Results matching “katrina”

By John H. Sullivan

"Not only is a government lawyer's neutrality essential to a fair outcome for the litigants in the case in which he is involved, it is essential to the proper function of the judicial process as a whole."

These words by Justice Stanley Mosk in his 1985 People ex rel. Clancy v. Superior Court decision have been a beacon for public attorneys. They know, as he also wrote, that "without a belief by the people that the system is just and impartial, the concept of the rule of law cannot survive."

Last week, the 6th District Court of Appeal, in County of Santa Clara v. Superior Court , dismissed most of his decision as dicta. Mosk's opinion has long protected impartiality by prohibiting public prosecutors from hiring lawyers on a contingency fee basis. It is a powerful unanimous statement, joined by then Chief Justice Rose Bird and future Chief Justice Malcolm Lucas. When Mosk wrote of "the heightened ethical requirements of one who performs governmental functions," it was not as a theoretical observer. He served six years as attorney general before a remarkable 37-year career on the California Supreme Court.

The 6th District, in approving government lawyer contingency fee hiring of private lawyers in lead paint nuisance actions, distinguished Clancy from the Santa Clara case. It saw a lack of control by the city of Corona over private attorney James Clancy in a quaint contingency fee contract ($60 an hour for wins, $30 an hour for losses) to hassle adult bookstores. In Santa Clara, the justices found a different contingency fee situation where private counsel are "merely assisting" government attorneys and "lack any decision-making authority or control."

We don't know much about the Corona's control of Clancy because there's little discussion of that in the Mosk decision. But we don't know much for certain either about the various city attorneys' and county counsels' control over the private attorneys in Santa Clara - even though the Court of Appeal gives the topic lots of attention. The seven contingency fee agreements involving each city or county and its private lawyers evidently were control deficient. Most of the cities, counties and private lawyers submitted post-litigation declarations saying the government lawyers were in charge. The city of San Mateo never produced an agreement but wrote to the court that its in-house lawyers retained "complete control ... final authority," etc.

Oakland, which declared that "notwithstanding any documents suggesting the contrary," its city attorney retained complete control and is in the process of revising the contingency fee agreement "so that it reflects the reality of the relationship."

Pity a judge having to determine what's really going on, as Justice Patricia Bamattre-Manoukian in her concurring opinion proposes be done. She would have the agreements plus "the factual circumstances" and "the conduct of the plaintiff's counsel" be among the "many important factors in each case" that courts should henceforth analyze when approval of contingency fee agreements come before them. And come before them they will - in droves, once the contingency fee bar seizes the financial opportunities that lay in a new block of government clients.

Santa Clara focuses on nuisance actions. These will be a springboard. The lead paint cases originally included causes of action for fraud, strict liability, negligence and unfair business practices. If Santa Clara stands, we will soon hear why there's no reason to distinguish between nuisance actions and the others in contingency fee deals.

How these "public-private" cases are managed matters less than who chooses the case in the first place.

In Santa Clara we are not told how the governments and private firms hooked up. Were bids solicited? Or did the firms solicit the cities and counties?

For a dire example of where the latter can lead, look at Mississippi. There, plaintiff lawyer icon Dickie Scruggs brought his Katrina litigation plan to state Attorney General Jim Hood. Their joint contingency fee effort won $80 million in private lawyer profits from State Farm. Scruggs and his firm contributed more than $50,000 to Hood in the 2007 election cycle, according to Wall Street Journal research. The Journal found that over the past five years, Hood and 27 law firms jointly pursued state lawsuits against companies. Those firms gave Hood $543,000 in campaign contributions. Now Mississippi is looking at requiring competitive bidding for private lawyer hiring and limiting contingency fee deals to $1 million.

What might securities lawyers Bill Lerach, Melvin Weiss, et al., have tried, given their willingness to illegally pay clients, if California had not been protected by the Clancy decision?

South Carolina-based Motley Rice, a private firm in the Santa Clara case, boasts that its attorneys have "gained global recognition for their work on behalf of the State Attorneys General."

Our association's amicus brief in Santa Clara noted, without any inference of wrongdoing, that two other law firms hired by the cities and counties in the lead paint litigation made campaign contributions to San Francisco's city attorney, one of the Santa Clara parties. San Francisco's unique city/county status makes its city attorney an elected official, as are all district attorneys in the state. Everywhere else, city attorneys and county counsels are hired by city councils or boards of supervisors. The Civil Justice Association of California's review of contribution records turned up no Santa Clara case private attorney contributions to local elected officials in the jurisdictions involved.

Some county counsels and city attorneys argue they can't afford expensive litigation, that small counties are especially handicapped. But a major product or financial transgression is not going to occur just in Mariposa County. It will be discovered statewide. City and county counsel can combine and coordinate their efforts across jurisdiction lines - just as district attorneys do. Maybe district attorneys and the attorney general should handle these matters.

Our amicus brief recalls how California's attorney general joined with 49 other states in a tobacco public nuisance lawsuit but rejected offers from outside contingency fee lawyers seeking a piece of the action.

Following the 2004 passage of CJAC-sponsored Proposition 64 barring Unfair Competition Law claims by private lawyers without injured clients, the Daily Journal reported that "the plaintiffs' bar has been looking to team up with public prosecutors since the [initiative] limited private attorney general suits." It didn't happen. A Lockyer spokesman told the paper that "it's not a good idea having private lawyers running around with a badge."

This philosophy, flowing directly from Clancy and Mosk, runs strong in district attorneys' offices around the state. Note that neither the attorney general's office nor a single district attorney filed an appellate court amicus brief in the Santa Clara case.

During the plague of private lawyer shakedown lawsuits leading up to Proposition 64, district attorneys called attention to the important distinction between public and private enforcement of civil laws. This distinction, the Los Angeles district attorney's office pointed out in a brief in one of the auto repair shop B&P Code Section 17200 extortion cases, "is especially important in that the systemic checks and balances - including special ethical norms and the democratic electoral process - applicable to public enforcement officials do not apply to 'private attorneys general' litigating representative causes of action."

Mosk died in 2001 at the age of 88, on the very day he was planning to submit his retirement resignation to the governor. In a tribute to him before Congress, it was observed that "while his life has ended, his legacy shines brightly for all Californians and for our great Nation." The Santa Clara ruling has dimmed his legacy. The Supreme Court should restore it.

John H. Sullivan is president of the Civil Justice Association of California in Sacramento, a nonprofit association representing businesses, professionals, and local governments. Information on the association and civil justice issues is at www.cjac.org.

Here are a few of the problems with activist AGs - PointOfLaw Forum

To be expected... you can't poke fun at the trial-lawyer front groups without eliciting a round of sneering and mockery in return, which is how the PopTort blog responds to yesterday's post about the Center for Justice and Democracy's "white paper" on activist attorneys general, "State Attorneys General: The People's Champion."

We thought the over-the-top enthusiasm of the authors for litigating AGs spoke for itself, but the front folk thought otherwise. Fair enough. So here are some substantive critiques of excessive litigation and activism by state attorneys general:

Coincidently, today's Wall Street Journal carries a relevant editorial, "A 'So-Called' Attorney General," reviewing the corruption and collusion that results when activist AGs get into bed with the plaintiff's bar.

Lawsuit legend and admitted felon Dickie Scruggs is headed for the Big House, but his methods are continuing to tarnish his partner in lawsuits, Mississippi Attorney General Jim Hood. Last week, Alabama federal Judge William Acker gave Mr. Hood a well deserved whack for colluding with the trial kingpin to evade a court order in a case regarding Hurricane Katrina claims.

Around the web, May 19 - PointOfLaw Forum

  • Another Scruggs ripple: Judge Senter disqualifies two Missouri lawyers (widely nicknamed the "Trailer Lawyers") from representing Rigsby sisters against State Farm in Katrina qui tam action [Sun-Herald via YallPolitics, more, Rossmiller with link to opinion]
  • "To recap the trial lawyer logic: Polls are great for calculating damages in large billion-dollar consumer fraud class action claims, but they're not appropriate for creating a ranking system for legal fairness." [Adomite/MC Record]
  • Scott Greenfield is bemused by the incivility at Ann Bartow's Feminist Law Professors site: "There is no doubt in my mind that I don't get it." [Simple Justice]
  • "We don't want a litigation industry," says head of largest German shareholder-protection body, of class action proposals [The Economist]
  • Vermont the next Roman Catholic diocese headed for bankruptcy? [Boston Globe] Plus: Albany lawprof Timothy Lytton has a new book hailing the church abuse litigation as a "remarkable success" of the tort system, not a view that passes entirely uncontested as readers here know ["Holding Bishops Accountable"]
  • By 2-1 margin, Second Circuit panel gives relatively broad reading to CAFA's scope in directing class actions to federal courts [NYLJ]
  • What if female underrepresentation in the hard sciences has something to do with women's own preferences? Who do we sue then? [Elaine McArdle, Boston Globe]

By Glenn G. Lammi

As Federal District Court Judge Loretta A. Preska wrote last summer in Kensington Int'l Ltd. v. Republic of Congo, 2007 U.S. Dist. LEXIS 63115, *1 (S.D.N.Y. Aug. 23, 2007), "Civil litigation is not always civil." The high stakes and cost of much litigation today, and the commercialization of the legal profession, have created greater pressure on lawyers to, in the words of lawyers' Model Rules of Professional Conduct, "zealously assert[] the client's position under the rules of the adversary system." When that pressure leads attorneys astray, judges possess the authority under federal statutes, civil procedure rules, and courts' inherent powers, to impose sanctions. Over the past year, federal judges in high-profile litigation have invoked these powers to take action against lawyer misconduct, either imposing sanctions or using their bully pulpit to put the legal profession on notice that judges will protect the public and legal consumers from abuse.

In the Kensington case, Kensington, a "financial institution which invests in debt and equity instruments issued by domestic and foreign entities," id. at *3, sought to collect on a nearly $57 million judgment against Congo. Kensington subpoenaed a Congolese citizen, Medard Mbemba, who Kensington believed would assist it in locating the whereabouts of the nation's assets. Difficulties in scheduling the time and place of the deposition ensued, and it came to light that an attorney from Congo's counsel of record, Cleary Gottlieb Steen & Hamilton, had contacted Mr. Mbemba directly. As the court noted, this partner had "extensive connections with Congo's political leadership." Id. at *5. Mr. Mbemba testified when asked if he felt the Cleary Gottlieb attorney was pressuring him to avoid the deposition, he replied that he was aware of the attorney's connections in Congo and that, "It is not an impression, he told me as such not to go." Id.

Judge Preska noted the court's inherent authority to sanction attorneys for bad faith acts. She found that "a mass of evidence" existed that Cleary Gottlieb's actions "were taken with the purpose of preventing Mbemba's deposition," id. at *16, and that "Cleary feared Mbemba might reveal damaging information or offer evidence of illegal conduct and thus attempted, in bad faith, to influence Mbemba's testimony or, better still, to avoid the deposition altogether," id. at *32. Because Cleary "show[ed] a willingness to operate in the murky area between zealous advocacy and improper conduct, and here it crossed the line," id. at *33, Judge Preska imposed monetary sanctions on the firm.

Another recent example where "aggressive representation [gave] way to misconduct," arose from trade secret litigation between rival financial software makers. Wolters Kluwer v. Scivantage, 2007 U.S. Dist. LEXIS 88052 (S.D.N.Y. Nov. 29, 2007). Judge Harold Baer issued a 129-page ruling peppered with regret that the standards of civility and professionalism in law have declined as legal representation has been transformed from a profession into a business. Much of the dispute focused on documents submitted under a protective order by the defendant to plaintiffs' counsel Dorsey & Whitney; the use of those documents in a nearly identical suit in a Massachusetts federal court; and the refusal of a now-former Dorsey lawyer to return the documents on order of the court once Wolters Kluwer had voluntarily dismissed the New York-based action. Judge Baer's opinion relates the dispute's particulars in exhaustive detail, after which he concludes that the lead plaintiffs' counsel or Dorsey & Whitney engaged in twenty-two instances of bad faith, sanctionable conduct. Judge Baer declined to financially punish the lead lawyer or Dorsey & Whitney, choosing instead to "impose a public reprimand" and forwarding a copy of his decision to "the Grievance Committee for the Southern District of New York" and to the state court's attorney disciplinary committee. Id. at *292.

A third instance in 2007 of a judge invoking his inherent powers involved insurance coverage litigation in the wake of Hurricane Katrina and noted plaintiffs' attorney Richard Scruggs. In an employment contract dispute arising out of a Katrina coverage issue, Federal District Court Judge William Acker ordered that Mr. Scruggs return covertly copied insurance documents he obtained from former employees of the insurance services company plaintiff. Scruggs instead sent them to Mississippi Attorney General Jim Hood. Judge Acker wrote in response that such behavior "is precisely the type of conduct that criminal contempt sanctions were designed to address." E.A. Renfroe & Co. v. Moran, Civ. Action No. 06-AR-1752-S (N.D. Ala. June 15, 2007), slip op. at 20. Judge Acker referred the matter to federal prosecutors, and when they declined to bring charges against Scruggs, Judge Acker invoked his authority under Federal Rule of Criminal Procedure 42(a) and appointed two private attorneys as special counsel to prosecute the case. E.A. Renfroe & Co. v. Moran, Civ. Action No. 06-AR-1752-S (N.D. Ala. July 26, 2007). In addition to having to defend against this criminal action, Mr. Scruggs was indicted last November on charges that he conspired to bribe a Mississippi state judge. A trial is scheduled for February 25. Donna Leinwand, Bribery case stemming from Katrina lawsuits makes waves, USA TODAY at http://www.usatoday.com/news/nation/2007-12-25-Scruggs_N.htm?csp=N009.

One further 2007 decision of note did not directly involve attorney misconduct or the application of sanctions, but the tone and force of the ruling displays how judges can use their bully pulpit to express their disdain with some lawyers' actions. In In Re Chiron Corp., 2007 U.S. Dist. LEXIS 91140 (N.D. Calif. Nov. 30, 2007), Judge Vaughn Walker rejected a class action settlement in a case involving a vaccine company's alleged market misrepresentations. In addition to rejecting the proposed $7.5 million attorneys' fees in a case which "appears to have proceeded almost directly form pleading to settlement with no ruling on the pleading," id. at *6, Judge Walker ruled that the settlement was "inconsistent with the interests of absent class members and the class action process itself." Id. at *38. The court strongly questioned the adequacy of the lead plaintiff, finding it to be a "serial plaintiff" whose involvement "seems to have been confined to an endorsement of lead counsel's proposed fee." Id. at *31.

Because of the "serial" nature of the lead plaintiff and the law firm representing it - Milberg Weiss - Judge Walker reluctantly found it "necessary to address criminal charges pending against lead counsel." Id. at *38. The judge noted that the case before him is not directly implicated in the criminal case, which involves alleged payment of kickbacks to lead plaintiffs. "But given the temporal proximity of this settlement and the criminal proceeding against lead counsel," he wrote, "whether the charges bear on this case is a determination best left to the class following full disclosure." Id.

Whether it is imposing monetary sanctions, issuing a public "censure", or appointing special counsel to enforce a criminal contempt ruling, judges possess the authority to regulate lawyers and the litigation process. As Judge Baer stated in Wolters Kluwer, not only is attorney misconduct and incivility "a drain on valuable judicial resources," supra at *7, it also "undermine[s] public confidence in the legal system" and works "to the serious detriment of the very individuals that have sought counsel." Id. at *8. Reasons abound for judges to use their considerable statutory and inherent police powers. With these recent decisions, the momentum to do so will hopefully continue to grow.

* Chambers v. Nasco, Inc., 501 U.S. 32 (1991). See also Thomas E. Baker, The Inherent Power to Impose Sanctions: How a Federal Judge Is Like an 800-Pound Gorilla, 4 LGL. OPINION LTR. 6 (WASH. LGL. FNDT.), Mar. 25, 1994.

Around the Web, May 4 - PointOfLaw Forum

  • The May issue of "Trial," the monthly magazine of the American Association for Justice, includes an article on In re Seroquel Prods. Liab. Litig., 2008 WL 215707 (M.D. Fla. Jan. 24, 2008). While the magazine is reserved for members, a summary of the article has been posted online: "The U.S. district court overseeing multidistrict litigation against the manufacturer of the atypical antipsychotic drug Seroquel held that documents reviewed by witnesses in preparation for depositions are not protected by the work-product privilege." Here's an article on the litigation last year at Law.com.
  • Apropos the AAJ, the trial lawyers group is sponsoring is a teleseminar Wednesday, "Using the McKinsey Documents in Your Bad Faith Case." The reference is to management consultant McKinsey & Co.'s documents recommending how Allstate Corp should challenge automotive insurance claims. One of the AAJ presenters is David Berardinelli, Santa Fe trial lawyers and author of the book, "From Good Hands to Boxing Gloves." Business Week covered Berardinelli and his book in May 2006.
  • Last month, All State decided to post the McKinsey documents online in response to a judge's order and fines. The 150,000 pages are available here. The decision prompted news reports, including this New Orleans Times-Picayune story, which notes that the documents do not include information about catastrophic claims, of potential use in Hurricane Katrina litigation. David Rossmiller at the Insurance Coverage Blog has more.
  • This line in the registration materials for the AAJ teleseminar caught our eye. "Note: Eastern Indiana and parts of Arizona--no daylight savings -- Please be sure to note correct time for the teleseminar you register for." Nope. Indiana went all Daylight Saving Time effective April 2006, an initiative of Gov. Mitch Daniels. So if you miss the seminar because of bad info, can you sue?
  • Via The Volokh Conspiracy comes news of the action by Swiss Federal Ethics Committee on Non-Human Biotechnology. Finding: Plants have rights. "The Committee members unanimously consider an arbitrary harm caused to plants to be morally impermissible. This kind of treatment would include, e.g. decapitation of wild flowers at the roadside without rational reason."
  • From the Wall Street Journal's Law Blog: "Just days before the first Bextra trial was to begin, Pfizer has struck tentative settlements with some plaintiffs who alleged that painkillers Celebrex and Bextra caused heart attacks, according to lawyers at three plaintiff firms involved in the litigation." More from Bloomberg.
  • A column by Ken Connor, Chairman of the Center for a Just Society in Washington, D.C., challenging the U.S. Chamber of Commerce's "Lawsuit Climate 2008: Ranking the States." By its sample -- corporate attorneys -- the survey is inherently biased and does not reflect a good knowledge of the court system, Connor argues: "As a trial lawyer for thirty-five years, I am among the first to admit that the civil justice is imperfect. But access to the court system is a constitutionally protected right, and at a time of rampant corporate misconduct it is a right that needs to be zealously defended. Conservatives who believe in the Constitution and the need for checks and balances in our public life should agree." Connor's column is a rebuttal to a pro-survey column by Lindsay Boyd of Townhall.com
  • Three-hundred-and-twenty five new laws go into effect in Utah on Monday. The Deseret News has a round-up. Many new opportunities for litigation. Here's one: The estate of a person killed by illegal drugs can sue the person who provided or administered the lethal drugs.
  • A post mortem in the Orlando Sentinel of the Central Florida commuter train debacle in the Legislature: "TALLAHASSEE - Central Florida's commuter-rail project failed in the Florida Legislature because its backers didn't heed a cardinal rule of politics: Know your enemy...They thought their main opponents were residents of Lakeland, angry that the state's deal with CSX Corp. would run more freight trains through their city. They didn't realize until too late that the state's trial lawyers were grimly determined to defeat the deal."

Around the web, April 15 - PointOfLaw Forum

  • "Paid at the end of the day": "eye-popping" ambiguity of former Mississippi AG Mike Moore's multiple roles as Katrina insurance "resolution counsel" [Parloff]
  • Called in Jones v. Scruggs fee dispute, Scruggs takes the Fifth at least 19 times [AP, YallPolitics, NMC @ Folo and more, Rossmiller]
  • Updating earlier item: appellate court stays Suffolk County's prosecution of lawyer who advised Filipina nurses they were free to quit jobs [Greenfield]
  • Kudos to SUNY Binghamton where they've cut back mandatory student fee outlays to Litigation Lobby pillar NYPIRG; official of that group claims cuts are a "direct violation of student rights" [BU Pipe Dream]
  • An "immediate" little uptick in the local crime rate when a house goes into foreclosure? Really, Sen. Dodd? [Mark Lieberman/FoxBusiness via Crime and Consequences]
  • Oh look, a company actually defending itself in public debate [Chevron on Ecuador environmental suit in SFChron; Reuters; ChrSciMon; earlier. More: IBD and WSJ editorials]
  • Jonathan Adler versus Jeffrey Rosen on supposed Bush "legal war against the environment" [Volokh]

Roger Parloff on Dickie Scruggs - PointOfLaw Forum

Must-read profile of the Fall of Scruggs in the latest Fortune.

Scruggs was someone who could render all of State Farm's actuarial calculations irrelevant, because he had the power and know-how to force it to rewrite its contracts retroactively. ...

While the bribery accusations have attracted most of the media attention, the story of Scruggs's siege upon the insurance industry is more jaw-dropping still. These were lawsuits in which the law itself played only a bit part. Victory was to be secured by aggregating pressure points, of which the most valuable were press attacks, threats of legislation harmful to the target or its industry, and the instigation of paralyzing state and federal investigations of the target.

Notwithstanding Scruggs's initial reliance on legal arguments that have been rejected by every federal appeals judge who has considered them, he still managed to squeeze out of State Farm $150 million for policyholders who, from a cold, contractual perspective, were probably entitled to only a fraction of that.

Recent opinion roundup - PointOfLaw Forum

A fairly spectacular rebuke to the lawyers formerly allied with Dickie Scruggs in the hurricane litigation, as well as to the now-disgraced Scruggs himself: the judge has disqualified both the lawyers and the Rigsby sisters from participating in Katrina claims in the Southern District of Mississippi because of the gross conflicts of interest created when the (former) Scruggs Katrina Group hired the sisters as consultants despite their status as fact witnesses. Tons of coverage from David Rossmiller, from NMC/Folo, and at YallPolitics here, here, and here. Plus: more from David Rossmiller.

When lawyers pay material witnesses - PointOfLaw Forum

Things don't always work out happily, as David Rossmiller notes of Dickie Scruggs's Katrina informants, the Rigsby sisters.

Brendan Vaughan's student note in the Illinois Law Review explores some of the questionable rulings in the Katrina litigation, and cites this weblog twice.

Reading other people's mail - PointOfLaw Forum

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?"

Mississippi AG Jim Hood - PointOfLaw Forum

Our own David Rossmiller is being disrespectful again. Won't someone make him stop?

The Washington Times has an interesting summary of the claims filed against the federal government for the Army Corps of Engineer's alleged negligence in the design and construction of the New Orleans Levees. One claimant is asking for Three Quadrillion dollars, which would give his attorney (assuming a 33% contingent fee...) a mere one quadrillion (about 80 times the gross national product).

"I understand the anger," said Baton Rouge economist Loren Scott. "I also understand it's a negotiating tactic: Aim high and negotiate down." Umm, I dunno. There's such a thing as aiming a tad too high...

Around the web, January 4 - PointOfLaw Forum

  • Aside from the terrorism-suit issue, Bush's pocket veto of defense bill also spared the country an expansion of the FMLA via military-related leave [Schwartz, Connecticut Employment Law Blog, Jottings of an Employer's Lawyer]
  • Even for those jaded by all the reports of Scruggs-duggery, the Kerri Rigsby deposition has some pretty amazing stuff regarding those stolen Katrina insurance files [Rossmiller]
  • Did California's lawsuit against EPA land in Ninth Circuit via venue gamesmanship, and if so who was the game-player? [Adler @ Volokh via ShopFloor]
  • We want your hard drive: one of the scarier discovery requests [NYLJ]
  • Attorney for asbestos-diagnosis figure Dr. Ray Harron denies that his client is hard to find [WV Record/earlier]
  • Justice at Stake campaign, which campaigns against (among other things) money in judicial elections, has new blog [Gavel Grab]

The other Scruggs Katrina scandal - PointOfLaw Forum

The bribery charges stemming from the fee dispute have been getting 99 percent of the attention, but as David Rossmiller relates (and earlier here), there are some major developments as well in the thicket of misconduct charges arising from Scruggs Katrina Group's remarkably uninhibited tactics in its litigation against State Farm. One highlight: a smoking-gunnish note by an engineer cooperating with SKG "recount[ing] an apparent conversation between Special Assistant Attorney General Courtney Schloemer and an SKG attorney: 'they agreed that a criminal conviction [if one could be obtained against State Farm] could help civil cases.'" Some further discussions here, here, here, and here.

Also, the Wall Street Journal's free OpinionJournal.com site has now posted a no-subscription-needed link to my Saturday op-ed on the Scruggs indictments. It can be found here.

Dickie Scruggs indicted for alleged bribery conspiracy - PointOfLaw Forum

As I said in a post earlier today, just when you think things in Mississippi Katrina litigation can't possibly get any stranger, there's something new that tops all the rest. According to the Jackson Clarion Ledger, well-known attorney Dickie Scruggs has been indicted for alleged involvement in a conspiracy to bribe a judge in a dispute over how to divide some $26.5 million in attorney fees. The fees were received as a result of mass settlements of Hurricane Katrina litigation earlier this year. Yesterday, you may recall, the FBI and federal prosecutors raided Scruggs' law offices. I'll be posting updates as the story develops at Insurance Coverage Law Blog.

FBI searches Dickie Scruggs' law offices - PointOfLaw Forum

The Mess in Mississippi keeps getting messier, and just when you think Hurricane Katrina litigation can't get any stranger, something comes along to prove you wrong. Yesterday FBI agents and federal prosecutors served a search warrant on the Oxford law offices of tort baron Dickie Scruggs, who has been in the thick of Katrina litigation of all stripes, including a criminal contempt of court prosecution aimed at him by a federal judge. Once the feds invited themselves in, they stayed all day. Exactly what they were looking for, whether they found it and what case this is connected to, no one is saying. Scruggs' attorney denies any involvement by Scruggs or his firm in wrongdoing, and appears to deny any connection of the search to the criminal prosecution. More at Insurance Coverage Law Blog.

Scruggs, Renfroe, and a bench recused - PointOfLaw Forum

David Rossmiller:

In yet another of the increasingly bizarre twists and turns in Katrina-spawned litigation, in USA v. Scruggs, the prosecution of Dickie Scruggs for criminal contempt of court, Scruggs filed a motion asking all federal judges in the Northern District of Alabama to recuse themselves, and they did.

David has more on developments here, here, and, especially, here, as well as a post on a more or less separate instance of Scrugg-duggery in which the hard drive of one of his adversaries somehow found its way into his hands. The WSJ law blog also comments.

Plus: For those with WSJ subscriber access, the peerless James Q. Wilson, one of the pre-eminent social scientists of our era (and also -- who knew? -- a former director of State Farm) tackles the Katrina litigation: "A Real Insurance Fraud".

Mississippi on Trial - PointOfLaw Columns

By Jim Copland

This piece originally appeared on National Review Online, 11-6-2007.

For all the attention being showered on the interminably long campaign leading up to next year�s election, a handful of states around the country are holding important elections for statewide office today. The stakes are particularly high in Mississippi, the nation�s poorest state and until recently its most abusively litigious. While Mississippi�s legal climate has recently improved, the Magnolia State�s trial lawyers have this year mounted an aggressive campaign to take control of the government and turn back the clock.

Headlining the trial bar�s ticket is John Arthur Eaves, the Democratic nominee for governor. Eaves is himself a personal injury, mass tort attorney, whose law firm website advertises for clients suing over a range of products from Benzene to Celebrex to Bextra, as well as nursing homes and even terrorism. In his bid to win over a conservative state, Eaves has been trumpeting his born-again Christian beliefs to religious fundamentalists as he challenges popular incumbent governor Haley Barbour, the Republican architect of the state�s comprehensive tort reform legislation of 2004.

While Eaves is one of Mississippi�s most prominent plaintiffs� lawyers, 34-year-old Democratic lieutenant-governor candidate Jamie Franks, while also educated as an attorney, has made his professional home for over a decade in the state legislature. Yet Franks too is a favorite of the trial bar and has based his campaign in significant part on his support for a �Mississippi Insurance Policyholders Bill of Rights,� which would make it easier to sue insurance companies to collect on less tenable claims.

Indeed, demagoguing against insurance companies in the wake of Hurricane Katrina is a theme that all the Democrat candidates in Mississippi have adopted. While the overwhelming majority of claimants have been paid, some homeowners who lacked flood insurance but whose houses were destroyed by flooding have engaged in litigation against insurers in an effort to collect under their general homeowners� policies, the flood-exclusion language be damned.

Leading this massive legal charge is none other than Pascagoula lawyer Dickie Scruggs, who led the negotiations for the states when they sued the tobacco companies and netted a cool billion in the process. In his handling of the Katrina cases, Scruggs�s behavior has been so aggressive that it has drawn the ire of federal judges and prosecutors; the feds have accused him of criminal contempt.

Politically, Scruggs is connected to both parties—he�s Republican Senator Trent Lott�s brother-in-law—and his efforts in the current campaign have been brazen. When the state�s eight-term incumbent insurance commissioner George Dale, a Democrat, refused to scapegoat the insurance companies, Scruggs gave $250,000 to a political action committee to support his favored candidate, Gary Anderson, who defeated Dale in the Democratic primary.

But Scruggs has certainly had no beef with the Democratic nominee for attorney general, his close friend Jim Hood, who launched civil suits and criminal investigations against State Farm, which was at the time of the hurricane Mississippi�s largest home insurer (and now, in response, has decided against writing any more homeowners� policies in the state). In his time in office, Hood has not only worked closely with Scruggs; his AG office has been so solicitous of hiring outside contingency fee counsel that it has often appeared to be on auction to the highest trial lawyer bidder.

For example, in November 2005, Hood received a campaign contribution of $15,000 from the New York law firm Bernstein Liebhard & Lifshitz; the firm received a state contract on February 16, 2006—and sent Hood another $15,000 one week later. Other out-of-state firms that have received Mississippi contracts for legal work and donated heavily to Hood�s campaign are the New York firm Bernstein Litowitz Berger & Grossman, which gave Hood over $30,000 in the last two years, and the Texas firm Baron & Budd, which gave him almost $20,000 in 2005.

The trial lawyers� efforts to take Mississippi reflect their weakened power in what was once their favorite jurisdiction: In the U.S. Chamber of Commerce�s annual survey of business attorneys conducted by the Harris Group, Mississippi was perennially ranked the �worst state� for overall legal climate, through 2004. Tiny Jefferson County—home to fewer than 10,000 residents—hosted over 600 lawsuits in 2000, involving over 3,000 plaintiffs, almost three-fourths of whom were from out of state. The owner of the only drugstore in town, Hilda Bankston, found herself dragged into every mass action pharmaceutical lawsuit in the county, since the out-of-town lawyers needed her as a defendant to keep the case in Mississippi courts.

In 2004, Governor Barbour led the charge to clean up this situation, and the state passed comprehensive tort reform. The results of this legislation, and improvements to the state�s judiciary, have been profound: the state�s largest medical malpractice insurer lowered rates each of the following three years, and businesses have begun to look at Mississippi as a attractive site for investment. But the improvement has been limited by fears that the state could revert to what the American Tort Reform Association calls a "judicial hellhole"—an outcome that will be largely determined by what the state�s voters do at the polls.

— Jim Copland is the director of the Center for Legal Policy at the Manhattan Institute.

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