REQUIRED READING.  Parloff has done an excellent job in breaking down this into bite-sized pieces.  It is pieces like this that will capture the attention of MSM.

This is a great snippet from Part VI.

Earlier this month State Farm made public e-mails recently obtained from the Scruggs Law Firm that appear to show that Scruggs knowingly sent court documents that were then under seal to reporters at ABC News, CBS News, Associated Press, and The New York Times. Here’s an example.

The documents include an “evidentiary disclosure” and the “first amended complaint” in the Rigsbys’ whistleblower suit, which was filed under seal in April 2006 and not made public until August 2007. (Whistleblower suits are typically filed under seal to allow the Justice Department an opportunity to pursue an investigation without tipping off the alleged wrongdoer to the fact that he is already under suspicion.)

Obviously, as a reporter I’m all in favor of sources leaking sealed documents to reporters, so I’m having trouble working up much outrage over this particular transgression.

On the other hand, it is obvious that the reporters in this case were faced with a dilemma and, in some cases, the public was misled as a result. Once the reporters saw the legal caption on the papers they should have realized that the Rigsbys were not wholly disinterested Good Samaritans, but also plaintiffs who had an enormous pecuniary stake – potentially tens of millions of dollars in whistleblower recoveries (see Part V of this series) — in interpreting State Farm’s conduct in the worst conceivable light. While the reporter would want to disclose that potential source of bias to the reader, the fact that the case was sealed made it impossible to do so. (It would get the source, Scruggs, in trouble.) So reporters faced a quandary: either don’t use the source at all, or use the source without revealing the huge potential bias.

If I’m being honest with myself, in that situation I can imagine myself possibly going ahead and using the source without revealing the potential bias if I was otherwise confident in the source and story. (Of course, it would ultimately be my editors’ call, not mine.) Still, there’s no denying that going forward with the incomplete story would not be fully fair to the reader or State Farm.

State Farm has all along suggested that it didn’t produce the October 12 McIntosh report for the simple reason that Kerri Rigsby improperly took it (or “stole it”) rather than filing it away the way she was supposed to. State Farm has theorized that Scruggs knew this and, indeed, that this was the whole reason Scruggs seemed so preternaturally certain all along that State Farm wouldn’t produce the McIntosh report in response to subpoenas. It is true, for instance, that in April 2006, long before State Farm had had a chance to respond to Hood’s subpoenas, attorney general Hood seemed to anticipate that State Farm wouldn’t be able to produce it. In a court proceeding concerning that document subpoena he told a state judge, “See, we already have these documents. . . . We’re just going to see if they [State Farm] actually give us what is written on them and stuck to them and so forth.”

It does seem odd to me that Hood already suspected State Farm would fail to provide what he was nominally looking for.

In a little noted filing last week State Farm revealed that one of its claims-adjusting supervisors, Alexis (“Lecky”) King, is now available to testify in a handful of Hurricane Katrina-related civil suits that are still being waged against the insurer by plaintiffs originally represented by Dickie Scruggs.

By March, Hardison said, colleagues at the Gulfport cat office were beginning to suspect the Rigsbys of being moles for either Scruggs or attorney general Hood. Accordingly, Hardison testified, Scruggs wanted to “throw suspicion off” the Rigsbys and send it, instead, to State Farm’s central office in Bloomington. Here’s what he allegedly did:

“So he either flew a jet, flew his jet out there,” Hardison testified, “hired some guy to meet him at the airport, called Bloomington and tipped them off and said that Dickie is there to meet somebody. And Pat [Lobrano] kept going, he loves all this. . . . And I was going, what was in the package? They were, like, oh, probably nothing. . . . They were laughing about it. . . . He loves cloak and dagger, you know.”

In an interview with me, Lobrano says she remembers “the whole Bloomington thing” but not any specifics of what was said. “I don’t know if [Scruggs] did that, if it was true. If he did, he would’ve been trying to protect the girls and we would’ve appreciated that.”

The Rigsbys did not turn over many documents in response to the Acker order, maintaining that they had previously turned over almost everything to Scruggs. Many months later, however, in fall 2007, State Farm subpoenaed Cori Rigsby’s home computer, to see if pertinent documents were stored there. (The Rigsbys had testified that they e-mailed some State Farm documents to Cori at her personal e-mail account, suggesting that documents might have been stored on her home computer.)

In October 2007, shortly after State Farm issued its subpoena to Cori, the Rigsbys attorneys notified the court that Cori’s home computer had “crashed” in early September 2007, and that she could no longer access any documents from it.

A federal magistrate judge then ordered that Cori turn over her computer to the court and he hired a technical expert to try to retrieve information. Some pertinent State Farm documents were, in fact, retrieved from the machine earlier this year, raising a question about why they had not previously been turned over to E.A. Renfroe in compliance with Judge Acker’s injunction. (Acker issued his injunction in December 2006, and Cori did not claim that her computer crashed until early September 2007.) Lawyers for the Rigsbys sought a protective order to prevent the recovered documents from being turned over to State Farm, but a federal magistrate denied the request last June. He wrote, “This Court will not enter a protective order to preclude State Farm from discovering the State Farm documents Rigsby stole.”