Posts Tagged ‘Katrina’

What liberal media bias? Part DCCXIV

Associated Press:

The Supreme Court has refused to offer help to Hurricane Katrina victims who want their insurance companies to pay for flood damage to their homes and businesses.

As David Rossmiller notes,

As if the choice in a case is simply going where your sympathies lie, and when the court decided not to take the appeal, the halls rang with evil laughter and mocking statements such as this: “We will extend no help to Katrina victims because we love to see them suffer and we love to support our evil twins, the insurance companies who steal from them.”

The Fifth Circuit, of course, simply enforced the insurance policies as written, and noted that the word “flood” included a flood caused by the breach of the levees in New Orleans, reversing a district court that disingenuously held otherwise. And the Supreme Court simply refused to make the appeal of that obvious decision one of the 1% of petitions for certiorari that it grants.

Update: Mark Obbie, while also critical of the lede, writes:

Read On…

“Katrina Suit Vs. Army Corps Dismissed”

Whatever the failings of the Army Corps of Engineers, the Flood Control Act of 1928 makes clear that federal taxpayers cannot be forced to pay through litigation for the catastrophic collapse of the levees, so there goes the multi-trillion-dollar class action. (Cain Burdeau and Michael Kunzelman, AP/Forbes, Jan. 30). Update: That wasn’t the last word, though: later rulings allowed suits against the Army Corps to go forward.

Scruggs scandal: Joey Langston charged, cooperating with feds

Now we may have a better idea why prominent Booneville, Miss. lawyer Joseph Langston recently withdrew as counsel for Dickie Scruggs in the widening corruption scandal: per a report by Jerry Mitchell in Sunday’s Jackson Clarion-Ledger, Langston was himself nabbed on corruption charges, has pleaded guilty and is cooperating with federal authorities. According to the article, Langston’s guilty plea arose from his involvement in one of Scruggs’s many fee disputes with fellow lawyers, this one being the Luckey-Wilson asbestos fee matter (in which Scruggs’ adversaries were Alwyn Luckey and William Roberts Wilson Jr.) Langston will apparently testify that he worked with both Dickie Scruggs and son Zach in an attempt to improperly influence Circuit Judge Bobby DeLaughter, who issued rulings favorable to Scruggs in the case. In one memorable detail, the C-L reports that federal authorities have obtained a May 29, 2006, e-mail in which “Zach Scruggs told his father’s attorney in the case, John Jones of Jackson, that ‘you could file briefs on a napkin right now and get it granted.'” Judge DeLaughter has denied any impropriety. (Jerry Mitchell, “Another lawyer pleads guilty”, Jan. 13). Separately, Patsy Brumfield of the Northeast Mississippi Daily Journal, who was first with an unconfirmed report of Langston’s guilty plea, also reports from unnamed sources that federal prosecutors have flipped another of the five indictees in the original scandal, Steven Patterson (partner of informant Tim Balducci), and that documents to be unsealed Monday will clarify other aspects of the status of the case. (“First public clue Patterson has pleaded in Scruggs case”, Jan. 11; “Scruggs updates”, Jan. 12). Discussion: Lotus/folo, Jan. 12, Jan. 13.

The implications are enormous. Among them:

* It looks as if informant Balducci, who formerly practiced law in the Langston law firm, wasn’t kidding when he said he knew where there were “bodies buried“. Information from Balducci likely helped lead the feds to raid the Langston office and seize records documenting the alleged Wilson-Luckey conspiracy.

* Langston is no incidental Scruggs sidekick or henchman; he’s quite a big deal in his own right, with a national reputation in mass tort litigation. He’s been deeply involved in pharmaceutical liability litigation, in tobacco litigation, in litigation against HMOs, and in litigation against non-profit hospitals over alleged violations of their charitable charters, among other areas. Mississippi attorney general Jim Hood, the law enforcement officer who has comically been playing potted plant as one after another of his closest political allies have been getting indicted in recent weeks, has employed Langston as lead counsel for the state in both the controversial Eli Lilly Zyprexa litigation and the even more controversial MCI back-tax-bill litigation. Langston also served Scruggs as go-between in the much-discussed funneling of $50 million in tobacco funds to ex-football player P.L. Blake (to whom now-reportedly-flipped Patterson was also close). If the reports that Langston is now cooperating with the feds are accurate, he will presumably be expected to tell what he knows about other episodes. (Langston has also endeavored to provide intellectual leadership for the plaintiff’s bar, as in this Federalist Society panel discussion presentation (PDF) in which he strongly criticizes the work on federalism and state attorneys general of Ted’s AEI colleague Michael Greve).

* Part of Scruggs’s modus operandi, as we know from tobacco and Katrina (among other) episodes, is to arrange to bring down prosecutions and other public enforcement actions on the heads of his litigation opponents. A particularly brutal instance of this crops up in today’s Clarion-Ledger piece, which reports that Scruggs in 2001 took documents obtained in discovery from Wilson, his fee-dispute opponent, and brought them to Hinds County (Jackson) district attorney Ed Peters hoping to instigate a state tax prosecution of Wilson:

Later, one of Wilson’s lawyers met with Peters, and [Wilson attorney Vicki] Slater said Peters told that lawyer that a “high-ranking public official” asked him to prosecute Wilson.

Peters could not be reached for comment.

Wilson did nothing to warrant criminal prosecution, Slater said. “All of this was to help Scruggs in his lawsuit.”

This is the same Dickie Scruggs of whom the New York Times was less than a year ago running moistly admiring profiles quoting common-man admirers of the Oxford, Miss.: lawyer: “good people. … If he tells you something, it’s gospel.”

P.S. It would certainly be interesting to know who that “high-ranking public official” who helped Scruggs in the tax-prosecution matter was, if there was one.

P.P.S. Corrected Monday a.m.: “Langston’s guilty plea was to an information; he waived indictment” (Folo). This post originally described Langston as pleading to an indictment.

The mother of all ad damnum clauses

I’ve joked about plaintiffs asking for a “squillion gazillion” dollars instead of other effectively fictional numbers, but one plaintiff has actually done it. One Baker, Louisiana, Katrina plaintiff (earlier on Overlawyered and Point of Law) suing the Army Corps of Engineers is asking for 3 quadrillion dollars—though he would presumably settle for one third that amount, which, at $3,000,000,000,000,000.00 would be over 200 times the annual $13 trillion gross domestic product of the United States. 246 other plaintiffs (including the City of New Orleans, which asked for “only” $77 billion, notwithstanding a taxpayer-funded bailout of tens of billions for a city built beneath sea level) are asking for over a billion each. [AP; TortsProf]

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.
Not exactly the profile of a “clueless wannabe”. More like a “trusted inside player”, no?

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?'”

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.”

$10 million in walking-around money — and Scruggs “never asked who or what or all that”? (Update: in a sensational new post, David Rossmiller points to a document — page 514 of the Luckey trial transcript, PDF — in which the overall money paid to or through Blake (most of it in the form of future payouts) is pegged at around $50 million. The “well over $500,000” figure told to reporter Michael Orey seems to have signified well, well over, indeed.)

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.

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.

Read On…

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.