Sunday, December 16, 2007

Katrina attorney Scruggs runs into own legal woes Richard Scruggs
Fri Dec 7, 2007

By Maggie Burks

JACKSON, Mississippi (Reuters) - A high-profile Mississippi lawyer who made a name battling powerful corporations, including insurance companies in the aftermath of Hurricane Katrina, is facing his own disaster after being indicted on allegations he tried to bribe a judge.

Richard "Dickie" Scruggs is conducting business as usual, according to a member of his defense team, after a federal grand jury indicted him and four colleagues on November 28.

Scruggs pleaded not guilty to six charges of conspiracy to bribe a judge.

Nevertheless, his law firm has since withdrawn from the Scruggs Katrina Group, a group of law firms he brought together after Hurricane Katrina devastated Mississippi and New Orleans and that took on insurance companies on behalf of Gulf Coast residents who had been denied insurance payouts.

"They just felt like, with this indictment pending, that it would be best that they just withdrew from the Scruggs Katrina Group so that it wouldn't be a distraction to their clients' litigation," said attorney Joey Langston of the Langston Law Firm in Boonville, Mississippi.

The Barrett Law Office, along with two other area firms, has taken over Scruggs' cases, a switch that Scruggs' corporate foes took in stride.

"We don't see any change from Scruggs to Don Barrett," said Fraser Engerman, a spokesman for State Farm, the largest Mississippi home insurer and one of Scruggs' fiercest opponents.

Ninety-nine percent of all insurance claims from Katrina were settled by August 2007, according to the Insurance Information Institute, a research group sponsored by the property casualty industry and a critic of the legal challenges championed by lawyers like Scruggs.

"The litigation brought by Scruggs and others only created a very difficult environment for insurers and added to the cost of providing coverage," said institute President Robert Hartwig.


Langston said Scruggs was trying to soldier on despite the indictments.

"Obviously it has an enormous impact on your personal and professional lives, and you just try to handle your business as best you can," said Langston, who has collaborated with Scruggs since the late 1990s and is one of his defense attorneys in the bribery case.

The indictment names Scruggs along with his son, David Zachary Scruggs, Scruggs Law Firm attorney Sidney Backsrom, Patterson and Balducci attorney Timothy Balducci and Patterson and Balducci employee Steven Patterson as co-conspirators in an eight-month plan to pay Circuit Judge Henry Lackey $50,000 to return a ruling favorable to the Scruggs Law Firm.

The case involved a lawsuit brought against the firm regarding the division of attorney's fees in Katrina-related insurance litigation.

According to the indictment, Balducci approached Lackey in March 2007 with an offer. According to the U.S. attorney's office in the northern district of Mississippi, Lackey reported the encounter to the FBI, and subsequently "co-operated substantially" with their investigation.

On December 4, Balducci pleaded guilty to the charges, the lone guilty plea among the five charged.

Balducci asserts that he was acting under the direction of Scruggs, and the indictment cites several conversations between Balducci and Lackey that name Scruggs as an absent party.

"The only person in the world outside of me and you that has discussed this is me and Dick (Scruggs)," the indictment says Balducci told Lackey.

Scruggs denies involvement with the attempted bribery.