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United States v. Dickie Scruggs



The special prosecutors in the criminal contempt of court case against prominent Mississippi lawyer Dickie Scruggs have unveiled more of their evidence against Scruggs in federal court filings in Alabama. Prosecutors accuse Scruggs of willfully violating the terms of federal judge William Acker's injunction in a civil case brought against his clients, Kerri and Cori Rigsby, who took 5,000 to 15,000 pages of State Farm Hurricane Katrina claims files and gave them to Scruggs. The civil case, for breach of their confidentiality agreements, was brought by the employer of the Rigsby sisters, E.A. Renfroe and Co., a State Farm claims contractor.

Prosecutors accuse Scruggs of devising a "sham" strategy of pretending to misinterpret the injunction so he wouldn't have to return the documents as ordered. Instead of sending them back to Renfroe's attorneys, he had at least two conversations with Mississippi Attorney General Jim Hood, a close friend, right after Acker entered the injunction, about fears that Renfroe's attorneys would violate a protective order accompanying the injunction and tell Renfroe and State Farm of the documents' contents. So Scruggs sent Hood the documents, even though the Rigsby sisters had previously provided copies of all the documents to Hood. Scruggs allegedly was trying to find safe harbor in an exception in the injunction for cooperating with law enforcement.

Scruggs did not represent the Rigsby sisters in the civil action, which is ongoing. Instead, the basis of their attorney-client relationship was the documents, as well as a qui tam "whistleblower" claim the sisters brought against several insurance companies, and a wrongful discharge suit they brought against Renfroe, which was filed and then voluntarily dismissed a short time later. Unusually for an attorney-client relationship, Scruggs also hired the two as litigation consultants, after they quit their jobs at Renfroe, at salaries of $150,000 a year. Prosecutors claim Scruggs' motive in violating the injunction was profit -- the documents were valuable to him in litigation and as leverage, particularly as long as he could keep State Farm in the dark about which documents they were and what they said. For recent posts I've written at Insurance Coverage Law Blog on prosecutors' filings, click here and here.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.