The Fall of the House of Zeus

by Curtis Wilkie

  Another nice thought, Scruggs said. But there was no time to put together such a grand trip on such short notice. They would talk about it again, he said, when Deloach returned.

  A few days later, on the morning of Saturday, August 27, Scruggs received a telephone call from Pascagoula telling him that his mother had died. Helen Scruggs had been in failing health for some time, and bedridden at her home, a couple of blocks from Scruggs’s beachfront house, since suffering a bad fall. Still, the news came as a shock to her only child.

  Dick, more heavily medicated than usual, and Diane flew to the coast, where they were joined by Zach and Amy, who had been in nearby Gulfport for a wedding. Their duties were sad ones as they prepared funeral arrangements. By contrast, the late summer day was glorious, with clear skies and little wind, weekend weather that ordinarily lured thousands to frolic in the gulf waters. But something ominous was out there, beyond the Mississippi Sound and the barrier islands.

  The storm was already hurricane-strength and had been given a name: Katrina. Its course was unpredictable, but projections pointed it toward New Orleans, one hundred miles to the west. Landfall was two days away, but close enough for apprehension. Pascagoula had endured great hurricanes before: Camille in 1969 and killers before the weather service designated names for the storms. The Mississippi coastline was regularly battered by seasonal blows, so residents knew to keep their vigilance.

  Early Sunday morning, Scruggs woke his son. “This thing’s heading our way. We’ve got to board up.”

  A look at television news confirmed his report. On the screen, Katrina had grown into a monster, a spinning red mass that seemed to occupy much of the gulf between the west coast of Florida and New Orleans. The Scruggses, accustomed to the drill over the years, began to gather portable items of value—pictures and antiques—and moved them to Helen’s home, a comfortable ranch house. It was built close to the ground, but high water had never gone that far inland in previous storms. At the Scruggses’ house, furniture was moved upstairs or away from windows. Storm shutters were sealed, and sandbags placed at the foot of doors. They pitched outdoor furniture into the water of the swimming pool to prevent the deck chairs and chaise lounges from being blown away.

  A visitation in Pascagoula to mourn Helen’s passing was canceled. Her body was sent ahead to her family’s old home in Brookhaven, a two-hour drive north. She had wanted to be buried there, and services would be rescheduled once the storm had passed.

  By noon, Pascagoula was under an evacuation order. Scruggs learned he had until 2:00 p.m. to leave. At that time the airport would be closed, and his plane would be grounded. Moving quickly, the Scruggses fit themselves and as many friends as they could into the jet and were airborne for Oxford.

  Shortly before dawn on Monday, Katrina struck land in the marshy bayou country south of New Orleans, near the mouth of the Mississippi River, then caromed toward the Mississippi coastline like a billiard ball. By that point, those who had fled their homes and those who had stayed could do nothing other than hope.

  Scruggs followed the situation from his home in Oxford, depending on television and sporadic cell phone calls from friends and family members who had stayed behind. First came word that Trent Lott’s lovely beachfront home, less than a mile from Scruggs’s place, was gone. Then it was the home of their good friends and neighbors the Bosios: gone. The home of Diane’s brother, Perry Thompson: gone. Then Scruggs’s own home: parts of it still standing, but basically, gone.

  Unsatisfied with its carnage on the coast, Katrina came churning inland, crippling the city of Hattiesburg, ninety miles north of Pascagoula, and then wiping out trees and electricity in Jackson, nearly two hundred miles from the coast. To Scruggs, the storm seemed to be chasing him. Still not spent, Katrina struck Oxford at nightfall, uprooting towering old oaks and forcing many residents to resort to candlelight. For emphasis, a tree fell on a guest house at Zach and Amy Scruggs’s home.

  Two days after Katrina, Scruggs obtained permission to fly his family south for his mother’s graveside service in Brookhaven, where heavy debris—felled trees and sheets of corrugated tin—lay scattered throughout the town. A small group gathered at the cemetery, members of the Furlow family and a few close friends. Scruggs was too emotional to speak. Instead, Zach spoke for the family.

  Afterward, they reboarded Scruggs’s jet and flew into Pascagoula, where Zach had left his car behind at the airport. The scene resembled a war zone. Helicopter rotors beat noisily in the air, and armed guards were posted at intervals on the way into town.

  They found the devastation they anticipated along the beach, but realized the damage went much deeper into Pascagoula. Helen’s house, which had remained dry through previous storms, had taken on five feet of water in the surge, and it reeked with the smell of decay—dead fish and animals. After hearing reports of looting, Dick and Zach armed themselves with handguns and shotguns and went about salvaging what was left in their homes. Mud caked Helen’s place. At Scruggs’s home, damage was much worse. Two wings of the mansion, as well as a guest house and small gym in the rear, had been washed away.

  As he picked through the wreckage along the coastline, Scruggs encountered many old friends faced with a similar task. Their mutual plight pulled him, spiritually, back to Pascagoula.

  He began a ritual that he carried out daily for several weeks. Each morning he loaded his plane in Oxford with provisions for the survivors and flew to Pascagoula with food and cases of bottled water and beer. Seeing the need for generators, he bought out the supply at the Oxford Wal-Mart and ferried them to Pascagoula for distribution. Sometimes Scruggs used both his nine-seat Citation and the more spacious Gulfstream; when he did, he flew as co-pilot because he had only three pilots on his payroll. He became a one-man relief agency, and the little Pascagoula airport, named Trent Lott International, took on the appearance of a third world waystop as people clambered around the planes to get the goods Scruggs was handing out. Each evening, he returned to Oxford, sometimes overloading his planes with passengers who wanted to flee the scene.

  The work made him manic. One morning, when he was told that the Gulf Coast air space was off limits because of a visit by Vice-President Dick Cheney, Scruggs told his pilots, “Fuck ’em. We’re flying in. They can shoot us down if they want to.”

  His obsession intensified after some of the Katrina victims told him in early September that insurance companies were already denying their claims for the loss of their homes. Citing fine print in the complicated policies, representatives of the insurance companies pointed out that coverage existed for wind but not for water. And much of the coastal damage was being attributed to the storm surge.

  Just when he had contemplated retirement, a new cause had come to him, a new target, one even more vast and powerful than the tobacco industry, one of America’s giants: the insurance industry. Scruggs felt energized again. His appraisal of the insurers mirrored his attitude toward the ban on use of Dick Cheney’s air space. Fuck ’em. We’re flying in.

  He would see them in court. And he would forge another alliance, just as he had done to carry out his wars on asbestos and tobacco. To combat the insurance industry, he would create a new entity, and this time he would give it his name and that of one of the greatest natural disasters in the history of the country. He would call it the Scruggs Katrina Group.

  CHAPTER 10

  To form his new attack group, Scruggs called on his comrade from the tobacco battles, Don Barrett, and the man who financed much of that initiative, David Nutt. He also invited a couple of new faces into the venture. One of them was Johnny Jones, a Jackson lawyer who had served on Scruggs’s defense team during the Luckey trial.

  Jones charmed his way into the group with a beguiling email to Scruggs less than three weeks after the storm: “Cupit tells me that you guys are getting together a class action or other consolidated action against insurance carriers for denying claims for Katrina damage. He tells me that he attended a meeting with y
ou guys on that topic. I told him I knew he was lying since I knew you guys would call me if you were looking for a real lawyer in Jackson … Do you want to get mixed up in more litigation with overweight and overpaid lawyers? … Cupit? Say it ain’t so.” He signed it simply, “Johnny.”

  Jones’s swipe at Danny Cupit, his old friend, was good-natured, but it succeeded in winning him a position in the unit Scruggs was developing.

  Papers formalizing the Scruggs Katrina Group were drawn up within two months, with Nutt’s firm putting up the first $1 million to handle expenses for the organization. SKG began to attract clients through advertisements and word of mouth, and before long a map of the Gulf Coast in Scruggs’s office was decorated with pushpins representing the properties of hundreds of clients. It looked like an exhibit in a war room.

  Scruggs, as usual, engaged in a bit of freelancing that his partners knew little about. A few months after he targeted the insurance industry, he received a tip concerning some potentially explosive evidence from a friend of his chief secretary, Charlene Bosarge. The source was the mother of Corri and Kerri Rigsby, two sisters who worked as claims adjusters on the Gulf Coast. After learning about “some hanky-panky going on” from her daughters, she told Bosarge, “Dickie needs to know what these girls are doing.” Scruggs met with the mother, then with her daughters, and grew enthusiastic over what they told him. State Farm, they said, had been doctoring reports on Katrina damage in an effort to absolve the company of responsibility. The Rigsby sisters turned over a couple of documents indicating that engineering reports to determine the cause of damage had been changed from “wind” to “water.”

  Scruggs enlisted the sisters, who were working for an Alabama firm that investigated claims for State Farm, to cooperate with him. Over the coming months, he would come into possession of roughly a thousand pages of confidential State Farm files.

  Scruggs excitedly described the women to his associates as “insiders” who were in a position to cripple an adversary in the same way that Merrell Williams and Jeff Wigand had damaged the tobacco industry’s credibility. But he was also mindful of the legal jeopardy involved, and in an attempt to justify his arrangement with the Rigsby sisters, Scruggs hired them as “consultants,” with annual salaries of $150,000 each.

  He employed the documents against State Farm, and to maximize pressure on the insurance company, he had much of the information passed to the U.S. Attorney’s Office for South Mississippi and to the state’s new attorney general, Jim Hood, who was elected in 2003. (After holding the office for sixteen years, Mike Moore had given up his political career to return to private practice.)

  The Rigsby sisters would become central figures in a complex series of lawsuits and countersuits that eventually ensnarled Scruggs in a criminal contempt citation by a federal judge. But not before their evidence helped persuade State Farm to surrender on one set of claims.

  Throughout 2006, the Scruggs Katrina Group fought and negotiated with State Farm before finally reaching a tentative agreement near the end of the year that promised to bring nearly $90 million for a set of clients and another $26.5 million in fees for the five law firms involved in the action.

  But an argument broke out over plans to divide the fees, and two relatively unknown lawyers—who had helped represent Scruggs in the Luckey trial and hoped to build on the association—wound up on opposing sides of the dispute. Johnny Jones and Tim Balducci were both native Mississippians and products of the Ole Miss law school, but had little in common other than a stake in Scruggs. They were separated in age by more than a decade and had contrasting interests and temperaments. Though working in the same profession, they traveled different tracks. Yet each had a critical part in a case that would send tremors across the country’s legal community. In fact, without them the whole drama would never have occurred.

  Jones was bookish and had a background that carried, by Mississippi standards, a whiff of the bohemian life. The product of a freethinking household in Jackson, Jones was one of a handful of white schoolchildren who stayed in the city’s public schools during the desegregation era. His mother taught English at Millsaps College and belonged to a cadre of liberal women who shared with their neighbor, the author Eudora Welty, an interest in literature and an allegiance to the national Democratic Party.

  When schoolbuses filled with new black students pulled up in front of Bailey Junior High, an Art Deco landmark on North State Street, at the beginning of the fall semester in 1970, most of Jones’s classmates withdrew. He felt like a guinea pig, thrown into an unprecedented social experiment. Scores of prominent white Mississippians had passed through the corridors of Bailey over the years; suddenly Jones found himself in a distinct minority at the school.

  A few blocks away, at the socially fashionable First Presbyterian Church, plans for a private, alternative school, Jackson Prep, were drawn up for those who felt dispossessed by the events at Bailey and elsewhere. “First Pres,” as the church was known in Jackson, rivaled the nearby First Baptist Church for power and rigid conservatism. Later, the congregation would lead a breakaway movement from the mainstream denomination and help form the new, theologically right-wing Presbyterian Church of America (PCA).

  Jones and his mother were never part of the religious axis—First Baptist and First Pres—that dominated politics in the state capital. As Episcopalians, they subscribed to the teachings of their own minister, John Jenkins, who encouraged racial reconciliation in a city torn by a decade of sit-ins, Freedom Rides, the assassination of civil rights martyr Medgar Evers, and a police fusillade at Jackson State that killed two black students. The Joneses also admired William Winter, a lay leader at the more progressive Fondren Presbyterian Church. Because Winter’s life would be distinguished by his long struggle to save public schools in Mississippi, it was no coincidence that Jones had been attracted to him for many of the same reasons that had led Scruggs to Winter’s law firm.

  After graduation from Murrah High School, once the seed ground for Ole Miss freshmen and now predominantly black, Jones lasted only a year in Oxford. In Jack Kerouac style, he went on the road. He painted houses in Austin at a time when the Texas capital was a refuge for the outlaw musicians Willie Nelson and Waylon Jennings. He spent a year at Millsaps, then returned to Ole Miss and finally graduated, two years late, in 1977. He went west again, worked a night shift in a canning factory in the Pacific Northwest, spent an obligatory amount of time in San Francisco, and wound up tending bar at Old Faithful Inn in Yellowstone Park. He then drifted back to Mississippi, met his future wife, and settled down.

  His mother’s friends, knowing of his fondness for English and history, got him a job with the state archives. Jones went through a phase that prepared him for a task awaiting him: writing legal briefs. He worked on an oral history project that enabled him to interview some of the state’s literary giants, including Shelby Foote and Walker Percy. The interviews were considered so artful that they were published by the University Press of Mississippi.

  In 1981, Jones and his wife moved to Oxford, where he enrolled in graduate school. Serendipitously, he arrived in the university town around the same time as two legendary Mississippi figures, the literary equivalents of Willie Nelson and Waylon Jennings, wound up there.

  Willie Morris, a native of Yazoo City and author of North Toward Home, had returned from years as an expatriate writer and editor of Harper’s magazine in New York to join the Ole Miss faculty. Barry Hannah, a brilliant craftsman of stories anthologized in many American collections, had also come to Ole Miss, to teach creative writing after losing his tenured position at the University of Alabama for displaying a pistol in class. Heavily fueled by drink, Morris and Hannah were at once friends and rivals, and they spent late hours almost every night in an off-campus coffeehouse with admiring students like Jones serving as their courtiers.

  To put some order in his unfocused life, Jones opted for law school and obtained a degree when he was thirty. Returning to Jackson, he clerked f
or a federal district judge, Tom S. Lee, and worked for a while in Danny Cupit’s firm during the asbestos frenzy.

  He carried on a knockabout practice for years and had no illusions that Scruggs was hiring him for his talent when he was asked in 2004 to join in the defense against Luckey. The case had been transferred at one point to Judge Lee’s jurisdiction, so Scruggs fell back on an old tactic: he retained Jones to make sure his side had a face familiar to the judge.

  Scruggs’s own interests and politics meshed with those of Jones, and the older lawyer enjoyed the younger man’s company. Though Scruggs reacted bitterly over the loss of the Luckey case, Jones had no qualms about inquiring if there might be a place for him in the Scruggs Katrina Group.

  Tim Balducci had also served as a junior member of Scruggs’s defense team in the Luckey case, but he took a route far different from that of Jones to get there. Born in Shelby, a little town in cotton country not far from the Mississippi River, Balducci belonged to a well-known family. Like many others in the area, the Balduccis could be traced to a tribe of Italian immigrants who left Ancona province on the Adriatic Sea a century earlier to settle in the rich farmland of the Mississippi Delta. They labored in agriculture, boasted of their skills in making whiskey—illicit at the time—and served as pioneers in introducing the Catholic Church to the region. As their numbers increased, the Italian Americans became a significant force in the community, producing outstanding athletes and a corps of merchants, physicians, and tradesmen. Balducci’s father was a banker. Though some Old World customs were retained—Shelby had a bocce league—the Italians were effectively assimilated into the local community, and many became Protestants in the process.

  Tim Balducci never strayed far from home. He attended Delta State University, located a few miles from Shelby. After graduation, he went to law school at Ole Miss. His grades were good, and he seemed bright enough, striking some of his classmates as a quick study and eager to learn. Others thought him ingratiating. Once, he approached his instructor in a poverty law class to assure her that the course had been a touchstone for him, revealing truths about the poor that he had missed all his life. She dismissed his comment as arrant bullshit; after all, Balducci had grown up in Bolivar County, where two thirds of the people were black and one third of the population lived below the poverty level.