In this world of sin and sorrow – USA v DeLaughter

The former prosecutor who made a worldwide name for himself for putting Klansman Byron De La Beckwith behind bars pleaded not guilty today to a five-count indictment in court, accused of ruling in favor of the former lawyer once called Mississippi’s “king of torts.”

An April 6 trial was set for Hinds County Circuit Judge Bobby DeLaughter in federal court in Oxford on a charge he was influenced to rule in favor of former high-profile lawyer Dickie Scruggs, who was sentenced this week to seven years in prison in the case.
DeLaughter was released on a $10,000 unsecured bond.

Assistant U.S. Attorney Bob Norman shook DeLaughter’s hand in the courtroom and said, “I’m sorry we even have to be here.”

DeLaughter has maintained his innocence, saying he followed the law in ruling largely in Scruggs’ favor in a legal-fees lawsuit brought by Scruggs’ former law partner, Bob Wilson… h/t Clarion Ledger

After writing the oft quoted phrase, In this world of sin and sorrow, H. L. Mencken continued with there is always something to be thankful for…and my “something” is the courtroom conduct of Assistant USA, Bob Norman.  As the official representative of we the people, his public expression of sorrow sets an example for the court of public opinion contrary to the gleeful response that followed the indictment of Dick Scruggs.

The Clarion-Ledger points out that “luck of the draw,” so to speak,  handed Judge Delaughter the Wilson case. However, Scruggs had three attorneys working with him on asbestos cases that later filed suit.

In sharp contrast to the highly publicized cases filed by Wilson and Luckey, there is little to no recognition of Jowett v Scruggs – or the insight the case provides on the events culminating in the indictment of Judge DeLaughter today.

Current 5th Circuit Judge Leslie Southwick provided a brief history of Jowett’s partnership with Scruggs when writing the August 2004 Decision issued by the Mississippi Court of Appeals in sharp contrast to the highly publicized cases filed by Wilson and Luckey.

In 1989, Juliet Lawson Jowett began working for Richard Scruggs as an employee of Asbestos Group, P.A. Jowett worked primarily in the area of occupational hearing loss. She litigated cases as a member of another of Scruggs’ professional associations, Occupational Hearing Loss, P.A. In 1994, the law firm of Scruggs, Millette, Lawson, Bozeman & Dent, P.A. (“SMLBD”) was formed. Jowett was the “Lawson” in this firm and owned eight percent of the shares.

The shareholders of the firm were paid a salary and were given a portion of net revenue based on their performance. The board of directors determined the annual bonuses of the shareholders. In 1995, Jowett signed an employment contract with SMLBD which discussed her rights as an employee of the firm and provided for a base salary of $100,000.

Jowett continued to work on the hearing loss litigation until she went on maternity leave in 1996. Another attorney took over the litigation at the time that Jowett began her leave. In 1997, Jowett returned to SMLBD. She and Scruggs executed a written agreement, effective on January 1, 1997, that modified the 1995 employment contract. Jowett would receive $100,000 annual salary, $110,360 cash, a possible annual bonus to be determined by the board of directors, one-third of the net fees received by SMLBD for the hearing loss cases, and $3,000 per month for rent and supplies for an Ocean Springs office.

Jowett opened an office in Ocean Springs under the name of Juliet Jowett, P.A. All advertisements and contracts with clients were done under this name and not SMLBD. Jowett kept all fees from this firm and did no further work for SMLBD. However, she continued to receive the contracted-for salary from SMLBD along with the $3,000 per month for expenses.

On February 13, 1998, Scruggs sent Jowett a letter advising her that she would be terminated sixty days from the date of the letter. Her termination was ratified by the firm on October 14, 1999.

During the period of Jowett’s work with Scruggs, litigation on behalf of the State against major tobacco companies was brought. See In re Fordice, 691 So. 2d 429, 430-31 (Miss. 1997) (only reported decision on this tobacco litigation; that appeal contested but the Court did not resolve the authority of the state’s attorney general to employ SMLBD and other private law firms). In October 1997, there was an agreement involving the amount of payments by the defendants to the plaintiff-states, but there was no agreement as to attorneys’ fees. In December 1997, the settlement was approved with a provision for arbitration to determine attorneys’ fees. In July 1998, the law firm, now Scruggs, Millette, Bozeman & Dent, P.A., received its first advance fee payment.

On February 26, 1998, Jowett filed suit against Scruggs and the firm in federal court on the basis of sex discrimination and other employment claims. This case was eventually dismissed with prejudice. On January 12, 1999, Jowett filed this complaint with the Chancery Court of Jackson County. In two phases of trial, the judge found that Jowett was entitled to $184,156 for income that was not distributed to her, taxable for the year 1997. He also found that the values of her shares of stock was $234,053.84.

Dissatisfied with these awards, Jowett appeals…

Jowett divides her appellate arguments into fourteen issues. We find the division to be somewhat unwieldy in analyzing what is before us. The following is our path to a conclusion: (1) was Jowett properly expelled as a shareholder; (2) if so, what is the date to value her shares; (3) what was the value of her shareholder interest on that date; (4) was there a breach of fiduciary duty owed by Scruggs or others to Jowett; (5) should punitive damages and her attorney’s fees be awarded?

The Court’s decision speaks to similar issues in Luckey and Wilson in a way contrary to common thinking.

Jowett argues that she should have received a greater sum for her shares in SMLBD than Scruggs has offered. She also argues that his breaches of fiduciary duty are so egregious, that they rise to a level deserving punitive damages. We have upheld the finding that there was no breach of a fiduciary duty. There was no basis to award punitive damages.

THE JUDGMENT OF THE CHANCERY COURT OF JACKSON COUNTY IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE TAXED TO THE APPELLANTS.

Once we have the indictment, I’ll set USA v DeLaughter up under legal.  Until then, Jowett provides fresh food for thought about the agreements Scruggs had with Luckey and Wilson.

Jowett opened her own firm and received a salary and benefits package from SMLBD, yet did not do any work for that firm beginning in 1997. Based on the evidence, we find that the chancellor did not err when he interpreted that the value of Jowett’s stock would include cost advances but would not include accounts receivable.

Save room for desert – Sin and Sorrow, part 2 – will be served later.

12 thoughts on “In this world of sin and sorrow – USA v DeLaughter”

  1. It’s not on Pacer – I just checked.

    Since the case is about the alleged advantage given some and not others, it would seem the government would make certain to practice what it’s preaching.

    Guess we’ll just wait until the indictment is available to the public.

  2. Nowdy certain blogs and North Mississippi newspapers have been the Government’s mouth piece on this for months. You don’t think for a second that sealed doc showed up on PACER by accident.

    People are beginning to understand this is less about judicial corruption as it is about who gets the spoils. The public is getting a glimpse of how things are done North Mississippi style – there isn’t a single one of those cats that is “innocent”.

    sop

  3. Are you suggesting there are some who believe “secret” access to a Court is only a crime if Dick Scruggs is involved, Sop?

    If so, it would appear “Sin and Sorrow” was a more appropriate title than I intended.

  4. I love title by the way!! I just can’t understand how Peters got away with this. All he had to do was forfeit what was left of the money he got and lose his law license? That is not justice for all.

  5. Not exactly Nowdy. A US Attorney leaking items that will help his case is nothing new.

    We’ve been regaled for over a year now with stories about what a monster Dick Scruggs was and is – but when you peek under the hood you find Scruugs did not exist in isolation, as he had plenty of partners in crime including Charlie Merkel and Jack Dunbar.

    So much of what has been written is designed to obscure those relationships and toss a few elbows against other lawyers. For instance I was surprised to find the gentleman I met and conversed with at length a few weeks ago was supposed to be hiding out overseas from a federal indictment related to Scruggs according to comments posted at FOLO instead of meeting me over drinks in Biloxi.

    Once you understand the biases, hidden agendas and vendettas the propagandists reveal themselves pretty easily. For all the good things we’ve seen out of lawyers involved in the insurance litigation here this mess shows you the entire otherside of the legal profession in Mississippi.

    sop

  6. Been away from all blogs for a long time and heard some rumors coming out of MS and thought I’d see what was going on. Good time to come take a look see. Based on what I’ve seen, it looks like a couple other fish get to swim away scott free (Peters/Blake) and I’d sure like to think that the ex senator had zero involvement in this with the exception of maybe being used by his bro in law.

    One sad part of this whole mess is what it has done to the reputation of the ENTIRE legal system in MS. Since this 1st came about I have believed that Dickie and crew were guilty as charged (like a fool, I do believe way too much of what I read in the media), and saw a lot of support from people claiming that he was set up and didn’t really do anything criminal. Now that this 2nd shoe has fallen in an entirely different set of circumstances, in which he once again plead guilty knowing he was going to get another 7 year sentence, I’m wondering if it has changed anyone’s mind on his guilt? I really have a hard time with anyone pleading guilty to a crime that they did not commit, especially when it means they will be locked up for a period of time that could end up being the rest of their life (he isn’t a young man).

    It sounds like Scruggs, Peters and others are cooperating with the gov’t in this case and if that is true, DeLaughter stands to go down for a long time. If what we have read (there again, believing too much what the media is telling me) is true, I would hope the man gets the maximum sentence if for no other reason then to set an example.

  7. Oh, so glad you stopped by – you’ve been missed. If I’d known you were coming, I would have rested a bit so I’d be ready for your usual thought provoking comments.

    Hope you’ll stay a while as I’ll be back shortly with a response to your thoughts.

  8. I haven’t changed my mind Beau but then again of the three of us I was the least charitable towards Dickie Scruggs. That said I harbor no hate towards the man, he was the product of the our legal system. And in that respect right along with years of nods and winks there are no “innocents” among the legal crowd. When you stand back and look at it from a bigger picture “the clique” of which Dick Scruggs was but one player are really nothing more than grownup versions of spoiled brats fighting over toys or in this case legal settlements.

    Meantime in Jackson Judge Houston Patten was locking up lawyers for doing their jobs yet the Government spends a year investigating the judge involved in a legal fee dispute. I don’t know about you but the ironies and contrast is most telling. And against all of this Ed Peter’s end up being the man who walked away with $1,000,000 and is scott free. Peters was also involved with Mr Patten.

    Nowdy’s post “Just us or Justice” sums it up for me. The Mississippi bar’s black eye is very well deserved IMHO.

    BTW – It’s a real treat to see you back.

    sop

  9. I’m back and getting back to just-us-justice shortly and responding to Beau’s comments there – and you’re right. It is a treat to have him back.

  10. Interesting comparison. Even the most cursory glance into Jowett v. Scruggs by the most untrained eye reveals sweeping changes in contract law and corporate law for Mississippians (as noted in Mississippi law schools) and eviserates the fiduciary relationships among shareholders. Jowett was treated by the Courts like no other and Scruggs actions overlooked and forgiven. Did the gray cloud pass over the Supreme Court of Mississippi?

  11. Good evening, everyone … It is always with great sadness that I think of what happened here … If I ever read these words before I have put them someplace where I could let my own cool down … I had so much to say and could not wrap my words around my thoughts at the time … So much happened before … So much has happened since … My words lost almost from the start by allowing them to filter through the mouths of others … Trust … It’s always been a hard validation that you can really trust no one … Maybe not even yourself as you choose to act or not act based on the moments in which the decisions are made … I must wonder how many of you are now the ghosts in the machine of public social media … Different names … Shared passwords … Shared … Phones … It does not matter, I suppose … I fight on … For what was right then … For what is right now … The obstacles not so different really … What I will do with the story that has become life … I don’t know … What I will do within the framework of the judicial system … Of that I am confident … Will I succeed … I don’t know … As always I will do what I feel is the right thing at the right time … And yes, it would be nice to have a confidant … A friend … A champion to stand at my side and behind me … But that … Is really not possible, is it … I was raised alone … I like being alone … It makes the moments when you have to look at those who are standing for you and ask yourself “really?” … Nil … Whoever you are … I hope you are happy with the paths you have chosen over these years … The times that you took action to correct wrongs … The times you were able to recognize that what appeared to be wrong … were really misunderstood … And the times … That you did what was right at all costs … Because it was the right thing to do … I have … I am a woman at peace with myself … I like me … I always have … And that … Means a lot … Juliet

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