Former business partners bear the sins of Scruggs
Jones’ attorneys said initially that they would call all the major players to testify in the state court case sanctions hearing, including Scruggs, as witnesses to determine who knew what, when.
Scruggs invoked the Fifth Amendment’s protection against self-incrimination more than 19 times, a fact that Jones’ attorney alluded to as proof that Scruggs’ guilty plea to federal conspiracy charges was not adequate proof of accepting responsibility for his actions and that severe sanctions were still warranted by the state court for judicial bribery, a crime Tollison said was “second only to treason.”
The remaining members of the former SKG all claimed that they had no knowledge of any under-the-table goings on carried out by Scruggs and Balducci, and should not be penalized.
Coleman had earlier ruled that acts of one joint venture partner would be attributed to all partners. That ruling could only be helped along by the fact that the same defendants were ruled against Tuesday. The KLG has also been disqualified from handling Katrina claims by U. S. District Judge L.T. Senter.
Disqualification of those attorneys in Scruggs’ and then KLG’s action against State Farm on behalf of Katrina victims was a penalty for Scruggs’ giving consulting jobs that carried $150,000 salaries to two former employees of E.A. Renfroe & Co. who had stolen confidential State Farm documents and given them to Scruggs.
The practical effect of Coleman’s ruling is that the defendants’ motion to compel arbitration and the defendants’ answer to Jones’ lawsuit will be struck from the record as if neither had ever been filed, and Jones will be allowed to take a default, as if the defendants from the former SKG had never responded to the Jones v. Scruggs, et al., lawsuit at all.
There will be discovery and a hearing to determine damages, and whether additional punitive damages are merited, before the final judgment is entered.
Suing Scruggs has practically become a cottage industry in its own right, as Scruggs’ former joint venture partners in mass tort/class action asbestos, tobacco and Katrina insurance claims litigation sue Scruggs and each other over dispensation of attorneys’ fees.
If the Scruggs convolutions seem difficult to follow, it is because the lawyers do indeed take turns and switch sides. John Jones, the victor in Tuesday’s fight, was a former Scruggs defense lawyer who represented him when he was being sued over attorneys fees by another of his former joint venture partners, that one a partner in asbestos litigation, attorney Roberts Wilson.
Legal Newsline
4/16/8
Magnolia Tribune
