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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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 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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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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Surprise, surprise! After seven months, the DOJ denied my appeal seeking disclosure of Ed Peters' immunity deal with the government. Here is the letter denying the appeal.

Previous posts about DOJ's refusal to disclose Peters' immunity deal are here, here, here, and here. 

In the last of the above-linked posts I point out that former DOJ prosecutor Tom Dawson disclosed the terms of Peters' deal in Kings of Tort, which Dawson co-authored with Jackson political observer Alan Lange:

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.

The fact that DOJ continues to refuse to produce the agreement when one of its former prosecutors disclosed the terms of the deal in a book makes me want to run out and join the Tea Party. You've got to love the bureaucracy.

Needless to say, I am not going to waste my time filing a lawsuit trying to confirm what Dawson disclosed in his book.

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You can ask Madison-Rankin DA Michael Guest one question—what would it be? If you’re like me, it would be why hasn’t he prosecuted Ed Peters for conspiring to bribe Bobby DeLaughter?

But if you’re Clarion-Ledger columnist Sid Salter, it would be questions like “what’s your favorite color?” Here is Salter’s Sunday morning with Michael Guest. Questions included soft-balls such as “what attracted you to the job of District Attorney” and “tell us about your childhood.”

Inexplicably, Salter did not ask Guest why he did not bring charges against Ed Peters for conspiracy. Peters, Joey Langston, Steve Patterson and Tim Balducci met at the Jackson or Madison airport to discuss the bribing Judge Bobby DeLaughter. Both the Jackson and Madison airports are in Guest’s jurisdiction. 

Federal authorities granted Peters immunity for his cooperation with respect to federal charges. But Guest could have asserted state charges against Peters (and others). His failure to do so is one of the mysteries of the judicial bribery scandal. It would have been nice if Salter had asked him about it.  

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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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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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Point of Law has this post about Governor Barbour speaking about the judicial bribery scandal in Mississippi. The original question appeared to be about tort reform, but Barbour worked in the scandal:

BARBOUR: I don't think it was related to the tort reform, but as you know, some of the more prominent plaintiffs' lawyers in my state got into trouble. ...

I hate it. It's bad for the court system, it's bad for everybody. One of the things I really believe is, the public has to think the legal system is on the up and up. I mean, that's just really, really important.

Once in my career, I was the deputy chairman of the International Democrat Union, which despite its name - Democrat and Union - is the organization of conservative parties of the world that President Reagan started with Mrs. Thatcher and Chancellor Kohl. And I was struck by how much people in other parts of the world realized the importance of the rule of law in America. And it is not that way everywhere. There are advanced countries that are very prosperous that don't have nearly the confidence, faith and commitment to the rule of law that we do.

And for us, an advantage for us is the little guy generally believes that the court system is on the up and up.

All of sudden we get judges getting convicted of taking bribes and lawyers, good lawyers - they may have been plaintiffs' lawyers and they may be on the other side from me, and politically and everything else - but they're good lawyers. To me it's sad, 'cause it's bad for what we all ultimately want in America, and we do want the rule of law, and we want a system that let's us progress. 

But the tort reform battle and the actual enactment of tort reform I don't think had any role in that. It was other stuff. Most of the litigation had actually started before.

MEESE: I understand that. I have always felt that, to some extent at least, the tremendous amount of money that came to be involved, and the way that the trial lawyers were holding their seminars and dealing themselves, led to the arrogance that led to people like Dickie Scruggs and Bill Lerach to have the bribes and so on...that the money in effect was so great for these trial lawyers that it almost corrupted the system and that's what led to some of these things that we've talked about.

BARBOUR: It's maybe a monetary takeoff on "Power corrupts and absolute power corrupts absolutely."

I don't always agree with Barbour, but he is dead on with his comments that it is important that the public believe in the integrity of the judicial system. The same applies for the bar. As a litigator, I realize that my client will not always win. But it is imperative that we be able to trust the process. Of course, according to DOJ there is no public interest in the judicial bribery scandal.

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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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The Clarion-Ledger contained two stories on Sunday about the controversial decision by the federal government to grant Ed Peters immunity in the judicial bribery scandal involving Judge Bobby DeLaughter. One is an opinion piece stating that Peters got off easy. The other article  mentions the fact that Peters could still face prosecution, stating:

But that doesn't mean Peters won't be charged in other districts for his alleged wrongdoings in other cases DeLaughter heard, Mississippi College School of Law professor Matt Steffey said. "Many people are justly concerned that Mr. Peters and Mr. Peters alone escaped criminal liability."

But at this point it appears that Peters will escape prosecution. The article quotes Hinds County D.A. Robert Smith as stating that he will not prosecute Peters:

Hinds County District Attorney Robert Shuler Smith said his office wouldn't investigate Peters because it's been a federal issue. "They've never called me and asked for our help," Smith said.

Smith said there was not a conflict of interest because of his relationship with Peters, who publicly endorsed Smith for district attorney. The two once were seen eating lunch together in Hattiesburg earlier this year. Smith said Peters was giving him advice on running a DA's office.

That's weak. Smith might as well just admit that he feels indebted to Peters. Smith is letting Peters take a walk not only in Scruggs v. Wilson, but also in Eaton v. Frisby if the facts in the government's 404(b) motion in the DeLaughter case are true. Here is NMC's discussion of that issue. Peters was prepared to testify that he conspired with DeLaughter in Eaton.

As for Mississippi Attorney General Jim Hood:

A spokesperson for Attorney General Jim Hood neither confirmed nor denied an investigation by Hood's office.

Many of Hood's prosecutions have been of the shoot first and ask questions later variety. Given this tendency to rush in, I doubt that Hood will prosecute at this late date. His office just will not come out and admit it.

That leaves one person not mentioned in the article who could prosecute Peters: Rankin-Madison County District Attorney Michael Guest. According to Tim Balducci, Peters, Steve Patterson, Joey Langston and Balducci met at the Jackson or Madison airport to discuss Peters' communications with Judge DeLaughter about Scruggs v. Wilson. Both airports are in Guest's jurisdiction. While I am no criminal law expert, it sounds like a conspiracy was committed in Guest's jurisdiction. It is unclear why Guest, who is a Republican, would not be eager to prosecute in this high profile case. It is unclear whether Guest has a personal relationship with Peters or if pressure has been put on Guest to not prosecute in the case. At this point, it looks like Guest is the last hope for those who would like to see Peters held accountable for his role in the scandal. Clarksdale attorney Charlie Merkel expresses the sentiments of many when he states:

"I hope [the investigation] goes forward, and I hope the rest of the culprits get nailed, but I am not optimistic that will happen."

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

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

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

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

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

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

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

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

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

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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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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.