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Media Alerts - United States v. Scruggs - Fifth Circuit
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April 13, 2013
  United States v. Scruggs - Fifth Circuit
Headline: Fifth Circuit Denies Relief in Dickie Scruggs Fraud Case.

Area of Law: honest-services fraud, collateral review, subject matter jurisdiction, First Amendment

Issue Presented: Whether Scruggs's sentence should be vacated in light of a recent Supreme Court case addressing honest-services fraud and bribery.

Brief Summary: The appeal arises from a fraud and corruption case involving noted plaintiffs' attorney Richard F. "Dickie" Scruggs. Scruggs entered into a deal with a state judge, Robert DeLaughter, who was presiding over a case in which Scruggs was a party. The deal provided that DeLaughter would help Scruggs win the lawsuit if Scruggs recommended DeLaughter to a United States Senator for a federal judgeship. After the case settled, the details of their scheme were discovered and Scruggs was charged with aiding and abetting honest-services mail fraud. Scruggs pled guilty to this charge and was sentenced to seven years in prison.

After the United States Supreme Court ruled in Skilling v. United States that the honest-services theory of fraud applies only to bribery and kickback schemes, Scruggs filed a motion to vacate his sentence, alleging that the indictment did not charge him with bribery. The United States District Court for the Northern District of Mississippi denied Scruggs's motion, holding that he had procedurally defaulted on his claim by pleading guilty.

On appeal, the U.S. Court of Appeals for the Fifth Circuit affirmed. The Fifth Circuit rejected Scruggs's attempts to avoid the effect of his guilty plea and rejected his argument that the honest-services statute violates the First Amendment because it chills protected political speech.

Extended Summary: Richard F. "Dickie" Scruggs, a noted plaintiffs' attorney, entered into a deal with a county judge, Robert DeLaughter, who was presiding over a case involving Scruggs's fee-sharing disputes with previous co-counsel. In exchange for DeLaughter's help in assuring a victory in the lawsuit, Scruggs would pass along DeLaughter's name to his brother-in-law, United States Senator Trent Lott, who had some influence in recommending candidates for a federal district court judge position. Throughout the trial, DeLaughter ruled in Scruggs's favor on motions and advised Scruggs on the proper arguments to make and which motions to file. The case eventually settled, with DeLaughter participating in the settlement process and revealing to Scruggs his opponent's confidential settlement position.

The details of Scruggs and DeLaughter's arrangement were eventually discovered, and both parties were indicted for conspiracy to commit federal programs bribery and for aiding and abetting honest-services fraud. A superseding information was later filed, charging Scruggs with aiding and abetting honest-services mail fraud, detailing that Scruggs and DeLaughter participated in a scheme where Scruggs would recommend DeLaughter to Senator Lott. The information did not mention what DeLaughter would do for Scruggs in return. Scruggs pled guilty to the charge in this information and was sentenced to seven years in prison. The charges in the original indictment were dismissed.

After the United States Supreme Court ruled in an honest-services case, Skilling v. United States, that the statute applied only to bribery and kickback schemes, Scruggs filed a motion under 28 U.S.C. ยง 2255 to vacate his sentence. Scruggs claimed that he did not admit to bribing DeLaughter, because the count to which he pled guilty did not discuss DeLaughter's participation in the alleged scheme. The United States District Court for the Northern District of Mississippi denied Scruggs's motion, holding that he had procedurally defaulted on his claim by pleading guilty.

On appeal to the U.S. Court of Appeals for the Fifth Circuit, Scruggs argued that (1) the district court had no subject matter jurisdiction over Scruggs's case; (2) he qualifies for an exception to the procedural default rule that would ordinarily bar him from challenging his conviction; and (3) the honest-services statute is facially overbroad because it chills protected political speech.

First, Scruggs argued that because his information did not use the word "bribe," the district court had no authority to hear his criminal case. In rejecting this argument, the Fifth Circuit held that even if there were a defect in the information, the defect would only cause the information to be "factually insufficient" but would not have affected the court's power to hear the case.

Second, Scruggs sought an exception to the usual rule that a guilty plea forecloses one's right to challenge a conviction. He claimed that he has cause to present his appeal to a federal court now because Skilling was decided after his guilty plea. The Fifth Circuit rejected this argument, holding that Scruggs was free to challenge the statute, as Skilling did, and therefore he could not show cause to set aside the procedural default. The Fifth Circuit also addressed Scruggs's contention that he was actually innocent of honest-services fraud and rejected this contention, finding that Scruggs could not show actual innocence of the counts alleged in the original indictment, which included a bribery scheme between Scruggs and DeLaughter.

Lastly, Scruggs alleged that the honest-services statute violates the First Amendment if it "applies to bribes that take the form of political endorsements." The Fifth Circuit again rejected Scruggs's argument, stating that the honest-services statute is not likely to chill protected political speech.

Accordingly, the Fifth Circuit affirmed the district court's judgment denying relief.

For the full opinion, please see: http://www.ca5.uscourts.gov/op...2/12-60423-CV0.wpd.pdf.

Panel: Chief Judge Stewart and Circuit Judges Smith and Wiener

Argument Date: 03/04/2013

Date of Issued Opinion: 4/12/2013

Docket Number: No. 12-60423

Decided: Affirmed

Case Alert Author: Julie Goodrich

Counsel: Robert Henry Norman, U.S. Attorney's Office, for Plaintiff-Appellee United States of America, and Edward D. Robertson, Jr., Bartimus, Frickleton, Robertson & Gorny, for Defendant-Appellant Richard F. Scruggs.

Author of Opinion: Judge Wiener

Case Alert Circuit Supervisor: Aaron-Andrew P. Bruhl

    Posted By: Aaron Bruhl @ 04/13/2013 02:43 PM     5th Circuit  

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