Scruggs Nation, Day 29

I continue on vacation through next Wednesday, but will post this week when I can.  For now, just a short post on the Wall Street Journal’s editorial yesterday (subscription only).  The editorial posits an unholy alliance between state law enforcement officials and certain members of the plaintiff’s bar:

This Mississippi Tort Inc. enterprise began in the 1990s, when former Attorney General Mike Moore sued tobacco companies and contracted out the lawsuit to his old law school buddy, Mr. Scruggs. Their nicknames were Scro and Mo. Mr. Scruggs’s firm is estimated to have earned nearly $1 billion in fees; Mr. Moore became a movie hero ("The Insider").

It is a seductive business model, and these days a crew of tort kingpins known as the Pascagoula Mafia show up in nearly every state lawsuit. Mr. Hood made trial lawyer Joey Langston rich by throwing him the state’s case against MCI/WorldCom. Mr. Hood also hired Mr. Langston’s firm — where Mr. Balducci was a partner — to pursue Eli Lilly. It also happens that Mr. Langston is one of Mr. Hood’s major campaign contributors.

When Mr. Hood sued State Farm, Mr. Scruggs supplied him with key documents. Former AG Moore, now a trial lawyer himself, worked both with Mr. Hood on his state insurance litigation and with Mr. Scruggs in private Katrina suits. Mr. Balducci, who left the Langston firm to set up his own practice, was also working with Mr. Scruggs on Katrina litigation. And did we mention who is Mr. Scruggs’s personal criminal attorney? Mr. Langston.

These relationships are now starting to haunt the participants. Mr. Hood faced a tough re-election this fall after his Republican opponent highlighted Mr. Hood’s backroom relations with the trial bar. State Auditor Phil Bryant this summer sent Mr. Hood a letter demanding his office commence proceedings to recover the $14 million paid to Mr. Langston and colleagues in the MCI/WorldCom case, saying that, under Mississippi law, the money paid in fees to Mr. Langston rightfully belonged to the state.

Mr. Hood has also been countersued by State Farm, in a detailed complaint alleging that he had an ethically conflicted relationship with Mr. Scruggs throughout the Katrina litigation. Mr. Scruggs gave Mr. Hood documents that had been purloined by two former State Farm contractors, and Mr. Hood helped Mr. Scruggs keep those documents away from a federal court. Mr. Scruggs is also — you had already guessed this — one of Mr. Hood’s major campaign contributors.

It’s not only the Wall Street Journal that thinks this way.  I’ve heard similar sentiments from plaintiff’s attorneys in Mississippi outside the Hood-Moore-Scruggs-Langston circle.  Speaking of Hood, he got a lucky break in that the Scruggs indictment didn’t happen until after he was re-elected.  Any scrutiny that Hood is now receiving, he is in a much better position to withstand it as the state’s AG than as a private citizen.  Hood himself must believe he is being scrutinized — how else to account for his month-long case of laryngitis?



Filed under Industry Developments

13 Responses to Scruggs Nation, Day 29


    What are some good links to the AG v Eli Lilly case? I’m hearing that Hood and 4/5 other AG’s are meeting to put together a class-action against Big Toy. Seems some inspectors in China looked the other way in the paint room.

  2. accurate

    Most comments are fairly accurate. However, a 60-40 win for Hood against a well financed opponent riding Haley Barbour’s coattails is a landslide not a close call.

  3. accuracy correction

    Speaking of Hood, he didn’t have as much of a landslide, as he did a cakewalk. His opponent had poor name ID, did little all summer to change that and raised roughly the same ratio of cash vs. Hood as did Hood’s 2003 opponent…who, ironically, was a retired FBI agent…how funny it would be that Hood bested a G-Man to get the office back in 03, but might lose it all thanks to them pesky Bureau boys…

  4. m.williams

    The observation by Mr. Rossmiller about the similarity of sentiments expressed by lawyers outside the inner circle is one reason for digging up the old Dixie Mafia. The old one was along highway 90. This Dixie Mafia was a stretch of Coast from “the Point” to New Orleans and thrived illegally for decades.
    Mike Moore’s deal with Scruggs, et al, was a legal, fresh idea, centered around Pascagoula. It wasn’t called a Mafia.
    The Mississippi Legislature apparently legalized the private Assistants, and this may have begun a slippery slope for ambitious, wealthy lawyers. Did this idea begin the re-tooling for big-time pay-out’s? I have a few questions about all this. First, is there a new Mafia?
    If the Ross Barnett and Paul Johnson era was smelly and dirty on the Coast, is the newer smell a little better because it’s legal?
    As tradition continues with Mr. Hood, could it be too inticing to avoid such things as bribery? The 1997 “trio” settlement was a windfall for Scruggs who pulled in about 870 million from Texas, Florida, and Mississippi. But that was just an entree. America’s hunting grounds were in States that needed help. Thus was the beginning of a really neat development – the “fee arbitration” panels. With that, a whole different story needs telling. The Attorneys General of the United States were investors without risk.
    It’s still not clear how Moore got reward, but it clearly wasn’t in a movie. In Texas, Morales got into a pillow fight, I think it was about money, and in Florida old Chiles just faded away and died.
    Did Mississippi’s AG Assistant law circa 1993, create a monster? If so,is that Mike Moore’s major contribution to law?
    Is it likely that Mr.Hood’s path will put an end to this bone-headed gold digging? Did Moore set precedent that an Attorney General may with impunity ignore a Court Order from another State? And Hood could be pumping iron one day?

  5. Ironic

    From American Tort Reform Association, a quote from Mr. Richard Scruggs.
    “What I call the “magic jurisdiction”, [is] where the judiciary is elected with verdict money. The trial lawyers have established relationships with the judges that are elected; they’re State Court judges; they’re popul[ists]. They’ve got large populations of voters who are in on the deal, they’re getting their [piece] in many cases. And so, it’s a political force in their jurisdiction, and it’s almost impossible to get a fair trial if you’re a defendant in some of these places. . . . These cases are not won in the courtroom. They’re won on the back roads long before the case goes to trial. Any lawyer fresh out of law school can walk in there and win the case, so it doesn’t matter what the evidence or law is.”
    I have seen shorter versions of this quote before that did not include the last ten words, “so it doesn’t matter what the evidence or law is.”
    It’s clear to me that Scruggs learned how to operate outside of the courtroom and the law. In light of recent bribery charges, one could also re-interpret the statements of court judges being “in on the deal” and “getting their piece”. Would anyone be surprised to find PL “Dark Side” Blake on the back road where the cases are really won.
    Hasn’t mr. scruggs just described their corporate shakedown formula?

  6. Jim

    You raise a very good question regarding Moore’s reward. Also we have to remember that there were rwards to the lobby types “on the dark side”. Are rewards ongoing? There is money coming in until 1923 and I am sure there will be money going out. How do you trace it?

  7. Justus

    M.WILLIAMS: In response to your question about a NEW MAFIA, did you ever hear of an organization called ICEPAK (spelling?), that was/is comprised of a very small group of ultra-wealthy Mississippi plaintiff lawyers? Until a few years ago, that group “controlled” nearly ALL BIG CASES in Mississippi, and made huge CAMPAIGN CONTRIBUTIONS TO JUDGES and other elected officials as a means to control POWER IN THE COURTS. And, yes, those lawyers have been named Assistant AGs by our former and present AGs to pursue big cases on behalf of the State of MS. They may still “formally” operate today as ICEPAK, but if they do, it is in the shadows. Most likely, they still operate as a group, but do so “informally” because the tort reform light was shining on them in the open, exposing their identities and their tactics.
    At least two of the law firms of the Scruggs Katrina Group (SKG) were/are members of ICEPAK. Can you guess which ones?

  8. m.williams

    I have this question for anyone out there to answer. Who was the Arbitrator that was selected to represent all the States in the Arbitration Fee Panels FOR the PLAINTIFF STATES?
    In each of the 46 State Arbitration fee hearings, there were three members of each panel in each State. One selected by Plaintiff, one by tobacco, and one selected from each single state to arbitrate the fee in that State.
    The Plaintiff’s lawyer fees had one single Arbitrator in all 46 States. [FL, MS, TX, MN, settled in different forums], but I’m curious if the PLAINTIFF PERMANANT ARBITRATOR is from MISSISSIPPI?
    It’s logical to assume so, but the cloudy way the Arbitration fees were handled shrouds past and present information concerning Mississippi’s on-gong use of what is a place to start looking into Mississippi legal ethics.
    Why is this important? I think because it’s so complicated and full of ill-gotten gains. The Arbitrators had a piece of each pie, so a permanant place for 46 States would have been sky’s the limit.
    In New York, for example, the Appeals Court ruled on May 19,2004, that the Castano Group (I thought it was 100 but it was 56 firms on record), held that 1.3 bln. was fair pickings for a group that virtually bank-rolled Scruggs and Motley. That’s all. I know this is true, in part, because I got a lesson is total ignorance of “tobacco issues” when J.D.Lee, said he was a Castano, put in 100k, and won 10 bln.
    Castano was in CA and 25 other “State” pay-out’s. Scruggs (and Moore?) were in numbers of States other than MS. So was Barrett.
    The key point is to know how dirty the MasterSettlement pay-out to hand-picked firms actually was. It was going on in two centuries, and is STILL going on. So, if there’s a serious mind to get to the “follow the money”, then it’s in the Arbitration Fee Panel’s pay-out’s to firms. I think money is everywhere, but it begins and ends in MS. And is that significant to on-going AG hand-out’s. I think so. Why isn’t it?
    Moore’s basting of the tobacco Defendant in 1994 started new law in MS. Shouldn’t the feds take a peak at how the law works from that far-off nirvana? It’s not simply the money. It’s the things that money creates in politics. If an AG in one State can be called “lawyer of the year” for making a handful of lawyers rich at the expense of helping dying victims in the subterfuge of silly, pointless rules and regulations that do nothing to cause an effective management of one issue (tobacco), and ALMOST get a seat in the Senate, but for a bad smell on the trail, something needs to start from the beginning and on-going problem in the law.
    So, for staters, does anybody know who the Plaintiff’s used as their representative in the three-panel 46 State arbitration law fee settlement? I think I do, but I’d rather not speculate. If you don’t believe it’s important, fair enough.
    This matter may not simply be limited to a trial about judge-bribery, but is far more important in a system where there really are “bodies” to dig up.

  9. observer

    The Mississippi gulf coast has quite a tradition of shadowy semi-buiness organizations, similiar to the triads and tongs, of the orient, that control much of what goes on down here.
    Here is a link to one of the most influential of those organizations, which not surprisingly, was founded by lawyers, and has many prominent lawyers in it. It is said, that on the gulf coast of Mississippi, you can forget about being elected to anything, if these guys don’t support you. The generally hand pick and recruit the candidates, and then give them as much money as they need to win.
    Next to the Coast 21, and the Dixie Mafia, ICEPAK doesn’t sound that all hard to believe.

  10. accurate

    I find it interesting that someone would try to link the dixie mafia with a republican business organization. Just look at the officers: Topazi (non-lawyer) republican, power Co. executive; St. Pe (non-lawyer) republican, gaming commission member; Swetman (non-lawyer) republican) banker; Sanderson (lawyer) republican. All supported Al Hopkins against Hood and A local supervisor against incumbent Highway Commissioner. They lost both of those. They have no more political clout than any other random group.

  11. m.williams

    Accurate: I find it interesting that a commment which does not say or link the Mississippi Republican party to the Dixie Mafia is plucked from the air and de-boned. History presents many examples of non-lawyers and business persons who were Baron mobsters with pathological behaviors. And OBSERVER’s comment is helpful. Politics and law are like fish who ride sharks to clean them. It’s symbiotic.
    I still don’t know what Mason’s do. I know what the Contract with America (1994) did not do. But I DO know what Ralph Reed and K Street did, and how the business in Micronesia worked out for Republicans.
    I know the history of Mississippi and the Dixie Mafia and know that the coast was their territory. Now, I don’t know who owns up to being in a special group but if it walks like a duck, it’s a duck.
    I know that Gene Taylor isn’t a Republican, but he’s been in power in a Republican district for a long time. I know Trent Lott will be remembered as taking a hike two days before the Scruggs indictment.
    I see no point in picking on businessmen as any different from lawyers. Of course, it often takes a lawyer to get business out of a “tight spot”.
    Enron blammed Arthur Anderson who got ok’s from Vincent and Elkins. The first two businesses got whacked, but the second was the lawfirm that made the call about what was legal and what was not, didn’t get a whack.
    But the Scruggs, issue might be a wake-up call. As is often said, Scruggs worked both sides – Republican and Democrat. He is known as a lawyer who happens to have a license to practice lawyer. He is by-politic but appears to be perfectly straight.

  12. observer

    Not trying to link them so much as demonstrate that the gulf coast has an affinity for forming secretive organizations. Maybe it’s the strong eastern European background here, I don’t know, but it’s real.
    I guess you have to live down here, and have grown up here, to see the irony of the Biloxi Sun Herald constantly complaining about lack of sunshine in the government while being a member of something like the GCBC, that refuses to disclose its membership.
    I am a Republican, and a pretty die hard one, and it bothers me. And, I know some of the members, and I have told them how much it bothers me (and one of them asked me if I liked it better when the Dixie Mafia was running candidates, which is where I got the example).
    Just because a shadowy group with a secret list of members happens to support the same people I do, doesn’t make me okay with it.
    Al’s problem was he didn’t really try to win, and I am still not sure why he even bothered to run. I think he was told that Hood was so damaged that all had to do was put his name up, make a few speeches, and he would beat him.
    I knew Al was in trouble when I kept asking regular people if they were going to vote for him, and they would ask what he was running for.
    But, I can be a member of a party, and a registered one, now, thanks, to the Democratic lawsuit, and still not like everything done under the party’s name.
    I don’t like stuff done in secret by people like Scruggs, or people like Hood, or people in the GCBC, because I have found there is always a reason why things that could be done in the open are not.
    Maybe, that just sounds like conspiracy nutjob stuff to you, but from talking to regular people down here, not political junkies, I have a lot of company.
    And, as to the idea that they have no more political clout than any other group, name any other group down here like them that has more clout.

  13. injustice4all

    Justus is a chamber plant, and not a good one. ICEPAK has been irrelevant for years now as the members starting fighting with each other and it dissolved as funding entity although member founding members still write big checks.
    Observer you are very astute and very correct. Here is one for you which member of the Council was also a partner with Scruggs in defending a company that got caught deliberately deposing of toxic chemical into the pascagoula aquifer and had to pay a 20 million dollar fine with two guys going to prison? Give up?