Famed attorney Richard “Dickie” Scruggs dodged criminal contemptcharges last month that stemmed from Hurricane Katrina litigationwhen a U.S. district judge granted his request for a dismissaldespite acknowledging that “a cloud of impropriety” surroundedScruggs' actions.

The ruling by Senior U.S. District Judge Roger Vinson is justthe latest action in a case that began in 2005 with a pair ofadjusters/sisters, Cori and Kerri Rigsby. The two were contractedby independent claim-adjusting firm E.A. Renfroe to work State Farmclaims that were reported following Katrina. But when theysuspected State Farm of committing bad faith against policyholders,the sisters copied thousands of pages of documents and shared themwith Scruggs, the U.S. attorney for Southern Mississippi, the FBI,and the producers of the television show, 20/20.

The criminal contempt charges against Scruggs involved thesedocuments. When Judge William Acker, Jr., ordered an injunctionrequiring the documents to be returned to Renfroe, an allegedmeeting took place between Scruggs and Mississippi Attorney GeneralJim Hood, which resulted in Hood “requesting” the documents fromScruggs. The end result is that this request enabled Scruggs tomaintain access to the documents, with the implied reason beingthat it could be used as a leveraging tool to settle cases withState Farm (it is alleged that this took place without the Rigsbysisters' knowledge). The ethics of the situation were blurred dueto the fact that a personal relationship existed between Scruggsand Hood. Scruggs could never ask Hood to request the documents;Hood was required to make that decision on his own. But prosecutorsallege that Scruggs did exactly that.