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Saturday, March 29, 2008
Carl Horowitz :: Townhall.com Columnist
Dickie Scruggs: A Legal Career Up In Smoke
by Carl Horowitz
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Richard F. "Dickie" Scruggs has a gentlemanly demeanor seemingly at odds with his profession as a take-no-prisoners trial litigator. A decade ago, the Mississippi native was riding high. Nobody in the plaintiffs' bar struck as much fear in the hearts of the nation's tobacco manufacturers as he. Now his career appears over, a casualty of scandal, though not of the sort that recently felled securities-industry scourge William Lerach.

This March 14, Scruggs, along with his Oxford, Miss. law firm partner, Sidney Backstrom, pleaded guilty in federal court to bribery charges. According to the indictment, the pair, along with three other persons, one of them Scruggs' son, had conspired to offer cash payments totaling some $50,000 to Lafayette County (Mississippi) Circuit Judge Henry L. Lackey in return for a favorable ruling. The case concerned the distribution of attorneys' fees in a settlement with State Farm Insurance over Hurricane Katrina-related claims. In return for Scruggs' guilty plea, federal prosecutors are likely to drop other charges. His son and law partner, David Zachary Scruggs, pleaded guilty on March 21.

It seems strange that one of the richest, smartest lawyers in America would risk his career by orchestrating a bribe of a state circuit judge. But in the world of aggressive, high-flying litigators, reputation is everything, especially for those already on the A-list. One has to win, and consistently, to retain existing clients and gain new ones. And though Scruggs had a reputation as a giant killer, he'd seen significant setbacks this decade. Bribery seemed a low-risk way to get back on track.

Born and raised in Mississippi, Scruggs, now 61, could pass for a leading character in a John Grisham novel. Indeed, he's allegedly the model for Grisham's "King of Torts." A former navy fighter pilot, Scruggs received a bachelor's and a law degree from the University of Mississippi. He gave generously to his alma mater; Scruggs Hall, which houses the university's music department, bears his name. A longtime Democrat, he knew how to make peace with Republicans, especially given that fellow native son Sen. Trent Lott, who recently stepped down, is his brother-in-law.

Dickie Scruggs is a populist, fighting for the Little Guy screwed over by the irresponsible and the powerful. In his reputation-building case, he represented workers at the Pascagoula shipyards who'd developed lung cancer and other illnesses from exposure to asbestos fiber. He followed that up with a series of successful class-action suits against the asbestos industry. But the main event was yet to come.

By the mid Nineties, the tobacco industry was ripe for the picking by prosecutors and litigators alike. Up until then, manufacturers had argued, successfully, in "sick smoker" cases that cigarettes aren't dangerous to one's health, and more plausibly, that the decision to smoke is freely chosen. But the climate of public opinion by then had shifted radically. Smoking, in the eyes of many Americans, was just this side of wicked. It was time to go in for the kill.

In May 1994, then-Mississippi State Attorney General Mike Moore sued several major tobacco companies. Seeking to "dramatically improve public health and save lives," he decided to secure outside private help, most importantly, Dickie Scruggs, who had been an Ole Miss classmate.

Getting the suit off the ground was a tough sell. The National Association of Attorneys General wouldn't even allow Moore to give a presentation at its 1994 convention in San Antonio. Moore managed to corral some of his colleagues on the premises. And he wouldn't quit after that.

What ultimately turned the tide was an interpretation of the law, codified by the State of Florida. Since cigarettes make smokers sick, plaintiffs' lawyers reasoned, they incur medical costs upon all of society. And since state governments bear a large portion of these costs, especially through Medicaid contributions, it was only fair that tobacco companies reimburse them. Scruggs later admitted: "Our theory was to sue on behalf of states, which had not chosen to smoke but were still being forced to pay health care costs, and that the tobacco companies had gotten rich because of it."

As the suit gathered steam, the underlying zealotry became more evident. Then-Texas Attorney General Dan Morales, declared in 1996 that his goal was "to bring this (tobacco) industry to its knees." One by one, states joined in the fray, smelling serious money. The potential costs of defeat for the tobacco industry rose accordingly. "Our goal was to raise the stakes so high that the industry would not be able to sustain a single loss," reflected Scruggs. "We wanted them to face a 'bet the company' lawsuit in each state, which we believed would force them to the negotiating table."

Tobacco companies, sensing they were boxed in, succumbed. On June 20, 1997, at a televised press conference, plaintiffs and defendants announced the results of a behind-the-scenes "master settlement." Brown & Williamson, Lorillard, Philip Morris, R. J. Reynolds, Commonwealth, and Liggett & Myers would pay out a combined $368.5 billion over 25 years.

But there was a catch: The agreement would require congressional approval. Sen. John McCain, R-Ariz., likely our next president, now was the man of the hour. He sponsored comprehensive legislation to raise the 25-year industry "contribution" level to $516 billion. The centerpiece of the bill was a $1.10-per-pack cigarette excise tax whose revenues would be earmarked to promote children's health. This time, tobacco manufacturers stiffened their spine and prevailed -- sort of. The bill died on the Senate floor in June 1998, partly because several key Senators decided the measure wasn't tough enough on cigarette makers. That November, the parties had negotiated a lower settlement: $206 billion for 46 states and various territories, plus another $40 billion for Florida, Mississippi, Minnesota and Texas, the latter four states in the process of preparing their cases for trial.

Dickie Scruggs was sitting on top of the world. Plaintiffs' attorneys had coaxed nearly $15.5 billion in reimbursed fees from Big Tobacco. His firm's share was nearly $1 billion. And he wasn't afraid to spend it. "Immediately, we went through a period of buying faster planes, bigger boats and nicer cars," he later ruminated. "The obscene amounts of money being handed out certainly damaged our cause before Congress and in the public." Prosecutors echoed this view. "The pursuit of perfection became the enemy of the good. We should have accepted less," said Iowa Attorney General Tom Miller. Now they tell us.

Scruggs' career never again would achieve the same heights. It was not for want of trying. In 2000, he led class-action lawsuits in four states and Puerto Rico against Novartis, maker of the drug Ritalin, plus the American Psychiatric Association and the nonprofit Children and Adults with Attention Deficit/Hyperactivity Disorder (CHADD). Scruggs alleged that Ritalin was a "huge risk," "grossly over-prescribed" and designed to treat a nonexistent disorder. The gambit didn't pan out. In all five jurisdictions, the court dismissed the suit before trial or the plaintiffs dropped the suit.

Hurricane Katrina would prove to be his downfall. The August 2005 storm and resulting floods caused an estimated $81.2 billion in property damage. A few months later, Scruggs formed the Scruggs Katrina Group (SKG), consisting of plaintiffs' lawyers representing Gulf Coast policy holders whose claims had been denied by major insurance companies. This case was personal as well as business. Pascagoula beach homes belonging to Scruggs and brother-in-law Senator Lott were among properties demolished.

The plaintiffs reached an $80 million settlement with State Farm, producing $26.5 million in legal fees for SKG. Unfortunately for Scruggs, a rival litigator, Jones, Funderberg, Sessums, Peterson & Lee, thought it was getting short-changed. The firm's lead partner, John Griffin Jones, sued to get some of that money.

Dickie Scruggs wasn't about to yield. In March 2007 he and four persons -- all future defendants -- paid Judge Henry Lackey a visit to make him an offer: Rule in our favor and we'll make you richer. Lackey, not wanting to bring legal troubles upon himself, quickly reported the incident to the FBI. That in turn led to an undercover sting operation. Timothy Balducci, a New Albany, Miss. lawyer, along with former Mississippi State Auditor Steven Patterson, decided to cop a plea and work with the feds. During September 27-November 1, 2007, Balducci made three cash payments to Judge Lackey totaling $50,000. "We paid for this ruling; let's be sure it says what we want it to say," Balducci told Zach Scruggs and Sid Backstrom.

The indictments came down not long after. Instantly, Dickie Scruggs became radioactive to his friends atop the Democratic Party food chain. Senator Hillary Clinton cancelled a scheduled December 15 presidential campaign fundraiser at his home.

Scruggs insisted he'd been railroaded. His lawyer, John Keker, got that message out to the media. "I'll say this, [the judge] sure as hell didn't get bribed by Dick Scruggs or anyone else in his law firm," the San Francisco-based Keker told the Wall Street Journal. He repeated the story to the newspaper this month, accusing prosecutors of concocting a "manufactured crime." The remark ran on March 14, the very day Dickie Scruggs entered his guilty plea -- classic bad timing.

Scruggs' career, for all intents and purposes, is over. He's looking at a five-year prison term and disbarment. But his fall may reveal more about systemic than personal failings. Over the last several decades, the plaintiffs' bar has succeeded in expanding definitions of liability beyond what many people would consider reasonable. The lawsuit remains a necessary option, but in cynically opportunistic hands it has become a tool for fleecing deep pockets. At least some members of the profession, including those sitting on the bench, are saying "no." It's the next best thing to tort reform.

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About The Author

Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a Townhall.com Gold Partner organization dedicated to promoting ethics in American public life.
 
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Beastie Boy, are you always
this dumb? Scruggs was and is a DEMO - get that straight. Oh, yes: Bush made him do it! You suffer from Bush Derangement Syndrome. The other sicko is that ambulance chaser John Edwards, who has the gall to lecture people about poverty as he builds his mansion. These people disgust me.

Moore motives, porn and alcohol
Being a former Mississippian, I always wondered about Mike Moore and his involvement with Scruggs in the tobacco suit. We always heard rumors of him getting paid off for bringing the suit as soon as he got out of office, then running for higher office.

Also, if injury to smokers, and the cost to the state is the motive, it would seem alcohol injury is even more costly, and would deserve a look. Disabilities, cost for treatment, medical bills, broken families, child support for the children and wives, etc.

Even the pornography industry and it's influence on men who abuse and damage women and children's lives after being influenced by varying degrees of porn would be a suitable target for pursuing damages. Of course, since most men were hooked on porn after Hefner mailed Playboy to all the male college students 30 plus years ago, it's not likely to happen. (most men would feel guilty for suing a company when they derive such pleasure from it's product) Porn has grown like Kudzu (a vicious acreage covering vine in the south). And wives could sue for emotional damages because their husbands are not able to truly connect emotionally with them, after the men have become addicted to having sex with images in their minds, instead of their wives.
The men could sue, for never being able to be totally sexually satisfied with a real human being for the same reason.

But sooner or later, we have got to stop being victims, and take responsibilty for our own actions. The money is not endless. And the working pool does not seem to be growing in this country.

Oh well, just rambling.


Simple: GREED
Wouldn't matter if Trent Lott were his brother, Scruggs made the decisions, eventually then to make one really bad one, trying to buy off an honest judge. Fry his hide!!!!

The big picture
The bigger problem is that our legal system has nothing to do with justice or morals. It's a game played by lawyers. Criminal lawyers lie, cheat, cry, whatever, to get criminals they know are guilty get declared "not guilty" by deluded juries. On the other side crooked prosecutors like Nifong and Spitzer lie, cheat, cry, whatever, to advance their careers.

Tort lawyers like Scruggs and John Edwards lie, cheat, cry, whatever, to bamboozle foolish, uninformed, and often stupid jurors to give them huge amounts of money in lawsuits that are patently bogus.

It's the way our system works -- it was set up by lawyers for the enrichment and empowerment of lawyers. Obvious facts and truths are "excluded" from testimony because of the silly rules of the "lawyer game." Tort cases involve "all and several liability" (I think that is the term -- if it isn't, I'm sorry): that is, whenever there is a real or perceived injury, you can sue whoever has the most money or the biggest insurance policy -- the "deep pockets" principle -- whether that person was in any real way responsible for the injury or not.

People like Scruggs just illustrate how crooked the system really is.

Ace
Regarding your very poignant post, I wish you would give it wide exposure on other boards. Few of us here except for leftists would consider the story of your personal epiphany redundant. More than one conservative arrived at your place after existing in dark ignorance for many years. If you change even one mind and prevent that person from having to learn those bitter lessons through experience, it will have been well worth it.

Not surprised
at all that he is associated with Trent Lott.

No wonder Lott is retiring.

Arrogant elitists
drugged by years of getting away with inturpitude, just can't believe there is something they can't get away with. The list is endless. Some commentary on the ethics of lawyers and law schools!!! Nothing less than time behind bars is suitable for these scoundrels.

why
Did he just not run for some political office like McQuack? He would have been safe there from prying eyes!

http://eclipptv.com/viewVideo.php?video_id=956&title=Vietn am_Veterans_Against_McCain&vpkey=62acaf320c

http://www.immigrationshumancost.org/text/crimevictims.htm l
Free Ramos and Compean
Write in a name folks, it is still a free country! Well, until McQuack comes up with more ideals on how to kill free speech.

The little guy got coupons or 5 cents on
the dollar. Scruggs and his crew made billions.

Yet, he had to argue about splitting a fee and was willing to try to bribe a judge so the fee split would go in Scruggs' favor, as if he needed another dime for anything.

Scruggs
Small technical point. Scruggs flew the A-6 Intruder. This is a bomber and not a fighter. Us old Navy types like to keep these things straight. Scruggs flew them during the Viet Nam era but never went in the combat zone. I never have figured that one out. He did his required time and left the Navy with a discharge, but he is not eligible for any retirement pay since he did not serve the required 20 yrs.

Scruggs is no hero of any sort. Mr. Horowitz's claim that Scruggs was for the "little guy" is BS. Scruggs used his "little guy" clients as a means to an end. He then teamed up with megalomaniac politician Mike Moore to get fame, power, and most of all, money for the two of them. Scruggs first scored big in asbestos where there were some workers who had been injured by that compound. Scruggs expanded the pool of "injured" (and thus his cut of the money) to include many who had no significant asbestos injury. Prof. Lester Brickman of the Cardozo Law School says those cases were "manufactured for money."

Scruggs co-conspirator Tim Balducci bragged to Judge Lackey (in the judge's wired by the FBI chambers) that this was, "not my first rodeo with Scruggs." Indeed. Scruggs also was a player in the mass tort silica cases. Federal Judge Janis Jack threw them all out of her court saying that the whole thing "reeked of fraud." That was over two years ago and so far no one has been indicted there. Why not?

Scruggs is a crooked lawyer and has been for a long time. He is no hero.

Beastie Boy
Gee, you'd think if "The Bu$hCo DoJ" looked the other way whenever it encountered corruption of the sort Dickie displays, then Dickie and his buds would have made lots of huge political donations to the Republican party, not almost entirely to Democrat candidates.

And corrupt as "The Bu$hCo DoJ" must be, wouldn't you think they'd have gotten tough when Dickie refused to pony up?

What a shame Dickie & Co. ran into an honest judge. Who'd have thought such a thing existed?! Looks like for once The People got lucky. Thanks, Judge Lackey.

Scruggs
How disappointing to read that Scruggs had been a Navy fighter pilot- is that how he met McCain through their navy connection? I'm curious if Scruggs did 20 years thus receiving a military retirement and if so, would he lose his military retirement and health benefits over this felony conviction?

The only reasonable lawsuit is yours.
CH: "Over the last several decades, the plaintiffs' bar has succeeded in expanding definitions of liability beyond what many people would consider reasonable. The lawsuit remains a necessary option, but in cynically opportunistic hands it has become a tool for fleecing deep pockets.
-------------------------
Robert Bork v. The Yale Club.

Business as usual
CH: " It seems strange that one of the richest, smartest lawyers in America would risk his career by orchestrating a bribe of a state circuit judge. But in the world of aggressive, high-flying litigators, reputation is everything, especially for those already on the A-list. One has to win, and consistently, to retain existing clients and gain new ones. And though Scruggs had a reputation as a giant killer, he'd seen significant setbacks this decade. Bribery seemed a low-risk way to get back on track.
---------------------------
Corruption is the order of the day in many of our courts. The Bu$hCo DoJ looks the other way in most instances.

Carl
How do you think "Dickie" GOT RICH?Bribing people, sometimes passes off as JUSTICE.You look a little too old,to be this naive.

The man is a sleaze . . .
I had remote dealings with him . . . thankfully nothing direct, but his record speaks for itself. If I had a list of the innocent people he has harmed, this blog would not be long enough. Rot in peace.

No sympathy for this Devil
It's always wonderful to see lawyer scum falling from grace they never earned to begin with. Scruggs was just another greedy opportunist and Lifestyle fascist; I've the same amount of sympathy for him as I do the idiots who smoked and smoked then later whined about getting sick despite 40 years of well-advertised warnings: none. I'll be buying a pack of cigars tomorrow to celebrate another dickie left flapping in the breeze. I'm only sorry he won't be sharing a cell with Shitzer, the Gollum of Zoo York. Ha ha ha.
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