Judge fines Scruggs, Rigsby sisters; Hood called ‘co-conspirator’

A federal judge in Alabama has lowered the boom on Dickie Scruggs and two former insurance adjusters, ordering them to pay a $65,000 fine for civil contempt and describing their behavior in most unflattering terms.

Judge William M. Acker Jr. also said Thursday that Attorney General Jim Hood, “a so-called law enforcement official,” actually was a “co-conspirator” with Scruggs in defying a December 2006 injunction Acker issued in the case.

The sisters first shared their suspicions with Scruggs in February 2006. He worked with other attorneys to file a whistle-blower lawsuit against State Farm on the Rigsbys’ behalf in April 2006. By law, the False Claims Act case was kept secret while federal prosecutors investigated to see whether they wanted to pursue the case on the government’s behalf.

In June 2006, the Rigsbys downloaded thousands of pages of State Farm documents as evidence that policyholders were being defrauded. They used a list of Scruggs clients suing State Farm to help determine what records to download.

At Scruggs’ urging, the Rigsbys went public with their allegations in August 2006. Renfroe promptly sued them in the company’s home state.

In December 2006, Acker ordered the Rigsbys to give Renfroe’s lawyers all the “pilfered” records, with the exception of those turned over to “law enforcement officials.” Instead, Scruggs sent them to Attorney General Hood, who already had his own set.

Acker ordered Scruggs prosecuted for criminal contempt of court, but a different federal judge found him not guilty. Acker clearly disagrees with that judgment. Scruggs used a “loophole” in the injunction to ignore its intent, Acker said.

Acker also wrote: “…

in context, General Hood was not a bona fide ‘law enforcement official,’ but rather was a co-conspirator with, and an aider and abettor of, Scruggs.”

Acker then asks: “Did General Hood need his extra copy in order to fulfill his ‘law enforcement’ duties? The question answers itself.”

Acker also rejected the argument that Scruggs could not be held in criminal contempt for what he did because he was not “legally identified” with the Rigsbys’ in Renfroe’s lawsuit.

“Scruggs was the alter ego of the Rigsbys and the Rigsbys were the alter egos of Scruggs,” Acker said. “They could not have been more closely ‘identified’ without obtaining a marriage license. They were in bed together.”

Sun Herald
6/6/8