The Alabama U.S. Attorney's office said there would be a meeting today to discuss a judge's order to bring a criminal contempt prosecution against a high-profile attorney, involved in Hurricane Katrina claims battles with State Farm.
"We aware of it [the order against Richard "Dickie" Scruggs and his law firm] and will comment soon," said Jill Ellis, a spokesperson for U.S. Attorney Alice Martin in Birmingham. Later Ms. Ellis said at this point the matter is in an investigative stage and there can be no comment until something is filed.
The demand for a prosecution was issued by U.S. District Court Judge William M. Acker Jr. and concerned what the judge said was a violation of an injunction against disclosing and misappropriating State Farm documents secretly copied by two former adjusters for E.A. Renfroe & Company.
If the U.S. Attorney's Office declines to prosecute, the judge said in his order he will "appoint another attorney to prosecute Scrugg's contempt."
At issue is the lawyer's handling of documents in a case involving two sisters, Corri Rigsby Moran and Kerri Rigsby who worked in Mississippi for Renfroe after Hurricane Katrina doing adjusting work on State Farm claims.
The women, according to a memo and opinion accompanying Judge Acker's order, witnessed what they believed to be fraudulent practices by State Farm and began copying documents they thought were evidence of "egregious misconduct."
In addition to providing Mr. Scruggs and his firm with thousands of pages, they also provided State Farm documents to Mississippi State Attorney General Jim Hood and the FBI and later became consultants to the Scruggs Katrina Group, the memo states.
When Renfroe sued the sisters, the judge ordered them to return the documents and their attorneys were ordered not to disclose any further material unless there was a request by law enforcement officials.
Mr. Scruggs testified at a hearing that Attorney General Hood read the injunction to mean Mr. Scruggs could send him the documents in question, which he did, rather than to lawyers for Renfroe–an interpretation the judge labeled "erroneous."
He wrote that Mr. Scruggs' disregard of the injunction was "brazen," and the lawyer had substituted his judgment for the courts adding, "That spells 'defiance."'
Mr. Hood, who dropped a grand jury investigation of State Farm Katrina claims handling, is currently suing the company for failing to go forward with a proposed class action settlement of certain policyholders' Katrina claims.
According to Judge Acker's memo, when an assistant in Mr. Hood's office asked Mr. Scruggs to send over Rigsby documents to keep them out of State Farm's grasp he delivered them and when Cori Rigsby asked him to send the documents to Renfroe, he said, he no longer had possession.
Eventually Renfroe received documents from Mr. Hood and Mr. Scruggs and after bringing an action in Judge Acker's court and seeking a civil contempt finding against the Rigsbys and Mr. Scruggs.
Mr. Scruggs firm did not return a request for comment, but according to an Associated Press report he said the firm had cooperated with the injunction and would oppose the judge's "bizarre" action.
This article updated June 19, 9:54 a.m.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.