Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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In my last post I talked about how bad it looked for Judge Bobby DeLaughter in his upcoming criminal trial. I was not alone in this assessment andtoday's announcement that DeLaughter will enter a guilty plea to lying to the FBI is not surprising. In fact, it would have been shocking if DeLaughter had not pleaded guilty given the lineup of former lawyers who were lined up to admit that they bribed DeLaughter.

DeLaughter's downfall is, in my mind, the worst part of the entire judicial bribery scandal. The trials of Whitfield and Teel were arguably political and everyone involved always denied any impropriety. But in the DeLaughter case everyone involved except for Trent Lott has admitted to wrongdoing. Before this mess started there were many lawyers who held DeLaughter in high esteem. I respected DeLaughter and have previously mentioned the fact that I thought his book Never Too Later was well done. I was not enamored with DeLaughter on the bench because I thought he was too unpredictable. That perception now casts a cloud over his entire judgeship. Many lawyers who lost on a questionable ruling by DeLaughter will wonder if there was any behind the scenes impropriety. At a minimum, DeLaughter's judgment, the very foundation of a judge, now appears flawed. 

If DeLaughter wants to truly make amends he should publicly come clean on any and all impropriety involving he and Ed Peters. It's hard to believe that DeLaughter and Peters got caught on the only case that they ever improperly conspired on. And while I am sure that DeLaughter still maintains that he didn't conspire with Peters in Scruggs v. Wilson, it is clear that at a minimum he allowed himself to be controlled by Peters. DeLaughter should publicly disclose every case that he and Peters discussed while DeLaughter was a judge. The files of those cases should be examined for any unusual rulings. 

The judicial bribery scandal has been a huge black eye for the Mississippi judicial system including the lawyers and judges in that system. If DeLaughter's plea brings the scandal to a close neither the public nor the legal community will believe that all the bad actors and illegal conduct has been exposed. So far the only person to publicly come clean is Tim Balducci and that is only because someone obtained a copy of his deposition in the Eaton v. Frisby case that was supposed to be sealed. We hear that all the lawyers in jail and Peters (who should be in jail) are cooperating with the government. But that does little to restore the public's faith in the judicial system because the government does not publicly disclose its investigation, which proceeds at a glacial pace. We need depositions or similar mechanisms to force all the principals in the Lackey and DeLaughter bribery scandals to publicly disclose everything that they know. If there are other lawyers or judges who committed illegal conduct, then they should be exposed, prosecuted and disbarred. We do not need this thing ending without knowing whether this was the tip of the iceberg or the whole iceberg.

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This is my first update in a week due to an ongoing trial in federal court in Jackson. I have another busy week ahead and will return to more regular blogging next week. Usually July is very slow in the legal world, but this year has been a notable exception. A huge story this week was the NAF completely pulling out of consumer arbitrations and the AAA pulling out of credit card consumer arbitrations. There is a clear indication that mandatory consumer arbitration will be dead soon. Other commentators who say that it's too early to tell are wrong. They remind me of people who go to the beach when a hurricane is about to hit to make sure it's for real. I saw the arbitration backlash coming several years ago, but it is arriving years before I expected. It appears that the NAF, and perhaps AAA, fear criminal investigations regarding the administration of arbitration claims. I expect there to be a lot more to come out about crooked arbitrations and people to go to jaiI. 

I give mandatory arbitration less than a year before Congress shuts it down. Mandatory arbitration is not popular with judges--even judges who enforce arbitration clauses. So don't expect the judiciary to rule that a Congressional ban on arbitration is unconstitutional. Any plaintiff lawyers with unfiled cases with arbitration clauses should sit on the cases as long as possible in order to allow arbitration's final demise.

On another subject, despite my trial I stayed up late one night this week reading Tim Balducci's deposition taken in Eaton v. Frisby. Balducci's deposition was fascinating. Chase Bryan at Forman Perry took the deposition and I do not think that was a coincidence. Bryan has been described as local counsel on the case for a Philadelphia firm and is below Alan Perry at Forman Perry in the defense pecking order. But Bryan and Balducci were law school classmates at Ole Miss in the early 90's and I could sense their familiarity in the deposition. One example is that Balducci repeatedly referred to Bryan as "Chase", but referred to Eaton lawyer Mike Wallace as "Mr. Wallace." It is rare for local counsel to receive such a marquee assignment and the move was a smart one. Bryan did a good job taking the deposition.

As for the deposition itself, I believe that Balducci was literally crying when he described his conduct as the biggest moral and ethical failure of his life. Two things lead to this conclusion: (1) the clearly emotional testimony and  (2) the fact that Bryan immediately said "lets take a break." It is customary in depositions to take a break to let a witness in tears compose themselves.

Balducci basically described himself as the brains of the operation in the Wilson v. Scruggs case. He made Joey Langston sound somewhat buffoonish. I don't completely buy the image of Balducci that he seems to have for himself. I get the impression that Balducci believes that he fell off the tracks morally when he got involved in the Wilson case. But I can't understand what he was doing working as an associate for Joey Langston at the time. Before going to Langston's firm Balducci had his own practice with Kent Smith for years. The two had been joined at the hip since law school and I've never heard an explanation for what led to their separation. Balducci apparently went back to work for Langston thinking that it would lead to a full partnership. If that was the case, Balducci should have known better.

Wealthy lawyers like Langston rarely ever cut someone in with a large piece of their practice. The state is littered with plaintiff lawyers who started working for a prominent plaintiff lawyer only to eventually go out on their own when partnership promises never materialized. Unlike in defense firms, it's extremely rare to see the same core group of lawyers at a plaintiff firm for years. Merkel and Cocke in Clarksdale is a notable exception.  

Balducci testified that he was the source of the $50,000 in cash that Langston first paid to Peters. What in the world was Balducci doing with $50,000 in cash sitting around the house? Keeping that much cash around is a bad idea for many reasons and wreaks of tax fraud.

As to the impact of Balducci's testimony on Eaton v. Frisby and the DeLaughter trial, it's hard to say. The vast majority of Balducci's testimony was based on hearsay that would not be admissible at trial. Mike Wallace skillfully established this point near the end of the deposition. But if Balducci's testimony is corroborated by Ed Peters, then I do not see how DeLaughter can be acquitted. And even if DeLaughter somehow escapes conviction, I don't see any path for his to return to the bench. It looks like the best case scenario for him is that he exercised terrible judgment in communicating with Ed Peters and was unwittingly used as a pawn by Peters, who he fawned over in his book It's Never Too Late.

As for Frisby,  Balducci didn't know anything about it or the lawyers in the case who he was asked about: Mike Allred, Rueben Anderson and Fred Banks. It's unclear what Judge Yerger is going to do in the case, but the longer he goes without dismissing the case for attorney misconduct the less likely that it will be dismissed.

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In a shocking development in the world of arbitration the National Arbitration Forum (NAF) has agreed to exit the consumer arbitration business only days after the Minnesota Attorney General filed a detailed lawsuit alleging shocking bias on the NAF's part in favor of business litigants. Here is a Business Week article reporting the news. The article states:

The settlement with the National Arbitration Forum comes after the Minnesota AG sued the firm on July 14 for consumer fraud, deceptive trade practices, and false advertising. The civil suit, filed in state district court in Minneapolis, alleged conflicting ties between the NAF and debt-collection law firms that represented major credit-card companies. The suit also alleged that New York hedge fund Accretive LLC owned stakes in such collection law firms and the NAF, sending arbitration business between the two.

The NAF is left with virtually nothing:

 The only business NAF can now be involved with is in arbitrating Internet domain disputes, a business it has long been in.

This lawsuit followed on the heels of a lawsuit against the NAF by a former employee who alleged that the NAF was biased in favor of business parties at the expense of consumers (regular people). Here is the WSJ's story on that lawsuit. In that case the former NAF employee alleged the following examples of favoritism by the NAF for business parties:

• instructing arbitrators to change decisions they had issued that were adverse to the [business parties];
• ensuring that arbitrators who had ruled against the [business parties] did not get more cases;
• drafting claim forms for the [business parties].

The NAF presided over arbitrations in Mississippi involving credit card disputes and nursing home abuse and neglect cases, including cases against Golden Living Centers, formerly known as Beverly Healthcare. The NAF effectively conceding that it was crooked is a huge blow to arbitration proponents.

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The Leisha Pickering alienation of affection lawsuit is bringing attention to this little used cause of action. The theory is without question alive and well in Mississippi. In August 2008 the Mississippi Supreme Court issued its opinion in Pierce v. Cook, a case that involved claims for alienation of affection and intentional infliction of emotional distress. A Rankin County jury rendered a $1.5 million verdict for the plaintiff and the Supreme Court affirmed. The Court listed the elements of an alienation of affection claim as:

1. wrongful conduct of the Defendant;

2. loss of affection or consortium and

3. causal connection between the conduct and loss.

The plaintiff's burden of proof is preponderance of the evidence--not a higher standard such as clear and convincing evidence.

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Earlier this week Alan Lange at Ya'll Politics reported that Christi McCoy is no longer in the running for the appointment for U.S. Attorney for the Northern District. As mentioned in this earlier post, Patsy Brumfield at the N.E. Daily Journal disagreed. I did not opine on the issue in my earlier post, but I am now going on the record saying that Lange is right and that McCoy will not be appointed. I have two sources who both told me that McCoy's nomination hit an insurmountable snag. My sources are less certain that Curtis Ivy will be appointed for the slot, but he does appear to be in the running.  

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As reported by the Clarion-Ledger and at Ipse Blogit, Leisha Pickering, otherwise known as Mrs. Chip Pickering, is suing Elizabeth Creekmore Byrd for alienation of affection. This is a cause of action where you sue the person your spouse had an affair with for busting up your marriage. The action is not recognized in many states, but is in Mississippi. The Mississippi Supreme Court recently affirmed a large jury verdict against a lawyer in one of these cases. You can read the Complaint at this Ipse Blogit post and read Matt Eichelberger's comments on the Complaint at this post.

Leisha Pickering is represented by former Mississippi Supreme Court Justices Chuck McRae and Oliver Diaz. The case is pending in Hinds County Circuit Court before Judge William Coleman, who is presiding over the cases that would have otherwise been assigned to Judge DeLaughter. The Defendant's family owns Cellular South, so she apparently has the money to satisfy a judgment. Alienation of affection lawsuits are typically only filed against wealthy individuals, since liability insurance policies do not provide coverage. You see a lot of doctors and lawyers getting sued under the theory. There have been rumors over the years of prominent attorneys and executives settling alienation claims, including a former CEO who is now in jail.

You would expect this case to be settled quietly. But divorces and the related fall out are messy, so if Leisha Pickering is out for blood rather than money, then this will be one of the most watched trials in the history of the State of Mississippi. Cameras are allowed in the courtroom in state court so the whole proceeding will probably be televised. Mississippi media is largely ignoring major litigation such as Eaton v. Frisby and the Colson Litigation. But you can bet that they will cover this case, since scandal sells.

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The big news yesterday was Governor Barbour's appointment of Gulfport resident and native John Gargiulo to fill the Circuit Judge seat vacated by the retiring Judge Jerry Terry. Here is the Sun-Herald's article on the appointment, which I speculated on in this post in May when Judge Terry announced his retirement. The article states:

Gargiulo attended college on a full ROTC scholarship before graduating from law school and joining a private practice in 1998. He has been a prosecutor with the District Attorney’s Office for nine years.

The following bio was attached to the article:

Age: 42

Hometown: Gulfport

Education: Graduate of St. Stanislaus, University of Southern Mississippi and Ole Miss

Experience: Assistant district attorney for Harrison, Hancock and Stone counties since 2000; private law practice of Bryant Clark Dukes in 1998.

Background: National Guard lieutenant colonel; served in U.S. Air Force as an intelligence officer for five years

Family: He and his wife, Lisa, have twin sons, Andrew and Jordan, 17, and a daughter, Katherine, 14.

It's also my understating that he was deployed in Operation Desert Storm. I am the same age as Gargiulo, but did not know him growing up (other than knowing who he was) because we lived in different neighborhoods and went to different schools. He has an excellent reputation on the Coast and will have no problem getting elected to a full term for the seat. Gargiulo is at least the second 1985 high school graduate from Gulfport to become a judge, joining U.S. District Judge Sul Ozerden.  

The other big story yesterday was the disagreement between Alan Lange at Ya'll Politics and Patsy Brumfield at the N.E. Daily Journal on whether Christi McCoy will still be appointed U.S. Attorney for the Northern District. Lange says that McCoy is out, Brumfield disagrees. Tom Freeland has the latest in this post. I do not have an opinion one way or the other right now, but I do know that Brumfield has mentioned names for the Southern District post after pretty much everyone around here agreed they were out of the running.  This makes me question whether Lange has information that has not yet reached Brumfield.

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Ya'll Politics has this post this morning stating that Christi McCoy is out as the U.S. Attorney appointment for the Northern District and that the Curtis Ivy of Oxford is in. According to Ya'll: 

Today a source with insider knowledge tells YallPolitics McCoy's "deep" ties with Joey Langston, and other issues, stalled her possible nomination. The source then went on to say Curtis Ivy, who has been a contender since the beginning, is highly regarded by many involved.

YP could not independently confirm Ivy's chances, or whether McCoy's ties actually prevented her from becoming the U.S. Attorney, however the source has been spot on with many other issues, and finds him credible enough to worthy this post.
 

Ivy is an African-American assistant U.S. Attorney in the Northern District who has a good reputation. In June, it was widely reported that McCoy's name was already submitted to the White House. I discussed it in this post. If McCoy is out, it is a recent development that apparently was based on a decision made by the White House. Of course, the White House could make such a decision based on anticipated Republican opposition after floating the name to Republican Congressional leaders.

It has long been presumed that one of Mississippi's U.S. Attorney seats would go to a white and the other to an African-American. With McCoy being white, speculation in the Southern District focused on Natchez attorney Deborah McDonald. One question now is that if Ivy is in in the North, does it open the door in the South for someone like Cliff Johnson. There will be a lot of speculation on these issues in the coming days. 

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Above the Law has the story on the Florida case where the plaintiff lawyer filed a motion to compel defense counsel to not wear shoes with a hole in the bottom. Apparently, the plaintiff lawyer (wrongly) thought that the simple man persona of the hole-in-the-shoe lawyer was unbeatable. The motion made it into the press about the time the jury returned a $2.2 million verdict for the plaintiff. The trial court set the verdict aside due to the press coverage of the shoe motion. Here is ATL's earlier post, which displays the motion.

Wow! As Will Ferrell said in this scene from Wedding Crashers, "what an idiot." Of course, if I'm the lawyer my response is: I got a $2.2 million verdict, so how big of an idiot can I be?

I encourage all of my future trial adversaries to wear shoes with holes in the bottom. I promise that if they do, I will not file a motion to compel nice footwear. It has been my experience in watching many focus group deliberations that jurors do not like poorly attired lawyers. This has been without exception.

Here are a few examples. I once got rid of my favorite suit because a mock juror at NITA said my pants were "high-waters." I presented at a focus group with Mark Lanier, one of the best trial lawyers in the nation. Lanier did a great job presenting the defense case, but dressed down to look like a simple man. Alas, the focus group talked about how they didn't like what he was wearing because it was not formal enough. The same focus group discussed my tie in detail before giving it a thumbs up. Finally, after a trial about a year ago word got out that the jury deliberated on the verdict for 15 minutes and then spent an hour discussing Who's Who awards for the trial's lawyers. Best dressed was one of the awards and it went to one of the lawyers on the winning side.

Don't get me wrong, I never thought any of those focus groups or juries decided the case based on lawyer attire. But lawyers like to be liked by jurors--to the point that many lawyers are more concerned post-trial with whether the jury liked them than whether the jury liked the case he/she tried. Jurors expect lawyers to dress professionally during trial and are critical of poorly dressed lawyers. And while David Boies  can wear the same cheap blue suit to trial every day, you better know something like that works before you try it. Attempts to dress down for jury appeal are prone to back-fire. Just ask the guy in Florida with the holes in his shoes.      

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The Clarion-Ledger contained a story this week on the deposition of Tim Balducci in the Eaton v. Frisby case. Balducci was deposed in prison in June and the Clarion-Ledger obtained a copy of the deposition, despite the fact that the case was supposed to be sealed. The focus of the story was how Balducci's testimony will impact the upcoming criminal trial of Judge Bobby DeLaughter. According to Balducci, Judge DeLaughter became upset when he did not get a federal judge appointment after issuing rulings favorable to Richard Scruggs in the Scruggs v. Wilson litigation.

The Ledger ignored the large question of how Balducci's testimony will impact the huge Eaton v. Frisby case and the careers of some of the attorneys in that case. If it is determined that Ed Peters attempted to improperly influence Judge DeLaughter in the Eaton case, it could lead to state or federal criminal charges against Peters and others who he acted in concert with. It could also lead to the dismissal of the case and sanctions by the Court or Mississippi Bar against the lawyers who participated in any wrongdoing. The Eaton case is just as significant as the DeLaughter trial and the Clarion-Ledger should not ignore it.   

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TheSun-Herald is reporting that the father of a ten year old girl who died last week as a result of a mishap while riding an inter-tube on the Jourdan River has filed suit against the driver of the boat:

An attorney for the father of a Waveland girl who was killed in a boating accident on the Jourdan River last week has filed a lawsuit, claiming that 10-year-old Madison Karno died because of negligence by the boat’s operator.

The Defendant is Dr. Rowe Crowder of Bay St. Louis. Tim Holleman of Gulfport filed the action. According to the article this is how the accident happened:

State officials said Crowder was at the wheel of the boat on July 3 when Madison Karno and an older companion were thrown off a flotation device being pulled behind the boat along the river.

The accident remains under investigation by the Mississippi Department of Wildlife, Fisheries and Parks. A department spokesman said this week the tragedy occurred when the boat piloted by Crowder apparently crossed a sandbar, hit roots or stumps in the river, and the flotation device veered out of control. Karno died after she was flung from the float and struck an obstacle near the river.

The child's parents are divorced. Sometimes a family split in a death case leads to a "race to the courthouse" to file a lawsuit, which appears possible given the speed of the filing of the lawsuit. Of course, there are also other reasons to file suit quickly. 

Growing up on the Coast my father would not let his kids ride a tube. He insisted that we use a water ski because you could control the direction of a ski, but not a tube. It's too bad that kids are grown before they can appreciate their parents' wisdom.  

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As if the Chinese Drywall situation could not have gotten worse for some Katrina victims, there is this report: 

The latest concerns about Chinese drywall focus on reports that radioactive substances may have been included in the imported product.

The article states that there will be more tests to determine the extent of the problem.

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On Thursday the Department of Justice intervened in a multi-million dollar qui tam lawsuit against Fortune 500 company SAIC and three current or former employees. Here is the A.P. story in the Clarion-Ledger, the government's Complaint and the original Complaint filed by the relator (or whistle blower) David Magee. Magee is represented by Ben Galloway with Owen and Galloway in Gulfport and firms from Cincinnati and Hawaii.

The Complaint alleges that SAIC rigged bids on government contracts. The action appears based on conduct that occurred at Stennis Space Center in Hancock County. Stennis is where NASA tests space shuttle main engines, is a training site for Navy seals, and has a lot of people working on site for the government or contractors who don't like to talk about what exactly they do. The government seeks over $100 million against SAIC. It could be a big payday for Magee, who stands to earn 25% of the recovery for being the whistle blower in the case.

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In Weathers v. Metropolitan Life Insurance Company the Mississippi Supreme Court issued its second recent opinion retreating from Stephens v. Equitable. This follows the Court's December opinion in Wilbourn v. Equitable that I discussed in this post. The cases involve a statute of limitations (deadline for filing suit) issue where the plaintiff purchased a "vanishing premium" life insurance policy and alleges deceptive sales practices by the agent and/or company.

I should disclose that I am a biased observer. I spent nearly ten years defending vanishing premium cases in Mississippi, including many cases for MetLife or related companies. I tried three vanishing premium cases to verdict for MetLife subsidiaries. I also tried a vanishing premium case to verdict for another life insurance company.

The "vanishing" premium sales pitch was a creature of the 1980's and early 1990's and depended on a rising interest rate environment. In the 1990's many life insurance companies switched their emphasis from whole life policies (with a vanishing premium illustration) to universal life policies. Sales of U.L. policies did not seem to lead to as much litigation, although there were some cases with U.L. policies allegedly sold with a vanishing premium pitch. One of the cases that I tried involved a U.L. policy. Stephens v. Equitable largely ended the litigation in Mississippi. Stephens led to many summary judgments and caused most lawyers to believe that the cases were untenable. The Court's retreat from Stephens is a win for disgruntled policy holders. But it remains to be seen whether it will reinvigorate sales practice litigation in Mississippi.

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A reader requested that I publish all of the exhibits to A&O's Motion to Intervene in the Colson litigation. Here they are:

• Ex. A - Escrow Services Management Agreement
• Ex. B-  Wire Transfer Agreement
• Ex. C-  Audit letter
• Ex. D- Policies
• Ex. E- Policy Status
• Urgent Motion
• Ex. D-1 to urgent motion - Cash Disbursement Journal
• Ex. D to urgent motion - Policy list

In addition, here is  a link to A&O's website and its Letter to Investors on its website.

A&O is represented in its Mississippi litigation by Don Dornan in Gulfport and John Herke in Metairie, La. Both are attorneys with Spyridon, Palermo and Dornan.

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Two new articles on the Chinese Drywall fiasco. This Wall Street Journal article states the obvious:

 The odors, respiratory complaints and corrosion blamed on drywall from China used in American homes may have been caused by the failure to remove sulfur and other contaminants from synthetic gypsum, some Chinese experts in building materials say.

I thought we already knew that sulfur in the drywall was the problem. On a more helpful note, the article list the symptoms suffered by some people with the Chinese Drywall in their new homes:

Homeowners who believe they have Chinese-made drywall have complained of itchy eyes and skin, runny noses, nosebleeds, headaches and asthma attacks, among other things. Patricia Williams, a toxicologist at the University of New Orleans hired by lawyers for some of the homeowners, says tests indicate they are being exposed to a variety of chemicals, including carbon disulfide, sulfur dioxide and hydrogen sulfide.

Some of these are people who lost their house in Katrina, so things have gone from worse to worse for them.

Another new article in the Kansas City Star points out that holding the Chinese manufactures liable in American Courts is difficult:

While everyone involved is likely to be sued - installers, contractors, distributors, importers and Chinese manufacturers - the last are the hardest to reach by far.

For starters, suing a Chinese company in a Chinese court isn't a good idea for most American plaintiffs, said Michael Lyle, a seasoned international lawyer. "It's like suing Michael Jordan in Chicago."

Yet many Chinese manufacturers also evade trial in the U.S. simply by persuading judges that their companies had no substantial business presence in the states in which they've been sued. That's not hard for Chinese manufacturers, which typically rely on independent importers to sell to the American market.

 This will make plaintiff lawyers focus suits on American distributors.