading a flock of lamb to the houses of evil tort feasing, particularly in the matter of coming upon the modern concept of whistleblowers. I've been recently in an unsolicited dialogue with one of the most famous "whisleblowers" in the United States, Daniel Elsberg, who revealed, after long consideration (5 or more years), what it took to come forth, approach the conceptual ideal of civil dissobedience and blow a whistle to save our country from distruction. I came to understand his view. I failed, however, to reckon his prolonged, often tangled, decisiveness to "produce" what the act of blowing a whistle would do - destroy him. I finally came to understand him. He waited for a propitious moment in history. But in waiting, I think, he should regret how much of humanity suffered in the time of his "civil disobedience", perhaps 50 thousand US lives lost. He regrets that. But he came forth, perhaps the ONLY whistleblower I know, and his failure to act sooner, is no less a simple decision to gather cumulative theories rather than wool to make a final offer of proof. I accept that. We are a nation of idealism and idealist. But, within the confines of the law, there are matters of greed and hurt that overreach the advise and consent of our liberties -the law is unfortunate, and a lamb of it's own sort. I often think of Billy Budd's fate - something so small vs something far more right and, failing all logic and reason, becomes the death of his "truth". When the "whistle" is a likely outcome of greeed, it's hot air; Scruggs has maintained, through his lawfully elected officials, more than three times, that, whatever makes the case seem important, and what he may design to augument to importance of, what may become dramatic, is truly more valued than his skill as a good man who uses his legal talent for the right reasons. He might have wanted an Elsberg for all his great battles, all his wins - but it is not his choice to create either the whistle or the blowing. It must, like Elsberg, devolve from a principal, and evolve into a dangerous action. Proudly, think of what must be such fallability in Scruggs'methods of the Rigsbys, for them, and for others...There is great thought given into the decision to cross a line, to take idealism into battle, but it has little to do with profiteering, I think, and nothing to do with Elected Officials collecting on pay-offs and the pretense of good. Look back in anger - take a picture of those who lost, those who won, and how much businessmen love the law because, in the main, some lawyers are mere businessmen who just happen to have a license to practice law...

Written By:observer On December 23, 2007 1:24 PM

Paragraphs are your friends.

Written By:m.williams On December 26, 2007 6:03 PM

I always sleep with one.


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