State court circus might match federal drama in Scruggs case

Adding to the intrigue is a sexual harassment case filed in federal court against Nutt & McAlister. Though it details female employees being paid for sex acts performed in a closet and one worker photographing his genitalia and showing it to the plaintiff, Tollison was more interested in something else.

The complaint says Mary McAlister violated the order of a federal judge in Alabama who demanded that confidential documents from State Farm be returned to the company. They had been leaked to the SKG by a pair of sisters who formerly worked for a claims-handling company.

Scruggs has been charged with criminal contempt in the matter. Maria Brown says McAlister told her that the documents were saved on the firm’s local Internet server, meaning they were part of the public domain and not subject to the order.

Tollison called it “conduct in direct violation of a U.S. District Judge in Alabama.” He added that the entire group of defendants is responsible for the actions of the others.

Citing a state Supreme Court decision, he wrote, “If the partner acted within the course and scope of actual or apparent authority, then even liability for fraudulent wrongs can be imputed to the partnership. The other partners, though innocent without knowledge of the act or omission, can be vicariously liable.”

All of this just to determine whether the matter will go before an arbitrator. Of course, there is a lot of money up for grabs — more than the reported $26.5 million. The SKG reached at least four other settlements.

Nationwide Insurance has asked to intervene in the case in order to protect the confidentiality of its settlement.

If Tollison has his way, it will be a jury that decides how all that money is split.

Legal Newsline