‘Kings of Tort’ chronicles a sordid chapter
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David Sanders
David Sanders
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In March of 2007, when Judge Henry L. Lackey perceived that he had been offered a bribe to influence him in a case before his court, he faced a quandary. Lackey was a judge in the sprawling Third Circuit of Mississippi, comprising the counties of Benton, Calhoun, Chickasaw, Lafayette, Marshall, Tippah and Union in north Mississippi. The initial approach had come from Timothy Balducci, a young lawyer whom Lackey had mentored early in Balducci’s career. The inducement offered was an “of counsel” position in Balducci’s law firm whenever the septuagenarian judge chose to retire from the bench. But Lackey knew that the offer was made on behalf of Richard L. ‘Dickie’ Scruggs, a litigant in a legal-fees dispute before Lackey’s court and the universally-acknowledged 800-pound gorilla of tort litigation in Mississippi.

Hence, Judge Lackey’s quandary: his first inclination was to report his suspicions to state authorities. But this would bring the information to the attention of Attorney General Jim Hood. In a telling sign of the rot and cronyism that had already infected the legal system in Mississippi, Lackey knew that Hood — and his predecessor, Mike Moore – had been allies and virtual tools of Scruggs and the plaintiffs’ bar in shaking down the tobacco industry and attempting to do the same to the insurance industry in the wake of Hurricane Katrina. Lackey wisely decided to take his information to Tom Dawson and John Hailman of the office of the United States Attorney for the Northern District of Mississippi in Oxford. The judge thus set in motion a chain of events that would dominate the remaining 21 months of Dawson’s tenure as First Assistant U.S. Attorney, while having profound consequences for all of the other players involved.

In late November of 2007 Alan Lange was running his business in Jackson and, on the side, operating a “blog” – short for weblog, an online journal or an interactive site where readers can post comments – called YallPolitics, which followed political stories in Mississippi. When personnel of the U.S. Attorney’s office and the FBI executed a search warrant on Scruggs’ law office on the Square in Oxford on the morning of November 27, and later that afternoon obtained grand jury indictments of Scruggs, his son, Zach, his law partner, Sidney Backstrom, Tim Balducci, and former State Auditor Steve Patterson, a new – albeit small— cottage industry sprang into existence: blogs devoted to following developments in “the Scruggs case.” On the West Coast, David Rossmiller was operating Insurance Coverage Blog, a site concerning itself with arcane matters of insurance law. When the Scruggs indictment broke, Rossmiller began blogging all Scruggs all the time. In Florida, a leftish lawyer with Mississippi connections, Jan Goodrich, switched her homey blog, which had featured recipes and gardening advice, to mostly covering the Scruggs case. But YallPolitics, being in Mississippi and at the center of the action, became the go-to site for breaking news in the Scruggs case.

Now, after most of the shoes presumably have dropped, Lange and Dawson have come together to produce an authoritative account of the takedown of the King of Torts, appropriately titled Kings of Tort. I followed the case so closely as it unfolded that I cannot judge with any confidence how a reader who did not follow the case will react to the book. For non-lawyers, there is a good bit of inside baseball, but it delivers a full account. In addition to what came to be called Scruggs I (the Lackey bribe), the authors also cover a number of related events, including Scruggs II, which involved the bribery of Judge Bobby DeLaughter in Wilson v. Scruggs, yet another legal-fees case, the tobacco litigation, the prosecution of Paul Minor, and the attempt to attack State Farm Insurance Company using tactics honed to perfection – or so it was thought – in the tobacco cases. The genesis and linchpin of the tobacco litigation was a theory of liability developed by Mike Lewis, a lawyer in Clarksdale who had been a law school classmate of Mike Moore.

The theory was not that tobacco companies were liable to injured smokers – who arguably were at least partly responsible for their own injuries, especially after health warnings appeared on cigarette packages – but that they were liable to the states, which had incurred Medicaid payments for tobacco-related illnesses. It would be easy enough to counter this claim by demonstrating that smoking actually reduced the total sum of Medicaid expenses by promoting premature deaths among smokers, who would not then hang around into senescence, consuming expensive medical goods and services. Since the case was settled without trial, Scruggs’ usual modus operandi, this evidence was never presented in court.

Seeing the full account of the Paul Minor prosecution in one place – rather than getting it in drips and dribbles as it was reported by members of the media who were not as conversant with the law as these authors – one may still claim that Minor may have been selectively prosecuted. One cannot credibly claim that he was not guilty. Scruggs’ history with co-counsel has been combative at best. He had already lost a case in which Alwyn Luckey, a one-time partner, had sued Scruggs for his share of fees from asbestos litigation. When Roberts Wilson sued him for what Wilson claimed was his share of the firm’s $26.5 million profits from his tenure as Scruggs’ partner, Scruggs had added reason to fear the outcome: Wilson added a claim that it was his money that partly financed Scruggs’ subsequent litigation against the tobacco industry and that, under a theory of constructive trust, Wilson was also entitled to a big chunk of the near billion-dollar fee that Scruggs harvested from that action. Scruggs’ alarm at this prospect led to the scheme to bribe Bobby DeLaughter, the judge in Wilson v. Scruggs in the Seventh Circuit Court (Hinds County). For this purpose, Scruggs changed counsel, bringing in Joey Langston and Tim Balducci, who would, secretly using Ed Peters as an undisclosed adviser, make the bribe offer to DeLaughter.

Johnny Jones and Steve Funderberg of Jackson, who had defended Scruggs in the Luckey case and who were part of SKG, the Scruggs Katrina Group, set up to sue insurance companies, played the part of the little boy who pulled on a thread and watched in astonishment as the whole dress fell apart. Told that they were being cut out of SKG with only miserly compensation, they filed suit in Judge Lackey’s court. Their case — Scruggs I, the attempted bribery of Judge Lackey — then opened the door to Scruggs II, and the Scruggs empire imploded.

The attempt to shake down State Farm, using the tactics from the tobacco litigation, came to resemble comedy more than anything else. With its slapstick cast of the “trailer lawyers,” the energetic Rigsby sisters, with their multiple office liaisons and visions of fame as heroic whistleblowers in the movie that was sure to follow, the ever-compliant Jim Hood, allowing his office to be used as a safe-house for the purloined State Farm documents, the State Farm litigation served as a fitting denouement for the orgy of tort abuse the state had endured: tragedy degenerates into farce.

One minor quibble about Kings of Tort: the text is plagued by a plethora of small usage errors. Pronouns in the wrong case, “effect” consistently used when the authors mean “affect,” mistaking $3 million for “3 percent of a billion,” when it is actually three tenths of one percent, to cite just a few. These oversights, which any half-awake editor should have caught, clang on the ear of an old English major. But this detracts only minimally from the enjoyment of this definitive account of the facts and chronology of the Scruggs case.

There are loose ends left from both Scruggs I and II, and from the tobacco litigation. Chief among them is the ultimate destination(s) of the $50 million that Scruggs funneled to P.L. Blake, a colorful political “operative” left over from the old Eastland machine. Because the tobacco settlement required congressional action in order to confer a monopoly on the settling tobacco companies, we can hazard some pretty good guesses. There may yet be more yet to come in the Scruggs saga. Stay tuned to the blogs

David Sanders is a Northsider.
comments (3)
« Alan Wade wrote on Tuesday, Dec 08 at 10:46 AM »
Anyone who thinks that Lange's blog was the "go-to" place online for information about the scandal wasn't paying all that close of attention to the matters as they were unfolding.

Amusing that David Sanders has rushed to post almost this same review on Amazon. Does he have a financial interest?
« Evan Whitton wrote on Thursday, Dec 03 at 03:42 PM »
Dear Northsiders,

I thought Mr Sanders' piece was a skilful and interesting summary of complex events.

Best,

Evan Whitton

Sydney, Australia
« Simon265 wrote on Thursday, Dec 03 at 09:01 AM »
Is this writer even a journalist? What a hack piece. And Alan Lange has an agenda. If they can't spell "Affect" right do you think the facts were researched? These two are just out for cash. Some of his "facts" aren't facts at all. A sad addition to any library.