Ala. judge appoints special prosecutors in Katrina-related case

Published 9:59 pm Saturday, July 28, 2007

A federal judge appointed two veteran Birmingham attorneys to prosecute prominent Mississippi attorney Richard F. Scruggs and his law firm for criminal contempt in a Hurricane Katrina insurance dispute.

In an order made public Friday, U.S. District Judge William Acker named Charles E. Sharp and Joel Williams to serve as special prosecutors after U.S. Attorney Alice Martin declined the judge’s request to prosecute Scruggs and his firm.

Acker’s order appointing the two lawyers said the contempt case would be randomly assigned to another federal judge in north Alabama to handle.

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Responding to the appointments, Zack Scruggs, Richard Scruggs’ son and law partner, said, “The U.S. attorney’s letter to Judge Acker and her decision that there is no criminal contempt is all that needs to said about this matter.”

Martin’s letter to the judge did not say why she declined to prosecute.

Sharp, 77, is a former president of the Alabama Defense Lawyers Association and handles business-related and personal injury litigation. His law partner, Williams, 53, served as a judge advocate in the Army before practicing law in Birmingham. The law firm’s Web site cites his experience in business and insurance litigation.

In a phone interview, Williams said the majority of the firm’s civil court work involves defense, but it does some plaintiff work.

He said Acker approached him and Sharp about handling the case. “We reviewed the evidence and it appeared the charge is accurate,” he said.

Richard Scruggs, a highly successful plaintiffs’ lawyer who is the brother-in-law of U.S. Sen. Trent Lott, R-Miss., is suing State Farm on behalf of hundreds of Mississippi residents.

Acker ruled in June that Scruggs “willfully violated” a Dec. 8 preliminary injunction that required him to deliver “all documents” about State Farm Insurance Co. that whistleblowers Cori and Kerri Rigsby secretly copied after Katrina.

Acker’s ruling came in a suit by E.A. Renfroe and Co. Inc., a claims adjusting firm that fired the Rigsbys after finding out they had taken internal documents.

Renfroe and Co. worked for State Farm, and the sisters were heavily involved in processing claims for the insurance giant.

Instead of complying with the December injunction, Acker said in the June ruling, Scruggs promptly sent the documents to Mississippi Attorney General Jim Hood’s office “for the calculated purpose of ensuring noncompliance with or avoidance” of the injunction.

The Rigsbys, from Ocean Springs, Miss., have admitted copying thousands of pages of records to back up their allegations that State Farm wrongly denied claims after Katrina struck the Gulf Coast in 2005.

The sisters gave the documents to law enforcement agents and Scruggs, who signed them each to a $150,000-a-year consulting contract. The sisters say they made about 15,000 copies — three sets of 5,000 separate records.