Here’s another piece of the story, about how Scruggs’s maneuver of sending the Luckey case to North Mississippi and Judge Davis backfired on him.
Recall that in 1994, Alywn Luckey sued Dickie Scruggs and Roberts Wilson over asbestos fees in the Circuit Court of Hinds County. Wilson and Scruggs had formed a corporation to handle asbestos cases in the 1980s; Wilson had been the first lawyer to file such a case in Mississippi. Later, they added as a shareholder another lawyer, Alywn Luckey.
In the early 1990s, Wilson and Scruggs made an agreement for Wilson to leave the practice and in the agreement set forth how they would divide up the future proceeds from the asbestos cases. In 1994, Scruggs fired Alywn Luckey, claiming he was firing him for misconduct. Scruggs was under the misapprehension that he could just "fire " a shareholder (Luckey) and deny him the benefit of his stock ownership. Thus Luckey’s lawsuit.
Throughout the lawsuit, Luckey and Wilson both agreed how the contract between them and Scruggs should be read, even when their interests were adverse.
Wilson cross-claimed against Scruggs about Wilson’s own fees. The lawsuit proceeded at a crawl.
Lotus’s post from yesterday tells some of the story of the case in its first decade. I’m going to pick up the story later on.
By early 2005, Wilson and his lawyers were trying to find ways to bring the case to a resolution. They proposed to Scruggs that they send the case to arbitration, to be resolved by a binding, non-appealable decision by an agreed-upon arbitrator. Instead of accepting Wilson’s proposal, Scruggs seized on it as a way to end Luckey’s claims rather than those of Wilson. Apparently believing that he was going to win and zero-out Luckey because of misconduct, Scruggs’s lawyers approached Luckey’s lawyers and proposed that Luckey’s case and not Wilson’s go to arbitration for quick resolution.
One of Scruggs’s lawyers approached Luckey’s lawyers, said that they had discussed arbitration with Wilson and it did not work out. Luckey’s lawyers picked up the suggestion and, after negotiations, both sides proposed possible arbitrators. One on Luckey’s list was Magistrate Jerry Davis. Scruggs agreed to send the case to Davis for arbitration. Scruggs particularly wanted an arbitration and not a trial because he did not want a public airing of evidence that Luckey’s lawyers had assembled. Recall that almost all of the publicly available facts about P.L. Blake came from the record in that trial. Also, according to statements later made to federal investigators, Scruggs believed that Magistrate Davis hoped to become a federal circuit judge, and that, knowing Scruggs’s connection to Trent Lott, this would give him an extra advantage with Davis.
On March 15th, Wilson’s lawyer Vicki Slater got wind that some sort of hearing was going to occur in the case in federal court the next day. "What hearing, " she thought, and called the federal court and learned lawyers for Luckey and Scruggs were meeting with Judge Lee the next day. Slater got an inkling what was going on and insisted on being there. She and Bill Kirksey showed up and learned that Scruggs and Luckey had reached a "confidential agreement " to sever the case, but were given no more details about what was going on. At the hearing, Slater and Kirksey were not allowed to see the "confidential agreement " until the hearing was over. They objected to the cases being split apart, and objected to any hearing without a formal motion having been filed. Judge Lee nevertheless gave Scruggs and Luckey an order that Luckey’s case would be separated from Wilson’s case, and that it would be sent to the federal court in North Mississippi, to be tried by magistrate Jerry Davis.
The month after he transferred the Luckey case, Judge Lee decided that Wilson’s constructive trust claims were viable.
Magistrate Judge Davis refused to hear the case under seal as an arbitration. He ruled that he could hear it as a judge and still bind the parties (leaving them no chance of an appeal) but that it would be an open-court conventional federal trial.
Luckey’s case was tried in June of that year. During the trial, Magistrate Judge Davis rejected Luckey’s claim for a share of the tobacco fees, and then, a month later, ruled that Scruggs owed Luckey $13,688,907.92 for Luckey’s share of the asbestos fees. As I described above, Scruggs, betting that he would be able to convince Judge Davis to reject Luckey’s claims because Scruggs had fired Luckey for cause, had cut a side deal to make sure Luckey’s case was tried first. This bet, and the bet reported to federal investigators –that Scruggs’s side thought that Davis’s desire to be a federal judge would improperly influence Davis, and that, having fired the lawyer-stockholder he could just zero-out the stockholder interest –backfired on Scruggs. He got sent to a level playing field and ended up having to pay out (or have paid out on his behalf) over fifteen million dollars in cash.
Update: While I thought this post completely clear, based on comments I’ve added the phrase “Scruggs’s side thought” after the dash in the second sentence in the last paragraph. I think it clearly said that before, but based on comments wanted to s-p-e-l-l i-t o-u-t.
Update x2: After a long conversation with one of the principals, I made the following changes:
- Removed the statement that a payment to Wilson would have reduced Luckey’s claim because I’ve been told that is not how the contract worked. I will repost about that separately based on the contract at a later date. The last paragraph is substantially rewritten.
- Initially, the Wilson talks were about agreeing to send the case to arbitration, and that was what Scruggs was seeking when he approached Luckey’s lawyers. I added some details about that.
- Added the discussion of the effort to keep the case under seal, and Judge Davis’s insistence that the case be a conventional open-court trial.
- Clarified to spell out that Luckey and Wilson agreed throughout on what the agreement was.
The post now relies on both Wilson’s and Luckey’s side, pleadings, and accounts of the evidence provided to the F.B.I. by Tim Balducci. Because of that, I cut a statement that the post was from the perspective of Wilson’s side.
Deeper and deeper… has there been anything further that would indicate attempted influencing of the Judge about the federal position? Did Lott make contact?
If Scruggs or anyone else thought in 2005 that Mag. J. Davis had aspirations for a district court appointment by the Bush administration, he would have been delusional. First, Davis would never pass the standard litmus tests on subjects near and dear to NeoCons … he’s far too smart for that. Second, his age would have worked against him. Third, there were no district court vacancies at the time and no prospects for one until 2007 or later. Fourth, Davis is too smart to believe that either Lott or Cochran would consider him for an appointment to the bench … Davis didn’t waste his time and talents kissing GOP rings. Scruggs had to know he couldn’t dangle hopes of a district judgeship before Davis. That story doesn’t wash.
Scruggs seems to be the kind of guy who believed he and Trent dazzled everyone. But I agree Davis is not the kind of Judge who would have been dazzled at all.
I’m not writing about rumor, Ben Cole, and that particular part of this account did not come from either Wilson’s side or from people uninvolved with the case. I’m standing by it.
About ten days before Backstrom’s guilty plea you wrote that the case against him was reed thin, at a time the available transcripts strongly suggested otherwise. Your skepticism in the past has not been born out by events. I don’t think it will be this time, either.
When I said that Scruggs’s idea backfired, it was in part because Davis was not susceptible to this form of influence. I said this was reported to be what Scruggs believed. Anyone who thought this was clueless.
I thought that completely clear from the post.
Oh hell, that’s to dumb for Dickie.
Delta Boy : You must not have followed the bribe scandal that recently went down, or you would no the DeLaughter bribe was much more sophisticated than what he already pleaded guilty to.
Thats not TOO dumb for Dickie.
since it seems to keep cropping up, could somebody ‘splain to us unlawschooled ones how these lawyers go about moving cases from judge to judge? Do they just claim that certain issues are better decided within a federal jurisdiction? or what?
duckeweed:
Luckey sued originally state court. When he and Wilson attempted to add a claim to a part of the tobacco fees, the sate court would not let them, and so they filed those claims in a new suit in Texarkana. The judge there was asked to move the case back to Mississippi; He did, but moved it to Mississippi federal court and refused to send it to state court. That was the subject of Folo’s post yesterday.
NMC, Was one of the reasons the judge in Texarkana moved it to federal court was because he suspected hanky panky going on in the state court? In other words it did not pass the smell test.
dm: what’s more sophisticated? a judge who said i want to be nominated for a federal judgeship. dickie said rule for me and i’ll get trent to put you up. trent called the judge and put him on the list. the judge ruled for dickie. period.
He said in his opinion he was sending it to federal court and not state court because the way the other part of the case had been handled in state court.
there’s this justsittinhere– DeLaughter got nothing tangible. The $s in the bribery scheme went to lawyers, appearing to be legal fees.
That’s right NMC, and that is also why there will be more suits than just a re-opening of the Wilson vs. Scruggs suit. Langston and company have also opened themselves up for civil suits which I anticipate the Wilson side would be filing soon.
NMC/folo – Big high five for getting the full history of this case out there. This matter has haad some major twists and turns; I think no one really had a full grasp on what had happened over the 15 years or more this thing has been going on, not to mention understanding the original Asbestos group which was formed between the two men after Wilson constructed the first suit ever in Mississippi. With the spotlight now firmly focusing on this case we are all now ready to spew forth our opinions in a somewhat educated manner.
I would like to see if y’all could further illuminate a couple of points that have been brought out over the past weeks – (1) where did the money paying the Luckey settlement (17 mil) come from? We have heard that Scruggs did not pay this out of pocket – I would like to see what is at the end of that rabbit hole. (2) Where was the money “flown” in from to Peters and why? (3) In the Commisson motion calling for DeLaughter’s suspension, it is noted that Trent did recommend Delaughter – “Lott did infact submit the Respondent’s name for the federal position and so notified the Repondent.” – where did that come from? And if it is true how has it flown under the radar?
Again, thanks for all the hard work!
The Tobacco Fee Settlement Deal that has made an ELITEST few Rich and Famous that started out as Legislation for Mississippi Medicaid should be brought Front and Center with The Corruption spread out for The People of Mississippi to see what our Elite Elected Officials can do when they keep the people in Poverty, while screaming it’s for the poor people . This is happening today as we sit here and watch Jim Hood being Mocked by People and Press outside our State and The Clarion Ledger and The Daily Journal his biggest Cheerleaders. This Local Press has always tried and been sucessful in keeping Mississippi on the bottom by never putting light on the corruption of public officials . Mississippi Press would have never covered Scruggs without Folo’s great perception of posting in an educated, up to date, legal, sometimes humorus way, and I must say they are followers not leaders. Thanks NMC and lotus, I myself, will always be grateful even tho I am so intimidated from lacking the skill of you two.
The Mississippi Press is the followers, I feel that they follow Folo around all day.
dmwriter 7, that’s “or you would KNOW” (high-five).
mag, my guess is that NMC and I have spent a lot more of our lives reading than you have, but shoot, darlin’, where this blog would be without your shrewd insights and humor, I don’t want to think about.
Can I get an amen, folo?
Love ya, mag! I’m in awe of lotus and NMC too.
greenlawyer 14, yep, we’re not anywhere near through with this one yet, and I’m looking for the same answers you are. That “flown in money” and the Lott sentence in the JPC motion are tantalizing me no end.
If anybody reading along here can enlighten us better about either of those or about “Scruggs, betting that he would be able to convince Judge Davis to reject Luckey’s claims because Scruggs had fired Luckey for cause, had cut a side deal to make sure Luckey’s case was tried first” — or anything else we have or haven’t mentioned yet — we invite/implore you to use our email addresses at top-right of this page!
The whole point of this post is to describe the side-deal, Lotus and how it blew up in Scruggs’s face– that Luckey’s lawyers and Scruggs’s lawyers made a deal to sever the case and send it to Judge Davis, and Judge Lee agreed to let them do that. Luckey’s lawyers just wanted to get his case done, I am sure, and (obviously correctly) felt they’d get a fair trial from him. Scruggs on the other hand seemed to think (erroneously) he had an argument that would eliminate Luckey’s claim and apparently (even more erroneously, and according to the description I’ve been given of documents containing Balducci’s statements to the FBI) thought Davis might be influenced by the desire to be a federal judge.
Whoops, NMC, ‘nother one of my brainfarts — thanks for the clarification.
Ben Cole, your comment @ 2 could be considered accurate except for the last two sentences. As justsittin’ noted, Scruggs did think that “he and Trent dazzled everyone.” Just look at how he dazzled and controlled the Ole Miss chancellor, for example. It appears that Scruggs sucked so many people into his dazzle. Many folo-ers have noted that Backstrom was a good guy who got dazzled. Langston was a successful lawyer without Scruggs, but he got dazzled.
I do think that Scruggs had a distorted view of the world in that he thought his power derived from his crooked deals and money controlled everyone. IMO, in every case in which he was involved, Scruggs tried to find an angle where he could insert his dazzle. Some he would dazzle with money; others with a judgeship or other powerful opportunity. And it appears that he thought no one was beyond being dazzled.
I’ll bet Judge Davis was mad as heck when he learned of Balducci’s statements.
Scruggs Ring after locating to NorthMississippi is like a gang that couldn’t shoot straight. In Southern Mississippi they (Lott and Scruggs) were so dug in with generations of Influence that what ever was needed just took a phone call to the GOB network. We do have honorable people in places of honor, that have know other asperations of greatness than to be where they are, and Scruggs’ so underestimated that Brand of Honor. All of this is mindboggling to me as I try desperately to get my mind around it.
NoMiss. Your “dazzle” comments reminded me of another saying, “If you can’t dazzle them with your brilliance, baffle them with your bullshirt.”
In the end analysis it appears that most of the people Scruggs surrounded himself with were more baffled (see Clueless) than dazzled. The good news is that there were people that don’t buy the style and look instead for the substance. Thank goodness for them seeing past that dazzle and doing the right thing.
Now as it turns out, Scruggs and his family are baffled themselves "that the dazzle sorta fizzled out on his parade.
Scruggs’ worst nightmare is revealed in his last answer in this old Frontline interview,
( http://tinyurl.com/2pc323 ) , his weakness is exposed and is coming to pass. " "I think, public humiliation was the worst one. If you are unsuccessful after taking on a task like this. Financial ruin. Discreditation, professionally. The wear and tear it puts on your family to read unfavorable things in the newspaper every day when you are not used to–not only not used to publicity, you are not used to national adverse publicity. Those sorts of things. ”
I’m betting he’ll be shaking his head wondering what happened for a long time…
Whoever controls the flow of information,
controls the populace!!!
Take the time to learn who owns these newspapers and who they, or their board of directors are affiliated with.
Mississippi Secretary of State website is available to assist you.
Follow the Money!
Freedom of the press was intended to help secure freedom forever! You know keep a check on the ****Separation of Powers****
EXECUTIVE
LEGISLATIVE
JUDICIAL
With all the Public Private Partnerships, Government is BIG BUSINESS!
Unfortunately all the employees, both government and corporate, don’t quite understand the damage, families have to be fed after all.
Numbers may be infinite, but math (economics) is finite. Research “Hyperinflation” , “Stagflation” on wikipedia! “Americans are in denial” As quoted by your EX-Comtroller General of the United States the Honorable David M. Walker.
Unfortunately Economies Collapse When the Payout Exceeds the Capacity to Generate Income! Visit the GAO that is the U.S. Government Accountability Office read GAO-08-371CG entitled ‘A Call for Stewardship’ released on December 17,2007. How many households have $455,000 today to foot this bill? Please Read!
I have always said, “When the money dries up thing will start happening!”
You can FOLLOW THE MONEY
CAMPAIGN CONTRIBUTIONS at
OpenSecrets.org
GRANTS and CONTRACTS at
fedspending.org
I now ask, after all these years why has the DOJ finally gotten marching orders?
JUSTICE OR AN OLD FASHIONED GOLD RUSH?
Corruption destroys economies, economic collapse destroys nations!
I am praying that the DOJ is finally realizing its separation power and responsibility!
MISPRISION OF FELONY
MISPRISION OF TREASON
MISREPRESENTATION
I am not a lawyer and for all you non-lawyer uneducated types like me, may I suggest for your library “Black’s Law Dictionary”.
All you reporters and journalists you have a responsibiliy, your nation needs you to
DIG and be BRAVE!
Now I have to go pay TAXES being the good serf that I have become.
Gotta Pay some on all those bonds that the monolines insured! Retired Lawyers, Judges, Government employees, Corporate employees might be dependin’ on it now!
Sure hope all that Data was Sound!
Walkinwater//I have speculated myself if its a hunt for a Pot Of Gold, and Then I prayed forgiveness for my bad thoughts and said No its for The Poor People of Mississippi so they might find Relief.
waterwalkin, you’re not the guy who writes copy for Dr. Bronner’s Magic Soap, are you? All-One!
Waterwalkin// Had to admit to myself, is this a hunt for A POT OF GOLD, and then I prayed for forgiveness for such thoughts abouts ones on free Demoracy and then I had this vision its for The Poor People of Mississippi.
waterwalkin, there is truth in the statement that whoever controls the flow of information controls the populace. In Scruggs’ case, shaves, I think the press confused his “bullshirt” with brilliance.
Well you can lead a horse to water but you can’t make him drink!
Least till he’s thirsty!
water, psssstt. You can’t make them drink, but you can salt their oats.
Shaves 28
Thanks for the tip!
I can salt them so much they’ll think they’re at sea!
At which point, they’ll need to decide to either go below, batten down the hatches and pray this ain’t the Titanic or Hurricane Katrina
or
stay on deck, secure themselves with the lifeline
and man their station!
Now where is that compass!
Dr. Bronner is my hero!
Master Chemist and Essene Rabbi! Moral ABC’s! All-One!
Where’s Sailor? Soon’s y’all find Dr. Bronner, we gotta haul Sailor in here!
Who thinks old P.L. Blake still has all of that $10 million downpayment and the subsequent $2 million annual payments? Sure would be interesting to find out how that money is going around and around– circles and cycles.
here is a new story on Langston-Balducci suit to recover MCI fees
http://www.legalnewsline.com/news/209696-fight-over-langstons-and-balduccis-millions-appears-headed-for-state-court
Langston has lost his Aura and has no one now to watch his back. Wonder why he isn’t whining to Sid Salter, and or John Grisham since they were the best of friends. Could be they have lost their way since they can nolonger find the Aura.
WW you may be the only one here that appreciates the wisdom in this essay as many classify the writer is a wingnut repeating what they were told to believe by the media. But I found this piece to a very good overview of the cause for the current financial turmoil which is the biggest fraud/scam ever put over on the hard working, honest Amercian citizen; the privately held Federal Reserve.
As you put it, they may drink when they get thirstly. I love that one!
http://tinyurl.com/yrh4q4
Reading the fine printe on the ingredients of the aforementioned “Magic Soap” I’m soooooooo surprised to find the secret ingredient is “hemp.”
http://www.drbronner.com/
And why do they all have on sun glasses?
Are they bathing with it or drinking it? Morals and ethics go better with hemp? Sssssshhhh mum’s the word. Be sure and watch the movie where he’s saving Spaceship Earth.
Its All Good
Thanks for the read.
Back at ya:
World Net Daily
Whistleblower magazine
July 2006 The Federal Reserve:
Fraud of the Century
April 2006 The End of Private
Property
If you can get ahold of a copy is well worth the
effort. Also check out my above post sources!
Since our Senators, Congressmen and press are bought and paid for, it is finally revealed Justice goes to the Highest Bidder (Wonder if these guys have an auctioneer license) we’ll just wait and see if we’re doin’ our job or just takin’ out a little competition! The latter being the case we could end up worse than before!
Tis oh so easy to spend someone else’s hard earned money!
All you nature lover know what happens when the plankton die or were we skippin class that day too!
Elementary School:
1 + 1 = 2
2 – 10 = -8
Since we’re not very good at math,
Might want to brush up on our foreign languages we’re really gonna need em!
P.S. PER Mr Bryant’s website statement at the time he was state auditor.
“Auditor Bryant has taken a tough stand on
public corruption, one that is not swayed by personal political agendas. Since taking office in 1996, Phil and his staff have recovered and returned over $7 million in taxpayers dollars that have been embezzeled or improperly spent, while aggressively investigating public corruption within state and local governments. The agency audits annually approximately $11 billion of taxpayers dollars for legal compliance and efficiency.”
That Calculates;
11,000,000,000 x 10 years audits =
110,000,000,000
7,000,000 divided by 110,000,000,000 =
.00006363636 rate of return
For information on the COST of White Collar Crime and Public Corruption:
National Press Club, Washington, D.C.
If a man ain’t willin’ to bankroll his own Venture do you think you should? Think about it!
Public Private Partnerships!
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” Frederic Bastiat, “The Law”
“I sincerely believe…that banking extablishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” Thomas Jefferson to John Taylor, 1816
“Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including merchants, the industries, and the mills of the country?” Sen Carter Glass, author of the Banking Act of 1933
The Fall of the Athenian Republic
“A democracy cannot exist as a permanent form
of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on , the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a DICTATORSHIP.”
“The average age of the world’s greatest civilizations has been two hundred years. These nations have progressed through this sequence. From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to complacency; from complacency to apathy, from apathy to dependence; from dependence back into BONDAGE.”
Professor Alexander Tyler, circa 1787
Now I don’t profess to be smarter than all these folks, so I’m gonna sit up and take note!
So WHEN you ask “WTF”
WHEN you ask “WHY”
“FOLLOW THE MONEY!”