While the Justice Department considered teaming up with Scruggs, federal prosecutors were secretly investigating the high-profile attorney for allegedly trying to bribe a state judge in Mississippi.
Last week, a grand jury in Oxford indicted Scruggs and four others on charges they paid the judge $40,000 for a favorable ruling in a dispute over $26.5 million in legal fees from a mass settlement of Katrina suits.
The indictments announced Nov. 29 by U.S. Attorney Jim Greenlee present an awkward question for the Justice Department’s civil division: Should the federal government take over a case brought by a lawyer under federal indictment?
“It does put them in a little bit of quandary,” said Randy Maniloff, a Philadelphia-based lawyer who represents insurance companies and has closely followed the wave of litigation spawned by the Aug. 29, 2005, hurricane.
The Justice Department has until Jan. 31 to decide whether to intervene in the case.