The Fall of the House of Zeus (24 page)

When Scruggs flew home that night, he did not invite Tollison to join him, and Tollison, who had been counting on the ride, had to spend the night ingloriously in an airport hotel and catch a commercial flight back to Memphis the next day.

    
Less than two weeks after he had been banished from the Scruggs Katrina Group, Johnny Jones and Tollison, newly retained, prepared to file suit against Jones’s erstwhile partners. It was a labor that inspired Tollison to rhetorical heights. He quickly whipped up a harsh eighteen-page attack portraying Scruggs and others as greedy and deceitful. He wrote, “The facts in this case show reprehensible conduct” by the Scruggs team. Though four firms in the group were all listed as defendants, Scruggs stood out as the obvious target.

Marshaling material provided by Jones, Tollison itemized no fewer than 130 points. He charged that “Scruggs and Barrett conspired among themselves and others” to set Jones’s allocation “at a ridiculously low figure.” During three months of arguments that had gone on since Scruggs’s December telephone call, Jones had been subjected to a campaign “to bully and cajole” him into accepting less than his fair share, the suit contended. “These intentional, egregious acts were intended to cause and did cause extreme distress” in Jones and members of his firm.

Jones’s suit demanded 20 percent of the fees collected by Scruggs Katrina Group—a claim that would be worth roughly $5 million—plus 20 percent of fees the consortium might be awarded in the future. In addition, it called for heavy punitive damages against Scruggs and Barrett to “deter such conduct in the future” and to serve “as an example to others that such conduct would not be tolerated.”

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On March 15, 2007, Tollison took the papers to file at the Lafayette County courthouse, across the street from his firm. He also carried a one-page attachment he had prepared in advance. That page contained an “order” to put the lawsuit under seal for four days, giving Tollison authority either to unseal the complaint by the afternoon of March 19 or to dismiss it altogether. On the single sheet, Tollison had left blank places for a docket number, a date, and a signature by a circuit court judge.

He encountered Judge Henry Lackey at the circuit clerk’s office. As one of only three judges in the district, Lackey was well known to members of the bar in Oxford. Tollison’s relationship with the judge was cordial, but not close. Because of the informality of the court system, Tollison effectively chose Lackey to preside over the Jones case when he asked him to sign the document sealing Jones’s complaint. Tollison explained that the lawsuit contained derogatory comments about lawyers and suggested that it might best be kept secret from the public. As Lackey would describe it later, Tollison told him “he hated to hang out our dirty wash in public.”

In Mississippi, where judges are short-staffed, it is not unusual for attorneys to prepare an order for a judge to sign—if the language is satisfactory. But in this case, the order given to Lackey provided Tollison with a trigger to use against Scruggs and his co-defendants: the threat that the complaint would be made public in four days.

Lackey signed the order. It was the first time he had ever put a case under seal.

With the judge’s order in hand, Tollison unleashed a parallel action. He sent the Scruggs office a copy of Jones’s suit along with a two-paragraph letter. “The complaint is currently under seal by order of the court at our request as a courtesy to you,” Tollison wrote. “Unless this matter can be resolved by Monday, March 19, at 4:30 p.m., we will move the court to unseal the complaint and will move forward.”

Scruggs recognized Tollison’s ploy immediately upon reading the letter. It represented the same kind of threat Scruggs had used during litigation many times himself. With such a tactic Scruggs, drawing on his many contacts with the press, was able to ensure that unfavorable publicity fell upon his adversaries when they refused to come to a settlement.

Unless he agreed to settle the Jones case, Scruggs knew his own name would be sullied this time. Well aware of Tollison’s growing antipathy toward him, Scruggs simply ignored the letter.

The next move was Tollison’s. On the morning of March 28, an
article by the Associated Press appeared in
The Clarion-Ledger
, a Jackson newspaper that circulated throughout the state. Under a bold headline, the story began: “A Jackson law firm has sued millionaire trial attorney Richard Scruggs for allegedly withholding money it claims it was owed for working on Hurricane Katrina insurance-related litigation.”

O
n the same day that the Associated Press article on the Jones lawsuit appeared, Steve Patterson and Tim Balducci showed up, unannounced, at the Scruggs Law Firm. The pair had completed their break with Joey Langston and were trying to build a caseload that would sustain their new firm. To show they were serious, they intended to establish an Oxford branch, renting a small office once used by Scruggs on the square. But Patterson and Balducci said they had come to see Scruggs about another matter: a product liability case in Kentucky that involved defective masks for coal miners.

Through Patterson’s political contacts, their new firm had landed a piece of the legal action with lawyers planning to file suit on behalf of the Commonwealth of Kentucky. Patterson and Balducci believed it would enhance their standing if Scruggs joined them, for his role in the tobacco wars was well known in Kentucky. Scruggs had already made one trip to Kentucky with Patterson to get a feel for the case.

When Patterson and his partner arrived in the reception area of Scruggs’s firm that Wednesday morning, there seemed nothing unusual about setting up an impromptu meeting. The two men were frequent visitors to the office. They gathered around a long table in a conference room with Scruggs, Zach, and Sid Backstrom, and their talk eventually turned to the issue featured in
The Clarion-Ledger
that morning.

The conversation changed forever the lives of those five men.

After disposing of questions about the Kentucky case, Patterson spoke up: “By the way, I saw where that bullshit lawsuit of Grady Tollison’s got assigned to Henry Lackey. Y’all need to hire Tim. Nobody has a better relationship with Henry Lackey than Tim. He’s like a son to him.” Balducci nodded in agreement.

Zach liked the idea. Although another Oxford firm was already representing Scruggs, he proposed hiring Balducci as an additional attorney of record in the case.

Balducci responded that it would not be necessary to retain him formally. “Let me just go and talk to the judge. Let him know I’m on the case. I have to go down there anyway. We’ll see what the judge says.”

Everyone at the conference table agreed on the plan. Balducci would ask the judge, as a personal favor, to send the case to arbitration. Though no one asked Balducci to offer anything to Judge Lackey, there was an underlying recognition that his mission was unethical. He had been asked to make a request, outside the court, to a judge to issue a favorable ruling for Scruggs. It is a practice known by an archaic term: earwigging. And Balducci knew he risked the loss of his law license by doing it.

    
Despite that possibility, Balducci telephoned Judge Lackey and asked if he could drive down to Calhoun City to see him. The older man was fond of the young lawyer, and he agreed to a meeting that afternoon. Lackey seemed to be a sympathetic figure. He had helped Balducci through some rough patches early in his legal career. But he was curious about Balducci’s urgency. He wondered if Balducci’s law practice was struggling, if he might be seeking more public defender cases to augment his income.

Lackey had the appearance of a fatherly country judge. With his shock of white hair, soft drawl, and courtly manners, he seemed eminently approachable—on any legitimate matter. But there was nothing in his background to indicate that he would be amenable to a bit of judicial chicanery.

For virtually all of his seventy-two years, Lackey had lived in Calhoun City, which really wasn’t a city at all, but an out-of-the-way town with a population of about eighteen hundred. Only forty miles lay between Oxford and Calhoun City, but the two were worlds apart. The little town’s most distinctive feature is a humble square, which motorists on State Highway 9 must circumnavigate. Lackey was born there, left to attend Mississippi College, then returned to help run his
family’s Ben Franklin dime store. Several years later, he enrolled in the Ole Miss law school and received a degree in 1966.

Like most of the residents of Calhoun City—which was named for the ninetieth-century South Carolina demagogue John C. Calhoun—Lackey was a religious man and a conservative.
He described himself as a “deepwater Baptist” and served as a deacon in the local Baptist church. He also followed state politics closely and was one of the early Republican converts in the days when Democrats were held responsible for civil rights legislation and the GOP became a refuge for disaffected white Southern voters.

After a quiet career as a small-town lawyer, Lackey was appointed circuit judge in 1993 to fill a vacancy by Governor Kirk Fordice. He won subsequent elections without opposition and had served on the bench ever since, presiding over criminal and civil cases.
He handled a couple of trials that attracted press attention. One involved a lawsuit against the University of Mississippi brought by a former football coach, Billy “Dog” Brewer. A couple of Lackey’s rulings struck the Ole Miss lawyers as strange. He disallowed evidence submitted by the school to support its decision to fire Brewer for committing NCAA violations. Though Brewer’s dismissal was based on interviews with individuals familiar with the football program, the judge disallowed the material as hearsay. Later, Lackey instructed the jury that a burden of proof rested on the defendant, Ole Miss, rather than the plaintiff. Brewer claimed vindication when he won a $250,000 judgment.

But publicity and controversy rarely followed Judge Lackey. In short, Henry Lackey hardly fit the profile for a man who might dispense an illicit favor for Dick Scruggs.

    
Lackey seemed jolly as he ushered his young friend into his personal office. He called his visitor Tim. Respectfully, Balducci addressed him as Judge. Lackey inquired about Balducci’s twins, and after other pleasantries, he learned that Balducci had left the Langston firm to start a practice in New Albany.

After a few minutes, Balducci got to the point. “Judge, I want to tell you the main reason why I came down here. While I was practicing with Joey Langston I made some mighty good friends, and I made some mighty good money practicing with them.” The “friends,” he explained, were the members of the Scruggs Katrina Group. And now they were under attack in a lawsuit before Judge Lackey. “Some scurrilous allegations” had been made against them in the case that Grady Tollison had
filed, Balducci said, and his friends were being unfairly abused. “I only want them to be treated properly,” he said, and suggested that Judge Lackey could accomplish this by disposing of some of the worst allegations in a summary judgment and sending the remainder of the case to arbitration.

Balducci acknowledged that he had “an interest in the outcome” of the case, even though he was not officially representing Scruggs. If Lackey would be willing to rule favorably, he said, it would “be an advantage to me,” implying that it would set Balducci in good stead with Scruggs.

When Balducci mentioned Scruggs’s name, he set off a soundless electric charge in the room. In recent years, few names had been more frequently mentioned in legal circles than Scruggs, and the judge could hardly believe it had come up in this context.

Dickie Scruggs was the very antithesis of Henry Lackey. Scruggs was known as the primary benefactor of the Democratic Party in the state; Lackey was a staunch Republican. Scruggs exuded wealth and fame; Lackey lived a middle-class existence and served in relative obscurity. Scruggs was cosmopolitan; Lackey was country. Although Scruggs lived only a few miles away, the judge had never met the man. Yet there was something distasteful about him. Lackey considered Scruggs a ruthless man who threw his weight around.

One example leaped quickly to mind, concerning Lackey’s friend George Dale, the state insurance commissioner. Lackey and Dale had served on the board of trustees of Mississippi College.
In the Baptist fashion, Lackey referred to him as “Brother Dale.” At the time, Dale was the target of a campaign by Scruggs to drive the insurance commissioner from office. The judge thought it outrageous.
Only three days before, the Scruggs Katrina Group had bought full-page advertisements in Mississippi newspapers to ridicule Dale, who was up for reelection later in the year. The ads had gone beyond the bounds of normal criticism, resorting to an ugly caricature of Dale branded with pink lips and a slogan, “Lipstick on a Pig.”

And now Scruggs had the temerity to send an emissary, the judge’s own protégé, to fix a case.

    
Before he left Lackey’s office, Balducci put out another idea. For their new firm, Patterson and Balducci were hiring older lawyers—some had held public office as judges or prosecutors—to act “of counsel.” Their names would be listed on the firm’s letterhead to give it
weight. Balducci told Lackey that when the judge decided to step down from the bench, the firm would be honored to enlist him in that capacity.

As he sorted out the conversation later, Lackey concluded that the offer of the “of counsel” position represented the quid pro quo necessary to make Balducci’s visit a crime.

Baffled and offended, the judge felt ill after the meeting. A couple of days later, he happened to see Kent Smith, a lawyer who had once practiced with Balducci. Lackey told Smith about the visit and asked, “What kind of character flaw do you think I have exhibited that would make Tim believe I would do something like this?”

Lackey felt he needed to talk with others. He called a fellow judge, Andy Howorth, who happened to be one of Johnny Jones’s closest friends. Howorth encouraged Lackey to report the overture to authorities. Lackey also discussed the situation with Lon Stallings, a local assistant district attorney. Stallings said his office did not have the capability to pursue the case properly. Stallings also said there might be a problem in taking it to the next level, the state attorney general’s office, because he understood Attorney General Jim Hood had been threatened with defeat in the 2007 election unless he sided with Scruggs in connection with SKG’s State Farm case.