Recent developments in the Mississippi wind vs. flood case and statements by attorney Richard “Dickie” Scruggs about having information from one or more whistleblowers are serious allegations and he should be challenged to “put up or shut up,” Bill Bailey, director of the Insurance Information Institute told Insurance Journal.
“If you can get away with making those kinds of allegations, and if nobody slaps you down, you are encouraged to do it again,” Bailey said. “I just wish someone would step up to the plate and say, look, I want to see the evidence. If you don’t want to give it to us under a subpoena we issued, then we are going to ask the court for a hearing and ask for an in camera hearing in chambers to smoke out the truth and veracity of the horrible allegations you are making.'”
Scruggs alleges that one company, and maybe others participated in illegal and immoral activities. “Is this something he is alleging the entire industry did as a practice, which is an incredible thought?” Bailey asked. “He is painting the insurance industry with a big brush and I’m not sure that is paint in the bucket. We have to look around and see if there are any bulls in the pasture.”
“The statement that whistleblowers are going to reveal that there was scurrilous conduct on the part of the insurance companies or by the entire industry, is just, unbelievable,” Bailey said. “I don’t care if you criticize me because you do not have to agree with me, but you shouldn’t say things about me and my integrity. Scruggs has gone too far. My attitude would be, I’ll meet you on the court house steps, you either put up, or shut up, or I’ll go into the court house and ask the judge to order you into court.”
“I hope that one of the parties to the action will go to the judge and insist on a subpoena in which Scruggs will have to come forward and not only name his whistleblower, but bring him, or if there is more than one, bring them with him to the court and have the court interrogate them in chambers,” Bailey said. “I don’t think that they should for a single moment go forward on this case without having Scruggs present for the trial court and judge the evidence he claims.”
Bailey said statements by Scruggs could reflect the way he may decide to try his case.
“The way it looks,” Bailey said, “facts shouldn’t get in the way of an argument that will get people riled up and incensed. If the allegations prove later not to be true at all many people will forget that and only remember the allegations.”
Bailey said Scruggs is using human psychology to play on people’s fears. He has been saying the testimony of a whistleblower, who is an insider, will prove that insurance companies have committed illegal and immoral activities.
On the topic of the whistleblower allegations, Bailey recalls a talk he had with Scruggs last December. Bailey says Scruggs commented that this case was going to try out in just the same way as the tobacco case did.
“I should have smelled something then,” Bailey said. “I couldn’t believe this was about a whistleblower.”
“First of all, the allegations make absolutely no sense,” Bailey explained. “It is highly offensive to say that companies of this size and stature, which have been in business for this long, are engaging in such debasing activities as going around and intimidating engineers to change their reports.
“If I were an engineer, I would have put a wire around my neck with a transmitter and let the police listen in,” Bailey said. “It is interesting to note this is coming from Dickie Scruggs, who is probably harkening back to his use of the whistleblower in the tobacco case seven or eight years ago.”
State vs. federal jurisdiction
Bailey said the decision to return the case to a state court is strictly a jurisdiction opinion. “It has nothing to do with the merits of the case. It will be tried in the state court and I do not think any of the parties think the case will be tried any different in the state court.”
Mississippi Attorney General Jim Hood has said that if the case goes back to state court, he can win hands-down because all of the judges in the state court have had property damaged by Hurricane Katrina.
“You talk about a comment that goes way outside the pale,” Bailey said. “Hood is saying that Mississippi judges will rule in his favor automatically, without even looking at the contracts.
“If I were a judge in Mississippi, I would be highly incensed at the comments Scruggs has made about the forum,” Bailey said. “The reason for having the cases tried in federal court is because the National Flood Plain Management Program is a federally-funded program, but the judge did not see it that way.”
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