As another shoe fell Monday in the saga of former tort king Dickie Scruggs – with a federal judge tossing two more of Scruggs’ co-counsel law firms from a case found to have been tainted by Scruggs’ misconduct (see the judge’s order and a previous blog item providing background) – Scruggs’ many nemeses continued to dog his heels, sniffing for still more improprieties and seeking yet more retribution.
Since Scruggs pleaded guilty in March to a federal charge of conspiring to bribe a state judge in Oxford, Miss., in 2007, the big question mark hovering over him has been, of course, the ongoing federal criminal inquiry surrounding whether he tried to bribe a second state judge in Jackson in 2006. (For background, here’s a feature story on the Scruggs affair.)
But in the meantime, State Farm and others for whom Scruggs made life Hell prior to his indictment continue to scour every rabbit trail searching for evidence of additional foul play on his part, large and small. Some of the searches get pretty arcane.
A discovery ruling by a federal magistrate judge on Thursday promises to shed some light on one of the most obscure mysteries that Scruggs-ologists have debated over the past two years: whether Scruggs ever had a third “insider.” (This issue is so obscure, that even Scruggs chronicler David Rossmiller admitted not previously having known about it, which is like Phil Schaap admitting that he’d never known about a surviving Charlie Parker acetate.)
In his post-Hurricane Katrina assault upon the insurance industry (again, for background, see here), Scruggs was famously assisted by two insiders working in State Farm’s Gulfport “cat” (for catastrophe) office, Cori and Kerri Rigsby. (A separate tempest rages about precisely when Scruggs began teaming up with the sisters – was it December 2005, as most Scruggs-ologists suspect, or was it not till February 2006 as the Rigsbys and Scruggs have steadfastly insisted – but we put that aside for another day.)
The notion that there may have been a third insider was born at 2:45 p.m. on April 5, 2006, when Bloomberg terminals around the country lit up with an otherwise unprepossessing story, co-bylined by Jesse Westbrook and Laurence Viele Davidson. It was about the grand jury investigation Mississippi attorney general Jim Hood had commenced to look into State Farm’s post-Katrina claims-handing practices. The ninth and tenth paragraphs (or tenth and eleventh paragraphs in the 5:30 p.m. update) read as follows:
“Scruggs said in an interview on March 30 [2006] that he plans to share [with Hood] documents from a ‘highly placed’ State Farm source. He had flown to Bloomington a week earlier to pick up a package from the source.
“‘They gave me a bunch of good stuff and I’m going through it now and turning it over to the attorney general,’ he said. State Farm’s [Fraser] Engerman declined to comment.”
The notion that Scruggs had a third insider located in Bloomington, Illinois – i.e., State Farm’s corporate headquarters – is one that Scruggs does not appear to have ever floated again in any context, be it media appearance or court filing. Scruggs-ologists have wondered, therefore: Had Scruggs just made this story up out of whole cloth, as some sort of psychological warfare gambit? Was he was hoping to psych State Farm out or to coax genuine potential whistleblowers to come out of the woodwork? Or had there really been a third insider? Or had there been static over the phone line, resulting in a reporter’s having simply misunderstood what Scruggs had been saying? (An email sent yesterday to Scruggs’ lead attorney John Keker was not returned, nor was one to Bloomberg reporter Westbrook; an email to Bloomberg reporter Davidson triggered an on-vacation auto-response.)
There is no question that Scruggs believed in psychological warfare. His Scruggs Katrina Group actually went so far as renting a billboard near State Farm’s headquarters in Bloomington, from May to July 2007, to carry the message that “Katrina only destroyed homes. Big insurance has destroyed hope.” (A story about the billboard was carried in the May 24, 2007, issue of the [Bloomington, Illinois] Pantograph, available for a fee at the Pantograph’s web site.)
Back in January, in one of the policyholder cases that Scruggs had filed against State Farm prior his indictment, State Farm issued subpoenas to Scruggs seeking a variety of documents in his possession, including those that he had referenced in the Bloomberg interview of March 30, 2006. Scruggs initially refused to provide them, objecting on relevance and attorney-client privilege grounds “to the extent that they were provided by individuals who are [his] clients or former clients.”
On Thursday, however, a federal magistrate rejected Scruggs’s arguments and ordered any documents responsive to the request to be produced. So Scruggs-ologists may yet be getting an answer shortly to this admittedly less-than-earthshaking, yet tantalizing, little mystery.
