Scruggs, Firm in Criminal Contempt Case

Legal Ethics

Posted Aug 22, 2007, 11:44 am CDT
By Martha Neil

A well-known Mississippi plaintiffs attorney and his law firm have been charged with criminal contempt by special federal prosecutors after they defied a federal judge's order to return internal claims documents to an insurance company.

Appointed by U.S. District Judge William M. Acker Jr. after the local U.S. attorney in Alabama declined to file contempt charges, two special prosecutors brought the contempt case yesterday against Richard Scruggs and his law firm, reports the Associated Press.

The special prosecutors are: Charles E. Sharp Sr. and Joel Williams. At their request, Acker also appointed a criminal defense lawyer, former Assistant U.S. Attorney Michael V. Rassmussen, as a special prosecutor in the case yesterday, according to the Birmingham News. The contempt case has now been randomly assigned to U.S. District Judge L. Scott Coogler.

As discussed in an earlier ABAJournal.com post, the contempt issue concerns a dispute over internal State Farm Insurance Co. claims documents that allegedly may show the insurer improperly denied Hurricane Katrina coverage. Scruggs, who represents policyholders in Katrina cases, got copies of the documents from two clients who worked for a third-party State Farm claims processor. Although Acker ordered that the documents be returned to State Farm, Scruggs instead reportedly gave them to the Mississippi attorney general.

Scruggs and his son, Zack, who practices with him, could not be reached for comment.

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