Breaking News! Judge dismisses RICO suit against Dick Scruggs and SMBD

With pleasure I eat ↑ (some of) my my words about Judge Keith Starrett who followed the law despite the fact his resulting Order dismissed the RICO case against Dick Scruggs and SMBD; i.e., Young v Scruggs:

Defendant Richard F. Scruggs was a highly successful trial lawyer who gained international fame from settlements with large tobacco companies. The plaintiffs, who are both attorneys, worked for Scruggs, Millette, Bozeman and Dent, P.A, (“SMBD”) a law firm and predecessor to defendant SMBD. The plaintiffs assert that they dedicated a large part of their legal career to assisting the defendants in obtaining the tobacco settlements.

On July 1, 1999, the plaintiffs entered into written agreements with the defendants which provided for the plaintiffs’ services in the tobacco litigation. The plaintiffs were employees of and not shareholders in the firm. As part of their compensation for services rendered in certain tobacco litigation, SMBD agreed to pay each plaintiff five percent of the net attorney fees the firm received from the tobacco litigation. Their agreement calculated “net fees” after certain deductions from gross proceeds, including fees due to other associated attorneys and “any other obligations by [the] firm in connection with tobacco litigation other than obligations to firm shareholders.” SMBD paid the plaintiffs through regular quarterly payments.

During and after the tobacco litigation, the defendants were involved in attorney fee disputes with Alwyn Luckey and William Roberts Wilson, both of whom claimed damages from fees earned in earlier asbestos litigation through association with the defendants. Luckey and Wilson also both sought a portion of the defendants’ tobacco attorney fees under a constructive trust theory, i.e., they should recover a portion of the defendants’ tobacco attorney fees because (they claimed) Scruggs and SMBD used asbestos fees due them to finance the tobacco litigation…

This court has previously addressed a similar issue in a RICO claim brought by Wilson and Luckey against the defendants and others for recovery of asbestos and tobacco attorney fees. In that case, Wilson and Luckey alleged that defendant Scruggs had committed predicate acts in furtherance of a scheme to deprive them of attorney fees. Wilson v. Scruggs, No. 3:02cv25TSL, slip op. at 16 (S.D. Miss. Sept. 29, 2003). In granting the defendants’ motion to dismiss for failure to state a claim, Judge Lee found that the alleged predicate acts did not meet the “continuity” requirement because they were all alleged to be “pursuant to a single effort to effectuate a single wrong against no one other than” Wilson and Luckey...

The plaintiffs’ allegations of racketeering activity are composed of nearly identical claims Continue reading “Breaking News! Judge dismisses RICO suit against Dick Scruggs and SMBD”

Cracking heads and cracking jokes – an update on Young v Scruggs

Plaintiffs next argue (apparently not in jest) that Richard Scruggs is “a Federal prisoner avoiding service of process.” It is not clear if Plaintiffs are suggesting that Scruggs decided to enter prison to avoid their service of process or that he is somehow able to move around within the prison system to avoid service of process. Either way, Plaintiffs’ argument is ludicrous. There is no evidence that Richard Scruggs is avoiding service. Instead, Plaintiffs have failed to follow the plain language of the applicable rules in completing service on him.

Arguments that once offered “food for thought” on the appropriate application of RICO are all about “service” now – law a la carte to the point that I’m uncertain if this is  an update or a menu. Service of process,  a  fly-in-the-soup issue in the Scruggs defendants Rebuttal in support of their Motion to Dismiss,  merited later mention chiefly because of a recent, related MSSC decision.

Plaintiffs in Young v Scruggs seemed to turn the table when they subsequently filed a Motion to Deem Service Sufficient and asked for a default judgment or extension of time to serve process: Continue reading “Cracking heads and cracking jokes – an update on Young v Scruggs”

Scruggs, Minor, and some legal odds and ends (pun intended) – Nielsen, Wilson, Robie and Tort Reform

The “drafts file” is overflowing (again) and time is short (again) – nothing to do but pull a handful of things I think worth a mention and go for what Sop has called a “round-up” post.

First up is an update on Young v Scruggs – brief because the case is stuck on proper service of the summons issued to Dick Scruggs, a discussion I passed on recenty when reporting Defendant’s Rebuttal.  What’s happened since the, however, is more interesting.  First, the defendants fied a Motion to Strike Purported Summons that basically restated the argument Scruggs was not lawfully served and there was a pending motion to dismiss on that basis.  Next, plaintiffs pop up and file Notice the summons has been reissued – and on that same day, according to the docket,  defendants filed anAmended Motion to Strike that cites and attaches a recent Mississippi Supreme Court ruling on the subject that’s worth a look.

The latest news on USA v Minor (Whitfield and Teel) makes for interesting reading – so did the recently filed Motion for Rehearing that was sitting in drafts when most media had the story up.  Here’s the Motion and here’s the latest:

Pursuant to Federal Rule of Appellate Procedure 28(j), Paul Minor notifies the Court of the Supreme Court’s recent decision in Citizens United v. FEC, No. 08-205 (Jan. 21, 2010). That decision clarifies that the jury instructions in this case, which allowed the jury to convict the defendants of honest services fraud for campaign contributions made with only an intent to influence and without any quid pro quo, violate the First Amendment. h/t Legal Schnauzer (entire letter posted there)

Now, news on the “odds” – the first “odd” appears to be Gerald Nielsen or, more accurately, Mr. Nielsen appears to be odd – long on ego but short on memory.  Continue reading “Scruggs, Minor, and some legal odds and ends (pun intended) – Nielsen, Wilson, Robie and Tort Reform”

Scruggs defendants file Rebuttal in support of Motion to Dismiss Young v Scruggs

They sought it with thimbles, they sought it with care;
They pursued it with forks and hope;
They threatened its life with a railway-share;
They charmed it with smiles and soap

Even with the pleadings reported in The Barriester’s Dream – Plaintiffs’ Oppose Scruggs’ Motion to Dismiss, Scruggs refused the role of  Snark in this latest filing in Young v Scruggs, Defendants’ Rebuttal Brief in Support of their Motion to Dismiss:

Plaintiffs’ RICO claims do not fail because of a technical misstep; they fail because the series of events alleged in the Complaint and the RICO Statement do not rise to the level of a RICO violation which entitles Plaintiffs to that statute’s special remedies.

The brief states, There is no magic language Plaintiffs can add to their pleadings to create a RICO cause of action. Believe me, there is also no magic language to make a discussion of law related to serving Richard Scruggs with process interesting reading.  The rest, however, is interesting reading and an apt reminder that RICO is not something you just toss out to get your case in federal court.

Defendants Scruggs et al make three clear arguments for dismissing Plaintiffs’ RICO claims: Continue reading “Scruggs defendants file Rebuttal in support of Motion to Dismiss Young v Scruggs”

The Barriester’s Dream – Plaintiffs’ Oppose Scruggs’ Motion to Dismiss

He dreamed that he stood in a shadowy Court,
Where the Snark, with a glass in its eye,
Dressed in gown, bands, and wig, was defending a pig
On the charge of deserting its sty.

Plaintiffs Lee Young and Charles Mikhail, Young v Scruggs, have filed a because-we-say-it-isn’t-so-Opposition to Scruggs’ Motion to Dismiss. Admittedly, I’m not an attorney, so I may err in thinking a judge should not be asked to grade papers and give them back for correction; but… Continue reading “The Barriester’s Dream – Plaintiffs’ Oppose Scruggs’ Motion to Dismiss”

Scruggs files a nothing here, move on Motion to Dismiss Young v Scruggs

After reading Eastland’s response for Patterson in the Wilson v Scruggs RICO case, it is difficult to disagree with the legal arguments of the Motion to Dismiss that Dick Scruggs filed in  Young v Scruggs; for example:

Plaintiffs’ pleadings fail to state a claim upon which relief can be granted under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Plaintiffs have failed to allege that Defendants engaged in a pattern of racketeering activity. Even if proven, Plaintiff’s allegations could not establish that any predicate acts posed a threat of continued criminal activity, as all of the alleged predicate acts mentioned in Plaintiffs’ Complaint are related to a single, discrete, otherwise lawful transaction.

The Memorandum Brief in Support of Motion to Dismiss provides background and more about the basis for the Motion:

This case relates to Plaintiffs’ demands for money from Defendants Richard F. Scruggs and SMBD, Inc., their employer, under an attorney fee agreement signed in July 1999. Plaintiffs seek damages for Defendants’ decision in July 2005 to charge Plaintiffs with responsibility for satisfying a portion of a federal court judgment rendered against Defendants. Plaintiffs also seek damages for the residual effect of Defendants’ payment of certain legal fees to a law firm which represented Defendants in another litigated matter.

Plaintiffs pursue their quests for money under a variety of legal theories, including RICO, breach of contract and breach of fiduciary duty. This Court should dismiss some or all of Plaintiffs’ claims. First, Plaintiffs have failed to sufficiently serve process on Richard Scruggs. Second, Plaintiffs have failed to state a RICO claim upon which relief can be granted. With dismissal of the RICO claims, this Court should decline to retain supplemental jurisdiction over the remaining state law claims. Even if this Court does retain jurisdiction, the applicable statute of limitations bars Plaintiffs’ claims related to the July 2005 decision to allocate responsibility to Plaintiffs for satisfying a portion of the federal court judgment. Continue reading “Scruggs files a nothing here, move on Motion to Dismiss Young v Scruggs”

Recuse in the Scruggs news

A coincidence, perhaps? Northern district Judge Shannon Aycock (Wilson v Scruggs) and southern district Judge Sul Ozerden (Young v Scruggs) each recused from a case involving Dick Scruggs in Orders dated October 15, 2009.

Wilson v Scruggs was filed in federal court in North Mississippi and assigned to Judge Neil Biggers.  Shortly after Scruggs’ co-defendant Steve Patterson filed his Motion to Dismiss, Judge Biggers recused and the case was reassigned to Judge Shannon Aycock.

However, Judge Aycock filed a Waiver of Judicial Disqualification with the Clerk:

Unless a waiver is obtained from all parties and all counsel, Judge Aycock intends to disqualify in this proceeding because of these circumstances:

Judge Aycock’s Courtroom Deputy, Ginger McDaniel Sullivan, worked as a
paralegal with the Wm. Roberts Wilson, Jr. P.A., law firm in Jackson, Mississippi, from June 2001 to February 2005. In that position, Sullivan worked under the direction of William Roberts Wilson, Jr., Charles M. Merkel, III, and Roberts Wilson, Jr. During her employment, Sullivan was familiar with and worked on issues in the lawsuit Wilson vs. Scruggs, et al, First Judicial District of Hinds County Circuit Court. This litigation was pending when she began her employment and was not resolved as of the date she left the firm…

If a waiver is not received from all parties and all counsel, this Notice and any responses will be kept under seal by the clerk and not shown to the judge, nor will the judge be informed of the identity of any party or lawyer who declined to waive the disqualification. If the disqualification is not waived, the case will be reassigned to another judge.

Apparently waivers were not received from all parties as Judge Aycock recused and issued a related Order dated October 15, 2009. Continue reading “Recuse in the Scruggs news”