Dickie Scruggs on his property o

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Dickie Scruggs on his property o Powered By Docstoc
					                  How the Mississippi lawyer who brought
                     down Big Tobacco overstepped.

Dickie Scruggs on his property on the Gulf Coast. After Hurricane Katrina struck, he launched another crusade—against the insurance
                                       T     he most exuberant football rally at
                                             the University of Mississippi last
                                       year occurred four days after the season
                                                                                     ment forced the enrollment of the first
                                                                                     black student at the university, James
                                                                                     Meredith, Ole Miss became a national
                                       ended, when the school’s chancellor,          symbol of white Southern resistance to
                                       Robert Khayat, announced the hiring of        the civil-rights movement. The U.S.
                                       a new head football coach. A cheering         Marshals accompanying Meredith were
                                       overflow crowd at the school’s Center for      pelted with rocks and bottles, and,
                                       the Performing Arts welcomed Houston          eventually, were targets of sniper fire.
                                       Nutt, whom the university had some-           Two people were killed, and more than
                                       how lured to Oxford from the Cotton           three hundred injured, before federal
                                       Bowl-bound Arkansas Razorbacks (who           troops ended the riots. Burke Marshall,
                                       had defeated Ole Miss, as the university      the head of the civil-rights division of
                                       is nicknamed, 44–8).                          the Kennedy Justice Department, called
                                           For Ole Miss, a relatively small pub-     the episode “the final gasp of the Civil
                                       lic school in a poor state, a seven-and-a-    War.”
                                       half-million-dollar deal (as was report-          By the time Khayat became chancel-
                                       edly given to Nutt) seemed an implausi-       lor, the school’s endowment and enroll-
                                       ble splurge, and some sensed the hand of      ment had seriously declined. Khayat ag-
                                       a private benefactor. Khayat acknowl-         gressively raised funds, cultivated allies in
                                       edged as much in his opening remarks,         the academic establishment, and went to
                                       pronouncing himself “profoundly grate-        work on the school’s image. Rebel flags
                                       ful to Dick Scruggs,” whose jet had been      largely disappeared from the football
                                       used as a shuttle during negotiations.        stands, “Dixie” was downplayed, and the
                                       Scruggs was arguably the most success-        school’s mascot—Colonel Reb—was
                                       ful tort lawyer in America, and a deeply      banished from the playing field. In thir-
                                       interested Ole Miss football fan. Dickie,     teen years under Khayat, the school’s
                                       as he was called, even by those who’d         endowment has quintupled, enrollment
                                       never met him, hated to lose; whenever        has increased by about fifty per cent, and,
                                       an Ole Miss coaching change was ru-           along with the old statue of the Confed-
                                       mored, fans tracked Scruggs’s plane on        erate soldier, a bronze sculpture com-
                                       the Internet, for hints about where the       memorating James Meredith now holds
                                       school was looking. If Houston Nutt           an honored place on the campus.
                                       needed a deal sweetener, Dickie Scruggs,          The transformation at Ole Miss
                                       the man who took down Big Tobacco             aroused a good deal of opposition, and
                                       without conducting a single trial, proba-     would not have happened without sup-
                                       bly had something to do with provid-          port from key alumni, among the most
                                       ing it.                                       important of whom was Dickie Scruggs.
                                           But Robert Khayat was grateful to         Although he is the brother-in-law of the
                                       Scruggs for other reasons, too. Khayat        former Republican Senator Trent Lott—
                                       became chancellor in 1995, with the mis-      the two men’s wives are sisters—Scruggs,
                                       sion of liberating Ole Miss from its          who is sixty-one, is a staunch Democrat,
                                       past—a perilous ambition at a place           and shares Khayat’s progressive vision for
                                       where the past was so insistently present.    the school. A few years after Scruggs hit
                                       Into the nineteen-sixties, Ole Miss em-       his first litigation jackpot, in 1993, tak-
                                       bodied an idealized antebellum South.         ing on asbestos companies, he asked
                                       There were plenty of black people on          Khayat what he could do for the univer-
                                       campus, but they were caring for the im-      sity. Khayat, who is seventy, had known
                                       maculate green—the magnolia-lined             Scruggs for most of his life. He had been
                                       Grove—or serving the sons and daugh-          his ninth-grade homeroom teacher in
                                       ters of the state’s white establishment in    Pascagoula, and was on the faculty at
                                       their Greek-revival sorority and fraternity   Ole Miss Law School when Scruggs was
                                       houses. The school’s nickname was itself      a student there. The Chancellor told
                                       a slave term for the mistress of a planta-    Scruggs that faculty salaries in the Col-
                                       tion. Students dressed for games as if        lege of Liberal Arts were pitifully low,
                                       going to church, and cheerleaders tossed      and Scruggs immediately made a twenty-
                                       bundles of Rebel flags into the stands be-     five-million-dollar pledge. After his to-
                                       fore the start of each game as the band       bacco victory, in 1997, he coaxed his
                                       played a rousing version of “Dixie.”          partner in that effort, an Ole Miss alum
industry. Photograph by Brian Smale.       When, in 1962, the federal govern-        named David Nutt, to expand his own
                                                                                     the NeW yorKer, Ma 19, 2008               45
contribution. Ole Miss professors have       U.S. senators. Professional and personal        lived there for four years before going to
since received several generous pay in-      relationships within this group are easily      a military school in Georgia, on a schol-
creases. In 2005, the music building,        tangled. John Grisham, a friend of              arship. Now back in Pascagoula, where
across from the Performing Arts Center,      Scruggs’s, was a classmate of one of            his mother still lived, Scruggs made his
was renamed Scruggs Hall.                    Scruggs’s prosecutors, U.S. Attorney Jim        first fortune from the Ingalls shipyard.
    Scruggs was not present in November      Greenlee (and they both sat through                 In the nineteen-eighties, the growth
when Khayat publicly thanked him for         Professor Khayat’s class). Barbour, one         field for tort lawyers was asbestos litiga-
his help in the coaching search. That        of Scruggs’s fraternity brothers, was his       tion. Inhalation of asbestos fibres had
morning, a federal grand jury in Oxford      adversary in the tobacco fight. Missis-          been linked to dire diseases, and lawyers,
returned an indictment charging Scruggs,     sippi lawyers keep score, counting each         inevitably, had uncovered documenta-
his son, Zach, and three other men           other’s divorces and courtroom out-             tion that asbestos manufacturers knew of
with conspiring to offer a fifty-thousand-     comes. Scruggs is not the only one of           the material’s dangers for decades, with-
dollar bribe to a judge in Calhoun City.     them to have been portrayed in the mov-         out issuing warnings. Workplaces such
That afternoon, Scruggs was finger-           ies (“The Insider”), or to pilot his own        as Ingalls, where asbestos was used in
printed, processed, and arraigned.           jet, but he is the only lawyer notable for      shipbuilding, produced whole popula-
    The reaction to the indictment was       both distinctions. Many also insist that,       tions of sick plaintiffs. Joining the rush of
incredulity. Scruggs had achieved rare       although Scruggs is Mississippi’s most          lawyers signing clients, Scruggs hit upon
standing among trial lawyers—as a vi-        famous trial lawyer, he never really was a      a competitive edge. Standard practice
sionary, whose extravagant fee awards al-    “trial” lawyer at all.                          was to sign only clients with medical ev-
lowed him to discount, with some cred-           “I can assure you he hasn’t tried ten       idence of disease (such as an X-ray);
ibility, money as his prime motivation.      cases to verdict in his life,” Bill Reed, a     Scruggs offered to pay the costs of a po-
He was said to have scored a billion-dol-    Jackson attorney who is one of Scruggs’s        tential client’s visit to a clinic, and to ac-
lar fee in the tobacco case. Why would       closest friends, says. “But he is the mas-      cept the case if the tests returned posi-
he bother with a tawdry little bribery       ter of the deal.”                               tive. He soon had hundreds of clients.
scam? Some speculated that the Bush              Scruggs finished near the top of his             The problem for Scruggs and other
Justice Department was trying to elimi-      class at Ole Miss Law, and was recruited        plaintiffs’ lawyers was getting their cli-
nate a prominent Democratic donor—           into the Jackson law firm headed by one          ents’ cases into court. In a product-lia-
invitations to a Hillary Clinton fund-       of his heroes—William Winter, the               bility case, the plaintiff had to prove that
raiser hosted by Scruggs, featuring an       leader of the progressive wing of the           the manufacturer knew that asbestos
appearance by Bill Clinton, had recently     state’s Democrats, and a future governor        was harmful or failed to properly inves-
been mailed. Others guessed that one of      of the state. It was a terrible fit for          tigate the danger, and that the plaintiff
the indicted figures had been caught in a     Scruggs, as was his brief stay at the next      was exposed to the material and harmed
crime and was trying to win leniency by      big Jackson firm he tried. He was, by that       by it. The litigation of one case could
blaming Scruggs.                             time, married to Diane Thompson, a              take years, and a deep-pocketed defen-
    “I’m rarely at a loss for words, but I   dentist’s daughter from Pascagoula, and         dant could extend the process for as
am at a complete loss about it,” said Jack   he had served five years as a Navy pilot,        long as possible, and then settle the case
Palladino, the San Francisco private in-     flying A-6 attack planes from the decks          just before trial. “It would typically cost
vestigator, who worked with Scruggs in       of aircraft carriers. Within the disciplined    more to litigate that one case than you
the tobacco wars and came away an ad-        hierarchy of the U.S. Navy, fighter-pilot        could ever hope to recover for the total
mirer. “It can’t be that he needed the       culture is a thing apart, attracting the sort   damage in the case,” says Danny Cupit,
money. I just don’t know what to say         of personalities that warrant nicknames         a Jackson lawyer who in 1982 helped
about it.”                                   like Maverick. Scruggs is inclined to go        win the first asbestos case in Missis-
                                             his own way, and did. He moved to Pas-          sippi, against Johns-Manville. By the

S    cruggs and his classmates at Ole
     Miss Law benefitted from a custom
called “diploma privilege,” under which
                                             cagoula and opened a law office, in a for-
                                             mer drugstore.
                                                 Pascagoula, on the eastern end of
                                                                                             time one case was resolved, hundreds
                                                                                             more had been brought. “If it took you
                                                                                             three years to get a case up for trial, and
the school’s graduates were admitted to      the Mississippi Gulf Coast, is an in-           there were hundreds of cases being filed
the Mississippi bar without having to        dustrial town in the most cosmopolitan          each year, the court could never keep up
pass the state exam. This practice (which    region of the state, and it was the near-       with that.”
ended in the nineteen-eighties) height-      est thing to a home town that Scruggs               Scruggs found that his cases were far
ened the striking insularity of the Mis-     had known. He was born in 1946 in               down on the court docket, stacked be-
sissippi bar, a community of lawyers who     Brookhaven, up in the Piney Woods.              hind those of Danny Cupit and other
mostly know one another, often because       (“We were so poor,” he likes to say,            lawyers who had filed earlier. Again, he
they were vetted by the same contracts       “that if I hadn’t been a boy, I wouldn’t        devised an edge. He persuaded a Pasca-
professor during first-year law at Ole        have had anything to play with.”) His           goula state-court judge, a populist who
Miss. Seven of the nine justices on Mis-     father, Tom Scruggs, left when Dickie           was sympathetic to the sick workers,
sissippi’s Supreme Court attended Ole        was five, and his mother, Helen, even-           to allow him to consolidate a mass of
Miss Law School, as did Governor             tually found work as a secretary at the         cases, and to split the traditional litiga-
Haley Barbour and both of the state’s        Ingalls shipyard, in Pascagoula. Dickie         tion process into two phases. The first
46                           y
           the NeW yorKer, Ma 19, 2008
phase would test only the general liabil-            egg.” The U.S. Chamber of Commerce          legal syndicate, with changing players
ity of the manufacturer: was asbestos                and big business began pouring money        (only some of whom were lawyers) cho-
harmful, did the manufacturer know it,               into the campaigns of industry-friendly     sen as needed for a particular skill or
and were plaintiffs exposed? If the an-               judges, and into those of politicians       connection.
swer to each question was yes, then a se-            who promised tort reform. Haley Bar-            The most important player in Scruggs’s
ries of mini-trials would follow, deter-             bour made the issue a priority after he     informal syndicate was his law-school
mining the damages to be paid to the                 was elected governor, in 2003. The          classmate Mike Moore, the attorney
individual plaintiffs. This formulation               Mississippi legislature passed his tort-    general of Mississippi. Moore was an-
raised the stakes tremendously for the               reform program, which severely limited      other Pascagoulan, a crusading prosecu-
defendant, because one bad verdict                   liability.                                  tor who was part of a team of young pro-
would multiply across all the cases.                                                             gressives swept into statewide office in
    “This is where the Scruggs approach
was unique,” Cupit says. “The risk to a
defendant of having liability imposed on
                                                     S   cruggs did not join the Big Pharma
                                                         frenzy. He prefers only “primary
                                                     kills,” he said in a 2002 interview with
                                                                                                 1988. Moore and Scruggs contrived a
                                                                                                 means of exploiting the asbestos issue to
                                                                                                 their mutual benefit. Moore, as the top
several hundred cases was a risk that was            the magazine Chief Executive. “I don’t      legal officer of the state, hired Scruggs,
more than that defendant wanted to                   want to get there after the antelope has    on a contingency basis, to press the as-
reasonably bear. It created an atmo-                 been brought down.”                         bestos industry to pay for removal of the
sphere to settle the cases.” The asbestos                Scruggs began to formulate his own      material from public places. Scruggs pre-
companies caved.                                     brand of litigation, entrepreneurial and    vailed, and was paid several million dol-
    Scruggs’s innovation helped to open              boldly speculative, of which the actual     lars for his effort.
the litigation floodgates in Mississippi,             practice of law was only one part. The          The asbestos model proved useful
and the state became a principal battle-             strategic manipulation of politics and      when Moore, early in his second term,
ground in the national political fight over           public opinion was just as important to     went after the manufacturers of cigarettes.
tort reform. Mississippi has an elected              this enterprise—“a three-legged stool,”     He had received a call from another Ole
judiciary, and, as settlement money rolled           as Scruggs described it to colleagues. By   Miss Law classmate, Michael Lewis, an
in, the plaintiffs bar began investing it in          exerting pressure at key points, he could   attorney in Clarksdale, who proposed
the campaigns of plaintiff-minded judges.             see to it that defenses collapsed and op-   that the State of Mississippi sue tobacco
Lawyers would then shop for friendly ju-             ponents settled without a jury ever hav-    companies in order to recover the enor-
risdictions. Jefferson County (pop. 9,740)            ing a say. He created a sort of floating     mous Medicaid costs and other state costs
became so attractive to the tort bar that
seventy-three mass-action lawsuits, rep-
resenting more than three thousand
plaintiffs, were filed there in 2000. The
American Tort Reform Association calls
such tortious hot spots “judicial hell-
holes.” Scruggs called them “magic juris-
dictions.” In a panel discussion hosted
by Prudential Financial in 2002, Scruggs
explained the development:
    The trial lawyers have established rela-
tionships with the judges that are elected;
they’re State Court judges; they’re populists.
They’ve got large populations of voters who
are in on the deal, they’re getting their piece in
many cases. And so, it’s a political force in
their jurisdiction, and it’s almost impossible
to get a fair trial if you’re a defendant in some
of these places. . . . The cases are not won in
the courtroom. They’re won on the back
roads long before the case goes to trial. Any
lawyer fresh out of law school can walk in
there and win the case, so it doesn’t matter
what the evidence or the law is.

    The major asbestos companies were
bankrupted, and the tort bar turned to
pharmaceutical companies, filing law-
suits on behalf of clients who were not
always legitimately injured parties.
“This is what I call the abusive phase,”
Cupit says, “or what some others call
killing the goose that laid the golden
spent on health care for sick smokers. Big
Tobacco had for decades loomed as the
unattainable prize for trial lawyers: de-                                          a PriMer
spite the overwhelming evidence of the
hazards of tobacco, plaintiffs had never                    I remember Michigan fondly as the place I go
won damages against the industry. To-                      to be in Michigan. The right hand of America
bacco’s principal defense was “assumed                     waving from maps or the left
risk”—the argument that, even if ciga-                     pressing into clay a mold to take home
rettes did cause harm (an assertion the to-                from kindergarten to Mother. I lived in Michigan
bacco companies did not fully concede),                    forty-three years. The state bird
smokers assumed all risk by deciding to                    is a chained factory gate. The state flower
smoke. That defense could not be used                      is Lake Superior, which sounds egotistical
against a state, which had no choice in the                though it is merely cold and deep as truth.
matter of paying smokers’ Medicaid costs.                  A Midwesterner can use the word “truth,”
    Moore deputized Scruggs to develop                     can sincerely use the word “sincere.”
a Medicaid suit, which Moore filed in                       In truth the Midwest is not mid or west.
Pascagoula in May, 1994. (Scruggs later                    When I go back to Michigan I drive through Ohio.
remarked that it was like having a chance                  There is off I-75 in Ohio a mosque, so life
to be the first man to scale Mt. Everest.)                  goes corn corn corn mosque, I wave at Islam,
The suit’s premise was innovative, but                     which we’re not getting along with
more important was the contribution of                     on account of the Towers as I pass.
two tobacco insiders, who guided Scruggs                   Then Ohio goes corn corn corn
and Moore to the industry’s pressure                       billboard, goodbye, Islam. You never forget
points. The first was Merrell Williams, a                   how to be from Michigan when you’re from Michigan.
former paralegal at a Kentucky law firm                     It’s like riding a bike of ice and fly fishing.
that had been hired by Brown & Wil-                        The Upper Peninsula is a spare state
liamson, the producer of Kool and Vice-
roy cigarettes, to review potentially in-
criminating internal documents. The           Wigand had signed a seemingly airtight       the tobacco action in exchange for an ad-
material included evidence that the com-      confidentiality agreement after he took a     vance investment to defray expenses.
pany had known of tobacco’s addictive         buyout from the company. Scruggs             Few agreed. Finally, Scruggs made an
and injurious effects for at least thirty      offered Wigand his legal services without     irresistible offer to a prosperous Jack-
years, and had hidden the information         charge, and helped facilitate Wigand’s       son asbestos attorney, David Nutt, who
from the public. Williams clandestinely       appearance in a controversial segment of     pledged several million to the effort, in
removed documents from the firm, and           the CBS broadcast “60 Minutes.”              return for a share of potential fees equal-
ultimately hid them at a friend’s house in       Any evidence and testimony pro-           ling Scruggs’s.
Florida while he tried to find a way to        vided by Williams and Wigand in a trial          The Mississippi Medicaid case was
bring the information to light. But the       would certainly be contested as hope-        set for trial in July, 1997. By then, the na-
theft was soon discovered, and a judge        lessly tainted, but, if the Scruggs for-     tional mood had become sharply anti-
ordered the material sealed and returned.     mula succeeded, a trial would be avoided.    tobacco, and the industry decided to buy
Williams and his documents became un-         Scruggs and Moore spent nearly two           peace. The case was settled for nearly four
touchable (he vainly approached several       years travelling around the country, lob-    billion dollars, and was followed by set-
attorneys and journalists), until he met      bying other state attorneys general to file   tlements in Minnesota, Texas, and Flor-
Dickie Scruggs. Scruggs flew with him to       their own tobacco lawsuits. The team         ida. Four tobacco companies split the
Florida on his jet, and retrieved the pur-    also worked the corridors of Congress        cost. The tobacco industry eventually
loined documents. Williams was out of         and the Clinton White House, trying to       reached settlements with the attorneys
work, and homeless; Scruggs moved him         fashion a national tobacco settlement.       general in the remaining forty-six states.
to the Gulf Coast, found him housing          The team had added other lawyers to          In all, the industry agreed to pay two
and a boat, and paid him thousands of         the effort, but Scruggs was paying most       hundred and forty-six billion dollars to
dollars in what he called “loans.”            of the bills, and by 1996 he was begin-      the states over twenty-five years, in return
    “Dick didn’t get where he got by ask-     ning to feel the strain.                     for freedom from future state lawsuits.
ing permission,” one Scruggs ally said.          “I was risking a career,” Moore re-       Scruggs’s fee over twenty-five years is es-
“He got where he got by counting on           calls. “But he was risking all his money.    timated at close to a billion dollars.
asking for forgiveness, if he needed to.”     And when I say ‘all his money,’ what
    The second tobacco insider was Jeffrey
Wigand, a former Brown & Williamson
scientist who also had incriminating in-
                                              people don’t know is, he put all his
                                              money in. I mean, all his money. Mort-
                                              gaged his house. He was all in.”
                                                                                           T   hree days after the federal grand jury
                                                                                               indicted Dickie and Zach Scruggs,
                                                                                           along with their law partner, Sidney
formation, and who could serve as an in-         Scruggs approached other members          Backstrom, and two associates, the
terpreter of the Williams documents. But      of the plaintiffs bar, offering a piece of     Scruggs family hosted one of the biggest
48                            y
            the NeW yorKer, Ma 19, 2008
                                                                                          lawyer, and it seemed to fit him as neatly
                                                                                          as the tailor-made suits he wore. He
              in case Michigan goes flat. I live now                                       was unfailingly polite, and spoke with
              in Virginia, which has no backup plan                                       a courtly manner, even in casual en-
              but is named the same as my mother,                                         counters with strangers. “He thought it
              I live in my mother again, which is creepy                                  would be a great place to just semi-
              but so is what the skin under my chin is doing,                             retire, and start a practice,” Mike Moore
              suddenly there’s a pouch like marsupials                                    says. “And I’m sure what he thought
              are needed. The state joy is spring.                                        was that maybe one day he would get
              “Osiris, we beseech thee, rise and give us baseball”                        out of the practice and Zach would have
              is how we might sound were we Egyptian in April,                            a practice, maybe set Zach up, and do
              when February hasn’t ended. February                                        something new and different in a place
              is thirteen months long in Michigan.                                        where they could raise their family and
              We are a people who by February                                             it would really be nice.”
              want to kill the sky for being so gray                                          In 2003, Scruggs bought the upper
              and angry at us. “What did we do?”                                          floor of a building on Courthouse
              is the state motto. There’s a day in May                                    Square, across from the courthouse it-
              when we’re all tumblers, gymnastics                                         self, and undertook a major renovation.
              is everywhere, and daffodils are asked                                       Across the top of the building’s buff-
              by young men to be their wives. When a man elopes                           colored exterior, in big block lettering,
              with a daffodil, you know where he’s from.                                   were placed the words “Scruggs Law
              In this way I have given you a primer.                                      Firm.” Office assistants tended to the
              Let us all be from somewhere.                                               chore of finding a parking space on the
              Let us tell each other everything we can.                                   crowded square for Scruggs’s Porsche
                                                                                          Cayenne. After the runway at the small
                                                          —Bob Hicok                      local airfield was extended, it could ac-
                                                                                          commodate his ten-seat Dassault Fal-
                                                                                          con 20. He and Diane bought a prime
social events of Oxford’s holiday season,    ball weekends; the large pregame tail-       piece of property at the edge of campus,
a Christmas party attended by more than      gate parties in the Grove came to feature    separated by a small forest from Faulk-
two hundred people. When guests ar-          barbecue suppers served on china with        ner’s home, Rowan Oak. The Scruggs
rived at the Scruggses’ home, they were      silver place settings. Sophisticated young   place, a five-million-dollar white man-
greeted by Dickie and Diane as if noth-      chefs opened restaurants on Court-           sion with six columns across the front,
ing were amiss.                              house Square, which also began to at-        gave them an address on a newly created
   “They did a pretty good job of carry-     tract high-end merchants. Richard Ho-        street—Faulkner Woods Place.
ing it off,” one guest recalls. “Diane        worth, the current mayor, converted a            To most of his colleagues in Oxford,
looked a little pained, but Dickie put his   former drugstore into Square Books,          Scruggs was a welcome addition. His
brave face on.” The guest list comprised     one of the country’s prized independent      generosity to the university benefitted
the Oxford élite, who fully understood       bookstores, which became the center of       all, and his building projects had in-
the game. “Everybody was very much           Oxford’s vibrant literary culture. Native    creased local property values. Scruggs
aware, but nobody was talking about it,”     writers such as Richard Ford, Barry          also had assumed the role of resident pa-
one friend recalls. “Everybody was trying    Hannah, and John Grisham moved to            tron. He lent his plane to an acquain-
to make a point of dealing with other        town, and the flowering of Oxford par-        tance who wanted to attend the Betty
things.” By the end of the night, the        alleled the renaissance of Ole Miss un-      Ford clinic, and to another who needed
party had achieved something like actual     der Khayat.                                  cancer surgery in Chicago. “Anybody—
holiday gaiety.                                  Both of the Scruggs children, Zach       anybody—can go in and see Dickie, ask
   Such evenings were a large part of the    and Claire, attended Ole Miss, and           him for money, and come out with a
reason that Scruggs had moved to Ox-         Scruggs began to think of a new phase        check,” Moore says. “I mean, it’s really
ford from Pascagoula, four years earlier.    in his life, even retirement. In Oxford,     dumb, how he has done some of that.”
The town had changed drastically since       he could assume the role of gentleman        Scruggs brought a certain élan to town,
Scruggs attended Ole Miss, when Ox-                                                       and politicians regularly came through
ford was a dull, provincial place known                                                   Oxford on fund-raising quests (Joe
mostly for William Faulkner and the na-                                                   Biden, Tom Daschle, Susan Collins,
tional ignominy of the integration riots.                                                 and Harry Reid among them). The fed-
Students nicknamed it Oxpatch.                                                            eral charges against Scruggs were sensa-
   But as baby boomers prospered and                                                      tional, and troubling, but the prevailing
began sending their children to Ole                                                       view was probably best summed up by
Miss, they bought apartments and built                                                    John Grisham, who remarked to the
condos near campus for use during foot-                                                   Wall Street Journal, “This doesn’t sound
                                                                                          the NeW yorKer, Ma 19, 2008           49
                                                                                                Attorney Tom Dawson. Dawson’s office
                                                                                                was sensitive to charges of Bush Justice
                                                                                                Department politicization of recent pub-
                                                                                                lic-corruption prosecutions, most notably
                                                                                                the controversial conviction of Alabama’s
                                                                                                Governor Don Siegelman, a Democrat,
                                                                                                in 2006. Bill Clinton had cancelled his
                                                                                                Oxford visit after the Scruggs indictment,
                                                                                                and Dawson believed that he needed to
                                                                                                make it clear that the case was about cor-
                                                                                                ruption, not politics.
                                                                                                    Dawson’s means of achieving this
                                                                                                aim was a provision in the Federal Rules
                                                                                                of Evidence called Rule 404 (b), which
                                                                                                allowed prosecutors to introduce evi-
                                                                                                dence of other alleged crimes in order to
                                                                                                demonstrate a defendant’s motive or
                                                                                                criminal intent. It is a favorite device of
                                                                                                Dawson’s (whose silver Chevy Tahoe,
                                                                                                often parked on the square, bears the
                                                                                                Mississippi license tag “404B”). Within
                                                                                                a month of the raid on Joey Langston’s
                                                                                                office, Langston was standing in federal
                                                                                                court in Oxford, confessing to having
                                                                                                participated in trying to corrupt another
                                                                                                judge, on behalf of Scruggs.
                                                                                                    As Dawson explained it to the judge,
                                                                                                Langston had represented Scruggs
          “I would be an animal-rights activist, but I have allergies.”                         a year earlier, in yet another dispute
                                                                                                over attorney fees, in a court in Hinds
                                       •           •                                            County, where the state capital, Jack-
                                                                                                son, is situated. Langston, working with
                                                                                                his then associate—none other than
like the Dickie Scruggs that I know. . . .      tionship with Dick is such that he and I        Timothy Balducci—and a former Mis-
When you know Dickie, and how suc-              can talk very private about these kinds of      sissippi state auditor, Steve Patterson,
cessful he has been, you could not believe      matters,” Balducci said. “He and I, um,         paid fifty thousand dollars to Ed Peters,
he would be involved in such a bone-            how shall I say, for over the last five or six   a close friend of the Jackson judge, in
headed bribery scam that is not in the          years there, there are bodies buried that,      the hope of influencing the outcome of
least bit sophisticated.”                       you know, that he and I know where              the fee-dispute case. The judge—disre-
                                                [they] are.”                                    garding a special master’s recommenda-

T    he central figure in the alleged
     bribery conspiracy was not Dickie
Scruggs, or his son, Zach, or even Back-
                                                    Balducci was an outsider in Scruggs’s
                                                Oxford social sphere, where it was as-
                                                sumed that he was a troubled person
                                                                                                tion that Scruggs owed the plaintiffs
                                                                                                roughly fifteen million dollars—essen-
                                                                                                tially ruled for Scruggs, saying that
strom, their law partner. It was a thirty-      who had tried to exploit a peripheral re-       he owed the plaintiff nothing further.
nine-year-old lawyer named Timothy              lationship with Scruggs in order to buy         Langston pleaded guilty, and no one
Balducci, from the tiny town of New Al-         leniency. The Scruggs defense lawyers           else has been charged. (Scruggs and
bany, about forty miles east of Oxford.         soon advanced this notion themselves.           Patterson deny any wrongdoing; Peters
The government claimed that Scruggs             “It’s a situation Tim Balducci did alone,”      could not be reached.)
had facilitated a conspiracy to bribe a local   Tony Farese, Zach’s lawyer, said. “After            Many in Mississippi’s bar found this
circuit-court judge, Henry Lackey, in the       he got apprehended, he decided to twist         development even more disturbing than
hope of getting a favorable ruling in a law-    and turn things around and implicate            the original accusation against Scruggs.
suit over an attorney’s-fee dispute; but it     others that were not involved.”                 The Jackson judge who had allegedly
was Balducci (who was not a party to that           The day after those remarks were pub-       been influenced was Bobby DeLaugh-
case) who approached Judge Lackey,              lished, F.B.I. agents raided the law office       ter (Ole Miss Law, ’77), a Mississippi
promised him a payoff, and delivered the         of Joey Langston, Scruggs’s principal at-       hero and a jurist uniformly regarded as
money to him. The indictment quoted             torney. It was a stunning event, given the      thoughtful and honest. In the mid-nine-
Balducci boasting to Lackey, in a conver-       sanctity of attorney-client privilege. The      teen-nineties, DeLaughter had resur-
sation that was obviously recorded, about       raid was engineered by the lead prosecu-        rected the cold case against Byron De La
how close he was to Scruggs. “My rela-          tor on the Scruggs case, Assistant U.S.         Beckwith, who had twice been acquitted
50                            y
            the NeW yorKer, Ma 19, 2008
by Mississippi juries of the 1963 killing    calls, “He would say to me, ‘You know          And I did it with just a handful of words,
of the civil-rights activist Medgar Evers.   what I really feel like doing? I really feel   artfully placed.”
(Alec Baldwin portrayed DeLaughter in        like throwin’ all the money I’ve made in a        After the settlement, Johnson wrote
the movie “Ghosts of Mississippi.”) Ac-      big pile, and just calling everybody up and    to Scruggs, suggesting that they meet
cording to the Langston plea colloquy, it    telling ’em, “Y’all come get what you think    to discuss Johnson’s payment. When
wasn’t necessarily the money exchange        is yours, and just leave whatever you think    Scruggs didn’t respond, Johnson drove
that had allegedly influenced DeLaugh-        is mine.” ’ ”                                  down to Pascagoula, but Scruggs re-
ter in the Scruggs case. DeLaughter was          Scruggs had promised to distribute         fused to see him. (Scruggs, through his
known to covet an appointment to the         bits and pieces of the litigation’s proceeds   attorney, disputes this account.) John-
federal bench, and “based on this knowl-     as needs arose, sometimes so casually as       son filed suit against Scruggs, but
edge,” Dawson said, at the hearing,          to invite later dispute. He wanted legis-      Scruggs had the case transferred to Pas-
“Scruggs told Langston to let the judge      lation authorizing his hiring, an unlikely     cagoula, where it was dismissed. John-
know that if he ruled in his favor, he       prospect in a state whose governor, Kirk       son could of course appeal, but he
would pass his name along for consider-      Fordice, so opposed the tobacco litiga-        says that one day he received a call “out
ation regarding the federal judgeship.”      tion that he is said to have refused to en-    of the blue” from a man named P. L.
Everyone knew to whom the accusation         dorse the check when Mississippi’s case        Blake, urging him to drop the case.
was referring—Trent Lott.                    was successfully settled. In 1994, Scruggs     “He’s kind of a dealmaker, so to speak,
    The families of Lott, the Republican     turned to Pete Johnson, a political blue-      that nobody ever sees,” Johnson says
whip in the Senate, and Scruggs were         blood (his uncle and his grandfather had       of Blake. “He’s a character. A Deep
close. Lott’s Thanksgiving gathering         been Mississippi governors) with deep          Throat kind of a guy.”
that year had taken place at Sub Rosa,       connections in the legislature. Johnson           Blake had risen from a hardscrabble
an antebellum plantation near Pocahon-       says that Scruggs promised him ten per         childhood in Webb, Mississippi. He
tas, Mississippi, which Patricia Lott had    cent in any settlement if he could sway        played football at Mississippi State, and
purchased in 2003. She bought the place      lawmakers toward the Scruggs position.         then in the Canadian Football League.
with a $1.5-million loan from Diane          A Medicaid bill was pending in confer-         When he returned to Mississippi, he
Scruggs, who holds the deed on the           ence, and Johnson had friends on the           made his way into the political sphere of
property. Scruggs would have known           committee. Johnson, who was not a leg-         the late Senator James Eastland, even-
that he could count on his brother-in-       islator, or even a registered lobbyist,        tually parlaying his connections into
law to make a telephone call to De-          wrote an amendment to the bill, giving         substantial landholdings and various
Laughter, and Lott subsequently did          Moore the authority to hire plaintiffs’ at-     business ventures. In the nineteen-
call the Judge. (DeLaughter, whose ser-      torneys on a contingency basis. “I just        eighties, Blake had a series of financial
vice on the bench has been temporarily       made several phone calls and told them         and legal setbacks which resulted in
suspended pending an investigation, has      what I wanted to do, and they said, ‘Send      bankruptcy and a bank-fraud convic-
denied any wrongdoing, as has Lott,          us the amendments,’ ” Johnson recalls.         tion, but even then he was able to call
who says that he customarily made calls      “So I sent ’em, and they were inserted.        upon powerful friends. One of his crim-
regarding potential federal judgeships
and never recommended DeLaughter.)
    Two days before the Scruggs indict-
ment, Lott announced his resignation
from the U.S. Senate, in order to be-
come a Washington-based lobbyist.
(“There’s a time for everything and ev-
erything—a special time for everything
under heaven,” he said.) In Oxford, the
DeLaughter development, and Lott’s
involvement, cast a new perspective on
events. “Trent cited the Book of Eccle-
siastes,” Curtis Wilkie, a professor at
Ole Miss, and a friend of Scruggs, said.
“But it was more like Revelations.”

I  n his war against the tobacco compa-
   nies, Scruggs assembled a collection of
lawyers, fixers, cutouts, and whistle-blow-
ers, who joined him with the prospect of
sharing in the payout. When the bonanza
materialized, Scruggs was overwhelmed
by claimants who believed that they had
his warrant for a share. Mike Moore re-               “I broke up with another one. Do you want her picture, too?”
inal lawyers was Fred Thompson, and            ordered Scruggs to pay seventeen million         per cent of that home or business that
he was represented in his bankruptcy           dollars to Luckey; the Wilson case landed        was destroyed by water.”
proceedings by Dickie Scruggs, who             in the Jackson courtroom of Judge Bobby              The insurance companies deter-
made monthly loans to his bankrupt cli-        DeLaughter.                                      mined that most of the slab cases were
ent, sometimes running to thousands of                                                          water cases, and, thus, excluded from
dollars; ultimately, the debt amounted
to more than a million dollars.
    According to Pete Johnson, Blake
                                               A     fter the tobacco settlement, Scruggs
                                                      fell into a slump. He had more
                                               money than he could spend, and was
                                                                                                full coverage. In instances where struc-
                                                                                                tures were still standing but had been
                                                                                                damaged by a combination of wind and
implored him to drop the Scruggs mat-          fully stocked with yachts, planes, and va-       water, property owners were granted
ter. Johnson was inclined to quit the suit     cation homes, but he ascribed to his             only fractional relief.
anyway (he had received a liver trans-         brand of law a moral dimension (“It’s not            The situation invited a Scruggs inter-
plant, and his prognosis was uncertain),       often in life that you have a chance to          vention, and he was on the coast almost
and told Blake as much. “He wrote me a         make a mark on humanity,” he said after          as soon as the water subsided. His wa-
check for a hundred thousand dollars,”         the tobacco victory), and looked for the         terfront home in Pascagoula had been
Johnson recalls. “I said, ‘Do you really       next great crusade. It arrived on the            destroyed, as had Trent Lott’s. “This
want me to take this money?’ And he            morning of August 29, 2005, when                 one was very personal to him,” Mike
said, ‘Please. Please take it.’ And that was   Hurricane Katrina made landfall on the           Moore says.
the last time I talked to him.”                Mississippi coast.                                   Scruggs set up a toll-free number and
    Other Scruggs money fights were not             Katrina’s peculiar ferocity was its surge,   hired a bank of operators to handle the
as easily resolved. By 1994, as Scruggs        a mass of Gulf water nearly three stories        incoming calls. He had signed up Lott as
was gearing up for the tobacco litigation,     high and six miles thick. Hurricane winds        a client, as well as the Democratic con-
two of his former partners in the asbestos     will smash things up, but water can level        gressman Gene Taylor, who also lost his
enterprise, Alwyn Luckey and William           a whole community and carry it away.             home to the storm, and Louis Guirola,
Roberts Wilson, had sued him, claiming         The Mississippi coast, accustomed to             Jr., a federal district judge. Scruggs was
that he had cheated them of their right-       hurricanes, was unprepared for a surge           featured in a long article in the New
ful share of fees. Scruggs fought the law-     like Katrina’s. More than two hundred            York Times, in which he declared, “I’m
suits, in a legal battle that lasted a dozen   people were killed there, but the storm          not going to sit still for this. I’m going to
years, wending through several state and       also carried a second disaster. Much of          bring every organizational and legal skill
federal courts. An attorney for the            the destruction of the coast was plainly         I possess to make these guys do the right
plaintiffs, Charlie Merkel, deposed             caused by the surge, and standard home-          thing under their policies.”
Scruggs five times over the years in an         owners’ insurance policies do not cover              Scruggs announced that he would
effort to determine how much Scruggs            damage caused by flooding. The federal            bring suit against the major insurance
made on tobacco, how he spent it, and          government offers flood insurance to               carriers on the coast, and he assembled a
with whom he shared it. When Merkel            property owners, but few property own-           team, which he called the Scruggs Ka-
pressed Scruggs as to why he had lent so       ers on the coast had the coverage. Many          trina Group. The core members of the
much to a bankrupt client—P. L. Blake—         properties were destroyed, down to the           group were mostly veterans of the to-
without collateral, Scruggs replied, “He       concrete slabs, and it was almost impossi-       bacco battle, including David Nutt, who
needed the money.” Scruggs was no more         ble to determine whether the damage in           once again bankrolled the venture. A
forthcoming about what Blake had done          these “slab cases,” as the insurance indus-      newcomer, brought into the group to de-
to earn a piece of the tobacco payment         try terms them, was caused by water or by        velop legal theories and write briefs for
that could reach fifty million dollars. The     wind or by both.                                 litigation, was a Jackson lawyer named
tobacco litigation was a war, Scruggs ex-          “The wind-and-water issue was just           Johnny Jones.
plained, and he needed people like Blake,      absolutely an unwinnable situation,”                 To some in the group, Jones was a
who had “his ear to the ground politically     George Dale, who had been Mississip-             surprising choice. He had a small prac-
in this state and in the South generally.”     pi’s insurance commissioner for thirty           tice in Jackson, in an old house near the
    Friends of Scruggs say that the pro-       years when Katrina struck, says. “If             Capitol, with a casual atmosphere that
tracted disputes wore him down, and that       there’s a regular hurricane that knocks          reflected his style. With longish gray-
his family wanted the matters settled. But     things down, the insurance company               ing hair and the slight squint of a
Scruggs refused to surrender any unmer-        comes in, pays what it owes, and people          smoker, Jones was known, as one col-
ited tobacco money. “All the people who        go back to their houses. But when there’s        league put it, as “an artsy-craftsy sort of
tried to get a piece of tobacco, he hated      an issue of a water surge, or winds and          guy—and he writes, too.” He had little
’em,” an attorney who represented Scruggs      water, there is no way to determine the          experience in mass torts, and none in
in yet another lawsuit says. “He just de-                                                       the sort of undertaking in which he was
spised ’em. I mean, he was not rational                                                         now invited to participate. As a young
about them. I don’t think, I still don’t be-                                                    lawyer in the mid-eighties, he had
lieve, that he would do anything illegal to                                                     done some asbestos work with the
beat ’em. But he would spend as much as                                                         master in the field, Danny Cupit, but
it took to beat ’em, even if it would be                                                        he was deterred by the administrative
smarter to settle it.” A judge eventually                                                       nature of the work. When he saw all
52                            y
            the NeW yorKer, Ma 19, 2008
the money that Scruggs and the others
were making at it, however, he prom-        sKetchbooK by roZ chast
ised his wife, Mary, and the younger
partners in his firm that if the right
chance came along he would take it.
The Katrina project seemed right. “It
was just an insurance-company bam-
boozle of Mississippians,” Jones says.
   Jones had spent much of the previ-
ous year in close contact with Scruggs,
defending him against the fee claims of
Alwyn Luckey and Bob Wilson. Al-
though Scruggs had been ordered to
pay seventeen million dollars in back
asbestos fees, Jones protected Scruggs’s
tobacco money. When Scruggs asked
him to be part of the Katrina group,
Jones went to work on legal theories,
figuring that four or five cases would
need to be tried, and won, before the
insurance companies would settle.
   If things went as Scruggs hoped,
Jones’s contribution would be the least
important component of the Scruggs
Katrina Group’s efforts. Within a few
weeks of the storm, the Scruggs group
had signed several hundred clients, and
was actively pursuing whistle-blowers.
By December, Scruggs was ready to test
his clout. He went to see George Dale,
the insurance commissioner, and his
deputy, in Dale’s office in Jackson, and
he was blunt. According to Dale, Scruggs
said that there was a war coming be-
tween the insurance companies and the
aggrieved people of the coast, and Dale
needed to choose a side. “He proceeded
to say, ‘Now, you know that they’re say-
ing some bad things about you—they’re
referring to you as the commissioner for
insurance, rather than as the commis-
sioner of insurance,’ ” Dale recalls.
   Scruggs then laid out his strategy for
going after State Farm, the state’s larg-
est insurer. He would use the same
strategy he had used with tobacco. Dale
says, “He said, ‘You also know that I
have all this inside information of all
this wrongdoing that these insurance
companies have done.’ And I said,
‘Well, Dickie, you ought to turn that
over to the proper folks.’ ”
   Dale says that Scruggs told him
he’d already gathered some information
showing that State Farm wasn’t playing
straight with property owners. “And
then he proceeded to say, ‘What I want
you to do is, I want you to make State
Farm put five hundred million in a
fund, which I would administer, and I        and hired by Scruggs as “consultants,” at     co-sponsored a proposal to strip the in-
will pay the claims on the coast.’ To        an annual fee of a hundred and fifty thou-     surance industry of an antitrust exemp-
which my answer was ‘Dickie, I can’t do      sand dollars each.                            tion that had been in place since the
that.’ ” (Scruggs denies Dale’s account of       Scruggs copied the State Farm mate-       nineteen-forties.
the conversation.) The meeting ended,        rial and passed it on to Jim Hood, a pro-         Meanwhile, the Rigsby sisters were
and Scruggs left. “And from that point       tégé of Mike Moore’s who in 2003 had          featured in an ABC News exposé of Ka-
forward,” according to Dale, “Dickie’s       succeeded him as attorney general.            trina insurance fraud, broadcast on the
intent was to get rid of me as commis-       Moore, who had entered private prac-          prime-time program “20/20.” Wearing
sioner of insurance, at which he suc-        tice, was in close contact with the Scruggs   State Farm windbreakers, the sisters told
ceeded.” (During Dale’s Democratic-          Katrina Group, and was also directly ad-      of doctored reports, shredded evidence,
primary race last year, Scruggs took out     vising Hood. Hood opened a criminal           and widespread malfeasance on the part
a full-page newspaper advertisement          investigation into State Farm.                of State Farm. Cori Rigsby said, “Ka-
depicting Dale as a pig, frolicking with         In August, 2006, the Scruggs group        trina was devastating, but so was State
insurance companies, under the head-         actually tried a case in court, winning a     Farm.” (A judge ultimately disqualified
line “LIPSTICK ON A PIG.”)                   nominal victory—an additional payout          them as witnesses.)
    Scruggs did obtain inside information    of twelve hundred and twenty-eight                On November 14, 2006, in a telecon-
about State Farm—volumes of it, deliv-       dollars for a Scruggs client from the         ference with the other members of the
ered to him by Cori and Kerri Rigsby, sis-   Nationwide insurance company. More            group, Scruggs announced that State
ters who were working as adjusters for a     important developments, however,              Farm had tentatively agreed to a settle-
firm contracted by State Farm. The            were occurring outside court. Trent           ment. The company would pay eighty-
Rigsby sisters, who were stepdaughters of    Lott and Gene Taylor, the Democratic          nine million dollars to settle the claims of
a former Scruggs client, claimed to have     congressman who had also lost his             the Scruggs group’s six hundred and
witnessed the firing by a State Farm man-     home in the storm, introduced amend-          forty clients, and $26.5 million in attor-
ager of an engineering firm that had at-      ments to the Homeland Security ap-            ney’s fees. State Farm also agreed to set-
tributed storm damage to wind, rather        propriations bill which would require         tle a separate class action on behalf of
than to water. The sisters, suspecting       investigations of the insurance industry.     other coast residents, Scruggs said, which
fraud, began to copy State Farm files, and,   Charles Chamness, the C.E.O. of a na-         could produce another ten million to
after meeting with Scruggs, started to de-   tional insurance trade association, has       twenty million dollars for the group.
liver the purloined company material to      claimed that Lott had threatened him,         (That settlement was later rejected by a
him. After a large data delivery in June,    in a telephone call, with “bringing down      federal judge.)
2006, the Rigsbys were fired by their firm,    State Farm and the industry.” Lott also           Jones had not known about the Rigsby
                                                                                           sisters, and he hadn’t been consulted in
                                                                                           the negotiations with State Farm. He felt
                                                                                           that his small firm had suffered without
                                                                                           his services, and he had been ignored
                                                                                           whenever he asked for an advance on po-
                                                                                           tential earnings. He figured that if the fees
                                                                                           were shared equally he and his firm would
                                                                                           receive about four million dollars. A few
                                                                                           weeks after the teleconference, according
                                                                                           to Jones, Scruggs called him to discuss his
                                                                                           split. “We’ve agreed to pay you a million
                                                                                           dollars off the top,” Scruggs said. Jones
                                                                                           says that he was delighted, assuming that
                                                                                           Scruggs was advancing him a portion of
                                                                                           his share to help him and his firm through
                                                                                           the holidays. “I said, ‘O.K., that’s mighty
                                                                                           nice, I appreciate that. How are we gonna
                                                                                           split up the fees?’ And he said, ‘Well,
                                                                                           that’s all you’re gonna get,’ ” Jones recalls.
                                                                                           “And I said, ‘No, it’s not all I’m gonna get,
                                                                                           Dickie.’ ” Jones wrote Scruggs a letter
                                                                                           conveying his disagreement with Scruggs’s
                                                                                           reckoning, the first of a months-long ex-
                                                                                           change of e-mails and letters aimed at re-
                                                                                           solving the dispute. Jones repeatedly
                                                                                           urged that the group turn the issue over to
                                                                                           arbitration, as provided for in the agree-
         “Remember when they couldn’t do this sort of thing to you?”                       ment, to no avail.
    The settlement was finalized in Janu-      Scruggs’s money fights with his former         Scruggs firm, and it was suggested that
ary, 2007, and in March Jones and his         associates, a spectacle to which Jones,       Balducci might be able to help, he was
partner, Steve Funderburg, were sum-          who had defended Scruggs in just such         eager to volunteer his services. The case
moned to a meeting in David Nutt’s            a dispute, would be able to lend reveal-      was to be heard by the circuit-court
office, to resolve the fee dispute. They        ing insight. The Tollison filing charged       judge Henry Lackey, whom Balducci
were told that the rest of the group had      Scruggs and his confederates with nu-         had often characterized as a mentor and
agreed to vote them out if they didn’t ac-    merous infamies, and concluded, “A            close friend. Balducci said that he would
cept a six-per-cent share, which Jones        scheming cabal should not be allowed to       have a word with the Judge on behalf of
calculated at $1.3 million.                   succeed.”                                     Scruggs’s position.
    Jones was despondent, and says that           The Jones complaint was filed on               In Mississippi’s casual sociality, law-
he thought of giving up the law. “I was       March 15, 2007, and was still the topic       yers see judges on hunting trips and at
too stupid to have seen it coming,” he        of discussion inside the Scruggs firm          cocktail parties, and sometimes visit
says. “Who needs a lawyer like that?” In-     several days later, when Tim Balducci         them privately in chambers. Occasion-
stead, Jones and Funderburg decided to        and his new law partner, Steve Patter-        ally, talk turns to the subject of a case
sue Scruggs and the group. Jones recalls      son, paid a visit to the firm. The pair        pending before the court. Such ex-parte
saying to himself, “I’m just gonna make       had become an increasingly familiar           communication—or “earwigging,” as
sure that those guys that I trusted never     presence around the firm, a fact that          it’s more commonly known—is a tech-
practice law again as long as they live.”     would have surprised many of Scruggs’s        nical violation of ethics standards, but
    Jones filed suit in Oxford, to maxi-       old friends. As state auditor in 1992,        it is hardly rare, and is usually harmless.
mize the embarrassment that the dis-          Patterson had examined Moore’s hiring         When Grady Tollison filed the Jones
pute could cause Scruggs. To represent        of Scruggs to represent the state in the      lawsuit, he bumped into Judge Lackey
him in the lawsuit, and to write the com-     asbestos litigation; Moore, in turn, ran      in the clerk’s office, and asked him to
plaint against Scruggs, Jones hired           Patterson out of office for a car-tag           keep the case under seal for a few days,
Grady Tollison, who had been practic-         scam. Patterson was not a licensed at-        to give the parties a chance to settle;
ing in Oxford for decades. Until the ar-      torney, yet he was now a full partner in      Lackey, who didn’t like lawyers air-
rival of Scruggs, whom some in the Ox-        the Patterson-Balducci firm.                   ing their dirty laundry in fee disputes,
ford legal community considered “a                Balducci was later lampooned as a         agreed. Technically, Tollison should
coast lawyer,” Tollison had been the law-     Dickie Scruggs wannabe, and the be-           have filed a motion, to which the de-
yer on the square. He had bought his          spectacled, wisecracking, ambitious law-      fendants would have had the chance to
building, a historic structure called the     yer might not have disputed that por-         reply, but in all likelihood they wouldn’t
Thompson House, in 1973, with Rob-            trayal. He had practiced for a time with      have objected anyway.
ert Khayat, who was then a young law          Scruggs’s ally Joey Langston—an asso-             Balducci wanted to influence a
professor. Tollison referred to Scruggs’s     ciation that introduced him to the world      judge presiding over a case in which he
new home as “the Taj Mahal,” and              of big-money cases and the corporate-         had no role, but he did not set out to
grumbled about “the jillion dollars’’ that    jet life style—but he left Langston at the    bribe Judge Lackey. Nor would he
Scruggs spent on the building that            end of 2006 to start his own firm, trying      have had reason to think that Lackey
housed his firm. (Tollison’s mood was          to create the impression of a politically     would have countenanced an illegal
not improved when the Thompson                connected practice in the Scruggs-            overture.
House, across the square from Scruggs’s       Langston league. He brought in Pat-               Henry Lackey was a self-described
building, partly collapsed last year.) But    terson as a rainmaker, and persuaded          “deep-water Baptist,” a deacon in his
Tollison’s objections to Scruggs repre-       several familiar names in Mississippi po-     church, and a member of the state Com-
sented something deeper. Tollison was         litical and legal circles (including a for-   mission on Judicial Performance. He
a traditionalist, a former president of the   mer governor) to accept “of counsel” sti-     lived in the small town where he was
state bar who delighted in the practice of    pends, using them for letterhead              born, Calhoun City, where his parents
law—the courtrooms and the juries, the        adornment. Balducci and Patterson             had owned a Ben Franklin five-and-
legal gossip exchanged in early-morning       opened offices in New Albany, Oxford,           dime store. He made early-morning
bull sessions. “I know some trial lawyers     and Washington, D.C., and set up an           front-porch deliveries from his vegetable
who’ve tried hundreds of cases—they’re        elaborate Web site that suggested the         garden to the local widows. At seventy-
my friends,” he would say, making it          resources and talent of an established        two, he had a full head of white hair, and
clear what he thought of the “three-          and prosperous firm. In fact, Balducci         spoke in a slow, Sam Ervin voice. He an-
legged stool” approach to the law.            had big startup expenses and few paying       swered his own phone, and drove around
                                              clients, and what income he had came          his circuit in a used GMC Yukon; Lackey

I n his complaint for Jones, Tollison
   accused Scruggs and his Katrina
cohort of conspiring to lure Jones into
                                              substantially from the odd jobs that
                                              Scruggs tossed his way.
                                                  Balducci knew that Jones had been
                                                                                            was a firm conservative, but in his court
                                                                                            an outspoken Democrat like Grady Tol-
                                                                                            lison could count on a fair shake.
the venture in order to exploit his legal     squeezed out of the Scruggs Katrina               Lackey liked Tim Balducci, and he
skills, only to freeze him out on fees.       Group, and hoped that he might be             knew that his young friend was having
Tollison indicated that he meant to pa-       dealt in. When the subject of the Jones       a difficult time. When Balducci called
rade before the court the history of          lawsuit came up during his visit to the       and asked for a meeting with him to
                                                                                            the NeW yorKer, Ma 19, 2008             55
discuss a personal matter, Lackey was             Calls and meetings between Balducci      with the mysterious P. L. Blake. Ac-
happy to oblige. On March 28th, Bal-          and the Judge continued through the          cording to Patterson’s account, he told
ducci met Lackey in his office, and told        summer. Balducci had broken the rules,       Blake that he and Balducci had taken
him that he thought the Scruggs side in       and possibly the law, but he hadn’t ex-      care of “a problem” for Scruggs (he
the Jones case was the right one, and         plicitly tried to bribe Lackey. There was    didn’t say how) and that it had cost
that if the Judge saw it that way, too, it    no indication, other than Balducci’s         them forty thousand dollars; Blake
would do Balducci some good. Later in         word, that Scruggs was directly involved.    met with Scruggs, and then reassured
the conversation, Balducci said that he       By September, Lackey had agreed to try       Patterson. (Scruggs denies that the
knew the Judge meant to retire soon,          to press the case another step forward—      meeting occurred; Blake could not be
and he hoped that Lackey would con-           determining, in essence, to solicit a        reached.)
sider joining Patterson-Balducci on an        bribe.                                           Scruggs later issued a check to Bal-
of-counsel basis.                                 In a conversation with Balducci          ducci’s firm in the amount of forty thou-
   Lackey felt that the overture was          on September 18th, Lackey haltingly          sand dollars, ostensibly as payment for
grossly improper, possibly even crimi-        broached the subject, until Balducci         legal work on a Katrina case.
nal. He says that he agonized for nearly      urged him to “put the corn on the                On November 1st, Balducci drove to
two weeks about the meeting, consult-         ground.”                                     Calhoun City, and delivered the pay-
ing another judge and a local prosecu-            “If I help them,” the Judge asked,       ment to the Judge. As he left Lackey’s
tor. He even discussed it with a former       “would they help me?”                        office, he was confronted by F.B.I.
partner of Balducci’s, he says, “to see if        “I think no question that would hap-     agents. The agents produced a portable
I could discover what character flaw           pen,” Balducci replied. “Yes, sir. No        DVD player, and replayed for Balducci
they had seen in me to think that I           question. Mm-hmm.”                           a video of himself making a payment to
would participate in something like               Lackey told Balducci that he’d got       Judge Lackey. The agents then offered
that.” He felt that he couldn’t take the      himself into a fix, and he needed some-       Balducci a choice: “You can go to Ox-
matter to the attorney general, Jim           thing “to just kinda help me over a little   ford, or you can go see Tom Dawson,”
Hood—“That would be like speaking             hump.” He couldn’t quite bring himself       the Assistant U.S. Attorney. Balducci, a
to Mr. Scruggs himself ”—and finally           to ask for money until, in a conversation    former public defender, knew that “Ox-
he decided to go to Assistant U.S.            three days later, he said, “To get, to get   ford” meant the detention center. He
Attorney John Hailman, in Oxford,             me over a hump, I need forty.”               said he would see Tom Dawson.
an old friend nearing retirement, who             Lackey says that he hoped Balducci           The agents drove Balducci to the
urged Lackey to play it out with Bal-         would turn him down. “I just hoped           Ethridge Professional Building, down
ducci. Lackey agreed to have his tele-        against hope that Tim would have said,       the hill from the federal courthouse, in
phone and office wired for recording.           ‘Judge, you misunderstood me, and I’m        Oxford, entering the building through a
                                              sorry, I didn’t mean to indicate that, and   basement door so that they wouldn’t be

O     n May 4th, Balducci faxed Lackey
      a proposed order that would have
sent the Jones case to arbitration. By this
                                              I was just wrong. You forget that, and
                                              I’ll go my merry way, and you have a
                                              good day,’ or something like that.”
                                                                                           seen. They escorted him to an interro-
                                                                                           gation room, where Dawson waited.
                                                                                           Balducci was told that his life as he knew
point, the Scruggs side would have been           Balducci replied, “Forty? O.K.”          it was over. “The only question is, will
happy to have an arbitrator dispose of            Balducci was now involved in a brib-     you see your children graduate from
the Jones matter, an option that Jones        ery attempt, and what he did next drew       high school?’’ Dawson said. Balducci
says he requested more than twenty            the Scruggs firm into the crime. He de-       did not hesitate. “What do you want me
times before he filed suit. On May 21st,       cided to pay Lackey out of his firm’s         to do?”
Lackey telephoned Balducci and said           “slush fund” (as Balducci termed it), but        Dawson asked Balducci if he would
that he needed reassurance: “I just want      he needed assurance that he and Pat-         wear a body wire, and go back into the
to hear you say it again, I guess. You        terson would be repaid. Balducci says        Scruggs firm. Balducci agreed.
and Scruggs only one know anything            that he received that assurance from             The ruse was that Lackey had re-
about this?”                                  Sid Backstrom, at the Scruggs firm.           written the arbitration order, and that
    “Absolutely, Judge,” Balducci replied.    (Backstrom denies this.) But Patterson       Balducci wanted to have the Scruggs
“Absolutely. There is nobody in this          wanted to be certain. He believed he         team read it before the Judge entered it.
world, ain’t but three folks in this world    knew how things really worked with           Less than three hours after being con-
that know that I’ve even seen you. And        Scruggs, so, he says, he got in touch        fronted by the F.B.I., Balducci climbed
it’s me and you and him. And that’s it.”                                                   the steps to the Scruggs office, where
Balducci went on to say that he didn’t                                                     he proceeded to give what one defense-
want the Judge to do anything that made                                                    team member conceded was “a daz-
him uncomfortable.                                                                         zling performance.”
    Lackey asked whether Scruggs could                                                         Balducci saw Dickie Scruggs almost
be trusted. If he played along, Lackey                                                     as soon as he arrived, but Scruggs apolo-
wondered, might Scruggs try to hold it                                                     gized and said he had to take a call. Bal-
over him somehow? “He ain’t that                                                           ducci spent most of the next hour josh-
way,” Balducci responded.                                                                  ing with the firm’s secretaries, talking
56                            y
            the NeW yorKer, Ma 19, 2008
about the L.S.U.-Alabama game that
weekend, and going over changes in the
proposed order with Backstrom and
Zach Scruggs. “Get it how you want it,”
Balducci said, “ ’cause we’re paying for it
to get it done right.”
   Finally, Dickie appeared, and, after
apologizing again, he brought Balducci
into his office. Scruggs was excited
about some satellite photographs he
had of damaged homes on the coast—
additional evidence, he was certain, of
insurance-company liability. Balducci
explained that he had a new order from
Lackey, and that he wanted Scruggs
to approve it. Scruggs looked it over.
“That last sentence is not really a sen-
tence,” he said. “I think he needs a
colon there.”
   Balducci then posed the question
that would decide Scruggs’s fate. The
Judge was feeling “a little more exposed
on the facts,” Balducci said. Would              “Why, Jimmy! Just what I wanted! Grand Theft Auto Number Four!”
Scruggs be willing to pay “ ’bout ten or
so more?”                                                                          •          •
   Scruggs’s secretary interrupted the
conversation, to say that the governor of
Delaware, Ruth Ann Minner, was on             grounded, and his request was granted.       Lackey—and, when Biggers asked
the line.                                     This became a minor issue a few days         Scruggs if he agreed with the prosecu-
   Scruggs said he would call her back.       later, when the Scruggs legal team, led by   tor’s account, Scruggs seemed eager to
   “That’s fund-raisin’, it sounds like,”     John Keker, of San Francisco, pleaded        offer a dissent. “I joined the conspiracy
Balducci said.                                with the court for permission to use the     later in the game,” Scruggs said. “It’s
   “Shit,” Scruggs remarked. “Don’t           plane; the magistrate judge, S. Allan Al-    not exactly as the prosecutor allocuted,
know who that is.”                            exander, a former partner of Grady Tol-      in that there was no intent to bribe the
   The two men returned to the criti-         lison’s, denied the request, issuing an      judge; it was an intent to earwig the
cal question: “Do you want me to cover        order that included a recitation of com-     judge, Judge Lackey.”
that, or not?” Balducci asked.                mercial-airline fares between San Fran-          Scruggs had to be prompted by his
   “I’ll take care of it,” Scruggs said.      cisco and Memphis, seventy-five miles         lawyer. “But then later—what about
                                              from Oxford.                                 later?” Keker said. “You got to say some-

O     n November 27th, Balducci told his
      story to the federal grand jury in
Oxford. As that secret proceeding un-
                                                  It was clear to the Scruggs team that
                                              Balducci, who was arraigned separately,
                                              had become a government witness.
                                                                                           thing about later.”
                                                                                               “I did join the conspiracy after that,”
                                                                                           Scruggs said. Backstrom pleaded to
folded, two of Grady Tollison’s office          Patterson made a plea bargain with the       the same count. (The following week,
workers stepped out to the balcony            government, leaving only the Scruggs         Zach Scruggs entered a plea of guilty
for a smoke, and noticed men wear-            men and Backstrom as defendants.             to the lesser offense of misprision of a
ing jackets and ties going in and out of          On Friday, March 14th—just two           felony.)
the Scruggs firm, carrying boxes. It was       weeks before the scheduled start of              Upon leaving the courtroom, Dickie
an F.B.I. raid. The following day, the        the trial—Scruggs arrived at the fed-        Scruggs began to prepare for his sen-
grand jury reported its indictment of         eral courthouse with Diane and his           tencing, which is likely to take place
Dickie and Zach Scruggs, their partner,       lawyer, Keker. Diane wept. Scruggs           next month. He had his plane flown
Sid Backstrom, Steve Patterson, and           worked the room, greeting friends and        to Houston, where it was put up for sale.
Tim Balducci. That afternoon, Scruggs         colleagues, but the months after the in-     The Scruggs Law Firm was closed, and
surrendered to the U.S. Marshals office,        dictment seemed to have diminished           the big block lettering was taken down
and was fingerprinted, and later ar-           him, to a slight, almost wispy presence.     from the building on the square, leav-
raigned. (He pleaded not guilty.) Tom         Then Judge Neal Biggers entered, and         ing only the faint imprint of the firm’s
Dawson had to recommend a bond, and           announced that a plea deal had been          name, traced by the sun, on the façade.
was stumped—how do you set a bond             made. Dawson read the charge that            Scruggs also wrote a letter to Chancel-
amount for someone as rich as Scruggs?        Scruggs agreed to plead guilty on—           lor Khayat, asking that his name be
He decided to ask to have Scruggs’s jet       one count of conspiracy to bribe Judge       removed from Scruggs Hall. 
                                                                                           the NeW yorKer, Ma 19, 2008             57