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

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The Clarion-Ledger reports on the Mississippi Supreme Court upholding Hinds County Circuit Judge Swan Yerger's $1,560,642.83 sanction against Eaton Corp. and its attorneys in the Eaton v. Frisby trade secrets case.

The reasons for the sanction are unknown and no one is talking:

Eaton and Frisby's attorneys will not discuss the case publicly.

"The information you asked about is under seal by the court, and we are not in a position to comment," said Gary Klasen, a spokesman for Eaton.

"I won't confirm or deny it," said Alan Perry, an attorney for Frisby.

Although Supreme Court documents are public record, many in this case have been filed under seal.

Actually, just about every substantive pleading has been filed under seal in the case. I believe that Frisby opposes the seal, but that Eaton and Judge Yerger support it. Presumably, the reason for the seal is to keep improper conduct under wraps. The biggest mystery in the case is why Judge Yerger wants to keep the matter confidential. The last time I checked the court file there was no order that explained the court's rationale.  

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In 2007 State Farm sued Attorney General Jim Hood. Here is the Complaint. State Farm does not like Jim Hood. No one likes State Farm. When State Farm filed the lawsuit, it filed this motion to seal the case. The Court later unsealed the case.

In 2008 Sate Farm and Hood settled and the Court dismissed the case. Here is the order. The terms of the settlement agreement were confidential and the court ordered that they remain under seal.

In 2009 Ya'll Politics, joined by three television stations, moved to intervene in the case in order to obtain the terms of the settlement agreement. State Farm did not object. General Hood did. Here is Hood's Response to the Motion to Unseal the agreement.

Hood's response states several times that the Court ordered that the settlement agreement be sealed upon a showing of good cause. I have looked for something in the record confirming that statement, but have not found it. Maybe I just missed it.

It seems that Hood views the terms of the settlement agreement as politically embarrassing. But open access to court proceedings should take precedent over politics.  

It is bad form and bad law for court files to be sealed without an evidentiary basis for a finding of good cause in the record. An example is Judge Yerger's unexplained sealing of all relevant pleadings in the Eaton v. Frisby case pending in Hinds County.  In the good old days newspapers viewed themselves as the guardians of public access to the courts and challenged improper sealing of court files and court proceedings. Now, newspapers can't afford to pay the lawyers to make the challenges.

I would like to see Judge Bramlette grant the motion for two reasons. First, it would reverse the trend of unexplained sealing of court files and confidentiality orders not supported with evidence. Second, it would start a trend of new media (a blog) successfully challenging secrecy in the courts. 

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Last week Judge Bramlette issued an Opinion and Order allowing Jackson New Media, Inc. (Alan Lange’s Ya’ll Politics), WDAM, WLBT and WLOX to challenge the settlement agreement in the State Farm v. Hood case. Attorney General Jim Hood opposes the request to unseal the agreement. The challengers will now file a motion to lift the seal and Judge Bramlette will rule on that motion.

It’s an interesting indicator of the direction of the media that the challenge was made by a blog instead of a print newspaper. In the past, newspapers would have made this type of challenge. But with circulations down and news papers both struggling financially and controlled by large corporations, the days of newspapers being the conscience of the community appear over. That role appears to be shifting to bloggers. But in Mississippi at least, there are probably not enough bloggers yet to completely fill the void.

Hopefully, the success in this case will lead to media outlets challenging Judge Yerger’s confidentiality order in the Eaton v. Frisby case. The case is probably the single biggest case in the Mississippi state court system and involved one of the parties (Eaton) secretly hiring Ed Peters when Bobby DeLaughter was the judge on the case. Judge Yerger’s decision to seal virtually the entire proceeding appears unjustified and, more importantly, is not explained in the public court record. 

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Saturday’s Clarion-Ledger ran this article on the Eaton v. Frisby case, focusing on the fact that most pleadings in the case are being filed under seal. When I looked at the file a few months ago there was no legitimate justification for sealing nearly the entire court file. Eaton—the party that hired Ed Peters—is behind all the sealed pleadings with the backing of Judge Swan Yerger.  

There were a few interesting quotes in the article. First, this one by Frisby attorney Ed Blackmon:

Blackmon said he doesn't expect an end to the case anytime soon, and added during an interview earlier this month, "I think the case is about to take a dramatic turn."

"I can't say anything about what is going on because everything is under seal," he said. "It's an unprecedented sealing of all documents." 

 A dramatic turn? Given the back story in this case, a dramatic turn will be a huge news event. Blackmon is right that the sealing of all documents in this case is wrong unprecedented.

Also interesting was this quote from Eaton spokesperson Don McGrath:

"We didn't have him (Peters) to do anything improper," McGrath said. "We want to see this come to an end. We want our day in court."

McGrath said Peters only became involved in 2007. "We in no way asked Ed Peters to try to influence Judge DeLaughter or any other judge," McGrath said.

If that sounds familiar, it should. McGrath said the same thing in August, as discussed in this post. McGrath has a script and he sticks to it.

I would like to see Eaton and McGrath answer these two questions:

1. exactly who told you that you should hire Ed Peters? 
2. what was the reason(s) you were given for why you should hire Peters?

There are legitimate possible reasons for Eaton to hire Peters. But Eaton has not publicly identified any of those reasons and its stated reason that it hired Peters because of his trial prowess is not believable. Peters was never going to try that case for Eaton. He might have sat at counsel table, but that would have been to influence Judge DeLaughter—not actually try the case.

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The book Kings of Tort, by Alan Lange and Tom Dawson, appears to disclose the terms of Ed Peters’ immunity deal with the government.

On page 199, the book states that in exchange for immunity, “Peters would surrender his law license, resign from the bar permanently, and forfeit all monies received from Scruggs and Langston, in addition to [throwing Bobby DeLaughter under the bus] testifying truthfully.” That’s it.

Ironically, while DOJ continues to refuse to disclose Peters’ agreement because there is “no public interest” in it, Dawson disclosed the terms of the agreement in a book that has garnered wide public interest.  

It appears that Dawson wrote the section of the book covering the Scruggs prosecution, including Peters’ role in the case. The book states that “immunity for Peters was a travesty of justice tough call.” The book justifies the decision by asserting that Peters corroborated Balducci’s information in the DeLaughter bribery case and caused Joey Langston to plead guilty and testify against Scruggs. It states that without Peters’ testimony, a Scruggs II [DeLaughter case] prosecution would not have been be possible.

This assertion, along with the decision to grant Peters immunity, does not make sense. The book provides little factual support for the conclusion and other facts cited in the book do not support the assertion that the Scruggs II prosecution depended on Peters. 

Elsewhere, the book suggests that Langston, who was not involved in the scheme to bribe Judge Lackey, did not trust Scruggs and was eager to reach a deal with the government before Scruggs turned on him. The book also states that the government was holding a RICO prosecution over Langston’s head, which could have led to a divestiture of much or all of Langston’s wealth earned from his law practice. Obviously, getting to keep his money would have been a huge motivation for Langston agreeing to plead guilty and cooperate.

In Scruggs I Balducci immediately confessed and cooperated, leading to the disclosure of the DeLaughter bribe in Scruggs II. Patterson and Backstrom also quickly agreed to play ball with the government, according to the book. Patterson was involved in the DeLaughter bribery and could corroborate Balducci’s testimony. Langston was approached next and was eager to cooperate as well, according to the book.  

The book does not cite facts that make it sound like the government needed Peters to get to Langston. Instead, it looks like they could have gotten to Langston with Balducci's and Patterson’s testimony. From there, they could have gotten to Peters with the testimony of Balducci, Langston and Patterson. Then, Peters would have had to turn on DeLaughter in order to reduce Peters’ prison sentence. Immunity to one individual was not necessary.

In addition, there are other reasons that the theory that granting Peters immunity was necessary does not make sense. If the Scruggs II prosecution depended on Peters, then Peters could have kept his protege Bobby DeLaughter out of jail and on the bench simply by keeping his mouth shut. And since there would have been no Scruggs II prosecution, Peters would have kept his law license and the money he was paid for bribing DeLaughter and kept Langston and everyone else from being prosecuted in Scruggs II.

Again, this does not make sense. If this were true, then Peters would have kept his mouth shut.  

My interpretation of this is that Dawson is making a poor attempt to justify a bad decision. If all these guys were so eager to plead guilty, then the government did not need to give anyone immunity. There were rumors that the government lawyers panicked and hastily agreed to grant Peters immunity. Conspiracy theorists will have more sinister explanations, but I do not buy an argument that the government lawyers were tainted in favor of Peters. It appears to have been either a poor decision made in haste, or there is more to the story than disclosed in the book.

I recognize that it’s easy to criticize a decision on the back-end when everyone knows what eventually happened. But Dawson should be able to justify the decision in the book and did not.         

The book spreads the blame for the admittedly bad controversial decision among the entire prosecution trial team, which included Dawson, Asst. U.S. Atty. Bob Norman and Asst. U.S. Atty. Dave Sanders, and U.S. Attorney Jim Greenlee.

For prior posts about my efforts to obtain the Peters immunity agreement from DOJ see here, here, and here.

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Shockingly, the government has another trick up its sleeve to stall on producing the Ed Peters immunity agreement. Taking a page out of Dean Smith's playbook, the DOJ has gone into the four corners.

Note: The four corners offense is an offensive strategy for stalling in basketball. Four of the players stand in the corners of the offensive half-court and the fifth dribbles the ball in the middle. Most of the time the point guard stays in the middle, but the middle player would periodically switch, temporarily, with one of the corner players.

Amazingly, I was unable to find a decent video of the four corners offense despite an exhaustive (10 minutes on You Tube) search.

Here is the DOJ's letter .

I can sue DOJ to try to get a judge to order production of the agreement, but not until the appeal is decided. I'm sure DOJ will be in a big hurry to rule on (deny) the appeal. I'm starting to see how Yossarian felt.

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Once again the Justice Department refused to turn over Ed Peters' immunity agreement. Here is the DOJ's response. I received what appears to be a form letter like the one that DOJ sent last time, as discussed in this earlier post.

But this time DOJ added a note on the last page:

NOTE: We have received your letter dated Sept. 16, 2009. Is the immunity agreement you seek a public record?

Great. A clue. I take this to mean that DOJ is either trying to be helpful, or playing games. I'm a natural cynic, so it's not much of a question to me. But I'll take the bait anyway and request all public records.

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I love NMC's comment about the latest quotes from the Eaton v. Frisby case:

The lawsuit has been put on hold as Yerger allows Frisby attorneys to try to determine if Peters improperly influenced DeLaughter and Eaton officials knew about it.

Alan Perry, an attorney for Frisby, said he couldn’t discuss Yerger’s ruling because much of the case is under seal.

Don McGrath, spokesman for Eaton Corp., said that if the Peters 1-3 documents are released they will demonstrate the communication was innocent.

“Eaton did not know Ed Peters was providing this correspondence with the court,” McGrath said. “We didn’t have him to do anything improper.”

I like the juxtaposition here– lawyers for Frisby refused to comment because much of the case (including the three documents in this order) is under seal, and a spokesman for Eaton talks anyway and tells us why he contends the documents under seal mean.  And you know what? I’m not buying what he’s selling.

Me neither. The funny thing is that Perry is not comfortable talking because Eaton (the other party) is filing everything under seal. But Eaton's McGrath comments every time they call him and it usually amounts to "trust us". Eaton reminds me of Kurt Russell in the movie used cars: 

Mam, this didn't used to be a taxi cab. That's yellow primer.

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Judge Davidson's opinion authorizing the delivery of materials related to Ed Peters' grand jury testimony in the DeLaughter criminal case to Judge Barbour (presides over Frisby employees' criminal trial) and Judge Yerger (presides over Eaton v. Frisby civil case) has been reported on multiple sites. Here is the AP newspaper article, and posts by NMC here and here. There is a link to Judge Davidson's opinion in the second NMC post. Judge Davidson's opinion states that there is authority to support requiring disclosure of the information.

Unfortunately for the public, the information will be provided to the judges under seal. Judge Yerger has already shown a tendency to seal evidence related to DeLaughter-Peters in the civil case even when the justification appears real thin. It will probably be easier for him to seal material from a grand jury investigation, which normally remains confidential.

The most interesting element of the story is the capacity for Eaton's spokesperson to continually stick his foot in his mouth. Eaton spokesman Don McGrath is quoted in the articles:

"We in no way hired [Peters] to influence Judge Delaughter or any other judge on Eaton's behalf," McGrath said. "We feel that our case is very strong, and I think the government's case is very strong."

You would think that Eaton would do a better job in screening McGrath's quotes. Here, he should have said that Peters wasn't hired to "improperly" influence Judge DeLaughter. Lawyers are most definitely hired to influence judges. Isn't that how cases are won? By influencing judges and juries? There is nothing wrong with hiring lawyers to influence judges--it's when you hire a lawyer to improperly influence a judge that you get into trouble.

In Eaton v. Frisby Ed Peters did not: originate the case, file an entry of appearance, appear as counsel on any pleadings, draft any briefs or other pleadings, appear at any depositions or appear at any hearings. So what was his job, Eaton?

We do know that Eaton did not like Special Master Jack Dunbar's rulings in the case and Ed Peters worked as an intermediary between Judge DeLaughter and Larry Latham and that DeLaughter unilaterally replaced Dunbar with Latham, until Latham smelled a rat and reported the whole thing to Judge Yerger. This falls outside the category of properly influencing a judge. Eaton will of course claim that it did not know what Peters was doing. It is unknown what Peters may say about this. But it brings one back to the question: what did Eaton think Peters was doing?  

I have not read a quote from Eaton giving a logical and coherent reason for its hiring Peters. Let's face it, everyone knows that Eaton hired Peters because of his relationship with DeLaughter. If Eaton denies this fact, it is going to damage all other arguments that Eaton makes. It's guilt by association: this Peters argument is hogwash, so the rest of your arguments must be hogwash too. And Eaton did not have to deny that it hired Peters to help with DeLaughter. All it had to say was that Eaton hired Peters because of his credibility with DeLaughter, but that everything was supposed to be on the up and up. If Peters did something improper, Eaton did not know or approve. But Eaton appears to be beyond making this assertion at this point and is stuck with arguments that no one believes.    

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A few weeks ago I made a Freedom of Information Act request to the Department of Justice seeking a copy of the government's immunity agreement with Ed Peters. DOJ refused my request. Here is a copy of DOJ's refusal letter. According to the DOJ, I am not entitled to the information because Peters did not consent and there was no showing that the public disclosure outweighs Peters' privacy interests. My request letter to the DOJ did not identify a public interest for the disclosure. My limited research on  the topic, however, suggests that this is not the type of private information that the privacy act was designed to protect. In addition, it's my understanding that the government should produce the information with the private information redacted.

The suggestion  that the public in not interested in the Peters immunity deal is a joke. I suspect that the DOJ does not want to produce the agreement because it is embarrassed that DOJ granted Peters immunity. My informal reading of public opinion both in and outside the bar is that Peters should have been prosecuted.

Rather than go straight to an appeal I am going to try to clean up DOJ's objections by submitting another request. If that request is denied I will appeal. In the meantime, if anyone already has the Peters immunity deal and is willing to share it with me I would appreciate it.

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Jimmy Gates at the Clarion-Ledger reports on a hearing yesterday in Eaton v. Frisby on the issue of whether the Peters-DeLaughter aspect of the case will be kept under seal. The more that this story develops the weaker Eaton's arguments sound. The article summarized the party's positions as follows:

Frisby:

But Alan Perry and Robert McDuff, attorneys for Frisby, now known as Triumph Group Inc., argued sealing should be done on a document-by-document basis.

"Closing everything engenders suspicion and mistrust," McDuff said.

Eaton:

Eaton has argued to keep many court papers sealed, including Yerger's order for Peters to give a deposition. Peters' transcript, however, would be sealed until the court makes a final determination, Yerger ruled.

Yerger asked [Mike] Wallace how Eaton would be prejudiced if the documents in the Eaton vs. Frisby case weren't sealed.

"By suspicion," Wallace responded.

Frisby has the better argument by far. We're ALREADY suspicious.Eaton wanting to maintain secrecy into the investigation of Eaton makes me more suspicious. If you did nothing wrong, why do you care if everything is public?

Eaton hired Ed Peters in the biggest civil case in Mississippi-- a theft of trade secrets case involving hundreds of millions of dollars. Peters' background was as a prosecutor, not as a civil trial lawyer who had obtained a lot of big verdicts. Then Peters did not file an entry of appearance in the case and Frisby did not even know he was on the case. Eaton says that it hired Peters because he had tried a lot of cases. But Eaton's story has some obvious holes.

First, when you hire a hot-shot trial lawyer you want that lawyer to appear in the case to try to scare the other side. Having Peters lay in the weeds does not really serve a purpose. Second, it begs the question of how Peters was being paid? Lawyers getting paid by the hour have an economic incentive to formally appear in the case so that the opposing party has to mail them all their pleadings. In a case this big, a lawyer billing by the hour stands to make a lot of money just reading all the pleadings that the parties file. That was apparently not a big concern for Peters.

Third, Eaton's claim is just intellectually dishonest. Although I believe that there should be, there is no prohibition in Mississippi of hiring a lawyer because of the lawyer's perceived relationship with the judge. The lawyer can't discuss the case with the judge, but he can work on the case. And if the judge respects the lawyer because he knows him, that's just part of it. Our system trusts the judge to not let the relationship influence him and the lawyer to not contact the judge about the case. Here, Eaton could literally just have said that it hired Peters because it thought that Peters could help it with the judge. But Eaton can't say that here, since DeLaughter had no way to know that Peters was on the case, since Peters never filed an entry of appearance.

Eaton appears to be conceding that Peters had improper contact with DeLaughter. Larry Latham's testimony in a 2008 hearing before Judge Yerger pretty much proves that fact with circumstantial evidence. Eaton's defense appears to be that it did not know what Peters was doing. But that begs the question of why Peters would do it on his own? Tim Balducci did it with Judge Lackey because he was sucking up to Scruggs. Peters did it with DeLaughter in the Langston case for a million dollars. But in the Eaton case why would Peters, with Scruggs' million already in his pocket, risk his and DeLaughter's freedom on a case where he wasn't even the lead local attorney for Eaton? When he didn't even appear on the pleadings? When if he was getting paid by the hour he would get paid the same win or lose? It just doesn't make sense unless:

1.  Peters and DeLaughter were so corrupt that they did not even think about crossing ethical lines; or
2. Eaton and/ or one or more of Eaton's other lawyers knew what Peters was doing.

If there's another plausible explanation I'd like to hear it.

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A subpoena has been issued in Eaton v. Frisby commanding Bobby DeLaughter to appear for a deposition on October 2, 2009 at 9:00 a.m. at the offices of Forman Perry in Jackson. The subpoena was issued by Frisby's attorneys. The court file also indicates that Frisby is attempting to serve a subpoena on Ed Peters in South Louisiana. Finally, there is a short Order signed by Judge Yerger stating that the transcript of Peters' deposition is to be sealed. The Court will presumably also seal the transcript of DeLaughter's deposition. 

The sealing of matters in this case that are unrelated to trade secrets at issue in the litigation is questionable. I doubt that Peters' and Delaughter's depositions will have anything to do with trade secrets or the underlying facts in the case. A review of the public court file suggests that the court is sealing just about everything that has to do with Peters/ DeLaughter. Why? Who knows. I cannot find an explanation in the file. I can't say for sure that it's not there, since its a large and disorganized file. But both myself and my assistant reviewed the file and did not find an explanation for Judge Yerger's treating the Peters/ DeLaughter aspect of the case like it's espionage. 

One party in the case files just about everything under seal and has resisted attempts to unseal portions of the file. Guess which party? Yep, the party whose attorney had ex parte contact with the judge.

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NMC and others have criticized the sealing of the court file in Eaton v. Frisby. It appears that it started with an an Agreed Protective Order in 2005 that was designed to protect the confidentiality of trade secrets. That was followed by a Supplemental Protective Order later in 2005 that was also directed at trade secrets. Now most pleadings and orders are filed under seal in the case. I don't have a problem with protecting trade secrets. The problem is that protective orders designed for protecting trade secrets are routinely abused with parties designating all sorts of material as protected that are not trade secrets. A review of the docket in Eaton suggests that the parties are improperly filing documents under seal, but it's hard to say when you do not know what is in the material under the seal.

Here is a copy of a printout of the docket in the case, which lists all filings in the case until this week. This shows that many, if not most, of the pleadings and orders are now being filed under seal. I do not know why Judge Yerger is ordering the sealing of so many orders in the case, but I suspect that it has more to do with DeLaughter than trade secrets. If so, I question the correctness of sealing the orders. As a practical matter, transparency in this case is particularly important and would strengthen the public and bar's confidence in the judiciary. Judge Yerger is also closing the hearings and has reportedly kicked Clarion-Ledger reporter Jimmy Gates out of hearings. A few years ago the Ledger would have been fighting the secrecy in this case, but in today's world of struggling newspapers Gannett probably does not want to spend to money on an attorney.

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Saturday's Clarion-Ledger contains this article about possible appointees for the Circuit Court Judge seat formerly held by Bobby DeLaughter. The article mentions Rep. Phillip Gunn and Judges Bill Skinner and Bill Gowan as possible replacements. Ipse Blogit has this position going to Gunn if he wants it. Ipse Blogit probably has much better sources on this than the Ledger.

Sunday's Clarion-Ledger has this article about the status of the judicial bribery probe and the Eaton v. Frisby case. While the probe may not be over, I have trouble believing that it is going anywhere. The original indictments of Scruggs and company were handed down quickly. With all of those guys cooperating it's hard to believe that it would take this long for more indictments. Everyone thought that there would be more lawyers indicted in the fen phen probe, but there never were. The judicial bribery probe looks similar as far as dying a slow death.

The most interesting part of the article were the quotes of Eaton senior vice president of communications Don McGrath. McGrath denies that Ed Peters was brought into the case to improplery influence Ed Peters:

"There are a lot of false statements in here," said Don McGrath, senior vice president of communications for Eaton, said of the document. "In no way did we ask Ed Peters to imply or ask or insinuate that he would do anything improper in trying to influence Judge DeLaughter or any other judge."

Asked why Eaton decided to hire Peters, a longtime prosecutor, McGrath replied, "There are few Mississippi trial lawyers that have as much experience as Ed Peters."

As for Peters not being listed with the other attorneys of record, McGrath explained that not everyone who works on a lawsuit gets mentioned. "There's no requirement to list everybody working on the case," he said.

I don't buy any of this. First, there is not one lawyer in the Jackson area who would believe that Peters' job on the case was to do anything other than influence DeLaughter. If Eaton's objective was for Peters to "properly" influence DeLaughter, that is a slippery slope. The fact that Peters never filed an entry of appearance, which is standard when a new lawyer enters a case, suggests that the intent was to improperly influence DeLaughter. Otherwise, how would DeLaughter know that Peters was even in the case, since he never appeared?

Second, the justification that Eaton hired Peters because of his trial experience is hogwash. If that was true, Peters would have been trying civil cases all over the state instead of focusing his civil practice on airport meetings sandwiched around lunch with the judge at Shoney's. If McGrath cannot do any better than this he needs to keep his mouth shut.

Third, although there is no requirement to mention everyone working on a case, why exactly did Eaton not disclose that Peters was on the case? The fact that it's not required sounds more like a defense than a real reason. Peters was involved in the case and apparently talked DeLaughter into replacing Jack Dunbar as special master. Peters went so far as to call Larry Latham to see if he would be willing to serve as special master, but later left a cryptic message with Latham to not mention his name. To Latham's credit, he immediately reported this. This leaves the question of what Eaton and its lawyers knew about all this.

According to Tim Balducci's testimony about Scruggs v. Wilson, Peters did not get hired and then never communicate back with the people who hired him. In the Scruggs case, Peters communicated his every move back to the Scruggs team. Why would it have been any different in Eaton? Why would Peters have taken it upon himself to get the special master replaced after a bad ruling?  And would he have done it without consulting with the other Eaton lawyers on the case? In my opinion, the answer is no. The bottom line is that the more information that emerges, the worse it looks for Eaton.

I intend to write more about this later, but there should be a rule or law in Mississippi that prohibits the hiring of a lawyer because of the lawyer's personal relationship with the presiding judge. There is currently no such prohibition.   

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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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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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According to this article in the Sunday Clarion-Ledger, Judge Yerger is allowing attorneys for Frisby Aerospace to take the depositions of Joey Langston, Timothy Balducci and Steve Patterson in the Eaton v. Frisby trade secrets case. Judge Yerger previously stayed the proceeding and the article does not explain why he lifted the stay. The three are all currently serving prison sentences for their roles in Scruggs-gate.

Eaton v. Frisby is a huge case involving many of the most prominent attorneys in the state:

In the trade secret case, Eaton Corp. alleges in the lawsuit that engineers who once worked for the Jackson company stole trade secrets for military contracts and gave them to Frisby Aerospace of North Carolina when they went to work there in 2002.

Frisby attorneys maintain rulings from DeLaughter began going in Eaton's favor when Peters became one of Eaton's attorneys. They won't discuss getting depositions of Langston, Balducci or Patterson. But Alan Perry, one of the attorneys, noted in court Peters' role in the other case involving DeLaughter. "It's a similar pattern," Perry said.

It seems like federal authorities who investigated DeLaughter did not find significant evidence of improper conduct in the Eaton case, since the case was not included in the allegations upon which DeLaughter will be tried and did not lead to further indictments.

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The Clarion-Ledger is reporting that Hinds County Circuit Judge Swan Yerger will not run for reelection when his current term expires on December 31, 2010.

Judge Yerger is 74 years old and has served on the bench since 1997. There have been rumors over the last few months that Judge Yerger would retire at the end of this year, which would allow Governor Barbour to appoint a replacement to serve until the next election. Judge Yerger currently presides over the Eaton v. Frisby trade secrets case, which is probably the biggest case currently pending in any Mississippi state court. Perhaps Judge Yerger plans to stay on the bench through 2010 so that  he can preside over the trial of that case.

Speculation will be rampant over who will run for the seat in 2010. The early favorite would have to be successful Jackson plaintiff attorney Ashley Ogden. Ogden ran against Yerger in the last election and almost won. Rumors around town are that Ogden already plans to run for the seat. Ogden is young and energetic and would be a formidable opponent  for any candidate. Republican interests would fear Ogden due to his plaintiff lawyer background. Ogden's firm web site is called Take Back Jackson and suggests that he never stopped campaigning for the seat. Former Mississippi Supreme Court Chief Justice Jim Smith is now associated with Ogden's firm. The conservative Smith's active support in a campaign would be a huge benefit to Ogden's chances.  

There is no doubt that Judge Yerger's retirement and the looming election to replace him will be a huge story in 2010.  

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The legal industry is being hit hard by the recession. Several blogs provide daily updates and there is a  layoff tracker at LawShucks.com : 

Major law firms are turning out to be just as susceptible to general economic conditions as every other industry. Historically, layoffs by top-tier firms were kept quiet and were done on a one-off basis. We’re trying to shed a little light on the situation.

As of March 31, 2009, there have been over 9,946 people laid off by major law firms (4,046 lawyers / 5,905 staff) since January 1, 2008. For the first quarter of 2009, 7,999 (3,149 lawyers, 4,850 staff), 3,677 in March alone (1,334 attorneys, 2,343 staff).

Subscribe to the blog Above the Law on your google or other reader and prepare to be depressed. The site provides daily updates from mega-firms complete with bootlegged emails announcing that the ax has been dropped.

It appears that the site defines major law firms as huge firms based in major cities. I do not believe that any firm with a presence in Mississippi fits their criteria for a major firm, but the recession is being felt everywhere. There is no doubt that Mississippi firms, attorneys and support staff are suffering. Hiring by law firms in Mississippi is down. There are rumors around town about layoffs, particularly of contract attorneys and staff. I have also heard that law school graduates are finding it very difficult to find a paying job in the legal field.       

In the litigation arena Mississippi began its recession a good five years ago with the change in joinder law, tort reform and a conservative supreme court sending mass tort plaintiff lawyers in search of greener pastures in other states. Katrina related litigation helped, but those cases have mostly been resolved. There are just not as many big cases in Mississippi as 5-10 years ago, with cases like Eaton v. Frisby being the exception. And no one I know sees that changing anytime soon. 

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Back on March 9 I had a post about the Eaton v. Frisby case and called it a mess worth watching. Hinds County Circuit Court Judge Swan Yerger made watching the case harder last Thursday by closing the courtroom to the press and public. In doing so, Judge Yerger apparently disregarded state Supreme Court rules for closing a court from the public. Jimmy Gates from the Clarion-Ledger objected, but was thrown out. The apparent justification for closing the courtroom was:

Yerger said attorneys for both sides agreed it should be closed to the media and the public.

On Sunday the Clarion-Ledger's Ronnie Agnew wrote a scathing criticism of  Judge Yerger's decision:

How can the public have confidence in the judicial system when shenanigans that took place Thursday continue to occur, when people in charge of upholding the law conveniently ignore what the law states?

The events of Thursday represent a travesty of justice and Senior Judge Swan Yerger, no newcomer to the bench, ought to know the law better than with the judgment he showed that day. Yerger is hearing a $1 billion theft of trade lawsuit where officials at Eaton Aerospace contend five employees revealed trade secrets when they went to work for a North Carolina competitor.

While I'm not going to go so far as to call it a travesty of justice, Mr. Agnew has a point. The Eaton v. Frisby case is probably the biggest case pending in Hinds County, perhaps in the whole state. The parties are litigating the case at the expense of the taxpayers, who fund the judicial system. If Eaton and Frisby are not comfortable airing their dispute in public, then they should agree to a private arbitration where they pay the decision maker and can set whatever ground rules they want. There are strong public policy reasons favoring open courts, and parties should not be able to disregard those policies and close a court by agreement.  

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On Friday the Clarion-Ledger reported that Hinds County Circuit Court Judge Swan Yerger stayed Eaton Corp. v. Frisby Aerospace pending a determination of whether former Eaton lawyer Ed Peters improperly influenced Judge DeLaughter when he had the case. Eaton is the plaintiff and alleges that former Eaton employees stole $1 billion in trade secrets and gave them to Frisby. If there is a bigger case pending in Hinds County I do not know what it is.

Frisby is represented by Jackson attorney Allen Perry. According to the Ledger: 

Perry argued Wednesday that Frisby has been put through "a lot of stuff because of what Peters and DeLaughter did to us."

"We know there was improper communications and he has admitted that fact," Perry said in court. "We have been done wrong and we are asking for justice."

Eaton attorney Reuben Anderson countered that Eaton is the real victim as the victim of the trade secrets theft. 

My initial reaction upon reading the article and Perry's quotes was that Frisby is full of it and the case should not be stayed. Upon further analysis, I changed my mind and agree with Judge Yerger's decision. It is prudent for Judge Yerger to stay the case until more of the Peters-DeLaughter facts are known. But unless more allegations surface that are directly related to this case, Frisby is probably going to have to defend the case on the merits. Otherwise, Judge Yerger probably would have already dismissed the case.