The legend of Richard Scruggs is by now well-known. His fame took root in the 1990s, when he won settlements for shipyard workers in Pascagoula, Miss., who had been exposed to asbestos. It blossomed in 1998, when the former Navy fighter pilot pressured tobacco companies to agree to a $248 billion settlement.
And, in recent months, his story descended into the realm of scandal when the 61-year-old Scruggs, his son David “Zach” Scruggs and three others were indicted in his hometown of Oxford, Miss., for trying to bribe a judge to get a favorable ruling in a fee dispute.
But the legend of Dickie Scruggs, as commonly told, generally omits a key fact. Scruggs’ reputation as a giant killer of the plaintiffs bar is outdated. Even before the indictment his career was in decline. In the 10 years since the tobacco settlement, Scruggs has taken on a series of quixotic cases. These matters were much ballyhooed in the press, but in the end they shared two things: big enemies and bad results.
The only major success he’s seen in the last decade hasn’t been for the underdog plaintiffs that he champions, but for a big corporation that he defended in a product liability case.
Scruggs’ experience with tobacco, where the plaintiffs achieved what had once been thought impossible, may have left him with an unrealistic expectation of the power of the legal system to cure social ills, and perhaps an inflated view of his abilities. Befitting a man who tamed tobacco, he set hugely ambitious targets and goals. He tried to reform the health care industry, hold Wall Street responsible for subprime lending years before the mortgage crisis erupted and take on the insurance powerhouses after Hurricane Katrina. But in the end he was largely thwarted. He did not return calls seeking comment for this story. His lawyer, John Keker of San Francisco’s Keker & Van Nest, maintains his client is innocent of the criminal charges. “There’s no question he didn’t know about any bribery scheme the way the government describes it,” Keker says. He also notes that most plaintiffs lawyers incur their share of losses, and Scruggs is no different: “Ask any successful plaintiffs lawyer. That happens more often than not.”
The tobacco settlement that made Scruggs so wealthy was in many ways an aberration. It was the first and so far the only time that plaintiffs lawyers had the clout of a small army of 46 state attorneys general behind them. In addition, one tobacco company, Liggett Group LLC, did the unthinkable and broke ranks, agreeing to cooperate with the plaintiffs. This unprecedented alliance pressured the biggest tobacco companies to negotiate.
Scruggs has never revealed how much he’s earned from the tobacco settlement. A three-person arbitration panel awarded a host of plaintiffs lawyers more than $13 billion in fees, which the tobacco companies are paying over 20 years. As a pioneer of this litigation, Scruggs presumably received one of the largest chunks. After the settlement, he spent time in Tahiti and enjoyed his yachts, jets, fast cars and vacation homes.
It was a life he likely never imagined during his childhood, when he was raised by a single mother who worked as a secretary in the Pascagoula shipyards. (His parents divorced when he was 6.) But, like many lawyers who don’t have to work, he couldn’t stop working. He seemed to believe that his tobacco wealth was coupled with a divine mandate to make the world a better place.
