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

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Wednesday's Clarion-Ledger contained this article about the City of Jackson settling a lawsuit with Cedric Willis, who was wrongfully imprisoned for 12 years. Willis was convicted of murder and armed robbery in 1997, but was later exonerated by DNA evidence. 

Willis alleged that the City of Jackson was at fault because a police officer lied when he claimed that a confidential informant identified Willis as the perpetrator. But Willis' attorney Rob McDuff of Jackson stated that the majority of blame should go to former Hinds County District Attorney Ed Peters and his assistant D.A. Bobby DeLaughter:

Willis' attorney, Rob McDuff said the settlement was less than his client should have received, but called it a "reasonable compromise" in light of a recent U.S. Supreme Court decision that made it harder to win this sort of case.

"This settlement of Cedric's federal constitutional claims is not what he should have received, but there were certain factors that required us to compromise," McDuff said.

"We could not sue the culprits most responsible - former prosecutors Ed Peters and Bobby DeLaughter - because of the legal doctrine of prosecutorial immunity."

Ed Peters was something else. Dirty as all get-up but equally slippery. At least DeLaughter lost his job and did some time.    

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That's a question that was asked in this weekend's Clarion-Ledger article by Jerry Mitchell following the unsealing of Ed Peters' grand jury testimony [available here courtesy of NMC] in Scruggs-gate. 

The photo to the right is of Peters and Bobby DeLaughter. Now we know what they are smiling about.  

The article quotes Oxford lawyer and blogger Tom Freeland (NMC) on this issue and states:

Oxford lawyer Tom Freeland, who has covered the case closely on his website, North Mississippi Commentor, nmisscommentor.com, said Peters' statements "show a lot more about what was going on inside and how corrupt it was."

Elsewhere in the FBI statement, Peters described how he had been approached by both sides in the same lawsuit involving a fatality.

"It's totally unethical," Freeland said. "Peters is on both sides of a transaction, hoping money shakes loose."

What has surprised him is the Scruggs cases weren't pursued by Mississippi prosecutors.

"These are state crimes, too," Freeland said. "Both local and statewide prosecutors have left it alone."

Attorney General Jim Hood sent letters to the local district attorneys in those counties, offering his assistance to them.

District Attorney Ben Creekmore of New Albany said his office met with federal prosecutors and let them know if there was anything that needed to be pursued, he would.

"We felt like any insertion of our office into that whole mess would have gained very little as far as criminal justice is concerned," he said. "It would have been more attention-seeking than justice."

He added that his office has "our hands full with our dockets."

I raised this question in 2010 in this post about a Sid Salter interview of Rankin County District Attorney Michael Guest. Salter raised the question in 2008 in a column that he quotes in his comment responding to my 2010 blog post, and took issue to Johnny Come Lately's on this issue:

District attorneys in multiple venues in Mississippi have already spoken to the fact that since Mississippi's attorney general didn't prosecute public corruption cases against Peters, DeLaughter, Langston, Scruggs, Balducci, Patterson, et al, then they didn't think they had the resources to go after such charges either. If you will recall in the Neshoba County state charges against former Klansmen Edgar Ray Killen and other high profile cases, the local DA got the active support of General Hood's office and his personal intervention in the case.

But Hood took a pass on the judicial bribery cases altogether — all of them.

Where were you in 2008 on this issue, Mr. Thomas? Massaging your "certified civil trial advocate" plaque?

What color is that, Bubba?

Next time you have a question about how I go about the interview process, be sure and weigh in again. I love interaction with "certified civil trial advocates" — being a mere mortal and all.

 My Take:

I still can't get over the Salter personal attack, but that's neither here nor there. 

I find it interesting how this issue has evolved since Salter first raised the question in 2008. Salter seemed to blame Attorney General Jim Hood for there being no State prosecution against Peters. But Jerry Mitchell's 2011 article states that General Hood offered to assist local D.A.'s in prosecutions. And there were at least three D.A. jurisdictions where charges could have been brought. And the feds could have prosecuted too in either the Northern or Southern Districts.

So who's to blame for what many agree is an injustice that Peters was never charged? I never came up with a good answer to this question. I heard a lot of theories; many of which made sense. But I never heard what I thought was a good definitive answer.  

On the issue of Eaton's culpability for Peters' actions in the Eaton v. Frisby case, Tom Freeland makes a good point at NMC:

It strikes me that the question isn’t whether Ed Peters, hired as a lawyer by Eaton, was supposed to influence the judge– after all, isn’t that what lawyers do?  The question is whether Peters (who was hired secretly and off the record, a fact Eaton’s legal pleadings keep omitting) was hired to improperly influence Judge DeLaughter.

 Specifically, I would like to see Eaton's answer to these two questions that I posed in this 2009 post:

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?  

Because let's face it: somebody on the Eaton side of the 'v' knew that they were hiring Peters to improperly influence DeLaughter. Or at a minimum, they figured it out pretty quickly that that's what Peters was doing when he came back reporting to them on what he was doing.

Think about it. In the Scruggs v. Wilson case Scruggs' lawyers knew every move Peters made in communicating with DeLaughter. Eaton v. Frisby was a very complicated trade secrets case. Peters was not Eaton's primary lawyer—not even close. But we are supposed to believe that—completely on his own—Peters got up to speed on the details of the case and then discussed them with DeLaughter? Come on.

If you haven't seen it already, you want to check out this recent NMC post on Eaton v. Frisby. NMC also has Ed Peters' 302 Report here, which details Peters' involvement in the case. In the 302 report, Peters states that he was hired by Eaton lawyer Mike Shauman of the Quarles Brady law firm in Milwaukee and that Jackson lawyer Mike Allred was Eaton's local counsel. It's impossible to read Peter's account of his improper meeting with DeLaughter about the Eaton case without concluding that the Eaton camp knew about the meeting. 

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In late January the Frisby Defendants in the Eaton v. Frisby litigation filed two Complaints against Eaton in Hinds County Circuit Court. Eaton removed the cases to federal court.

One Complaint pleads mostly state law claims that are generally based on the same underlying factual allegations as Frisby's antitrust case filed in North Carolina. 

The second Complaint pleads one cause of action for conspiracy to deprive the Frisby parties of their civil rights.

Not much new here after reading the North Carolina antitrust complaint. One interesting allegation in the Complaints is in paragraph 38. This paragraph states that Frisby cannot list all of the facts that support the Complaints because the Hinds County Circuit Court file is still sealed. Eventually all the dirt will probably get aired.

Is it just me or should Eaton be looking for an exit strategy?

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Alison Grant with the Plain Dealer (Cleveland newspaper) reported last week on two lawsuits recently filed against Eaton Corporation related to the Eaton v. Frisby litigation in Hinds County.

The North Carolina Antitrust Case

The first case is an antitrust case filed by Frisby (now called Triumph Actuation Systems) in North Carolina on February 1. Here is the Complaint in that case. NMC has a nice analysis of the Complaint here.

This is a well written complaint. It should come with a box of popcorn. It ties together the facts of the entire Eaton v. Frisby saga from Eaton paying a former Frisby employee to rat on Frisby to the Peters-DeLaughter saga. The Complaint seeks treble [triple] damages and attorney's fees.

The Complaint names Ed Peters, Jackson lawyer Mike Allred and the Quarles & Brady law firm out of Milwaukee as co-conspirators in the Eaton scheme to covertly influence DeLaughter. According to the Complaint, Allred and Peters had a contingency interest in the proceeds of Eaton's lawsuit against Frisby. That would explain some things. Think about it.

Allred and Peters have both been out of the case for years, but the Quarles & Brady firm remains the apparent driving force behind Eaton's litigation in Mississippi. I have always found that amazing. If I'm Eaton, I have to have completely new counsel to trust the advice that I'm getting. It's my understanding that Eaton only replaced its lawyers in Mississippi.

One theory I heard about Eaton not replacing Quarles & Brady was that the firm has close personal ties to Eaton CEO Sandy Cutler. One person told me that Cutler's father was a longtime senior partner in the firm. I located a Richard Cutler on the firm's website, but have not been able to verify the relationship. If the Frisby-Triumph allegations are true, then Eaton did not replace Quarles & Brady because the firm was conspiring with Eaton.

In any event, I don't see how Eaton can continue to have the firm work on the Frisby-Triumph litigation due to the lawsuit's allegations. But what do I know? I can't see how the firm is still in the case now.

The Ohio Shareholder Derivative Case

The second lawsuit is a shareholder derivative case filed against Eaton directors and employees on February 11 in state court in Ohio. Here is the Complaint in that case.

The Complaint alleges that Eaton directors and employees knew or should have known about the improper conduct by Eaton's lawyers in Mississippi, but did not stop it. The Complaint alleges that the dismissal of the Mississippi lawsuit cost Eaton the proceeds of the lawsuit, which were valued as high as $1 billion.

Eaton CEO's Sale of $26 Million in Company Stock

Coincidentally—or not, Eaton CEO Sandy Cutler sold over $26 million in Eaton shares on February 11, according to the February 19 issue of the Wall Street Journal. It was the 13th largest insider sale of stock in a publicly traded company for the week. The timing of the sale was "interesting."

Chronology of Interesting Events

That leads to the following interesting timeline:

• December 22, 2010: Hinds Circuit Judge Swan Yerger dismissed Eaton's case against Frisby based on finding that Eaton knowingly hired Ed Peters to improperly influence Judge Bobby DeLaughter
• January 28, 2011:  Eaton CEO Sandy Cutler appears on the Jim Cramer Mad Money show talking about Eaton's blowout quarter and expectations of further growth in the company's business.  
• February 1, 2011: Frisby/ Triumph file North Carolina antitrust case alleging that the Peters-DeLaughter connection was only one component of a multi-faceted scheme by Eaton to prevent Frisby from competing against Eaton.
• February 9, 2011: Cutler sells $26 million in Eaton stock less than two weeks after touting the company on Cramer.
• February 11, 2011: Eaton shareholders file derivative action against Cutler and other Eaton employees and directors.

My Take:

It's amazing how Eaton continues to paint itself into a corner and make itself look bad. In 2009, I noted in this post that Eaton's spokesperson Don McGrath repeatedly stuck his foot in his mouth when commenting on the Frisby litigation. At the time, I just thought that Eaton's public relations department issued statements without much thought.

Now, the situation looks deeper than a poor PR campaign. Eaton's repeated missteps and bizarre conduct suggest top-down leadership issues. Cutler selling a boat load of Eaton stock right after Frisby filed its case and just before the filing of the shareholder case makes both Cutler and Eaton look bad.

Another possibility is that Eaton is getting completely out-lawyered by Frisby-Triumph. That's possible. But that also falls on the company's leadership who continues to use a firm that helped get the company into this mess.  

Finally, the shareholder action raises interesting questions: why is the Eaton board of directors allowing Eaton to continue down this path? Does Eaton have an independent and active board of directors? Or is it a bunch of sheep in the Enron board mold?

Stay tuned.     

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Hinds County Circuit Court Judge Jeff Weill has denied Eaton Corporation's Motion to Recuse Trial Judge that I previously discussed in this post. Here is Judge Weill's Order, which was filed on January 20, 2011.

The order states:

 there is no evidence, nor can there be, that the prior involvement of former Judge DeLaughter and other former Hinds County employees in proceedings regarding the above-referenced matter will have any effect, whatsoever, on this judge's ability to be fair and impartial. Further, there is no evidence that can produce a 'reasonable doubt' as to this judge's impartiality as required.

The denial of Eaton's motion is not surprising.

I don't know the genesis of Eaton's motion. But it's the kind of motion that often originates with micro-managing in-house counsel. Sometimes wing-nut these kinds of motions are filed even though the lawyers actually litigating the case know the motions are a bad idea.

In this case Eaton could very well end up liking Judge Weill better than whoever would have replaced him on the case. It's too early for reports to be in, but I suspect that Judge Weill is going to be the type of judge who both sides believe that they get a fair shot with.     

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Hinds County Circuit Judge Swan Yerger retired effective the end of 2011. Former Jackson City Councilman Jeff Weill was elected to replace Judge Yerger and inherited his docket.

On January 4, 2011–-the day of Judge Weill's investiture—Eaton Corporation moved to have Judge Weill recuse himself from the Eaton v. Frisby case. Eaton filed its motion under seal even though Judge Yerger lifted the seal in the case. Frisby did not file its response under seal. Here is Frisby's response. [Here is page 5, which was not in my initial posting.]

According to Frisby's response, Eaton contends that no judge in Hinds County can be fair due to Judge Yerger's finding that Eaton used Ed Peters to improperly influence Judge Bobby DeLaughter in the case.

Frisby responds that there is no legal or factual basis for recusal of Judge Weill. Frisby also contends that Eaton's motion constitutes improper judge shopping.

Eaton's request to recuse Judge Weill is bizarre. Judge Weill is conservative and is expected to be a detail oriented trial judge. That would seem to be the type of judge who you would want on the case if it's your position that the last judge got it wrong.

Eaton, on the other hand, wants the judge behind door number 2.

Should Judge Weill recuse himself, Eaton has no idea whether it will like the judge who the Supreme Court assigns to the case. I do not know exactly how that system works, but it appears random. That means that the Supreme Court could assign any current Mississippi Circuit Judge. Although it is more likely that it would be one from an area surrounding Jackson, that is no guarantee.

The uncertainty about what judge might be assigned to the case is what makes Eaton's request bizarre. How do you move to recuse a new judge who is a blank slate, but who no one has any real criticism of, in order to get a random draw that could be much worse? A lot of people will probably question that strategy if Judge Weill grants Eaton's motion and Eaton draws a judge who is perceived to be bad for Eaton in the case.

But that is probably a moot point since it appears unlikely that Judge Weill will grant Eaton's motion.      

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Eaton Corporation touts itself as one of the world's most ethical companies. Its CEO touts the company's ethical values.

Those ethical values did not extend to Eaton's legal department. As discussed in this post, Hinds County Circuit Judge Swan Yerger unsealed an opinion last week in which he found by clear and convincing evidence that Eaton's in-house and outside counsel cheated in a civil lawsuit.

Judge Yerger's opinion gave “just a few examples from an extensive record of clear and convincing evidence” of Eaton's misconduct by turning Ed Peters loose to play fast a loose with the justice system by improperly contacting and influencing Judge Bobby DeLaughter while remaining behind the scenes in Eaton's billion dollar lawsuit.

So far, Eaton's response to Judge Yerger's ruling is to maintain its innocence and state that it will appeal. The Mississippi Supreme Court's ruling on an appeal will be very interesting. My gut feeling is that at the Supreme Court Eaton is going to run into nine justices who—on the whole—are even less sympathetic to Eaton than Judge Yerger.

I don't know how Eaton can genuinely believe that it will win on appeal. In this August 2009 post, I pointed out that Eaton's arguments did not make sense and suggested that Eaton knew what Peter's was doing.

Eaton knew it hired Peters and that he was working on the case. Eaton has never given a legitimate reason for: (1) why it hired Peters; and (2) why after hiring Peters, it actively made sure that Peters' involvement was concealed from Frisby (the defendant in the lawsuit). Eaton's public attempts to answer these questions have been comically bad.

That will be obvious to the Supreme Court. And that's on top of the specific evidence that Eaton knew what Peters was doing. 

Eaton's current lawyers may be telling Eaton this. But if Eaton is taking advice from any of the in-house or outside counsel who got it into this mess, I suspect that Eaton is hearing a self-preserving and incorrect different tune.

In addition, the Supreme Court will be free to write an opinion discussing the entire record before Judge Yerger—not just the examples of misconduct that Judge Yerger cited. That means that things could get even worse for Eaton on appeal. Judge Yerger issued a thorough and well written opinion. But writing opinions is much more of a core function of appellate courts than trial courts. So Eaton's appeal could result in an even more damning opinion from a higher court.

At this point I am waiting to see if Eaton shows signs of a new plan. They sure need one.

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Perhaps the biggest legal development of the year in Mississippi happened today during what is usually the quietest weeks of the year for lawyers and the judiciary.

Hinds County Circuit Court Judge Yerger unsealed an opinion today dismissing Eaton Corporation's case against Frisby due to Eaton's hiring Ed Peters to improperly influence Judge Bobby DeLaughter in the case.

Here is the Judgment of Dismissal.

Here is Judge Yerger's opinion.

Eaton has a market cap. of over $17 billion, is in the S&P 500 and has over 70,000 employees.

 Judge Yerger's opinion states that Eaton in-house counsel were aware of Ed Peters' improper ex parte contacts with Judge DeLaughter. The opinion also refers to evidence that suggests that Eaton's general counsel was aware of the scheme to improperly influence Judge DeLaughter.

Judge Yeger's opinion included the following findings:

• Eaton and its counsel intentionally hid Peters' involvement from defendants despite knowledge that Peters was communicating with DeLaughter about the case.
• Eaton Vice President and Chief Counsel Vic Leo sent an email to other Eaton lawyers including General Counsel Mark McGuire that stated that Peters "intends to speak with Court Administrator and the Judge about the trial date. This may take some finessing."
• The same e-mail stated that Peters forecast that the chances of Eaton winning a particular ruling were 100% [note: nothing is 100% in litigation].
• In another email Leo told McGuire that Peters had taken DeLaughter's temperature on a meeting about the possible recusal of Judge Tom Lee in the Frisby criminal trial.
• Eaton's corporate office and Wisconsin counsel were aware of Peters' improper actions. [Note: by this point in the case I believe that Eaton's Mississippi counsel were former Mississippi Supreme Court Justices Reuben Anderson and Fred Banks. I know they took over the representation at some point. Eaton's lead counsel were in Wisconsin. Anderson and Banks have not been implicated to date in Peters' misconduct. They may have had a ceremonial local counsel role in the case. I believe that Mike Allred represented Eaton when Eaton hired Peters].
• Eaton and its counsel were aware of and sanctioned Peters' clandestine actions.
• Eaton "turned Peters loose" to "play fast and loose" with the judicial system without ever appearing in the case [note: this means that Frisby was unaware that Peters was behind the scenes sinking its case.].
• Eaton's counsel failed to present a plausible explanation for their complacency with Peters' conduct.
• Eaton and its counsel knew of the serious improprieties occurring and stood by with blind eyes.

Judge Yerger determined that in order to protect the integrity of the judicial system it was necessary to dismiss Eaton's case with prejudice. A billion dollar trade secrets case has been dismissed due to successful efforts to improperly influence a judge.

The fallout from Scruggs-gate grows. This is another case where but for Tim Balducci getting caught attempting to bribe Judge Henry Lackey, there would have been a serious miscarriage of justice due to blatant cheating. 

Ed Peters remains the Teflon Man, having received immunity from the DOJ. 

For earlier posts on the case go here.

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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.