Scruggs Nation, February 27: the ‘Bama prosecution

I read the latest filing by the special prosecutors in USA v. Scruggs (Alabama edition) and they really slagged Scruggs big time in this one.  An excerpt:  

The Special Prosecutors have also learned of recent sworn testimony by Cori Rigsby Moran and/or Kerri Rigsby, in which it was acknowledged by one or both of these material witnesses, that the Defendant Scruggs knew of the planned "data dump" weekend in June 2006, before the data dump occurred, and that it was Scruggs who made pre-arrangements for the Attorney General’s office to pick up the documents on that Monday morning.  Other witnesses are expected to offer evidence that the weekend before the data dump . . . Scruggs arranged for a computer expert to assist Kerri Rigsby with her State Farm laptop.  This sworn testimony by colleagues, clients and employees of Scruggs, given under oath, contradicts not only their prior testimony, but Scruggs’ sworn testimony before this Court.  The truth is finally coming out — that it was Scruggs who helped arrange the "data dump" while suing State Farm, from whom the documents were taken . . . .

The government expects to show at trial, based upon recent facts discovered, that Scruggs provided cell phones to the Rigsby sisters, that were in the name of a relative of Scruggs’ legal assistant, in order to attempt to hide communications between Scruggs and the Rigsbys.  These furtive actions once again demonstrate the intent of the Defendants to avoid disclosure of their communications and true relationship.

Included in the attachments are excerpts from the recent court testimony of Attorney General Jim Hood in the Federal Court civil suit, State Farm v. Hood  . . . . Contrary to the testimony provided by Scruggs in the Renfroe v. Rigsby action, the testimony of Mr. Hood makes it clear that he learned of the court’s injunctive order while on his cell phone driving with his from from Jackson to Natchez for the weekend on Friday night, December 8th, when Scruggs called him. He had not seen the injunction prior to that call from his generous benefactor and it was Scruggs, rather than Attorney General Hood, who therefore made the interpretation that is now being used as a hypothetical excuse for the defiance of the court.  Indeed, Hood denies ever seeing or reading the injunction.  This is directly contrary to Scruggs’ testimony in this case in which he says it was the Attorney General’s interpretation of the order and he simply agreed with Hood.

Now, in fairness to Scruggs, I have read that transcript of Hood’s testimony word by word, and it seemed like Hood was so panicked on the stand he would have denied he was wearing pants, if anyone had asked him about it.  I mean, it was almost like he thought he was at an audition for a remake of Ernest: Scared Stupid.  My read of the transcript of the February 6 State Farm v. Hood hearing was that Jim Hood was busting a move for the tall grass and he would trample anyone, man, woman, child or pet, who got in this way.  

But be that as it may, the prosecutors have put together their best piece yet in this supplemental reply to a Scruggs motion that seeks to quash the prosecutors’ attempt to force him to produce documents.  

The prosecutors took a somewhat different approach than I expected in saying how Scruggs allegedly violated Judge William Acker’s injunction. Recall that the injunction required the Rigsby sisters and their agents to return copies of claims documents the sisters took from their employer, E.A. Renfroe. I’ll get to more about what the prosecutors said in this latest pleading in a moment.  But before then, so that we can all see it as we follow along, here is the language of Acker’s injunction and the accompanying protective order. Except for the sub-headings, which were in bold in the original, I’ve left it the same except to bold-face some of the body text to emphasize the important parts.

Preliminary Injunction

[D]efendants, Cori Rigsby Moran and Kerri Rigsby, and their agents, servants, employees, attorneys, and other persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise (with the express exception of law enforcement officials) are hereby MANDATORILY ENJOINED to deliver forthwith to counsel for plaintiffs all documents, whether originals or copies, of each document and tangible thing, in any form or medium, that either of the defendants or anyone acting in conjunction with or at the request or instruction of either of them, downloaded, copied took or transferred from the premises, files, records or systems of Renfroe or of any of its clients, including, but not limited to State Farm Insurance Company and which refer or relate to any insurance claims involving damages caused or alleged to have been caused by Hurricane Katrina in the State of Mississippi.

Defendants and their agents, servants, employees, attorneys, and other persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, are further ENJOINED not to further disclose, use or misappropriate any material described in the preceding paragraph unless to law enforcement officials at their request.

This injunction shall become effective upon the posting by plaintiff of an injunction bond in the amount of $50,000 for the payment of such costs and damages as may be suffered by defendants or any persons found to have been wrongfully enjoined. The said bond shall be in a form, and with a corporate surety, approved by the Clerk.

Protective Order

Because the documents and information in the possession or control of defendants and/or their agent or, or may be, relevant to an ongoing criminal investigation by the Attorney General of Mississippi, the court finds that there is a compelling interest in protecting the use and disclosures of those certain documents and information to anyone not needing that information for the criminal investigation or for preparation of the above-entitled case. Therefore, plaintiff’s counsel shall not disclose to State Farm or any of its agents, including E.A. Renfroe & Company, Inc., any of the material delivered to them pursuant to the mandatory injunction without first obtaining the express written approval of the court after in camera inspection. The documents shall be kept by counsel for plaintiff in a separate, locked location, and no copies shall be made and the contents thereof shall not be revealed without express authorization of the court.

Now, without even getting to what the prosecutors said, do you believe that the language of the first paragraph allows someone holding copies of the documents, with the exception of law enforcement, not to comply with the order to return them?  Any way you read that language, it says everyone who is an attorney or is acting in concert with the Rigsbys, save for law enforcement officials, must return the documents. It does not say anyone who has the documents does not need to return them if they give them to law enforcement officials instead, particularly when those law enforcement officials already have their own copies of the documents. There is no way you can read it that way unless you put in words that aren’t there.

Well, you say, what about the second paragraph — it says the documents can be further "disclosed" to law enforcement "at their request."  To which I say, if I give you a piece of paper with your name written on it, I have not disclosed anything to you. If I tell you the surprise ending of a book you own and which you just read, I have not disclosed anything to you.  Nor can you disclose documents or their contents to someone who already has the documents and has read their contents.  Also, disclosing something in this context does not mean you can defy the first part of the order to return the documents so that you can disclose.  And let’s remember another thing — the Court was fully aware as were all participants in this lawsuit that Hood had his own copies: it had been all over the news and it had also been discussed in pleadings before the court in the Renfroe v. Rigsby lawsuit.  So let’s face it — Scruggs’ continued word games with these provisions of the injunction are getting old and sounding more and more childish and desperate.

Now, with more evidence gathered, prosecutors are highlighting another part of the injunction: that Scruggs did not provide the documents "at their request." For evidence, they offer this December 13, 2006 e-mail to Scruggs from Courtney Schloemer, one of Hood’s assistant AGs.  The e-mail said, "Upon reviewing my letter, I see that I was not clear that I propose taking custody of your documents with the permission of Judge Acker.  I don’t want to thwart him and wind up in an Alabama jail."

Not clear is an understatement.  See if you can find any hint of seeking Acker’s permission in this letter she wrote to Scruggs the day before, asking him to send the documents because "I am not comfortable that the protective measures put in place by the Court will be effective in keeping these documents out of the grasp of State Farm."  Here’s another e-mail chain, where you can see Schloemer is being cautioned against taking the documents from Scruggs, as opposed to copies of them — (Why in the world would she need copies? She already had copies of the documents!) — because Hood’s office had intervened in the case and therefore had notice of the injunction.  So, Schloemer was cautioned in this December 15, 2006 e-mail, watch out because Acker will hit the roof.

So the special prosecutors can play it the way they feel it, and say all this adds up to that neither Hood nor Schloemer requested the documents from Scruggs.  I don’t believe that.  However you want to put it, if Scruggs asked Hood to ask Scruggs to send the documents, or whatever, here’s how it all played out: Hood and Scruggs talked about sending the documents after Acker issued the injunction, and then Scruggs sent them, and then Hood received them.  I don’t think it makes sense to claim the documents weren’t at Hood’s office at Hood’s request. 

Even if Hood and Schloemer requested the documents be sent — and look at that December 12 letter again — there is no credible reading of the injunction that says Scruggs, along with all other attorneys and others acting in concert with the Rigsbys except for law enforcement, can refuse to return the documents to the Renfroe lawyers.  

One more thing: the prosecutors are quite specific as to what they think Scruggs’ motive was to allegedly defy the injunction — he wanted to prevent any possibility the documents would be revealed to State Farm, despite the protective order preventing this, because he was in the middle of negotiating the settlement that brought $26.5 million in fees (and ironically, a fee dispute with the Jones firm that led to Scruggs’ indictment on bribery charges).  The theory is that Scruggs did not want State Farm to know there were no "smoking guns" in the documents. 

That doesn’t make total sense to me. Didn’t State Farm knew exactly what was in those documents because they had a forensic computer technician analyze what documents the Rigsbys downloaded from the State Farm system, because Scruggs later introduced some of the documents in the McIntosh case and the Rigsbys talked about them on the 20/20 TV "news" show in August 2006?  You think that State Farm wasn’t thinking to themselves, Scruggs wouldn’t hold back the worst stuff, if there was anything worse than what he used on 20/20, he would have used that instead.  So they knew a lot, but there was also some things they probably didn’t know — the Rigsbys could have made paper copies before the data dump.  And yet, the same logic applied — Scruggs would lead with his best stuff.  

I have considered a theory that what Scruggs wanted to do was use the mystery about the documents to keep the media believing they were a smoking gun, and to keep the heat on State Farm as a way of pumping up the rage and creating some more of those "Magic Jurisdictions" in Mississippi that Scruggs so famously spoke of.  If you don’t remember those days, Scruggs had a great thing going, he and his crew were like the Lords of Flatbush.  

Scruggs even had the AG’s office all worked up in a tizzy about these documents, convincing them he was some kind of confidential informant or some such tommyrot.  And he wanted them in a tizzy until such time as they needed to be de-tizzified: when State Farm demanded that the criminal investigation be dropped as part of any civil settlement with Scruggs.  And you might think that sounds like asking for a lot, but you know what, State Farm believed and still does believe that the criminal investigation was baseless and was nothing but an unethical, incestuous merger of politics, law and good old shotgun justice, an adjunct of the Scruggs lawsuits.  So demanding that it go away was no big deal, it would be like you expecting your neighbors to take their kids with them when they go home.

But to test this Media War theory as Scruggs’ motivation, let’s remember that under the terms of the injunction State Farm wasn’t supposed to see the returned documents.  Even if someone had violated the terms of the protective order and had leaked the contents to State Farm, it’s not as if State Farm was going to hold a press conference and show everyone that the documents were OK.

So Scruggs, one would conclude, must have believed either (a) the documents held a smoking gun, (b) the documents did not in fact contain a smoking gun, (c) the documents had a gun but it had never smoked due to public health awareness campaigns funded by Scruggs’ tobacco litigation, or (d) Scruggs like all other human beings commits mistakes in strategy and had some dumb internal calcuation that no longer makes sense, if it ever did.  It seems to me that (a) is unlikely, in that if one has damning evidence the best leverage is to show it.  However, (b), (c) and (d) all seem possible, and without additional information, about equally likely. 

Give me a better explanation and I’ll buy it. 

Finally, let me close by linking to another exhibit attached to the prosecutors’ brief, this January 18, 2007 letter from Don Barrett of the Scruggs Katrina Group to Sheila Birnbaum, of Skadden, Arps, lead counsel for State Farm.  I’m not even going to summarize it, it’s all so objectionable all I’d do is repeat the whole thing.  Just take two minutes to read it for yourself.  You know, I’ve seen this letter before, but every single time I read it, it just makes me nauseated all over again. How come this stuff never winds up in a Grisham book? 




Filed under Industry Developments

9 Responses to Scruggs Nation, February 27: the ‘Bama prosecution

  1. Wow

    That last letter you linked to sickened me. I cannot believe a “news” show like 20/20 doesn’t pick up on any of this drama. How sad that a settlement was reached under such rhetoric.
    Maybe SF should argue the SKG didn’t live up to its end of the bargain contained points 2,3 and 4.
    Rambling now…I apologize.

  2. Thick

    Why did Barrett’s letter not end up in a Grisham novel? Because Grisham’s yarns never portray the defendant as victim…it is always some poor schmuck who chose to smoke or work in an asbestos refinery (such as the boat yard in Pascagoula which has received billions from Lott’s efforts.) Not to mention he does think DS was dumb enough to do what he did.
    My take on the letter and State Farm’s reaction to such? They did not think they had any “bad actors” on the coast who required public humiliation. Nor did they feel the need to give alms to Senter. Nor did they feel the need to stoop to the backwoods legal tactics outlined in the Barrett letter.
    Honestly, I do not care for Scruggs or his group of attorneys, but I always had respect for them and their profession. No more. They are a disgrace to the legal profession and the inhabitants of Mississippi. It is obvious the SKG group did not care about their clients, SF employees or the whistleblowers…they merely cared about the money. Sickening.

  3. wandering

    I do not know Scruggs but how can you indict someone for turning over documents to the very authority that the order says it is preserving the documents for? See paragraph that starts with “because”. Much ado about nothing.

  4. Wandering, did you even read the post? The injunction wasn’t to preserve anything for Hood, it came in a civil lawsuit between the Rigsby sisters and their former employers over a breach of their confidentiality agreements and return of the documents. Let me repeat this, because some people seem to have a hard time understanding it. HOOD DIDN’T NEED SCRUGGS’ COPIES OF THE DOCUMENTS BECAUSE HOOD ALREADY HAD COPIES OF THE EXACT SAME DOCUMENTS AND HE IN FACT NEVER EVEN OPENED THE BOXES OF DOCUMENTS SCRUGGS SENT HIM BECAUSE HOOD ALREADY HAD HIS OWN COPIES OF THE DOCUMENTS AND HE THEREFORE DIDN’T NEED THE DOCUMENTS SCRUGGS HAD BECAUSE THESE WERE IDENTICAL IN EVERY WAY POSSIBLE OR IN OTHER WORDS THE SAME.
    I find it amazing you can be so cavalier about refusing to obey a federal judge’s orders. Our system depends in large part on voluntary compliance, or in other words, respect for the rule of law. When that is not present, all pretense of justice is gone.
    Also, Scruggs has not been indicted in this case. He is being prosecuted by special prosecutors for criminal contempt of court.

  5. EyeOnHood

    Wandering. Maybe you should change your ID to Wondering. You may go back to sleep now.

  6. David, 2 quick questions: (1)With the waffling that is now appearing in the sisters’ testimony (when they first met with Scruggs, how they came to steal-or copy- or borrow the documents, etc.) should they be worried about some sort of charges? (2) In light of the motion you posted in response to the request for dismissal, it seems a timeline exists which makes it tough for the sisters to say they didn’t have the documents at the appropriate time. Is it possible they too may be subject to some sort of contempt charge? Thanks for any opinion or insight you might share.

  7. doug

    All of this kind of reminds me of an old Cheech and Chong sketch.
    knock, knock knock.
    Who is it?
    Dave’s not here.
    Knock knock knock.
    Who is it?
    Dave, man open up.
    Dave’s not here

  8. Sampson, in reality, I doubt they will be face any kind of punishment. There could be questions of what kind of representations were made to the court, but that falls on the lawyers mostly. Testimony under oath is a different thing, however. Without having seen these latest depositions and not being sure exactly what other evidence the prosecutors speak of, I can’t comment further. Also, I would like to reiterate that I have nothing against Kerri or Cori Rigsby — I don’t agree with their point of view based on the evidence I have seen, but I wish them no ill will.

  9. Reading other people’s mail

    A peek behind the scenes at how sausage is made in the State Farm Katrina negotiations (PDF). Asks David Rossmiller: “How come this stuff never winds up in a Grisham book?”…