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Who Should Hold Katrina Fees?

  Law Firm News  -   POSTED: 2007/12/07 17:27

A law firm fighting over legal fees with a prominent trial attorney recently charged with bribery wants a judge to take control of millions of dollars in settlement money from a Hurricane Katrina insurance case.

The motion filed Wednesday by the law firm of Jones, Funderburg, Sessums, Peterson & Lee said the indictment against Richard "Dickie" Scruggs "indicates that the Defendants are not proper persons to have control of any funds" at issue in the dispute.

Scruggs was indicted last week on federal charges of trying to bribe a judge to get a favorable ruling on a lawsuit filed by the Jones firm.

Scruggs and a group of his high-octane legal associates known as the Scruggs Katrina Group brokered a mass settlement with State Farm Insurance Cos. The Jones firm, which worked on the case, sued for a bigger cut of at least $26.5 million in legal fees; it rejected a check for $617,924 the Scruggs group sent it in March.

The Jones firm claims, among other things, breach of contract.

The indictment accuses Scruggs of conspiring to pay a judge $50,000 to rule in his favor on the Jones firm's lawsuit.

Four other people were charged, including Scruggs' son and law partner, Zach Scruggs. All pleaded not guilty, but on Tuesday one of the defendants, attorney Timothy Balducci, changed his plea to guilty on conspiracy to bribe a state court judge and is cooperating with prosecutors.

A message left after hours Thursday for Scruggs' attorney, Billy Quin, was not immediately returned.

The Jones firm's motion asks the Lafayette County Circuit Court to take control of all fees collected by the Scruggs Katrina Group, a consortium of lawyers that has represented thousands of Gulf Coast homeowners who sued over hurricane damages. It did not specify how much money is thought to have been collected by the group.

Scruggs, a brother-in-law of Sen. Trent Lott, R-Miss., has made millions from tobacco and asbestos litigation. He reportedly made $848 million for his part in brokering a multibillion-dollar settlement with tobacco companies in the mid-1990s. That case was portrayed in the 1999 movie "The Insider."

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