Grand jury seeks hard drive, firm suspects Scruggs of violating judge’s order and tipping off U.S. Attorney

Just when you think there can’t possibly be any other angles to Katrina litigation, another one sticks its head up like in some kind of Whack-A-Mole game, and Dickie Scruggs has a way of being involved.  Check out this story by Mike Kunzelman of the AP.  

It says Forensic Analysis and Engineering — and you may remember that firm as being involved in adjusting Katrina damage and also being the locus of those dumb e-mails that keep getting trotted out like they’re all that, but they ain’t, kind of like some middle-aged guy strutting around in a Speedo  — is seeking to block a grand jury subpoena of the hard drive of one of its employees.  The grand jury, convened by a U.S. Attorney, seems to be investigating whether insurers committed improprieties in paying wind claims off with federal flood policy money.  OK, we’ve been around and around on that, I don’t need to go over it again.  If you want more on that subject use my blog’s search bar and you’ll find a ton of posts.  Ah, but here, in the middle and at the bottom of the AP story, what is this? It looks like, could it be? Yes, yes it is — further allegations of Dickie Scruggs violating a judicial order:

Scruggs’ firm, for one of its cases against State Farm Fire & Casualty Co., obtained the hard drive from Forensic employee Nellie Williams in July. Forensic, which helped State Farm adjust claims after Katrina, says Scruggs’ firm wasn’t entitled to obtain the hard drive.

On Oct. 9, U.S. Magistrate Judge Robert Walker in Gulfport, Miss., agreed to temporarily block Scruggs from disseminating any information obtained from the hard drive. Two days later, however, Lampton’s office served Scruggs with the subpoena for the hard drive. (Lampton is the U.S. Attorney)

Scruggs subsequently asked for Walker’s permission to comply with the subpoena. Walker hasn’t ruled on that request.

Forensic’s lawyers say the timing of Lampton’s subpoena was "odd, but coincidence just cannot be the explanation." Instead, the firm’s attorneys claim Scruggs tipped off Lampton’s office to the existence of the hard drive "in direct contravention" to Walker’s order.

"Knowledge of the exact location of the hard drive and its potential contents are most likely not a lucky guess," Forensic attorney Kathryn Platt wrote.

Richard "Dickie" Scruggs, Zach’s father and law partner, said they told federal investigators about the hard drive before Walker issued his Oct. 9 order.

"We weren’t trying to circumvent Judge Walker’s order," he added. "We have complied with the letter and the spirit of his order."

. . . .

Scruggs also has cooperated with Mississippi Attorney General Jim Hood, whose office has investigated allegations that insurers fraudulently denied claims after Katrina. Scruggs’ firm provided Hood’s office with copies of internal State Farm documents obtained by two sisters who helped the company adjust claims.

In June, however, U.S. District Judge William Acker in Alabama ruled that Scruggs "willfully" violated a court order to return the documents. Acker named two special prosecutors to handle the case after U.S. Attorney Alice Martin declined to prosecute Scruggs for criminal contempt charges.

Forensic said Scruggs’ handling of the hard drive is "not completely dissimilar" from the contempt proceedings in Alabama. Scruggs, for his part, rejected that comparison.


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