The Fall of the House of Zeus

by Curtis Wilkie

  The contentions by Wilson and Luckey that Scruggs had cheated them became the first public accusations that Scruggs had a tendency to shortchange his associates. Over the years, Scruggs would become the subject of numerous lawsuits and quarrels involving the distribution of funds and the methods he used to get reimbursements for expenses. In some cases, he wound up alienating former partners. Along the way, he developed enemies who nurtured their hatred of him with the dedication of biologists cultivating a strain of poison to eradicate pests.

  Though it seemed relatively insignificant at the time, Luckey’s claim would escalate with each passing year. So would Wilson’s demands, especially after Scruggs grew richer from tobacco litigation. Scruggs’s former partners argued that he had used money that was rightfully theirs to help finance his tobacco initiative. As a result, they said, they were entitled to a piece of the tobacco spoils.

  The lawsuits got uglier. In one affidavit, Mitchell Tyner, a former associate of Wilson’s, testified that he overheard Wilson and Luckey conspiring against Scruggs in 1993, when they decided to retain a hard-nosed trial lawyer, Charlie Merkel, to represent them. Wilson fought back with a legal complaint charging that Tyner and Scruggs had a “secret financial arrangement” to obtain “confidential proprietary information” about Wilson’s new firm.

  While Scruggs’s legal battles with Wilson and Luckey degenerated into a mess of lawsuits, the acrimony escalated into clashes involving millions of dollars.

  At the time the legal challenges arose, however, they seemed only a minor irritant to the good life Scruggs was enjoying.

  Even though Scruggs had assured himself of enough wealth to retire and settle nicely into middle age, he remained restless for new challenges.

  He followed developments in a heavily publicized lawsuit in North Mississippi against American Tobacco Company. Don Barrett, the lawyer who had outmaneuvered Scruggs early in the latter’s career in the trial involving the electric company, was representing the family of a man whose death from lung cancer was blamed on cigarettes. The first trial, which took place in 1988 in Barrett’s hometown in Holmes County, ended with a divided jury. After a mistrial was declared, Barrett was stunned. The cancer victim, Nathan Horton, was a local black man, and the trial had taken place in a predominantly black county. Barrett had felt he held home court advantage.

  Though the tobacco industry declared victory, Barrett was unwilling to drop the case. Especially after his firm had been contacted by a local businessman who had been hired by American Tobacco as a “jury consultant.” In a call tape-recorded without his knowledge, the businessman told Barrett’s brother how the tobacco industry had influenced the jury through payments to friends and relatives of the jurors.

  To rig the jury, Barrett later charged, tobacco interests paid fifty dollars an hour to local black leaders to serve as “consultants.” They were expected to sit in the courtroom on the side of American Tobacco and to make nightly calls to the jurors’ homes. African American churches were blessed with sudden gifts. In one instance, the cousin of a juror was freed from jail, with bail money provided by the tobacco representatives; he appeared in court the next day, sitting with the tobacco “consultants.”

  Barrett and other trial lawyers in Mississippi realized that if they challenged Big Tobacco, they were confronted with an enemy willing to pay a heavy price and committed to any technique short of outright bribery to fight off the litigation.

  In 1990, shortly before the second trial was to start, courthouse officials discovered that a metal box containing the names of prospective jurors had been forced open overnight, with papers strewn on the floor. But it took a pretrial publicity kit circulated in the black community by Barrett’s firm to force a change in venue. The packet of material included comments by Louis Sullivan, a black member of President George H. W. Bush’s cabinet, criticizing “unworthy efforts of the tobacco merchants to earn profits at the expense and well-being of poor and minority citizens.”

  The trial was shifted to Oxford. After three weeks, a jury required only six hours to render a verdict. American Tobacco was found liable for Horton’s death, but no financial award was given to the plaintiffs. Afterward, jurors said they were not inclined to reward Horton’s family because it had been his choice to smoke the fatal cigarettes.

  If a successful assault was to be made against tobacco, new strategies were needed. Three years later, an idea emerged from the mind of a Mississippi Delta lawyer, Mike Lewis.

  The mother of Lewis’s secretary was dying in a Memphis hospital. After visiting her and seeing how this forty-nine-year-old woman—once a three-pack-a-day smoker—had been ravaged by illness, Lewis grew angry. The long hospitalization had exhausted her medical insurance and now was sapping her family’s resources. To pay her bills, she had to turn to Medicaid, a government program offering health coverage for the indigent. Before she would die, it would cost the state and federal governments more than $1 million.

  Ending a visit with her one day, Lewis, who had come to loathe the tobacco industry, had a thought before the hospital elevator reached the ground floor: If the lawsuits against tobacco failed because the plaintiffs had chosen to smoke, why not sue in the name of the state, which was forced to pay medical bills for heavy smokers through its Medicaid program?

  After discussing his concept with his wife, Pauline, who practiced law with him, Lewis decided to call the state’s attorney general, Mike Moore. Though the Lewises had both attended law school with Moore at Ole Miss, they were not sure he would be receptive. They were pleased when the attorney general liked the idea and asked to hear more. In a few days, the Lewises went to Jackson to elaborate on the unorthodox proposal to use the state of Mississippi as a plaintiff to recover costs the public had borne because of tobacco-related health problems. After hearing more details, Moore became enthusiastic and encouraged them to run the theory past Dick Scruggs, another law school classmate.

  Scruggs was found in Greenville, a river city in the Delta, assisting Barrett in yet another losing battle with tobacco. This time a jury would reject the suit against American Tobacco on the grounds that the victim’s death was unrelated to smoking.

  But before Scruggs and Barrett suffered another disappointment, they met with Mike and Pauline Lewis in a room in an undistinguished highway hotel after a court session. Scruggs and Barrett were still charged with adrenaline from their courtroom clashes with the tobacco lawyers, and they became even more energized as Lewis explained his concept that provided a legal basis for an attack on tobacco in the name of the state of Mississippi. All four lawyers left the meeting with a fresh sense of resolve, united in an initiative that would eventually lead to unimagined riches for all of them. But within a few years, their personal bond was destined to be broken.

  A few months later, in October 1993, Scruggs invited a small group of trial lawyers to a meeting in New Orleans to consider early steps in the offensive. With Moore’s approval, Scruggs had become the de facto leader of the group, a role he enjoyed because he liked to assemble teams to brainstorm critical litigation. And the tobacco wars were so imposing that the effort would require legal and financial contributions from a number of players.

  Scruggs and Moore were seeking commitments of support, but they also wanted to discuss strategy. On the agenda for the meeting in a private conference room at the Royal Sonesta Hotel in the French Quarter was a presentation by a man unknown to most of the lawyers: Dick Morris. Scruggs knew him as an innovative political consultant and pollster whose clients included President Clinton and Trent Lott.

  A political switch-hitter, Morris had been involved in Lott’s 1988 campaign to win a Senate seat and had helped defuse the populist attacks of Lott’s Democratic opponent Wayne Dowdy. The Democrat had a mantra that he bellowed at every stop in the pronounced drawl of South Mississippi: “Ah wanna mess up his hair!” Lott prided himself on his appearance, and every hair on his head seemed held in place by lacquer. Morris advised Lott to loosen his imag
e and accentuate his blue-collar background with a series of television spots. Lott’s campaign succeeded.

  Scruggs respected Morris’s track record, so he hired him to conduct surveys in four separate counties in Mississippi to determine a site to file the suit against Big Tobacco. Unfortunately for the group, Morris reported that none of the locales seemed sympathetic to their issue. Opinion was sharply divided among potential jurors over the merits of the case. Even though a majority of the respondents expressed a favorable view of the state’s position, it would not be enough to win over three fourths of the members of a jury, the number needed for a successful verdict in civil cases.

  The Mississippi lawyers were discouraged by Morris’s report, but undeterred in their determination to follow through with a lawsuit somewhere.

  Scruggs had invited several Gulf Coast lawyers with experience in asbestos cases to the 1993 exploratory meeting, but he also included two Jackson lawyers who were quiet forces in the Democratic Party in Mississsippi, Danny Cupit and Crymes Pittman. Both men had been helpful in extricating Scruggs from his dilemma over asbestos contingency fees in 1992, and Scruggs saw this as a way of repaying them for that assistance.

  Driving back to Jackson that evening, Cupit and Pittman talked about the wisdom of investing in the tobacco case. Cupit, already wealthy from his own asbestos lawsuits, was dubious. It was a risky endeavor. The tobacco industry appeared too powerful an adversary for a handful of Mississippi lawyers.

  But Pittman was intrigued by the proposal. His mother, a smoker, had died from lung cancer. He thought it would be worth the investment to take up the fight against the tobacco companies.

  “I’m in,” he announced to Cupit.

  “I think it’s a harebrained idea,” Cupit replied. “It doesn’t have a chance of succeeding.”

  In casting about for favorable venues, several of the lawyers visited Smith County, a backcountry outpost southeast of Jackson with a reputation for producing fine hunting dogs and delicious watermelons. Outside Mississippi, Smith County was known, if at all, as the home of the National Tobacco Spitting Contest. The irony was not lost on Scruggs.

  There were other factors that made Smith County attractive. The jurisdiction was effectively ruled by Eugene Tullos, a lawyer in Raleigh, the county seat. Smith County was one of those places where one man could wield disproportionate authority without holding public office. Tullos got his law degree at Ole Miss while Scruggs was an undergraduate, and in the three decades since that time, he had built a power base appreciated by attorneys around the state. Crymes Pittman, who had family ties to Smith County, liked to try cases there. With a predominantly white, working-class farming population, the county’s jury pools were invariably filled with men and women who could be expected to side with underdog plaintiffs in lawsuits against business interests. And it was especially helpful to plaintiff lawyers if Tullos made it known that he supported their case.

  Scruggs and Don Barrett had not forgotten the lessons learned in Holmes County a few years earlier, when Big Tobacco bought the jurors’ goodwill. In Smith County, however, it would be possible to deliver a preemptive strike. Scruggs talked with Tullos and felt he had laid the groundwork for a suit there. The trial lawyers would take the tactics used by Big Tobacco in Holmes County and turn it on them elsewhere. By bringing Tullos into his fold, Smith County would be wired for the plaintiffs before the tobacco interests could move in with big money and consultant fees.

  But the Smith County gambit died after the plan was revealed to Mike Moore. After listening to Scruggs and the other lawyers outline the proposal, Moore balked at the chosen venue. He told them, “Gentlemen, the attorney general of Mississippi isn’t going to do this.”

  Despite his misgivings about Smith County, Moore did not lose enthusiasm for the tobacco offensive. He convened regular meetings in his office, and the number of interested lawyers was whittled down to a dozen or so. The group knew they faced a deadline to file their suit before June 30, 1994, when a new state law would take effect that would have a negative impact on their claim.

  They also realized the venture would require a private financial commitment. To finance the project, they calculated that a 10 percent stake in the Mississippi lawsuit would require an investment of $30,000 a year until the litigation was completed. If they lost the suit, the financial cost would be significant for each of them.

  Nothing was certain about the litigation, and to buck up their spirits, the attorney general employed a motivational tactic. Moore emulated a nineteenth-century performance by Col. William Travis, the commander of Texas troops at the Alamo, who drew a line in the sand of the besieged garrison and called upon his followers to step across it if they were willing to fight on. With his foot, Moore drew a figurative line in the blue shag carpet of his office and asked if the lawyers in his group were truly dedicated to the fight. The lawyers in the room grinned at Moore’s act, but pledged their support.

  As they plotted into 1994, word of the plan to use Mississippi’s Medicaid program as the fulcrum for their lawsuit spread among politicians in the state, and it did not meet with unanimous approval.

  One day, as Scruggs and Barrett conferred with Moore, the attorney general paused to take a telephone call from Charlie Capps, a legislator from Bolivar County. During his political career, Capps had progressed from serving as sheriff during the civil rights era to the chairmanship of the House Appropriations Committee. He was a legacy of the school of Delta politicians affiliated with Jim Eastland, and over the years he had ascended through that network to a position of power.

  Capps had thirty years’ seniority, in age and public office, over Moore, so he had no reluctance to deliver a blunt message to the attorney general. As Capps spoke, Moore thought to share the conversation with his guests. He put Capps’s diatribe on speakerphone.

  “I want you to know that the state is not going to pay for a single telephone call,” Capps sputtered. “The state is not going to pay for a single pencil. Not even a sheet of notepaper will be paid by the state for this doomed lawsuit.”

  After Capps had hung up, Moore looked at his group. “Okay, guys,” he said, “You can see how much help we’re going to get from the state.”

  Scruggs reflected on the situation. The dark side of the Force is going to screw us again, he thought. The old network, in which his own brother-in-law had become an integral part, was still capable of gumming up the works. With tens of thousands of black voters now enfranchised, the old guard no longer held total control of the state, but they could thwart progressive legislation, defeat political adversaries in many places, and throw up obstacles to initiatives such as the anti-tobacco lawsuit.

  Scruggs called P. L. Blake and told him, “We don’t want a rear-guard attack by this group.” He promised to pay Blake “to keep his eyes and ears open.”

  For good measure, Scruggs called Steve Patterson, who had become a political connection for him after Blake brought them together two years earlier. Scruggs wanted Patterson to stay on top of things, to serve as a back channel, passing on information quietly. Between Blake and Patterson, two major operatives in the “Force,” Scruggs believed he could be assured of advance warning of attacks, and of some measure of protection.

  Because of his experience as a “special assistant attorney general” in the asbestos cases, Scruggs knew of one vulnerability that needed fixing. He asked Blake to find someone to take care of a bit of legislative legerdemain. Blake said he knew the man for the job: Pete Johnson.

  While men such as Blake wormed their way into Eastland’s political network, Pete Johnson was born into it. He was a grandson of Governor Paul B. Johnson, who appointed Eastland to a vacant Senate seat in 1942, and the nephew of another governor, “Little Paul” Johnson, Jr., who served for one term in the 1960s, while Eastland was at the peak of his power.

  Pete Johnson had run for Congress twice, unsuccessfully, in a predominantly black Delta district, but he used his ties to his family’s politica
l organization to win election as state auditor in 1987. Of course, he knew P. L. Blake. Anyone active in politics in the Delta knew Blake and understood that he had behind-the-scenes influence. In the post-Watergate period, Johnson referred to him as “Mississippi’s Deep Throat,” because Blake operated in the shadows and seemed to know so much.

  In March 1994, a couple of years after an unsuccessful bid to follow his relatives as governor, Johnson got a call from Blake. By this time, Johnson had switched parties and become a Republican. No matter. Most of the old guard had gone over to the GOP, too, and Blake was now closely allied with Trent Lott.

  “Dickie needs your help,” Blake told Johnson. Scruggs wanted to draw on Johnson’s experience as state auditor and his contacts in the legislature to arrange passage of an amendment that would eliminate the problem that had exposed him to indictment in 1992. He wanted to be sure that future contingency fees for lawyers representing the state would be legal. “Are you willing to talk to him?” Blake asked.

  “Sure,” Johnson replied. Not only had he known Scruggs as an undergraduate at Ole Miss, but Johnson was married to Scruggs’s cousin.

  Blake drove Johnson to a rendezvous with Scruggs at a restaurant at the Jackson airport. On the way, he told Johnson that the Pascagoula lawyer was willing to pay him a $10,000-a-month retainer.

  After Johnson sat down with Scruggs, he was told of the plans for the Medicaid initiative on behalf of the state. The lawyers who took part in the action against tobacco, Scruggs said, needed Johnson to determine what changes were necessary in state law to ensure that they could be paid contingency fees.

  Johnson was glad to be involved in the effort, and he left the meeting with the impression that Scruggs had promised him a $5,000-a-month retainer for two years—less than Blake mentioned, but a nice bonus nonetheless. More alluring, Johnson believed, was a cut of Scruggs’s share in any settlement Mississippi might get out of the litigation. Afterward, he would swear that Scruggs had given him assurances of 10 percent, a figure that would eventually amount to a king’s ransom.