I read through every single word of the transcript, and it was painful — painful because Jim Hood thoroughly beclowned himself. Whether it was an intentional diversionary tactic or involuntary, I cannot say, but the persona Hood offered at the hearing was certainly no Albert Einstein — in fact, it was not even an Alfred Einstein. After a time, I began to wonder if Hood’s act was some kind of misguided Jerry Lewis tribute — like this one — and I hesitantly turned the pages, expecting him to burst out with a "Hey Laaaaady!"
In the biggest laugh of the hearing, Hood claimed he sent the "Dickie Scruggs is my confidential informant" letter to U.S. Attorney Alice Walker, in July 2007, not as a favor to Scruggs but to protect the Rigsby sisters and the State Farm documents they took. Kerri and Cori Rigsby, you may recall, were and are being sued by State Farm contractor E.A. Renfroe for allegedly breaching their confidentiality agreements by taking thousands of claims documents and feeding them to Dickie Scruggs.
Hood seemed hopelessly out of his element talking about, well, just about anything you would expect him to know about, but especially the Renfroe v. Rigsby suit and surrounding issues. It turns out that he did not even write the letter — his assistant AG Courtney Schloemer did — and he claimed repeatedly to know little to nothing about the case, or about the order Judge William Acker issued requiring the sisters and their agents to return all copies of the documents to Renfroe’s attorneys (a protective order was also part of the order, which forbad the attorneys from sharing the contents of the documents with Renfroe itself or with State Farm).
Instead of returning them, Scruggs called Hood (Scruggs has testified to this), and they made an arrangement to send the docs to Hood in an effort to take advantage of the injunction’s law enforcement exception. Now, there are three problems with this course of conduct. One, Hood already had his own copies, so he didn’t need any more from Scruggs. Two, the law enforcement exception in the injunction was so Hood wouldn’t have to return his own copies, not so he could become the public library for anyone with papers who wants to take it on the lam from the law (it was also so the Rigsbys could cooperate with Hood’s criminal investigation without violating the order). Three, it torqued off Judge Acker, who by and by issued an order ripping Scruggs and referring him for prosecution for criminal contempt of court.
Let’s look at one passage of the transcript, beginning on page 127, where Hood explains the letter to Martin:
A. So Courtney sent the letters. Courtney was the one who was handling the Alabama litigation. I did send a letter. It was not at Mr. Scruggs’ request. I don’t recall him ever asking me to send that letter or anything of that nature.
I had a concern as a prosecutor. And I knew Ms. Martin who as a prosecutor and has prosecuted a lot of white collar crime over in Alabama would also have a concern about litigation in another state that is designed to or the effect of harassing witnesses that we’re about to put in before the grand jury and disclosing those documents. That was primarily Courtney’s concern. It was my concern as well. And that’s why I wrote the letter.
Q. So you did it out of the kindness of your heart and your conscientiousness as the attorney general of the State of Mississippi.
A. Out of the kindness of my heart. I can tell you I have a duty to protect people as a prosecutor. If it’s a dope dealer that’s going to testify for me in a case, I have a duty to try to protect him as best I can. And that is the duty upon where I act. It’s not out of the kindness of my heart or any kind of comments like that. But it was just my duty I felt to protect witnesses and grand jury information.
Q. Which witnesses were you protecting?
A. The Rigsby sisters, the documents. See, we were about to cross-examine, your Honor, these witnesses that were State Farm’s people, employees. They were coming to our grand jury down in Jackson County. And this was all going on about three weeks before our grand jury. And so Courtney’s concern and my concern was they were going to give the documents to these witnesses so they’d know what we were going to ask them. And so that was our concern. And that’s what I conveyed in the letter to the United States Attorney, that that was where our concern was coming from. And it was because states have to get along and the state and federal systems both have to work together in prosecuting white collar crime cases.
Q. I’m still trying to get a simple answer to the simple question of which witnesses you were protecting.
A. I was trying to protect the — I thought I answered that, but I’ll try again — the two — the two confidential informants, the documents themselves. Mr. Scruggs had provided us with a lot more information than — I don’t know. He had — it wasn’t just what those witnesses gave us. It was a lot of other information that he had discovered during discovery, depositions. Other lawyers were doing that as well. So I was trying to protect those three individuals as well as the documents and the integrity of my grand jury in Jackson County.
Q. And what jeopardy were the Rigsbys under?
A. Well, they are being sued over in state court by an independent contractor of State Farm. We felt like it was designed to intimidate our witnesses and make them turn over documents that they had already given to the federal government. They had filed a qui-tam suit which is protected, as I understand it, by the whistleblower protections under federal law and had given them to the state prosecutor in the state.
Crikey! Reading this, it gives me the same feeling I had a few years ago when a woman from England told me the English navy was indisputably the greatest and most powerful in the world. I didn’t really have any response. What are you going to say to someone who said adios to reality about the time of Adm. Nelson?
I could compile a list of what is wrong with this passage, but why overdecorate the Christmas tree? You can see for yourself. Just remember one thing — and here may want to take a closer look at the date at the top of the letter to Martin — about the events Hood is talking about, the Rigsbys testifying before the grand jury, the State Farm witnesses before the grand jury: All that happened six months before he wrote the letter to Martin! Not to mention it wasn’t Renfroe who referred Scruggs out for criminal prosecution, it was Judge Acker. Does Hood mean to imply that Acker was shilling for Renfroe,or that Scruggs gets a pass whatever he does merely because he plays cards and shoots pool with Hood?
Let’s also remember that those documents Hood was seeking to protect by writing the letter to Martin, he had already returned Scruggs’ copy to Renfroe’s attorneys several months prior.
And let us not forget that despite Hood’s repeated protestations of ignorance — he said he didn’t know what Acker’s injunction said, didn’t keep up on the pleadings in the Renfroe case, didn’t really know what was going on — he apparently felt well-qualified and sufficiently knowledgeable to send the letter to Martin. The fact that Scruggs had just contributed $33,000 to his re-election campaign, he said, had absolutely nothing to do with his decision — didn’t even serve as an attention-getter.
Another curious aspect of Hood’s testimony is he portrayed himself far differently than he has throughout his career, especially when running for re-election last year. Back then, he was the man in charge, the Alpha Law Dude, finger on the pulse, etc. etc. Now, according to his testimony, it’s like Courtney Schloemer was the secret real AG and he was a sort of Chauncey Gardiner figure who makes vapid pronouncements that others, through the power of wishful thinking and self-interest, interpret as being full of meaning. Check it out: 51 references to the word "Courtney" in the transcript, almost all from Hood. Don’t ask me, Courtney did it. I don’t know about that, you’ll have to ask Courtney. I wasn’t in charge of that, Courtney was. I didn’t eat any breakfast that day, Courtney never called and told me to. Hood had to know this was a disastrous performance, didn’t he? I mean, he couldn’t have done himself any more damage by wearing to court one of those "I’m with stupid" T-shirts with the arrow pointing up. So what would have been his motive for painting a portrait of himself with the words "Out to Lunch" tattooed on his forehead? Is he that worried about the current state of investigations in Mississippi that he’s going to claim either ignorance or ineffectiveness as a defense?
Before making two final points, let’s compile a short list of other notable things about this hearing transcript:
- First off, if you have not seen it, take a look at the State Farm amended complaint in State Farm v. Hood, paragraph 18. This contains the agreement between Hood and State Farm that ended his criminal investigation of the insurer. Hood claimed that the words "the investigation" could not have referred to allegations State Farm defrauded the federal government by processing wind damage as federally insured flood damage (for properties with flood insurance), and that he didn’t think of such allegations until April 2007. Instead, Hood said, his investigation prior to the settlement dealt only with insurers’ failure to pay wind claims. You may not need me to point this out, but this is the same thing! Not to mention that you can watch this video of Hood testifying to Congress on February 28, 2007, where Hood cited the implications for failure to pay wind damage as including that the federal flood insurance paid for damage it shouldn’t have (see approx. 7:10 of the video). Note that February 28, 2007 is prior to April 2007.
- Hood said he got the idea for filing his civil lawsuit against insurers, which he filed just two weeks after Katrina hit, from the sheriff of Jackson County. No offense to the sheriff, but why isn’t Hood soliciting legal advice from other key sources like his barber, his dry cleaner and the guy at the burrito cart down the street?
- He admitted he circulated a draft of his civil lawsuit against insurers, filed just two weeks after Katrina hit, to a group of plaintiffs’ lawyers including Dickie Scruggs. At this point, most Katrina claims had not yet been made, much less adjusted. At the very least, this stinks. Not saying that the two things are in any way tied together, but one can’t help but remember that this lawsuit was filed in Hinds County, the same county were Joey Langston has confessed that he tried to bribe a judge.
- Several people who read the transcript wondered why State Farm attorney Jim Robie didn’t try to pin Hood down more — he failed to answer many, many questions. After reading the whole transcript, I have two answers: first, to the degree Robie tried to pin him down, Hood said he didn’t know and/or that Courtney did it, and second, Hood was destroying himself as it was, decimating his credibility and his own case like the Grim Reaper swathing down whole populations in the Black Death. If this is not true, whatever could have possessed Hood’s lawyers to enter into a settlement just a few hours after he stepped off the stand, without even waiting for the next day’s testimony?
- If you’re Courtney Schloemer, how do you like Hood laying everything off on you? You gotta love a leader that stands behind you — way, way, way behind you, as you lead the charge into a machine gun nest.
- One Mississippi lawyer who is vehemently anti-State Farm told me, after reading the transcript, that the worst thing Hood and Scruggs have ever done is to make State Farm look like a victim. I don’t quite see it the same way, but the person makes a point.
- In looking through Robie’s questions to Hood, I know the facts behind many of these questions, and so I know those questions weren’t tricks or phony. In light of that, and considering Robie’s reputation, I have to assume he had solid evidence to ask the question about whether Hood was approached by Tim Balducci and Steve Patterson, who have since pleaded guilty in the judicial bribery case. The question was whether Scruggs sent the two to tell Hood that if he didn’t settle the criminal investigation of State Farm (State Farm had demanded that Scruggs’ 640 civil cases, Hood’s civil lawsuit, and the criminal investigation all be wrapped up at once), that Scruggs would fund an opponent to Hood in the primary election (see page 158). Hood eventually denied it, but read the back-and-forth for yourself. The theory behind this question, of course, is that Scruggs would exert such pressure because he wanted the cases to settle, in that Scruggs and the Scruggs Katrina Group stood to gain attorney fees of $26 million from the settlement.
Second to last, I want to talk about Hood’s answers about anti-concurrent cause language in insurance policies, one of my favorite subjects. As I said in the last section of this article that appeared in New Appleman on Insurance: Critical Issues, Hood is completely, totally wrong about how anti-concurrent language works and how it was used by insurance companies in Katrina adjusting. I cannot stress strongly enough that out of everything he has ever said about anti-concurrent cause language, not one single word I have heard or read has been correct. Not one.
He again testified at length about anti-concurrent cause language in the hearing, and again, he got it all wrong. Read the article above, look at the transcript, and you will see that I am right. (I think the version of the article I linked to above was not in fact quite final, not the exact version that appeared in the publication, so it probably has a few typos still in it).
I was appalled at how proud Hood was that he negotiated language for State Farm’s proposed arbitration procedure that was to have been a part of the class action certification and settlement that never happened. On page 169, he said he subtly inserted the phrase "During the reevaluation and arbitration process, State Farm will not assert as a ground for the total denial of a claim that water contributed to policyholder’s loss if wind damage occurred."
When I read that, I actually felt sick to my stomach that he has fooled himself into believing he got one over on State Farm. Hood, listen to me! These people wrote that clause 25 years ago, they guard it like it’s the Holy Grail, they know what it means and what it doesn’t mean, they fought for it in the Fifth Circuit and won. Why do you think they let that language go in, Hood? That’s right, because what I have been saying for a year is true — Katrina damage did not involve concurrent or sequential causes of loss, as those terms are understood in this context, and State Farm knows it — they repeatedly admitted that very thing in depositions. So congratulations, you got them to agree to their own interpretation of the policy and their own interpretation of the facts of Katrina damage! The real point of controversy is the last part of the phrase — "if wind damage occurred." You missed the whole point, Hood! Who is to say whether wind damage occurred or not, and if it did, how much? Right. Now you begin to see. This is kind of like someone sitting around smoking packs upon packs of Marlboros and thinking the biggest threat to their health is vampires.
And really lastly, I want to address briefly the concerns I’ve heard about the settlement in this case being sealed. How can this be, folks ask — Hood is a state official, he enters into an agreement, the people have the right to know what it is. Yes, others say, but Judge Bramlette has jurisdiction over the case, he can seal the settlement if he wants to. But here’s what I wonder about — unless he plans to memorize the settlement, Hood has to have it on file somewhere in state government. Once it is there, is it not a public record that anyone can access? And how long is this supposed to be under seal, and why? Do you think in this secret settlement that Hood got the better of State Farm, just like he did with that "subtle" provision on the anti-concurrent cause language?