Removing yet a few more lawyers from the cacophany of Scruggs-influenced lawyers, Judge Senter rules that the now infamous Trailer Lawyers from Missouri are not allowed any further participation in the Ex. Rel. Rigsby case involving State Farm.
When the current attorneys learned of the financial arrangement among
Scruggs, their co-counsel in this case, and the Rigsby sisters, their clients, they took no
action. While the current attorneys assert that they “affirmatively disavowed any
participation in any payments to the Relators” (Relators’ Response to Defendant State
Farm’s Motion To Disqualify the Law Firm of Bartimus, Frickleton, Robertson & Gorny,
PC, Page 20 ) in fact they continued to represent the Rigsby sisters with Scruggs
acting as their co-counsel. I do not consider this to be a repudiation or disavowal of
Scruggs’s arrangement with the Rigsby sisters. Rather, continuing to act as co-counsel
with Scruggs and taking no other action after learning of this arrangement constitutes a
tacit approval, if not an outright ratification of the arrangement. Since the Rigsby sisters
were both material witnesses in many civil actions Scruggs was then handling and the
relators in this action, the payments Scruggs was making were clearly improper.
Although the role of current counsel was that of attorney for the Rigsby sisters in this
particular False Claims Act case, current counsel could not simply turn a blind eye to
the impropriety of these payments or to the circumstances in which the payments were
being made. In light of the current attorneys’ having acquired, during the course of their
joint representation of the Rigsby sisters, actual knowledge of the financial arrangement
among their co-counsel, Scruggs, and the Rigsby sisters and constructive knowledge
that the arrangement was improper, I find that the current attorneys should be
disqualified from further participation as counsel in this action.
From the point of view of the Rigsby sisters, I see no evidence that at the time
they made their arrangement with Scruggs they were aware of the ethical implications
of such an agreement. Scruggs was both their attorney and their employer under this
arrangement. The Rigsby sisters are not attorneys, and they are not bound by the rules
of professional conduct that apply to Scruggs, the other members of the SKG, or the
current attorneys. But all of these attorneys who undertook to represent the Rigsby
sisters were operating under these rules of professional conduct, and all of these
attorneys have a duty to adhere to the ethical rules that govern the conduct of members
of the bar. Having become associated with Scruggs during the time this “consulting”
arrangement was in existence, and having learned of this arrangement, the current
attorneys were under a duty, at a minimum, to make a reasonable inquiry into the
particulars of this arrangement, and they are charged with knowledge of what such an
inquiry would have disclosed. Current counsel had ample opportunity to see the role
the Rigsby sisters were playing in litigation against State Farm since at least April 2006.
Thus, I find that the current attorneys knew or should have known that their co-counsel
had entered an improper financial arrangement with their mutual clients, that the current
attorneys took no action after learning of this improper arrangement, and that the
current counsel should therefore be disqualified from further participation in this case.
An appropriate order will be entered.
This is another in a long line of legal setbacks that the Dickie Scruggs legal empire has suffered at the hands of Mississippi federal court judges in the last six weeks. Sentencing for Dickie Scruggs’ felony admission of guilt is pending.