United States v. Scruggs, CRIMINAL CASE NO. 3:09-CR-00002-GHD

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Mississippi
PartiesUNITED STATES OF AMERICA v. RICHARD F. "DICKIE" SCRUGGS
Docket NumberCRIMINAL CASE NO. 3:09-CR-00002-GHD
Decision Date23 May 2012

UNITED STATES OF AMERICA
v.
RICHARD F. "DICKIE" SCRUGGS

CRIMINAL CASE NO. 3:09-CR-00002-GHD

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI WESTERN DIVISION

Dated: May 23, 2012


MEMORANDUM OPINION

Presently before the Court is a motion to vacate and set aside conviction pursuant to 28 U.S.C. § 2255 [125] filed by the Petitioner Richard F. "Dickie" Scruggs (the "Petitioner," "Dickie Scruggs," or "Scruggs"). Upon due consideration of the extensive record, including the petition, response, reply, exhibits, rules, authorities, and testimony presented in the evidentiary hearing, the Court is ready to rule.

A. Factual and Procedural Background

In a meeting with the FBI to discuss his involvement in the bribery of state circuit court Judge Henry Lackey,1 attorney Timothy Balducci first revealed that he had been privy to another matter in which Dickie Scruggs had bribed a different state circuit court judge for a favorable outcome in a case. The judge was Bobby B. DeLaughter. The case was Wilson v. Scruggs, Cause No. 251-94-582, in the Circuit Court of Hinds County, Mississippi. Wilson was a suit concerning the division of legal fees in asbestos litigation; Dickie Scruggs' former associate, Robert Wilson, claimed Scruggs had wrongfully withheld millions of dollars from him.2 The hailstorm that followed Balducci's revelation culminated in Scruggs' guilty plea to a one-count

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information charging him with aiding and abetting in honest services mail fraud (18 U.S.C. §§ 2, 1341, 1346) for his role in a secret scheme to corrupt then-Judge DeLaughter in connection with the Wilson case.

Scruggs admitted under oath at his plea colloquy that the corruption scheme exploited two of DeLaughter's vulnerabilities: "[f]irst, his close association with former district attorney Ed Peters, and, second, his known ambition to become a federal judge."3 Scruggs further admitted that the scheme involved "contact[ing] his brother-in-law [Trent Lott], then a United States Senator from Mississippi, to recommend [DeLaughter] for consideration for a federal district judgeship then open in the Southern District of Mississippi."4 Ed Peters was hired to corrupt then-Judge DeLaughter while Wilson was pending.

Several federal district judgeship vacancies occurred in the Southern District of Mississippi during the pendency of the Wilson litigation. U.S. District Judge William H. Barbour, Jr., assumed senior status on February 4, 2006;5 U.S. District Judge David C. Bramlette assumed senior status on March 20, 2006;6 and U.S. District Judge Tom S. Lee assumed senior status on April 8, 2006.7 Nominations for the open judgeships were as follows: Judge Daniel P. Jordan was nominated for Judge Lee's seat on April 24, 2006;8 Judge Leslie Southwick was nominated for Judge Barbour's seat on June 6, 2006;9 and Judge Sul Ozerden was nominated to fill Judge Bramlette's seat on January 9, 2007.10 Interestingly, Judge Barbour's seat remained vacant from February 4, 2006, until December 20, 2010. Although

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Judge Southwick had been nominated for the seat on June 6, 2006, his nomination was subsequently withdrawn when he was nominated to fill a vacancy on the Fifth Circuit Court of Appeals. Judge Carlton Reeves assumed the seat on December 20, 2010.11

Pursuant to the terms of the plea agreement, the Government moved to dismiss the indictment which charged the Petitioner with conspiracy to violate the federal programs bribery statute, 18 U.S.C. § 666 (Count I), and three counts of aiding and abetting in honest services mail fraud in violation of 18 U.S.C. §§ 2, 1341, 1346 (Counts II-IV). The Petitioner was subsequently sentenced to seven years in the custody of the United States Bureau of Prisons and three years of supervised release, both to run concurrently with the five-year sentence he received in Cause No. 3:07-CR-00192; the Court also imposed a $100,000.00 fine.12

On June 23, 2011, the Petitioner timely filed a 28 U.S.C. § 2255 motion to vacate or set aside his conviction based on Skilling v. United States, ___ U.S. ___, 130 S. Ct. 2896 (June 24, 2010), which confined the reach of the honest services statute to "paradigmatic cases of bribes and kickbacks." See Skilling, 130 S. Ct. at 2932-2933.

The Petitioner concedes that the scheme to corrupt DeLaughter was "reprehensibly unethical," and the type of contact that "threatens the very heart of the judicial system."13 However, he argues that the scheme did not involve the core requirement of a bribe, a quid pro quo, and therefore, that he is actually innocent of the crime to which he pled guilty. A quid pro quo is defined as a "special intent to give or receive something of value in exchange for an

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official act." United States v. Sun-Diamond Growers of Calif., 526 U.S. 398, 404-05, 119 S. Ct. 1402, 143 L. Ed. 2d 576 (1999). The Petitioner maintains that the case sub judice involved a mere verbal recommendation, which cannot constitute a thing of value, and, thus, that the requisite quid pro quo was not established.

The Government argues in response that the Petitioner's § 2255 motion merely attacks the sufficiency of the Government's evidence—not the crime itself. And further, the Government contends that a paradigmatic bribe existed, because the Petitioner used the "lure of a federal judgeship" to "make Bobby DeLaughter think Scruggs was helping him attain his goal of becoming a federal judge," and, in return, DeLaughter "rule[d] in favor of Scruggs while giving team Scruggs the advantage of secret access to the Court."14

An evidentiary hearing was held on March 26 and 27, 2012. Prior to the evidentiary hearing, this Court ruled that Skilling should be applied retroactively, as the decision is substantive and narrows the scope of the honest services fraud statute by interpreting its terms.15 The Court also ruled that the § 2255 petition was timely, because it was filed within one year of the Skilling decision.16 The Court found that the Petitioner procedurally defaulted on the claim he now raises because he failed to file a direct appeal and could not show "cause" for his default.17 The Court found that the exhibits submitted by the Government in response to the petition, as well as the Court's own file in a companion case, United States of America v. Joseph C. Langston, Cause No. l:08-CR-00003, created a genuine issue as to whether the Petitioner aided and abetted in a bribery scheme.18 The evidentiary hearing gave the Petitioner an

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opportunity to prove his actual innocence of aiding and abetting in honest services fraud as that crime is now defined by Skilling, to test the evidence and the credibility of the witnesses, and to admit or deny the correctness of the Government's exhibits and the Langston court file.19

B. Standard of Review

"Habeas review is an extraordinary remedy and will not be allowed to do service for an appeal." Bousley v. United States, 523 U.S. 614, 621, 118 S. Ct. 1604, 140 L. Ed. 2d 828 (1998) (internal quotation marks and citations omitted). The Supreme Court has "strictly limited the circumstances under which a guilty plea may be attacked on collateral review." Id., 118 S. Ct. 1604. "Indeed, the concern with finality served by the limitation on collateral attack has special force with respect to convictions based on guilty pleas." Id., 118 S. Ct. 1604 (internal quotation marks and citation omitted).

The Petitioner procedurally defaulted on his "actual innocence" claim by filing no direct appeal of his conviction or sentence. In order to overcome procedural default and prevail on a motion to set aside his conviction pursuant to § 2255, the Petitioner must prove his "actual innocence" of the crime to which he pled guilty, as well as the charges dismissed in the original indictment. Id. at 624, 118 S. Ct. 1604. The Petitioner's burden is substantial. "To establish actual innocence, [a] petitioner must demonstrate that, in light of all the evidence, it is more likely than not that no reasonable juror would have convicted him." Id. at 623, 118 S. Ct. 1604 (citing Schlup v. Delo, 513 U.S. 298, 327-28, 115 S. Ct. 851, 130 L. Ed. 2d 808 (1995) (quoting Friendly, Is Innocence Irrelevant? Collateral Attack on Criminal Judgments, 38 U. CHI. L. REV. 142, 160 (1970) (internal quotation marks omitted)). The actual innocence standard "does not merely require a showing that a reasonable doubt exists in the light of the new evidence, but

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rather that no reasonable juror would have found the defendant guilty." Schlup, 513 U.S. at 329, 115 S. Ct. 85 (emphasis added); see Bosley v. Cain, 409 F.3d 657, 664 (5th Cir. 2005) (per curiam), cert, denied, 547 U.S. 1208, 126 S. Ct. 2887, 165 L. Ed. 2d 920 (2006). The standard is not satisfied where at least one juror, acting reasonably and properly instructed, would vote to convict the petitioner. Schlup, 513 U.S. at 329, 115 S. Ct. 851; Bosley, 409 F.3d at 665.

"[A]ctual innocence" means factual innocence, not mere legal insufficiency. In other words, the Government is not limited to the existing record to rebut any showing that petitioner might make. Rather, . . . the Government should be permitted to present any admissible evidence of petitioner's guilt even if that evidence was not presented during petitioner's plea colloquy and would not normally have been offered .... In cases where the Government has forgone
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