On Friday, word began circulating about a new development in the Scruggs universe.

The core of the case stems back to the late 1980s. Merkel represented an asbestos plaintiff named Scott. Merkel approached Bobs Wilson to provide assistance with that case. It settled for $300K and Wilson was due half of the fees. When Wilson and Scruggs blew up and Merkel wound up representing Wilson and Luckey in 1994, Scruggs sued Merkel shortly thereafter over the Scott fees, even though he knew about it as early as 1991 and never pressed the issue. To simplify the issues, Scruggs was basically alleging that Merkel had interfered with Scruggs’s contractual relationship with Wilson. Merkel contended that his arrangement was with Wilson and he never pressed one way or the other about how to distribute fees between Wilson and Scruggs. Once Merkel learned about the dispute over the Scott fees, he began escrowing settlement proceeds and pressing Wilson and Scruggs on how to disburse them.

From the prior MSSC filings . . .

Scruggs filed this suit in the Jackson County Chancery Court against M & C, Merkel, Mitchell, Wilson, Wilson, P.A., and Luckey, alleging that they tortiously interfered with his contract with Wilson and Wilson, P.A., and that he is entitled to damages. Following a trial, the chancellor dismissed? Scruggs’ action with prejudice, finding that there was no evidence to support a finding that Merkel, Mitchell, or M & C intended to harm Scruggs, and that it was unclear, at best, whether Merkel, Mitchell or M & C had knowledge of Scruggs’ agreements with Wilson and Luckey.

Based on the record, we conclude that the decision of whether or not to share their portion of the Scott proceeds was for Wilson and Luckey to make and that there is absolutely no evidence that M & C, Merkel, and Mitchell had an intention to interfere with Scruggs’ contract or to otherwise harm Scruggs. We therefore affirm the chancellor’s judgment dismissing Scruggs’ complaint.

Indeed, if there was any ill will or malice between these parties, it arose after Scruggs attempted to have M & C disqualified in the Hinds County action (editors note: Wilson v. Scruggs) and, when the motion to disqualify was denied, Scruggs filed the instant lawsuit against Merkel, M & C and Mitchell.

On prior occasions, Merkel said that he had spent well in excess of $1M in legal fees defending this litigation over only a fraction of that amount in damages involved. In several courts on several occasions over nearly a decade, courts at all levels repeatedly found for Merkel. There’s not a lot of data in the public domain about it, but those associated with it have called it some of the most contentious litigation they’ve ever been involved with. It was legal bloodsport at the highest levels.

Not just content to let the matter die, Merkel countersued Scruggs on a malicious prosecution action. That case was scheduled to go to court on April 4, 2011 in Coahoma County Circuit Court. A pool of over 300 jurors were ready to go. On Friday, it came to an abrupt end with Scruggs agreeing to fork over to Merkel about $3,000,000 to end the hostilities in what can only be considered a unilateral victory for Merkel. Within the last 60 days leading up to this trial, Dickie Scruggs was deposed by Merkel’s counsel with Brook Dooley of the Keker firm representing Scruggs. In that deposition, Scruggs asserted his 5th amendment protection dozens of times.

Merkel has made it a sport of sorts to take large chunks of money out of Dickie Scruggs’s hide. It seems like Merkel’s biggest crime was having the audacity to represent someone adverse to Scruggs. However, the methodology behind the legal whipsawing of Merkel speaks to the story that we began to tell in Kings of Tort. As I have said in the past, the more that the Scruggs camp fights these civil and criminal actions, the more information that comes out. The more information that comes out, the worse the narrative gets for them. Merkel is one of a select few that has stood in the breach and fought Scruggs with an eye for an eye attitude and not given up even under massive legal and financial pressure.

I can promise you this won’t get much press. ZNN, the Clarion Ledger nor AP will likely even give it a second look. However, it is important in the context of what we and others have helped bring to light and we will be bringing more out about it as we search the files in Coahoma County.