By Patsy R. Brumfield/NEMS Daily Journal
NEW ORLEANS – A three-judge panel listened and asked questions Monday about issues former Oxford attorney Zach Scruggs raises in his quest to have his 2008 conviction and sentence overturned.
“They asked all the right questions,” said Scruggs’ attorney, Edward “Chip” Robertson Jr., after the hour-long hearing in the 5th Circuit Court of Appeals’ ornate courtroom in downtown New Orleans. “They focused on the right issues, now we’ll see.”
Scruggs, 38, pleaded guilty to knowing about, concealing and failing to report a felony – in this case someone else’s illegal contact with a judge presiding over a legal-fees lawsuit against his litigator father, Richard F. “Dickie” Scruggs, and others surrounding Katrina insurance cases.
In November 2007, both Scruggses, a law partner, and two others were indicted on multiple counts that they conspired to bribe Circuit Judge Henry L. Lackey of Calhoun City. The government also alleged they tried to deprive the public of Lackey’s “honest services.” Everyone but Zach Scruggs pleaded guilty to one count and went to prison.
Zach Scruggs insisted he knew nothing about a bribery scheme, but pleaded guilty to knowing about the conversations with the judge about sending their case to arbitration.
In Oxford, Senior Judge Neal B. Biggers Jr. sentenced him to 14 months in prison and $250,000 fine with 12 months post-release supervision.
Months later, the U.S. Supreme Court ruled in the Texas case Skilling v. USA that only bribery or kickbacks are so-called “honest services” crimes. Scruggs maintains he pleaded guilty to neither.
In the 5th Circuit hearing, Robertson reminded the judges that Biggers agreed at Scruggs’ sentencing that he did not plead guilty to any part of a bribery case.
Key to their side’s issues, Robertson said, was that the document that charged Scruggs, charged him with misprision to something that isn’t a crime.
Assistant U.S. Attorney John Marshall Alexander insisted during the government’s 30 minutes allotted that the younger Scruggs knew about the bribe.
Two of the appeals court judges – Senior Judge Patrick E. Higginbotham and Judge W. Eugene Davis – asked numerous questions of both sides, while Judge James L. Dennis listened.
Couldn’t a reasonable juror conclude that payment to co-defendant Timothy Balducci for pre-trial work “was just a cover for a bribe?” Davis said to Robertson.
“It’s important to look at the evidence,” Robertson responded, saying Balducci admitted he never talked to Zach Scruggs about a bribe and that a Nov. 1, 2007, conversation about edits to the judge’s proposed arbitration order gave no indication Scruggs knew.
“You can’t join a conspiracy without an affirmative action,” Robertson said. “This whole case boils down to those eight minutes,” referring to the secretly recorded meeting in the Scruggs Law Firm on the Square in Oxford.
Dennis, though, suggested Scruggs might have known as Balducci talked about “taking another load of sweet potatoes” to Lackey that it was about money, a bribe.
“If you know he means money, yes,” Robertson responded. “But I believe – if you hear the tapes – he doesn’t join the conspiracy.”
Davis asked Alexander if no crime is charged in the pleading documents, would the court have no jurisdiction, in the wake of the Skilling decision?
“Skilling did not invalidate misprision,” Alexander responded.
He told the judges that Scruggs knew about the bribe and that Balducci told him to get the arbitration order right “because we’re paying for it.”
But, Judge Higginbotham asked him, does his indictment or record of his plea state an underlying felony?
Alexander said an associated document, called the factual basis, “shows it was to corruptly influence.”
Higginbotham also noted that when Scruggs pleaded guilty, he was emphatic that he knew nothing about the bribery, and that Biggers accepted that.
While Alexander told the panel “it didn’t matter at the time,” Higginbotham said, “It does here. I don’t see any specific conduct being charged.”
The crime was conspiracy to bribe and honest services bribery, which “are Skilling-proof,” Alexander responded.
Higginbotham and Davis, though, appeared skeptical on that point.
“You’re not showing me that,” Higginbotham said, “if you’re left with a plea to honest services and the Supreme Court says it’s not a crime.”
Alexander said that because Scruggs did not appeal his guilty plea and conviction, he’s barred from raising the Skilling issue.
Biggers presided over Scruggs’ first appeals hearing in 2011 and denied it, which moved the case to the Court of Appeals.
For Scruggs to win in court, Biggers and the government contend he must prove actual innocence on all charges, not just the misprision count, and convince his appeals panel that not one reasonable, well instructed juror would have voted for his guilt at trial.
In his appeal denial order, Biggers also noted that conspiracy to commit wire fraud was part of the original charges, and that charge is not affected by the Skilling decision.
Experienced court-watchers say the 5th Circuit is interested in hearing both sides’ issues in this case because so few Skilling appeals have come their way.
The panel’s decision isn’t likely immediately, and whoever loses may seek further relief from the U.S. Supreme Court.