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Criminal contempt prosecution of Dickie Scruggs



Two days after a U.S. Attorney declined his request to prosecute attorney Dickie Scruggs for criminal contempt, federal judge William Acker on Friday appointed two Birmingham attorneys as special prosecutors. In a June order, Acker had said he would do just that if U.S. Attorney Alice Martin of Alabama declined to take the case against Scruggs, of tobacco and Hurricane Katrina insurance litigation fame.

The criminal contempt prosecution is an offshoot of Katrina litigation. Two sisters, Cori and Kerri Rigsby, worked for E.A. Renfroe, a State Farm contractor, and took documents they said showed the insurer was engaging in bad faith adjusting of Katrina claims. The Rigsby sisters then gave the documents -- some 15,000 pages -- to Scruggs and went to work for him at $150,000 a year each. Renfroe sued them for alleged breach of their confidentiality contracts, and Judge Acker entered an injunction in December requiring Scruggs to return the documents to counsel for Renfroe. Instead of doing this, just hours after the injunction was entered Scruggs called Mississippi Attorney General Jim Hood, who already had copies of the documents, and sent them to Hood rather than to Renfroe's attorneys. The apparent objective? To make sure State Farm was kept guessing about the documents' contents during a period where Scruggs, Hood and State Farm were involved in intense negotiations over large-scale settlements of insurance claims and litigation, and where both Scruggs and Hood mounted highly effective media campaigns to put State Farm in the worst possible public light and pressure the insurer. In the June order, Acker found that Scruggs willfully defied the injunction and referred Scruggs to Martin for prosecution of criminal contempt. If you care to know more, I've written lengthy posts here and here about this issue, with links to the pdfs of Judge Acker's orders.

Zach Scruggs, Dickie Scruggs' son and law partner, has tried to spin Martin's declination as equivalent to a finding that Scruggs did nothing wrong. Martin, however, in a letter to Judge Acker, did not give a reason why she declined.

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.