I’ve got a piece in Saturday’s Wall Street Journal on the indictment of perhaps the nation’s most successful tort lawyer and four colleagues on charges of attempted judicial bribery. The tag line the Journal’s editors give the piece: “Dickie Scruggs’s mistake may have been to stiff another lawyer.” (Walter Olson, Wall Street Journal, Dec. 15)(sub-only). For new readers who’d like much more detail about the indictments and their aftermath, check out my regular updates at this site and also those of David Rossmiller at Insurance Coverage Blog. I’ve been covering Mr. Scruggs’s doings in tobacco, asbestos, product liability, reparations, HMO, and hospital litigation pretty steadily since this site got its start in 1999 (newer/older posts). (Bumped Monday a.m. for those who didn’t see it over the weekend).
Posts Tagged ‘Mississippi’
Scruggs indictment XI
Two noteworthy stories in the Mississippi press: Anita Lee of the Biloxi Sun-Herald takes a look at “Dickie Scruggs’ $50 million man: What did P.L. Blake do to earn all that money?” (Dec. 16; some earlier Blake discussion).
Blake will earn $50 million, court records show, for clipping newspaper articles and alerting Scruggs to maneuvering in political “cloakrooms,” as Scruggs put it, from Mississippi to Washington. …
Accounts of how Blake earned the money are vague and contradictory.
Even more surprising, Blake and Scruggs were unable to say whether they sealed their business agreement with a handshake or in writing.
A few points brought out in the article: “Scruggs said Tom Anderson, who then worked in Lott’s office, referred Blake to Scruggs.” Attorney General Mike Moore, nominally Scruggs’s public client after hiring him to advance the state’s interests in the tobacco litigation, was aware that Blake was being paid, though he professes surprise at how much. And Scruggs routed the $10 million in initial tobacco payments to Blake through attorney Joey Langston as intermediary. (more discussion)
The assignment of steady continuing payments to Blake over the life of the tobacco settlement distinctly resembles a gesture toward diverting a share of the tobacco proceeds (a contingency share, as it were) to reward and incentivize Blake, or perhaps Blake-and-others-too, to work for the success of the deal. [corrected 12:24 on proofreading after posting; I mistakenly used a wrong surname in place of “Blake” here and below.]
If reporters or others at some point succeed in reaching and questioning Blake, who is said to have moved to Alabama, presumably one of the questions worth asking him will be: is he really the final recipient and ultimate beneficiary of all that impressive cash flow — declaring it on his income tax, having all the funds available for his personal use, and so forth — or does he pass/has he passed some of the money along to anyone else? If he keeps it all, it’s no wonder the questions will keep re-echoing about whether his services could really have been worth that much. If it turns out he is passing/has passed some of it along to another actor or actors, why would things have been arranged that way? One possibility — though not the only one, of course — is that such further beneficiary or beneficiaries might not wish to be known publicly as holding a share in the payouts of the great tobacco project. (Update: a Monday article by Anita Lee in the Sun-Herald (“Blake’s information ‘right-on'”, Dec. 17) quotes Moore saying that Blake seemed to have accurate intelligence in what was going on in tobacco-industry and Republican circles.)
The other noteworthy story is by Jerry Mitchell in the Jackson Clarion-Ledger (“Feds probe Hinds case under scrutiny”, Dec. 16). It confirms that one of the “bodies buried” that Balducci told federal agents about relates to the Luckey/Wilson asbestos fee matter, which was eventually split into two legal proceedings, both hard-fought, with Luckey faring better than Wilson in the legal battle against Scruggs. In addition, the search warrant for the Langston law firm sought documents relating to the Wilson case “as well as documents regarding payments to Jackson lawyer Ed Peters, who played no known role in the case. In 2001, Peters retired as Hinds County district attorney.”
An active comment thread at Lotus/folo includes additional information about Peters, among other topics, and also passes along details about some of non-wannabe Timothy Balducci’s past involvements in high-stakes litigation, from his own promotional material. A sampling:
In 2006, Tim was Lead Counsel in Mississippi’s successful prosecution of securities fraud claims against Citigroup in Federal District Court in New York. His success in representing the state in so many complex litigations was a major factor which contributed to his selection by the Commonwealth of Kentucky to prosecute an action on its behalf to recover over $1 Billion dollars in government funds from a major chemical manufacturer. Also, the United States District Court in Charleston, South Carolina, selected Tim to serve on the National Leadership Committee for the ReNu contact lens solution litigation against Bausch & Lomb.
Notes a commenter: “it’s amazing how much lawyering these tiny law firms seem to get done. It’s just as amazing that he gets it done with *no reported decisions.* Pretty strange.”
Alan Lange at Y’All Politics is back with a synopsis of Scruggs’s current troubles, and as always don’t miss the David Rossmiller updates (Dec. 15 and Dec. 16).
Scruggs indictment IX
Yes, it seems there were wiretaps. Defendants will be seeing evidence from the prosecution momentarily which might (or might not) be the trigger for further flipping and early plea deals, if such there will be.
There is enormous curiosity (e.g.) about P.L. Blake, to whom Scruggs says he paid $10 million (and tens of millions more in future payments) for vaguely described intelligence services aimed at swaying political influentials during the tobacco caper. Per a 1997 account posted at Y’All Politics, “Blake pleaded ‘no contest’ in 1988 to a federal charge that he conspired to bribe officials of the now-defunct Mississippi Bank to secure favorable loan terms.” The same article, citing reporting in the Jackson Clarion-Ledger, reports that Blake was in close phone contact between 1994 and 1996 with eventually-disgraced state Auditor Steve Patterson, who after leaving office went into partnership with Timothy Balducci and is one of the five indicted in the current Scruggs affair. Per AP, “Patterson was a banker at Mississippi Bank before his 1984-1987 tenure as head of the Mississippi Democratic Party.”
David Rossmiller, as so often, is out front with a report filling in background on two other controversies involving Blake. One arose from a venture into the grain storage business which landed him in a Texas dispute in which his attorney was none other than Fred Thompson, later a Tennessee senator and presidential candidate. The other arose from his cordial dealings with a former chief of staff to Sen. Trent Lott (R-Mississippi).
Harper’s blogger Scott Horton has now published his take, as is his wont heavily dependent on hush-hush (but no doubt wholly trustworthy) confidential sources who float all sorts of theories about scoundrelly doings by the highly placed. He winds up with a theory that would pull Sen. Lott into it (though with no allegation of criminality) by way of the Acker contempt matter, as distinct from either the Balducci/Lackey bribery attempt or, say, the Paul Minor affair. Of Horton’s many anonymously sourced speculations, the one that caught my eye was tucked into a footnote: “A law enforcement official I interviewed, who for professional reasons asked to remain anonymous, told me that Scruggs’s junior partner Sidney Backstrom might take the same road as Balducci.” Now that is news a rumor (more). (Update Tues. evening: Backstrom’s attorney Frank Trapp flatly denies that anything of the sort is in the works: Patsy R. Brumfield, “Backstrom firm on innocence, his attorney says”, Northeast Mississippi Daily Journal, Dec. 12.)
This is probably a good place to apprise readers who aren’t aware of it that 25-odd years ago, while first gaining a footing in the policy world, I worked briefly on Capitol Hill drafting research papers for a committee then headed by Mr. Lott. We only talked a couple of times, I had never set foot in the state of Mississippi at the time, and I’m pretty sure he wouldn’t recognize me on the street, but if you’re a conspiracy theorist about such matters, there you have it.
At Y’All Politics, commenter “lawdoctor1960” has some speculation as to why the remarkable deposition of Scruggs in the Luckey case didn’t get more media or political attention at the time.
Welcome Andrew Sullivan, David Rossmiller, Y’All Politics readers.
Attorney Tim Balducci’s role as deputized lawyer for the state of Mississippi in the MCI and Zyprexa cases is drawing public scrutiny, and may result in pressure for reform of AG outside contracting.
We’ve started a new “Scandals” category for readers who want quick access to coverage of the Mississippi mess, also stocked with some earlier links to coverage of such earlier blow-ups as Milberg Weiss/Lerach, Kentucky fen-phen, the Paul Minor affair, etc. For those who are following Scruggs posts in sequence, be aware that yesterday’s first and second posts fell outside the numbering scheme.
Timothy Balducci, wannabe?
A major early theme of the Dickie Scruggs defense has been that fortyish attorney Timothy Balducci, who was “flipped” by the feds and is cooperating with prosecutors, and who has spoken of sharing with Scruggs knowledge of where there are various “bodies buried”, is a clueless newbie, a mere Timmy Tiptoes who sought to impress his elders in hopes of someday being admitted to their inner circle. Scruggs attorney John Keker used the “wannabe” epithet the other day, saying he didn’t think Scruggs and Balducci “were close at all”, and 
it had earlier come to mind as I sought to convey the tone of the WSJ’s Oxford Christmas party quotes. Let’s review, then, some of the revelations of recent days:
- As a former principal in the Langston law firm, one of the state’s best known, Balducci had been appointed individually to represent the state of Mississippi as a Special Assistant Attorney General in two high-stakes and politically sensitive matters, the MCI tax dispute and the litigation against drugmaker Lilly seeking reimbursement for outlays on the psychiatric drug Zyprexa.
- According to Alan Lange at Y’All Politics, the agreement from AG Hood’s office in the MCI case retaining the Langston Law Firm refers to “its principal members, Joseph C. Langston and Timothy R. Balducci”, and Langston’s own advertising at the time referred to the firm as being “anchored by longterm partners Langston and Tim Balducci”.
- Scruggs retained Balducci to represent him in the highly sensitive Jones lawsuit, which aside from demanding millions of dollars carried the prospect of laying open the financial arrangements of the Scruggs Katrina Group to a curious world.
- Earlier, Scruggs retained Balducci to represent him in the long-running and highly sensitive Alwyn Luckey fee lawsuit, which per the Times culminated in an eventual $17 million payout to Luckey. The opposing attorney who handled that case for Luckey, Charles M. Merkel, Jr., told the New York Times: “Balducci made part of the closing arguments in one of my cases, and they sat at the same table. When I was negotiating with them, it was generally with Balducci.”
- In the Luckey case, when Scruggs sat for the fantastically sensitive 2004 deposition in which he was obliged to unveil explosive details of how he spread around money to advance the tobacco-Medicaid litigation — the episode that made his national reputation and brought him plus-or-minus a billion in fees — the lawyer on hand representing him, and peppering the proceedings with continual objections, was Balducci.
- After Balducci struck out with former state auditor Steve Patterson to form an independent practice, his firm listed of counsel political and legal notables that included a former governor of the state of Mississippi and the former DA of the county that includes most of Jackson.
P.S. For those unacquainted with the Beatrix Potter reference, the eponymous gray squirrel in her story gets into trouble with his fellows: “Timmy rolled over and over, and then turned tail and fled towards his nest, followed by a crowd of squirrels shouting — ‘Who’s-been digging-up my-nuts?'”
FBI searches Joey Langston offices
Yesterday’s sensational developments are covered at the Jackson Clarion-Ledger, Rossmiller, and AP/FoxNews.com. The Northeast Mississippi Daily Journal quotes attorney Tony Farese, who among other connections to the principals represents Zach Scruggs, as asserting that the files taken relate to former Langston firm attorney Tim Balducci. However, some other reports, such as Sid Salter’s Clarion-Ledger blog, are indicating that the federal agents also removed files from Langston’s residence. (Update Dec. 12: Langston’s mother says these reports are erroneous, per Salter). Discussions are in progress at Y’AllPolitics and Lotus/folo.
Langston, a prominent figure on the Mississippi litigation scene, has been among lawyers representing Dickie Scruggs following his criminal indictment; the Sun-Herald notes that he also (with Balducci) represented Scruggs in the Alwyn Luckey fee dispute, known to be a topic of interest to federal prosecutors. Readers of this site may also remember Langston from the Foradori v. Captain D’s case two years ago, and more recently from the controversy over the MCI contigency-fee tax-negotiation case.
Scruggs indictment VIII
A report in today’s New York Times advances the ball on a number of fronts:
- Per an unidentified official, “federal prosecutors have asked the Justice Department’s Public Integrity Section to examine whether Mr. Scruggs has engaged in multiple bribery attempts of local judges.” DoJ is said to have sent lawyers to Mississippi to check out leads along these lines, and is also said to be interested in possible misconduct by Scruggs in the Alwyn Luckey fee dispute.
- The Times interviews Clarksdale, Miss. attorney Charles M. Merkel Jr., who spent more than a decade in court fighting Scruggs in the Luckey dispute:
“It’s scorched earth with Dickie Scruggs,” says Mr. Merkel, sitting in a wood-paneled office featuring duck-hunting memorabilia and two framed checks representing about $17 million in payments that Mr. Scruggs had to disgorge to Mr. Merkel’s client — a lawyer named Alwyn Luckey who argued that Mr. Scruggs shortchanged him for work he performed on asbestos cases that made Mr. Scruggs rich.
Mr. Merkel and prosecutors say that the Luckey case foreshadowed some of Mr. Scruggs’ woes in the current bribery case. “As far as whether he’s guilty, I can’t say,” Mr. Merkel concedes. “But I’m not surprised, because he’s willing to use any means to an end. And it irks the hell out of me when Scruggs skates on the edge and makes the profession look bad.”
- Keker, as predicted, is labeling Timothy Balducci a “wannabe” and says, of him and Scruggs: “I don’t think they’re close at all.” Merkel, for one, isn’t buying that: “He’s a lot closer to Scruggs than Scruggs would like to portray now,” Mr. Merkel says. “Balducci made part of the closing arguments in one of my cases, and they sat at the same table. When I was negotiating with them, it was generally with Balducci.”
- The Times also picks up on Scruggs’s liberal dispensing of resources to sway Mississippi political influence-holders during the tobacco caper:
In his deposition with Mr. Merkel in 2004, he discussed some $10 million in payments he made to P. L. Blake, a onetime college football star in Mississippi. After running into financial troubles, Mr. Blake became a political consultant for Mr. Scruggs, helping his boss navigate the back rooms of state politics and tobacco litigation.
In the deposition, where he was represented by Mr. Balducci, Mr. Scruggs praised Mr. Blake for keeping “his ear to the ground politically in this state and in the South generally, and he has been extremely helpful in keeping me apprised of that type activity.” Mr. Blake could not be reached for comment.
When Mr. Merkel further pressed Mr. Scruggs about Mr. Blake’s services, Mr. Scruggs elaborated: “He has numerous connections — in terms — when I say connections, I don’t mean that in a sinister way, I mean he just has a lot — he knows an awful lot of people in the political realm. And he — depending on the stage of tobacco litigation proceedings was keeping his ear to the ground, prying, checking. I mean, I never asked who or what or all that.”
David Rossmiller takes note of a letter by Balducci dated August 1 over a regulatory matter which in its cocksure and sarcastic tone suggests that Balducci had not yet been confronted and “flipped” by federal investigators as of that date. This morning he adds a document and link roundup.
The Jackson Clarion-Ledger quotes Jackson attorney Dennis Sweet, who partnered with Scruggs on slavery reparations, as saying he “had a hard time believing that Dickie would involve his son in anything like this,” a comment that perhaps is open to close reading.
At Y’AllPolitics, two commenters discuss how conspiracy investigations logically develop over their life cycle. David Sanders notes that when the timing is up to them, federal investigators prefer not to uncover operations and reveal informants until they are satisfied they’ve caught all the targets in their net, which raises the question of whether they had developed what they considered to be the best evidence they were going to get, or whether some development forced their hand into closing the net before that point. “LawDoctor1960” observes that the indictees will soon get a look at the prosecution’s case, which if damning could induce one or more to join Balducci in “flipping” with resulting further revelations and perhaps further indictments.
The WSJ law blog has some answers to the question put the other day: Where is Mr. Keker?
Folo wonders: does the Scruggs firm (as opposed to Scruggs Katrina) really not have a website, and if so, isn’t that exceedingly strange? Don’t they want to encourage potential clients to approach them?
Finally, for those who are wondering whether there’s any pro-Scruggs blogging to be found, we can report that we’ve spotted a reasonable facsimile at Cotton Mouth and at Pensacola Beach Blog.
Earlier coverage: here, here, here, etc.
Breaking Monday afternoon: FBI agents search offices of another leading Mississippi plaintiff’s attorney, Joey Langston, who has been representing Scruggs in his indictment, and has had many other past dealings with him.
December 8 roundup
- As governor, Huckabee signed a good tort reform package capping punitive and non-economic damages, and reforming joint and several liability and venue law, but the rest of his economic record is big-government. And David Harsanyi is critical of Huckabee’s claimed opposition to nanny-statism. [Insurance Journal; Human Events; Harsanyi; RCP; Michael Tanner @ FoxNews]
- Update to the popular Bridezilla flowers lawsuit; florist files opposition. Lots of comments ensue. [Lattman]
- South Dakota Supreme Court: no, you can’t sue a pharmacy for being a “drug dealer” when plaintiff steals prescription medicine for a disabled friend and injures himself OD’ing on it. [On Point]
- Former litigator hired to invest $100m in court cases for UK hedge fund. [Times Online]
- Atkins fallout in Texas and California, as professional anti-death-penalty experts there happily minimize subject IQs to call their intelligent clients retarded. Earlier: Feb. 2005; Sep. 2003. [Science Evidence blog; and again]
- Heartbalm tort of alienation of affection withstand constitutional challenge in Mississippi. Earlier: Jul. 5; Nov. 2006, etc. [Torts Prof]
- Bob Woodruff biography: I would have died if my injury happened in the United States because of fear of liability. [Murnane]
- I’ve updated my paper on Thomas Geoghegan’s new book. [SSRN]
- Overlawyered holds slim lead at ABA Blawg 100 popularity contest. But why aren’t any of you voting for Point of Law? [ABA Journal]
Scruggs indictment VII
With the criminal case itself not furnishing many new developments over the past day or two, attention is turning to the question of what the “buried bodies” might be of which Tim Balducci claimed knowledge (and which prosecutors might wish him to sing about), and also to the possibly overlapping topic of Scruggs’s earlier run-ins with lawyers and other professionals over the splitting of fees. (Balducci represented Scruggs in some fee disputes, as did the Jones firm that later sued him over fees.) Also drawing much attention is the question of whether an intensified ethical searchlight will make life hot for the Mississippi political figures who’ve participated most extensively in Scruggs’s litigation campaigns over the years, namely former Attorney General Mike Moore and present AG Jim Hood.
The U.S. Chamber-backed stable of publications that includes Legal NewsLine has been digging into these topics. At the SE Texas Record, Steve Korris relates details of Scruggs’s lengthy and bitter dispute over asbestos fees with attorneys William Roberts Wilson Jr. and Alwyn Luckey, in which Scruggs was represented by John Griffin Jones. Jones’s associate Steve Funderburg in March of this year confronted Scruggs in dramatic fashion in an email over his sense of having been done out of Katrina fees:
“I have looked in the mirror all weekend and tried to figure out how I could be so stupid,” he wrote. “John and I DEFENDED you in fee dispute litigation for God’s sake.”
He wrote, “We DEFENDED you when people said you were greedy, or were a back stabber, or a liar, or anything else.”
He wrote, “You have developed a good routine. It worked. But go to your grave knowing that you have shaken my belief in everything I hold dear.”
He wrote, “I did not believe that people like you really existed. I am ashamed and will always be ashamed of having defended you and protected you.”
See also Y’All Politics for discussion.
Scruggs indictment VI
Plenty of news today, and some links to commentary:
As part of Timothy Balducci’s guilty plea, the feds confirm that Balducci has been “substantially” assisting them in their case against the other defendants. Per the sub-only WSJ: “People familiar with the case said the government has recordings of Mr. Scruggs that include evidence beyond that alluded to in the indictment.” Paul Kiel at TPM Muckraker observes that the feds might have interviewed Balducci on any number of other matters, such as where “there are bodies buried,” in his own memorable phrase.
A Jan. 22 trial date has been set in the case.
Where’s John Keker? wonders Folo: “[Billy] Quin was sure doing all the talking for Team Scruggs yesterday”.
David Rossmiller employs the verb “to Scruggs”, and numerous commentators read the lawyer’s withdrawal from representation of Katrina cases as a step he would not have taken had the new criminal charges not loomed very seriously indeed.
Y’All Politics keeps wondering where AG Jim Hood is. It also notices that former Mississippi AG Mike Moore, a figure well known to longterm readers of this site, seems to be involved with the doings of the now Scruggs-less Scruggs Katrina Group. Martin Grace finds irony in that lawyer consortium’s approach to its own issues of “emergency management”, as well as in its solicitation of whistleblowers.
X Curmudgeon notes Scruggs’s long history of skating close to the edge on use of confidential informants: “some lawyers would argue [that] his success has depended heavily on his willingness to break the rules, or to play outside the rules.” Regarding John Grisham’s statement that his friend Scruggs would not have gotten involved in a “boneheaded bribery scam that is not in the least bit sophisticated”.
Isn’t it great having friends like John Grisham? In other words, if it had been a SOPHISTICATED bribery scheme, then, yeah, sure, he could see Dickie doing that. But not a boneheaded scam.
White Collar Crime Prof speculates about the shape of a Scruggs defense based on the twin themes of “it’s too boneheaded for smart guys like us”, and hanging Balducci out to dry.
Not to mention hoping that the tape recordings aren’t too damning.
Update: A new post from David Rossmiller ties together several loose threads mentioned above relating to Katrina litigation, confidential informants, the Renfroe documents and AG Hood. Our earlier coverage, by the way, can be reached by links from here.
Scruggs indictment V
Roger Parloff at Fortune Legal Pad is out with some informative analysis based on an interview with attorney John Griffin Jones, who filed the fee suit against Scruggs. Among the questions explored: how high were the stakes in that suit, and why might the defendants have been keen on an arbitration order? Relating to the latter point, Parloff writes:
Scruggs’s lead counsel, John Keker of Keker & Van Nest, adds that the notion that Scruggs might have wanted to keep the case out of public view by putting it into arbitration is “absurd as a motive” for a bribe, since the case “was certainly going into arbitration” and that was “the only place it could possibly be.”
Which raises the question: if an order for arbitration was a foregone conclusion, why are Scruggs chums floating the theory that attorney Timothy Balducci thought he could impress Scruggs by getting such an order from Judge Lackey?
The WSJ law blog reports that Balducci was arraigned Tuesday and has asked to withdraw his law license. On the location of his arraignment, see Mississippi blogger Folo (earlier). (Update: Whoops, actually Mississippi expatriate, see comments.) Balducci was named to represent himself, drawing many puzzled reactions. (Update: NE Mississippi Daily Journal has more on Balducci’s arraignment and likely cooperation, via Folo.) Also, the WSJ law blog interviews David Rossmiller (who himself has several new posts up) and reports that the Scruggs firm may be withdrawing from Scruggs Katrina Group cases after all. (Update: confirmed in this Sun-Herald story).
This Sunday profile of Judge Lackey in the Sun-Herald notes that he’s “a deacon at First Baptist Church and a member of a state commission charged with ensuring judicial integrity,” which as several commentators note might indicate that he was a risky one to approach with a proposal for corruption.
A commenter at David Rossmiller notes whose interests are served by the pre-emptive “character assassination of Balducci” in recent coverage and also writes:
Patterson resigned Oct. 18, 1996 after pleading guilty to filing false documents to avoid paying taxes on a Range Rover. And Grisham thinks these folks are super sophisticated, why?…
And how bad does the spin from last week look? The FBI did not find “the document” and Scruggs is not withdrawing from Katrina cases, and then a few days later he is withdrawing. By the way, the FBI removed computer data which is most likely being analyzed right now, so who the heck knows what they have found. Maybe “dead bodies”? …
Earlier coverage of the indictment here, here, here, and here.