Blawgletter®

The Saga of Dickie Scruggs

Blawgletter admires good writing, no matter whence it comes. But we like it better when a judge produces it.

Last week, Fifth Circuit Judge Jacques Wiener did a fine piece of work. It kind of sings. And it tells the on-going tale of Dickie Scruggs, the rich lawyer who flew too close to the sun. We think you'll enjoy his narrative of the facts:

    Scruggs made both a name and a fortune as a plaintiffs’ attorney in asbestos and tobacco litigation. Along the way, he became entangled in many fee-sharing disputes with co-counsel, one of which resulted in a lawsuit filed by Robert Wilson in the Circuit Court of Hinds County, Mississippi (“the Wilson Case”). Robert “Bobby” DeLaughter, best known first for successfully prosecuting Byron De La Beckwith for murdering civil rights leader Medgar Evers, sat on the Circuit Court of Hinds County, where he was assigned the Wilson Case and his path crossed with Scruggs.

Scruggs wanted a sure thing in the Wilson Case, having recently lost a similar fee fight. As the presiding judge, DeLaughter could put his finger on the scales. DeLaughter coveted a federal Article III judgeship more than anything else; as the brother-in-law of then-United State Senator Trent Lott, Scruggs could influence the person who sent candidates to the President. In early 2006, Scruggs retained Ed Peters, a close friend and mentor of DeLaughter’s, as a secret go-between who conveyed an offer: If DeLaughter would help Scruggs win the Wilson Case, Scruggs would recommend DeLaughter to Lott for a district court judgeship.

    DeLaughter kept his end of the bargain: When Scruggs badly needed a trial continuance, DeLaughter entered, verbatim, a scheduling order prepared by one of Scruggs’s attorneys, despite having disclaimed input from either party. DeLaughter also reviewed yet-to-be-filed motions for Scruggs, advising how he would rule and which arguments needed work. During 2006, three judicial vacancies opened on Mississippi federal district courts. In March 2006, after being passed over for nomination to one of those seats, DeLaughter relayed his dissatisfaction and concern that “he was doing his part of the bargain and that . . . Scruggs was not going to fulfill his part of the deal.” Immediately thereafter, Scruggs had Senator Lott call DeLaughter. Although the record suggests that Lott did not say that DeLaughter was being considered, DeLaughter nonetheless came away with the impression that he was in the running for the seat.

    Mollified that Scruggs was keeping his end of the bargain, DeLaughter continued secretly to tilt the scales in the Wilson Case. When Wilson filed a potentially dispositive motion asking DeLaughter to quantify the amount of fees Scruggs still owed, Scruggs’s attorneys did not know whether to oppose the motion and pursue a full trial or to agree to submit the quantification issue to the judge. DeLaughter assured them that Scruggs would win the quantification motion, and he did. After faxing a preview of his order to Scruggs’s counsel, DeLaughter held that Scruggs owed no more than he had already paid and denied Wilson’s motion for reconsideration without comment. But the quantification order was so
favorable that even Scruggs’s attorneys worried that it could not be affirmed on appeal, so Scruggs settled the Wilson Case before appeal with the help of DeLaughter, who revealed Wilson’s confidential settlement position.

    These machinations came to light when members of Scruggs’s legal team began cooperating with the government’s investigation of an unrelated judicial bribery scheme. A grand jury returned an indictment charging Scruggs and DeLaughter with one count of conspiracy to commit federal programs bribery, in violation of 18 U.S.C. § 666, and three counts of aiding and abetting honest-services mail fraud, in violation of 18 U.S.C. §§ 1341 and 1346. The honest-services counts in the indictment alleged “a scheme and artifice to secretly and corruptly influence” DeLaughter, thus “depriving [Wilson] and the citizens of the State of Mississippi of their intangible right to [his] honest services.” In particular, the indictment alleged that Scruggs prevailed on Lott to consider DeLaughter, and “in return” DeLaughter provided secret access and favorable treatment.

    Scruggs pleaded guilty to a superseding information charging him with a single count of aiding and abetting honest-services mail fraud, in violation of 18 U.S.C. §§ 1341 and 1346. Like the original indictment, the information alleged a scheme corruptly to influence DeLaughter and deprive the citizens of Mississippi of their right to his honest services, describing Scruggs’s call to Lott on DeLaughter’s behalf. But the Information omitted that which DeLaughter did for Scruggs “in return.”

    Pursuant to a plea agreement, the charges in the indictment were dismissed. Scruggs was sentenced to imprisonment for seven years, concurrent with a prior five-year term for conspiring to bribe another judge who was presiding over a different fee dispute.

    On June 24, 2010, the Supreme Court issued Skilling v. United States in which it addressed the constitutionality of 18 U.S.C. § 1346, the honest-services statute. Section 1346 states that “the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.” To avoid problems of constitutional vagueness with this definition, the Court in Skilling limited the application of the statute to paradigmatic bribery and kickback schemes only.3 In June 2011, Scruggs filed a motion to vacate his sentence pursuant to 28 U.S.C. § 2255, contending in light of Skilling that, as he did not admit to bribing Judge DeLaughter, he is not guilty of a crime.

    The district court concluded that, by pleading guilty, Scruggs had procedurally defaulted on that claim. After a two-day evidentiary hearing, thedistrict court issued a thorough 48-page opinion denying the § 2255 motion because Scruggs had not shown either his actual innocence or cause and prejudice. The district court issued a certificate of appealability on the issue of “actual innocence” and “other issues in the opinion,” and Scruggs timely filed a notice of appeal.

United States v. Scruggs, No. 12-60423, slip op. at 1-4 (5th Cir. Apr. 12, 2013).

Scruggs lost the appeal, by the way. We can imagine your surprise.

Quote of the Day: Randolph F. Treece

 In a review of Business and Commercial Litigation in Federal Courts (3d ed. 2012), U.S. Magistrate Judge Randolph F. Treece writes about a chapter that Blawgletter co-authored:

Two chapters I hope readers would not overlook are "Techniques for Expediting and Streamlining Litigation" and "Litigation Technology". The former chapter is replete with commonsensical practical approaches to litigation. Reflecting upon the complex litigation that has come before me, I have observed litigators twist themselves into knots with superfluous litigation machinations and strategies, and extravagant, unnecessary and, of course, expensive litigation approaches. These litigators and litigants forget or ignore the cardinal aspiration of litigation within the federal system: litigants should ―secure the just, speedy, and inexpensive determination of every action and proceeding. With well-considered, clear, concise, and cogent advice, these authors drive this very point home.59 Constrained by space and time, I cannot mine for you all of the abundant and invaluable nuggets of experience set forth in this chapter, but here is one to consider. Something that I constantly urge battling litigators when hearing obstreperous disagreements over sweeping discovery demands is succinctly and aphoristically stated by these two authors: when ―reduc[ing] expense without sacrificing . . . success, less discovery is better than more because excess discovery is often counterproductive, primarily because most complex cases generally involve only several hundred documents rather than thousands or millions. But, when it comes to disclosing documents, caution urges more production than parsimoniousness and recalcitrance.61 On another note, it is grueling for federal judges to convince parties to eschew deposing the world of witnesses on every detail or minutiae. Our authors plainly tell us that ―[y]ou don’t need to look under every stone. You just need to know where the boulders are. Or, that there is ―no such thing as a bad witness—only one who has been ill-prepared. What advice could be more simply stated, yet be incredibly indispensable, than this? This chapter should be a required text for any law school’s practical skills courses, because, right now, our law graduates, as many law firms exclaim, are devoid of such litigation insights and thus unprepared for the world of litigation.

 Randolph F. Treece, "Book Review: Business and Commercial Litigation in Federal Courts, Third Edition", 76 Alb. L. Rev. 253, 259-60 (2013) (without footnotes).

Spoliation, Shmoliation?

A brigantine making sail -- perhaps to escape spoliation.

Have you noticed how many e-discovery pros have e-merged in the last decade to offer e-services? Some promise low, low prices, vow super se-cure review platforms in the cloud, and guarantee nearly-omniscient pre-dictive coding software? They call, text, or e-mail you e-very day.

You may treat them with disdain. They need you more than you need them. E-xactly.

And yet they have affected how you think. Or at least the ubiquity of e-discovery has. Now you may be-lieve the best way to win your case involves not so much proving it as e-stablishing that the other side Spoliated E-vidence.

Let us pause to consider what spoliation means. It comes from the Latin for plunder. As in de-spoil, ransack, loot, pillage. The first time the U.S. Supre-me Court deployed the word, in fact, it used it in that piratical sense, in a case that involved what the Court deemed unlawful:

Talbot [the French captain of the schooner L'Ami de la Point-a-Petre] knew that Ballard [an American who commanded another schooner, L'Ami de la Liberte] had no commission; he so states it in his claim: the facts confirm the statement; for, about an hour after Ballard had captured the [Dutch brigantine] Magdalena, he came up, and took a joint possession, hoping to cover the capture by his commission, and thus to legalise Ballard's spoliation. How silly and contemptible is cunning, how vile and debasing is fraud.

Talbot v. Jansen, 3 U.S. 133, 157 (1795) (emphasis ours).

But accusing the other side of e-plunder seldom works out for the accuser. See, e.g., here. A de-cision by the D.C. Circuit illustrates the fact.

In Grosdidier v. Broadcasting Board of Governors, No. 11-5291 (D.C. Cir. Mar. 8, 2013), a French woman alleged that the Voice of America discriminated against her on grounds of gender by promoting a man instead of her to a Senior Editor spot. Two of the three VOA people who interviewed the candidates had discarded their notes, a no-no under an EEOC regulation, which required the VOA to keep the notes for a year. But the district court granted summary judgment for the VOA's Broadcasting Board of Governors (BBG), ruling that Grosdidier had shown little more than uncouth and unprofessional behavior.

The D.C. Circuit affirmed despite Grosdidier's argument that the improper destruction of the interviewers' notes lifted her over the summary judgment threshold. The panel said:

Grosdidier requested . . . a spoliation inference . . . that the interview panelists considered her to have superior qualifications. But this would not be a reasonable inference in light of the evidence of the relative qualifications of the applicants and the panel’s evaluation of their qualifications. Neither does the evidence support a reasonable inference that the notes would likely contain information that the BBG is falsely defending on the ground that it selected Donangmaye for his knowledge, skills, and abilities. Even if it would be reasonable to infer that the destroyed notes included evidence corroborating that Grosdidier performed well in the interview or that different interviewers emphasized different qualifications of the applicants, other evidence, including the panel’s contemporaneous written explanation for its recommendation in view of the skill sets for the position, would not permit a reasonable finding that the destroyed notes would have established pretext, let alone unlawful discrimination. For this reason, the denial of Grosdidier’s request for an adverse spoliation inference was harmless error.

Grosdidier v. Broadcasting Board of Governors, No. 11-5291, slip op. 15 (D.C. Cir. Mar. 8, 2013).

We can all agree "[h]ow silly and contemptible is cunning, how vile and debasing is fraud." But a jury acquitted Ballard of piracy. And the D.C. Circuit let the VOA off the hook.

You may protest that spoliation sometimes can make the difference between getting to trial and losing on summary judgment. Blawgletter asks you to cite a single instance in which it did matter. And we bet that in more than a few cases the accuser lost more in credibility on the merits than she gained with the accusation.

Let's focus on proving the main charge, people, and leave charges of spoliation to the rare instances of actual evidence-plundering.

Gud Rytin

Did you see the piece in the March 2013 issue of ABA Journal by Bryan Garner? The guy who edits Black's Law Dictionary? Author of books on American, legal, and American-legal prosel. He wrote "Why lawyers can't write".

Whoa.

Mr. Garner said the great mass of legal writers think themselves Far Better at pen- and keyboard-wielding than the facts support. He cites "the Dunning-Kugler effect" as the chief cause of their blindness to the poverty of their prose. He compares lawyers in their guise as writers to duffers who delude themselves into thinking that their 23 handicap makes them the in-fact equal of Phil Mickelson or Tiger Woods.

As Wikipedia explains:

The Dunning–Kruger effect is a cognitive bias in which unskilled individuals suffer from illusory superiority, mistakenly rating their ability much higher than average. This bias is attributed to a metacognitive inability of the unskilled to recognize their mistakes.

Those who suffer from D-K do as the Black Knight in Monty Python and the Holy Grail did. As you will recall, when King Arthur's sword relieves the Black Knight of his upper limbs, he calls his injuries "a flesh wound". After Arthur then hews off his legs, too, he says "alright, we'll call it a draw." Dunning-Kruger.

The article doesn't explain why lawyers can't write, but you'll like it anyway. Mr. Garner does have a way with words.

B. McLeod does, too. He wrote in one of his comments on the piece:

I fur wan wuz glad to see this artikul.  Mini tymz ovur the yeers, aftur fileeng an upellit breef, I wood find a miztake in thair.  Eevun tho I red the theeng a duzzen tymz beefor sendeeng it in.  Now I reelize it must be beecuz of my bad golf skilz, which hav ulweez bin veree por.  To Mistur Garner for cawleeng this to my attenshun now I veree thankful am.  I hoap I will hav a chans eevenshulee to by his boox, or sum of such, so I can beegin to fix my awbveeus Dunnig-Kruger prawblum too.  Providud, howevur, that he duz not want too big a pryce for the such boox menshund hearin abuv (beeeeng nawt so much a faymuss ritur myself, I prawblee need to be mor cairful how I spend my munny).  Of corse, I hav bawt a fue boox beefor, but sum of them wur kwite unhelpful.  Fawnix, fur exampul, woant ulweez git yu thair.  Thatz fur shure.

Does Having Fun Matter to Clients?

Clients of Blawgletter's law firm told an outside consultant not long ago that they have "fun" working with our lawyers.

The funny thing? She hadn't asked them whether they enjoyed working with us. They volunteered that they do. Insisted on telling her that. Demanded that she write it down.

That took the interviewer by surprise, she told us. She said she couldn't recall clients using the f-word in talking about lawyers at any other firm.

It didn't feel like a revelation to us. We whose founding partner told The Wall Street Journal last month that he advises the firm's lawyers to behave as "lovers" instead of fighters. You get better results with the other side, he said, if you use sugar instead of vinegar.Jennifer Smith, "Lawyers Behaving Badly Get a Dressing Down from Civility Cops", The Wall Street Journal, Jan. 28, 2013.  Amen to that.

What works in your dealings with the opposing counsel you want to beat on the merits goes double for the client you want to trust and help you. A happy warrior pleases everyone more than a dour and grumpy one.

Don't get the idea that having a sense of humor, smiling now and then, and showing a real interest in your clients' and colleagues' families and paying attention to their daily challenges substitute for preparation, judgment, and execution. They don't.

But what client doesn't want both, we wonder.

What do you think, all you Blawgletterati out there?

Lawyer Mess-Up Dooms Appeal

Blawgletter thinks we can all agree that no lawyer wants to see this sort of reference to him or her in a court ruling:

The failure to [do something important] was entirely and indefensibly the fault of [litigant's] counsel.

Communications Network Int'l, Ltd. v. MCI WorldCom Communications, Inc. (In re WorldCom, Inc.), No. 10-4588(l), slip op. 3 (2d Cir. Jan. 24, 2013).

The mis-step in question involved a failure to file a timely notice of appeal from an order awarding MCI $2.4 million from CNI for telecom services. Why did it happen? Because CNI's lawyer changed his email address, listed the new one in papers he filed with the district court, but didn't tell the ECF system to update its records so that notices it sends our electronically would go to the new address.

The dissenting judge felt the majority's decision unduly punished a client for a "garden variety" lawyer error.

What do you think? Did the majority (per District Judge Lewis A. Kaplan) get the ruling right? Or do you agree with the dissent (per Circuit Judge Gerard E. Lynch)?

We note that the lawyer-in-error appears to have argued the case to the court. And we bet it wasn't pretty.

Third Circuit Okays 7.5-Hour Per Side Limit on Trial

Blawgletter believes trial judges should set a limit on how long each side can take to try a case. Any time a lawyer for Side A has the floor as the jury sits in the box counts against Side A. The same applies to Side B. Our firm in fact includes a pact on trial time in the standard set of agreements we ask our adverse friends to agree to.

But 7.5 hours per side strikes us as harsh and more than a little odd. The limit seemed that way to the Third Circuit also, but the court ruled that the district judge in Pittsburgh had not gone beyond the bounds of his discretion. The panel said:

In denying mandamus relief, we emphasize that we are not ruling on the propriety of the time-limit order. We appreciate that this is a complex case, that the Committee has sued sixteen individual defendants, and that many of the defendants may need to testify to present their own defenses, even if some of their testimony is duplicative. Because 7.5 hours may ultimately be too little time for the Lemington Defendants to adequately present their case, we do not conclude that the time-limit order is permissible or valid. We hold only that a post-judgment appeal is adequate to assure meaningful review of the propriety of the time-limit order.

In re Baldwin, No. 11-447, slip op. 14 (3d Cir. Nov. 26, 2012). Then, in a footnote, the panel said how it really felt:

It is difficult to conceive how either side in this complex case could possibly present the necessary evidence to a jury in 7.5 hours of trial time. Although the Committee has not sought immediate review of the time-limit order, it did make clear at oral argument that it was not willing to concede that the order was a proper exercise of discretion. Instead, the Committee asserted that it was not waiving its right to challenge the time-limit order if it does not prevail at trial. It is also difficult to understand the District Court’s rationale in allocating to the entire defense side of the case 7.5 hours of evidence presentation time given the fact that there may be different liability rules and defenses applicable to defendants who were members of the board of directors versus defendants who were officers of the non-profit entity. 15 Pa. Cons. Stat. Ann. § 5712(a)-(b) (standard of care for directors of a nonprofit corporation) with 15 Pa. Cons. Stat. Ann. § 5712(c) (standard of care for officers of a nonprofit corporation). We therefore urge the District Court to re-examine the time-limit order to avoid the necessity of a re-trial. We trust that if, at any time, the District Court is persuaded that any time limits it has set are not sufficient to allow for a fair presentation of the case, the Court will take appropriate steps to see that due process is satisfied.

Id. at 14 n.5.

We suspect the Third Circuit judges held out hope that their seemingly petulant colleague on the district court bench would see the error of his time-limiting ways. And we've hard of instances in which circuit judges would get on the phone with such a colleague in an effort to give him or her a chance to hear how nutty he must sound to everybody else.

Bonus:    You can see our post on an earlier Third Circuit ruling that sent the case back for trial here.

Second bonus:    The ruling we just mentioned named the trial judge. The one about the trial limits thing does not.

 

 

"Predictive Coding" in E-Discovery

Blawgletter gets calls each work day from people who want to sell something. It happens to you, too. When you pick up the phone, you hear dead air for a second or two before a person comes on the line. The "agent" often asks if he can speak with "[your name here]".

The tell-tale lag means that the caller forms part of what Blawgletter knows as "outbound telemarketing" -- and that the agent used a "predictive dialer" to reach our line. Our source for all facts whose accuracy doesn't matter -- Wikipedia -- tells us:

Predictive dialers use statistical algorithms to minimize the time that agents spend waiting between conversations, while minimizing the occurrence of someone answering when no agent is available.

The dialer raises the time when an agent speaks with a callee from about 40 minutes per hour to around 57.

What, you demand to know, does that have to do with e-discovery. Just this: A growing number of fancy-pants e-discovery vendors claim that their software programs vastly enhance the efficiency of looking for stuff -- in this case, hot documents instead of hot prospects for buying Veg-a-Matics, credit repair services, and hair-weaving devices.

But does the hype match the True Facts? Because if it does a lot of lawyers will spend a lot less time searching through terabytes of electronic documents to find things relevant to lawsuits. And clients will spend a lot less money paying for all that doc-review time.

Call us slightly more on the side of the hypers. Slightly.

Using algorithms to locate hot docs makes a ton of sense for that first cut through the Great Mass of E-matter that you image from your client's gargantuan server. The process does better than having lawyers do "keyword" searches, not least because keyword searches can go on and on and on. The big gain from using the software should come from having more faith that the program will catch the right documents. If you do it over and over again, though, you haven't done much more than find a new way to waste time.

And yet you just might do that. Per the ABA Journal:

Essentially, the software works by delivering results based on a barrage of keyword inputs, which are tweaked by a seasoned attorney who then continually refeeds the best resulting documents back into the system as examples until the software “learns” what the attorney is really looking for.

So you still need someone who can teach the software what types of docs to sort into the human-review pile. But one person instead of dozens. Which should improve consistency but makes the value of the whole effort depend on how hard and well the one person does the job.

Who should play the role? We say someone who has Tried a Case. Because we don't care how smart a lawyer you have culling through the docs that make the first cut. If that person doesn't have a good idea of what you can do with the hot docs in front of a judge or jury, you'll likely get a big pile of docs that will never see an exhibit sticker.

So, we like the tool. Sort of. But like any tool it will save time only if you use it with planning and discipline.

How to Value Settlements (By Richard Posner)

Seventh Circuit Judge Richard Posner likes to riff on things that tickle his fancy. He does it a lot in his legal writing, of which he does a great deal. Just this week he wrote about how to tell if you should take an offer to settle:

Determining the reasonableness of a settlement requires comparing the amount of the settlement to the net expected gain of seeking a litigated judgment. The "expected gain" is the gain if the judgment is favorable, discounted (that is, multiplied) by the probability of a favorable judgment. The qualification "net" signals the need to subtract the cost of pressing ahead to judgment in order to estimate the value of litigating to judgment rather than of settling. Suppose the setttlement is $1 million, and a litigated judgment favorable to the plaintiff would be $4 million but the probability of obtaining the judgment would have been only 10 percent and the cost of obtaining it (the litigation cost) $100,000. Then the net expected gain from litigating to judgment would have been only $300,000 ($4 million x .10 = $400,000; $400,000 - $100,000 = $300,000) -- much lower than the $1 million settlement. And so the settlement would be reasonable.

In re Fort Wayne Telsat, Inc., No. 11-2112, slip op. at 7-8 (7th Cir. Nov. 23, 2011) (affirming bankruptcy judge's okay of trustee's settling of claim by debtor).

Why Does the NYT Hate Law Schools

Today the Paper of Record printed a long item on How Law Schools Cheat Their Students.

Not really. The thing tells how poor a job lawyer-mills do at teaching their toils how to "lawyer". It says the schools worry so much about trade school stigma that they commit the unbusinesslike sins of teaching people how to think instead of how to work and hiring profs who churn out goofy papers rather than teach the little law tykes how to keyboard a motion to dismiss.

Call Blawgletter a skeptic. We think the legal academy does fine work in teaching law students the skill they need most -- how to think with pristine good sense when others can't, won't, or shouldn't even try. A knack for using logic to head off trouble or master it keeps on giving year after year, client after client, case after case. And you just don't get as much of a pure ration of thinking without feeling outside the law classroom.

As for training in stuff that calls for know-how more than wit or brains -- how to write briefs, draft contracts, respond to greenmail, answer questions from the Board of Sanitation, blog about Law -- we'd suggest two things, both of which law schools do more now anyhow. One: urge students to work in the Real World for a bit before buying a Black's Law Dictionary. Two: offer more chances to do real lawyer things for credit, maybe even require the doing of such things.

What about law firms, you say? Doesn't the NYT piece highlight their fading power to bill clients for teaching new law grads the nuts and bolts of law practice?

Yes, it does. And there lies the source of the title for this post. The question of whether clients will pay to train baby lawyers isses-may the oint-pay. Of course they'll pay for it. They have to. Because if they didn't the hits to law firms' profits would cause the law firm model to fall apart.

No, the question comes down to How Big a Share each cog in the machine has to bear of the training costs. The NYT suggests law schools should pay a bigger part of the cost. But the truth comes down to the fact that, in a time of more lawyers and firms chasing a stagnant supply of work that doesn't demand world-class lawyer work, the client trumps all. The newbies, the schools, and the firms must each take a hit. Econ 101, baby!