11th Circuit affirms Judge Acker’s preliminary injunction in Renfroe v. Rigsby “whistleblower” case

The "whistleblower" Rigsby sisters were rebuffed today in their appeal of a December 2006 preliminary injunction by federal district court Judge William Acker, who had ordered them to return thousands of pages of claims files they took from a E.A. Renfroe, a State Farm contractor.  The U.S. Eleventh Circuit Court of Appeals affirmed Acker’s injunction in an opinion that, as these things go, was bluntly worded in places.  Most judicial opinions are not blunt and judges are usually quite gentle in saying why they prefer one argument over another — however, they do not like their time to be wasted. So when judges openly label an argument "illogical," as happened in this opinion, they really didn’t think much of it at all.    Read a pdf of the opinion, and you will note that the Eleventh Circuit had little patience for this appeal.

A couple things to remember here.  One, the standard of review here is abuse of the judge’s discretion, a pretty hard standard to meet on appeal.  This standard presumes the judge at Ground Zero is in the best position to make the call.  Second, although Dickie Scruggs claims an attorney-client relationship with the Rigsby sisters, neither he nor his firm are representing them as defense counsel in Renfroe’s lawsuit against the Rigsbies or this appeal (some write "Rigsbys," but I don’t agree that is the correct plural).  Third, Scruggs is in hot water because of an alleged willful violation of the injunction — Acker appointed special prosecutors who have filed charges of criminal contempt against Scruggs and his firm — so if the appellate court had found the injunction was an abuse of discretion, it could have provided hope to Scruggs.  However, I’m not sure at all that would have meant he gets a free pass here.  Again, I’m not a specialist on criminal law, I’ll have to wait for the new season of Boston Legal and see if this issue comes up and how they deal with it. 

Fourth, the Renfroe lawsuit against the sisters goes on — the basis is their alleged violation of their confidentiality agreement, a fairly standard thing in the industry (confidentiality agreements are standard, I mean, not violations). Fifth, I keep putting "whistleblower" in quotes because I’m still waiting for someone to explain exactly what they blew the whistle on. Just because you call yourself the Green Lantern doesn’t mean I have to.  I know, I know, fraudulent practices and blah blah blah, but there’s more talk than action here, and so far, these documents sound like a lot of sound and fury signifying, well, you know the rest of the quote.  

5 Comments

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5 Responses to 11th Circuit affirms Judge Acker’s preliminary injunction in Renfroe v. Rigsby “whistleblower” case

  1. Kevin

    David,
    I have one question.
    Scruggs has argued that his turnover of the documents to Hood was proper because of a law-enforcement excpetion in Acker’s order.
    In his contempt decision, Acker said that handing the documents over to Hood was defiant because there was no law-enforcement exception.
    Yet, the 11th Circuit clearly says that there is such an excpetion.
    How does this affect the Scruggs prosecution? It seems to me that it seriously undermines it.
    By the way, even though I sometimes disagree with your views, I really appreciate this blog.
    Thanks.

  2. If you look on page 6 of Acker’s opinion, it quotes from the injunction. The injunction, which Acker wrote, states that there IS a law enforcement exception: documents can be turned over to investigators. However, AG Hood already had copies of the documents, the Rigsby sisters gave them to him earlier. So Scruggs was not furnishing them to Hood by sending his own copies to Hood –there has to be another reason for it. Hood’s assistant AG later sent a letter to Scruggs saying Acker’s protective order was not sufficient to keep State Farm from seeing the documents — which would be true only if one assumed that Renfroe’s counsel would act in bad faith and in defiance of the protective order and reveal the contents to State Farm, which is not even their client. Look at it this way. If I’m an accountant working under a contract to do work on a hospital’s books, I operate under a confidentiality agreement. If I breach that agreement and give the documents to some opponent of the hospital, I can’t shield myself from the consequences by saying I also gave copies to the IRS, and if a federal judge issues an injunction that forces me to return them, I can’t disobey it by sending my remaining copies also to the IRS, and then asking the IRS to shoot me back some copies of my copies.

  3. Kevin

    Good point.
    But why would Scruggs send the documents to Hood in the first place? I assume that Hood returned all of the documents to Renfroe’s lawyers anyway.
    If I follow you correctly, you are saying that he was doing so as a cover for disseminating them to some third party? Has that been alleged?
    I just have doubts that this prosecution is really going to go anywhere. Fun to watch, though.

  4. I think the judge’s inference is that Scruggs sent his copy of the documents to Hood solely to get out of fulfilling the requirement to return them to Renfroe’s attorneys. Then Scruggs wanted Hood to send him back copies. So you see, if that happens, that is pretty much the same as keeping them, but just using Hood as some soap to launder the documents. I haven’t heard Scruggs wanted to disseminate them to a third party, what I believe is alleged is merely that he wanted to keep them himself to make sure that State Farm did not know the contents, so that he could leverage State Farm’s lack of knowledge in settlement negotiations. I don’t believe Hood returned anything to Renfroe, he wasn’t covered by the injunction and I presume he still has the copies he was originally given by the Rigsbies.

  5. Jim Smith

    Hood and Scruggs are bed fellows and were supplied information from the sisters long before they blew their whistles. All this legal wrangling has nothing to do with right versus wrong or the poor, mistreated populace of south Mississippi. Neither does it really involve the never ending saga of properly interpreting the anti-concurrent language of an insurance policy. This entire smelly mess has several contributing factors, not the least of which is an inherent sense of entitlement from a populace grown accustomed to receiving something for nothing. I enjoy the legal posts…they are interesting and right on point, but this issue is really indicative of a societal disease which will not be cured in any court of law.