The Fall of the House of Zeus

by Curtis Wilkie

  In many ways, Balducci was a quintessential good ole boy, a regional description for those who might choose hunting and fishing over books. A law degree did not rule anyone out of the good ole boys’ club. There is nothing inherently antiintellectual about a good ole boy. Plenty of lawyers readily accept the designation. But good ole boys prefer telling jokes and outlandish tales over having serious discussions. Good ole boys dare to be uncouth and poke fun at high manners. They favor informality: Caterpillar caps, blue jeans, and boots. They devote Saturdays to NASCAR rather than the Metropolitan Opera. Despite his Italian surname, Balducci fit right in with the Bubbas.

  Good ole boys are essentially friendly, and Balducci realized that flattery and a willingness to learn from his elders could be tools as he climbed through the legal profession. Following law school, he had a modest practice in a couple of small-town firms in North Mississippi. To augment his income, he worked as a public defender in Oxford and nearby Holly Springs, representing indigents who faced criminal charges.

  During this period, he became acquainted with circuit judge Henry Lackey, who presided over many of the cases. Balducci made the most of the relationship. He called Lackey, who was a generation older, his “mentor” and described their friendship as a warm one. As he said later of Lackey, “He took me in his court, taught me the practice of law from the bench, showed me my mistakes, congratulated me on my successes, counseled me on my failures. We became close friends, not just in a professional sense, but more in a personal sense. I really looked up to him.”

  After attracting attention as a hustler, Balducci was hired in 2000 by Joey Langston to return to the law firm where he’d spent the first year of his career. While Balducci may have thought of Judge Lackey as his mentor, he considered lawyers such as Langston and Dick Scruggs role models.

  At the end of 2006, after the Scruggs Katrina Group’s settlement with State Farm, the lives of Jones and Balducci would take radically different directions.

  For Jones, bad news came in a telephone call on December 6. Scruggs told him that he could expect to receive a check for $1 million for his work on the Katrina cases. At first, Jones thought: This is great. It would cover his expenses and compensate for his work over the past year, and the money would come just before Christmas. Then he asked, what about his share of the $26.5 million fee coming to the group from the State Farm settlement?

  “Well,” Scruggs said, “you won’t get any more money out of this settlement.”

  Jones felt his stomach heave. He was being cut out of the deal.

  Scruggs tried to allay Jones’s distress. “This is the first one, Johnny, and we are going forward, and we’ve got other settlements coming in. We think we can get the same thing that we got from State Farm out of Nationwide and Allstate combined.”

  Scruggs said the million-dollar payment to Jones was something that others in the Katrina alliance had decided they “can live with.” He added: “Johnny, this is the first one. It’s a proposal, you know.” There was no malice in Scruggs’s voice, no tone of dominance by an older partner. He sounded almost casual, as though a few million dollars here, a few million dollars there, amounted to little in the greater scheme of things.

  But to Johnny Jones, fifty-one at the time and still in search of the big lick, the words were devastating.

  “Dick,” he said, “I don’t want to say anything right now. We’ve been friends for a long time. But this doesn’t make me whole. Just let me shut my big mouth and think about this.”

  It was the last real conversation the two men ever had.

  Around the same time, thirty-eight-year-old Timothy Balducci had grown dissatisfied with Langston. Just as Scruggs had served as “special assistant attorney general” two decades earlier in the asbestos cases, Balducci had held the same title as a member of Langston’s firm. In a move that would later cause controversy, Langston had been given a mandate by Attorney General Jim Hood to recover unpaid taxes for the state from the bankrupt Mississippi colossus MCI/WorldCom. The effort collected over $100 million for the state treasury and won a $14 million legal fee that Langston split with the Louisiana firm that came up with the idea to sue MCI/WorldCom.

  Like Johnny Jones, Balducci was disappointed over his failure to get a substantial share of the fee. “I didn’t get paid shit out of it,” he told one friend. Actually, Balducci had been disgruntled for some time over Langston’s distribution of the money pouring into the little law office in the northeast Mississippi town. He felt that Langston was keeping virtually all of the spoils for himself and leaving little for his subordinates.

  Balducci found a partner in his complaint—Steve Patterson, the former state auditor who had been working as a “rainmaker” at Langston’s firm for a decade. Tommy Cadle, a Booneville lawyer, once said admiringly of Patterson, “Hell, he not only makes it rain, he makes it storm.” Patterson had been hired because of his connections. Years after he had been forced out of public office, he kept reappearing in a narrative of behind-the-scenes politics in Mississippi. He seemed to have limitless contacts, from former governors to current U.S. senators. He knew valuable sources in courthouses across the state, and had maintained his friendships with players in the old Eastland network. Despite his move against Scruggs in 1992, Patterson and Scruggs now consulted with each other on politics and inside deals.

  One hundred pounds overweight, Patterson had the appearance of an Edwardian actor, his bloated face crowned with wavy brown hair. With his jowls, he would never be mistaken for a matinee idol, but he excelled in bringing business to Langston. And he, too, had begun to feel underappreciated.

  Balducci and Patterson became close while working at the Langston firm, and they commiserated with one another over slights they felt they’d suffered at Langston’s hands. They envied Langston for his wealth, and they resented his attempts to exploit some of Patterson’s connections.

  A few years before, Patterson’s old friend Senator Joe Biden of Delaware had come to Mississippi to attend an Ole Miss football game. Instead of Patterson, it had been Langston who got to parade Biden around North Mississippi, showing off the visiting senator like a prized possession. Driving in Oxford on game day, Langston stopped to shout at friends, “I want you to meet a good friend of mine. I’ve got Senator Biden here with me.” Later, Langston escorted Biden to Dick Scruggs’s stadium skybox to impress the group there. Though the Georgia Bulldogs vanquished Ole Miss that day, Biden left with a favorable impression. The parties in the Grove, a wooded area on campus where tens of thousands of fans fraternize on football Saturdays, were grand, he thought.

  Privately, Balducci and Patterson talked of striking out on their own, using Patterson’s connections for themselves to start a new superfirm. They believed they could persuade Dick Scruggs to lend his support. If Scruggs were willing to join them in any kind of legal initiative it would give them the imprimatur they needed to become a legitimate big-time operation.

  The pair intended to call their firm Patterson and Balducci, but Patterson held no law degree, and the state of Mississippi demanded that founding partners of legal firms have such qualifications. Instead, they chartered the operation in Washington, D.C. Later, as their preparations evolved, they allowed themselves, in their wildest dreams, to consider a more powerful name: Patterson, Balducci and Biden.

  While Balducci was thinking expansion in North Mississippi, Johnny Jones saw his situation deteriorating. From the time he had been invited to take part in Scruggs Katrina Group, Jones had counted on its potential to deliver his struggling firm out of its everyday practice and into a world already enjoyed by other partners in the group.

  Jones and his colleagues in the firm of Jones, Funderburg, Sessums, Peterson and Lee worked out of an old mansion on North State Street in Jackson, not far from the state capitol. The building had all of the elegance of Tara after the Civil War. Boards creaked. A draft pushed through the halls on chilly days. Painted surfaces were chipped and peeling. There was little that looked
illustrious about the place, but Jones and his associates knew that everything could change with one big lick.

  Jones felt he was a full partner in the Katrina enterprise. From the inception of the agreement until well into 2006, he worked practically full time on the SKG project. As a writer whose reputation extended beyond the bar association, he was entrusted with preparing the briefs.

  Under the contract, Nutt provided the bankroll. Scruggs served as “lead counsel.” Dewitt “Sparky” Lovelace, a Florida lawyer with Mississippi family connections to P. L Blake, would provide expertise on “adjuster retention,” while Don Barrett, the fiery veteran of the tobacco wars, was given responsibility for developing witnesses.

  Barrett had doubts about Jones from the start. He had never heard of the Jackson lawyer, and when he asked Scruggs why he wanted to bring Jones into the group, Scruggs replied, “He’s a great writer.” Barrett remained unconvinced.

  If Scruggs Katrina Group struck it rich, the terms of the agreement called for Nutt to recover his investment and take 35 percent of any net fee. The remaining 65 percent would be split among the remaining partners through a formula based on Model Rules of Professional Conduct and on each partner’s contribution to the successful litigation. Agreement by four of the five parties was necessary to decide precisely how much each partner would receive.

  In the first blush of the news that State Farm had settled, Jones’s firm projected an infusion of upward of $5 million. With those hopes dashed, Jones began to look for a way to get a greater share of the money. Less than a week after Scruggs’s telephone call, Jones served notice on the Katrina Group that he would hold them in breach of contract. A series of snarling exchanges ensued, threats that soured the Christmas season and spilled over into the new year.

  Jones asked Jack Dunbar, the Oxford lawyer who had spearheaded the defense of Scruggs in the Wilson and Luckey cases, to intercede informally and offer his services as a mediator. Dunbar held the respect of both Jones and Scruggs, and he agreed to see what he could do to resolve the dispute. But after talking with Scruggs, Dunbar realized there were other belligerents in the case who made a compromise unlikely. Don Barrett was adamant that Jones should be rebuffed.

  Meanwhile, Balducci and Patterson broke with the Langston Law Firm at the end of 2006 and established their own office in Patterson’s hometown of New Albany. It seemed a curious place to build a super law firm. New Albany lay halfway between Langston’s base, thirty miles away in Booneville, and Scruggs’s office in Oxford, and no highway fancier than old four-lane U.S. 78 served the town. New Albany had tenuous fame as William Faulkner’s birthplace, but the writer’s family had moved to Oxford a century earlier. The place was best known, if at all, as simply a pleasant little southern town, a remote county seat in the hills of northeast Mississippi.

  Patterson had lived there as a child and had moved back a few years before, causing folks to wonder how he had acquired his money after he bought a house for $300,000 and spent at least that much more renovating it. Balducci had moved his wife and twin sons there, too, and paid handsomely for a new home.

  There was nothing modest about their venture. They hired a few young associates fresh out of law school, and found several attorneys around the state willing to lend their names to the firm’s letterhead as “of counsel” in exchange for $1,000 a month. After Patterson and Balducci rented the office of a retired judge, Rodney Shands, they hired him to serve “of counsel” as well. Through the association with Shands, they sought to develop some local credibility. But they stirred indignation with their audacity.

  When a young woman introduced herself to a local lawyer, Thomas McDonough, as an employee of the new “Patterson-Balducci” firm, McDonough observed that no such firm existed because Patterson lacked a law degree. Patterson responded with a letter to McDonough.

  I am not a lawyer and have never claimed or desired to be one. I am just an old worn out politician who is trying to make a future for my son. I am a member of a Washington, D.C. based group that bears my name and my son will soon be a member of a New Albany firm that will bear his name. The irony is I don’t claim to be a lawyer and you do! Piss ants often try to disrupt picnics, but rarely do. Be assured you will not disrupt mine.

  Patterson’s letter set off a volley of correspondence to the arbiters of ethics with the Mississippi Bar Association. Stephen Livingston, president of the Union County Bar Association, noted that a $10,000 campaign contribution to Attorney General Hood had been attributed to “Steve Patterson, New Albany lawyer.” Livingston also noted that a defendant had claimed in city court that he had hired Patterson as his attorney. He submitted further evidence that a “Patterson Balducci Law Group” was advertising in Gulf Coast newspapers to attract clients, urging victims of Hurricane Katrina, “It’s not too late to take action against your insurance company!”

  Livingston told the state bar association, “We are not trying to ruffle anyone’s feathers, but we would like for the Mississippi bar to look at this matter and advise whether or not there is any unethical conduct occurring.”

  Balducci responded with his own “Dear Steve” letter to Livingston. “It appears that someone has recently stolen some of your firm’s letterhead and has mailed a series of crazy, accusation-filled letters about me and my firm to the Mississippi bar.” In language steeped in sarcasm, Balducci praised Livingston “for your Solomon-like wisdom, which is tempered only by your relentless hunger for justice, which abides you always as our chosen Leader.”

  Livingston dismissed it as a “smart aleck” letter. When he mentioned the controversy to his friend Judge Henry Lackey that summer, Balducci’s mentor merely smiled and assured Livingston, “It’s all going to work out in the end.”

  When Jones walked into a showdown meeting with the Scruggs Katrina Group on March 2, 2007, there was a perceptible coolness in the surburban suite of Nutt’s firm. Based on conversations he had had earlier, Jones believed that Nutt would support him. And Scruggs did not seem aggressively opposed. But he discovered that Barrett would preside over the meeting, and it was apparent that Barrett was bristling over Jones’s threat to sue.

  Barrett had tried to replace Jones earlier, hiring his own brief writer, Jeff Schultz, for $10,000 a month. During one clash, Schultz called Jones a “greasy redneck.” Jones, on the other hand, considered Barrett the real redneck in the group, a hick from the hills posing as a prima donna. If a closing argument had been needed in any trial, Jones said at one point, “you couldn’t have wedged Dick and Barrett out of that.”

  Barrett was annoyed that Scruggs had offered Jones $1 million in the first place. It was another instance, he thought, of Scruggs acting without the approval of partners in the venture. But he was especially angry over the tone of Jones’s emails that held out the threat of a lawsuit.

  To Barrett, a rough-and-tumble son of Lexington, a town on the edge of the Mississippi Delta, Jones represented the elite culture of Jackson. Jones might consider himself an erudite fellow, but Barrett wrote him off as a pissy-assed whiner.

  At the outset of the tense meeting, Barrett told Jones that the group had $22 million ready to distribute that day, and that two checks had been cut for Jones.

  One check represented 6 percent, or a bit more than $1 million. “You can take that,” Barrett said firmly. “If you take it, we’ve got the check cut, and we can go about our business. We can be out of here. We can continue working, and you can continue working on the litigation, and we’ll reassess the future. We’ll act like this didn’t happen.”

  A second check had been written for 3 percent of the $22 million, Barrett said. “I don’t think you’re entitled to three percent. You’re certainly not entitled to six percent. But we have two checks for you. If you don’t take the first check, then the group has voted to kick you out and to pay you three percent.”

  He demanded an answer from Jones “before you leave this room.”

  Jones asked about the possibility of sending the disagreem
ent to arbitration.

  “Nothing to arbitrate,” Barrett said. The agreement among the principals of the Scruggs Katrina Group was clear: a member could be removed by the vote of supermajority of four others in the venture. “Only thing to arbitrate is: you signed this thing right here saying we could kick you out on a four-to-one vote.”

  If the case came to arbitration, Barrett said, “I would ask: ‘Is that your signature?’ That’s what I would say to the arbitrator. And you would be out on your ass.”

  Jones was sitting next to Scruggs, whose silence seemed as cutting as Barrett’s remarks. Jones felt that after working with Scruggs for more than two years he was being consigned to Barrett’s wrath.

  Jones turned to David Nutt, who he felt would be sympathetic. Nutt volunteered no support. “Johnny,” he said, “I know you think I’m betraying you. I know you think I fucked you.” Nutt said he had been told “some things” about Jones, some “stuff that I’m not going to get into” that convinced him the offer to Jones was fair.

  Jones and one of his partners, Steve Funderburg, asked if they could confer with other members of their firm.

  Barrett cut him off. “No,” he said. “You can call them from here. We’ll leave the room and you can talk to them on the speakerphone right here. But we want an answer before you leave.”

  Funderburg appealed to Nutt. Surely, Funderbug said, he and Jones could consult personally with their partners. In spite of Barrett’s objections, Nutt said he thought that would be all right.