Dubbed by Newsweek "the most influential man in America that you've never heard of," Scruggs rose to prominence in Pascagoula in the early '80s, shortly after hanging out his own shingle. In a company town dominated by Ingalls Shipbuilding, Scruggs sued the local industrial behemoth and won. Later, he earned a fortune representing thousands of Ingalls employees in personal injury claims against asbestos manufacturers.
But Scruggs stepped onto the national stage by taking on the world's biggest tobacco companies. Supported by the attorneys general of several states, he led a team of lawyers in a four-year war against Liggett Group, R.J. Reynolds Tobacco, Brown & Williamson, and other cigarette makers. Scruggs sought reimbursement for the cost of treating smoking-related illnesses under Medicaid. In 1997, he won a host of concessions from the tobacco companies-and a tidy little settlement of $240 billion.
Scruggs's modus operandi: Take on gargantuan opponents, then stick your neck out-way out-to win. When Mississippi attorney general Michael Moore recruited Scruggs to battle the tobacco companies, the state could not devote taxpayer dollars to litigation, so Scruggs bankrolled the case with millions of his own money. And when the state's key witness in that matter-former Brown & Williamson research director Jeffrey Wigand-faced a smear campaign, death threats, and a court order prohibiting his testimony, Scruggs opened his home to Wigand to protect him.
Recently, Scruggs opened his home to JD Jungle. In a wide-ranging interview held in "Al Pacino's dressing room" (a.k.a. the parlor of Scruggs's columned 1940s colonial overlooking the Gulf Coast), Scruggs recalled the peaks and valleys of the tobacco case, reflected on his other career highlights, and outlined the battle plan against his next adversary: the HMO industry.
JD Jungle: The tobacco companies once appeared invulnerable to lawsuits. What made you decide to take on such long odds?
Richard Scruggs: The same sort of motivation that Sir Edmund Hillary had when he climbed Mount Everest. It was the pinnacle-the legal equivalent of Mount Everest. Nobody had ever beaten these guys. We thought we could. We had the ideas and the legal theories. We had the skills and the legal resources. We had an attorney general, Mike Moore, who was willing to gamble his reputation on the whole thing. Maybe we were just young and dumb. Actually, we were very fortunate.
Luck played a part?
It was more than luck. We had providence. One of those things destiny commanded, and I don't know why. Not because we were the chosen few, but because, I think, the time had come. The political forces were right, and it turned out we had institutional allies we didn't know we had when we started.
Such as . . .
The national press corps was one, because the tobacco industry had just successfully sued ABC and had threatened to sue CBS. The press knew tobacco companies were a true threat to the First Amendment, so I don't think the industry got any breaks.
Still, some people thought it was flat-out nuts to take on big tobacco.
Let's put it this way: It was not prudent to take on the tobacco industry. Your entire fortune, your career, and everything else was on the line. But it basically took on the overtone of a crusade. I think when you're taking on something like that, you have to be totally dedicated beyond rationality. I won't say fanatical, because you have to use judgment in what you do, at least in your tactics. But there were many, many lawyers-good lawyers-who declined to be involved with us because they didn't think the suit could be won. They didn't think that the legal theories would support it or that the public would support it. And I think that in order to succeed, we had to-with an objective mind- become reckless.
Did you ever pray during the battle?
Oh, many times! I still do. Just to give thanks for getting through it. We had some near-death experiences during that thing. Not in a physical sense, but there were many times I thought that we were going to go down in flames.
Probably the Jeffrey Wigand smear campaign. We had become so closely identified with Wigand [played by Russell Crowe in The Insider] that his credibility and our credibility had become linked; if he'd been discredited significantly, it would have set us way back.
How much have you personally earned from the settlement?
Oh, boy. That's hard to say. It depends on how you calculate it.
Roughly.
If you added it all up, hundreds of millions of dollars.
Three hundred?
Yeah, probably, but not a whole lot more than that. I haven't got that in the bank, if that's what you mean. That's paid out over 26 years.
You've said that "lawyers who have made these sorts of fees have an obligation to invest them and create a resource for fighting against other wrongs in future litigation." Would you support a law mandating lawyers to pay a portion of their fees to a fund that supports public interest law?
I'm not sure I'd be willing to go that far. I sure would support a law that would make it easier for lawyers to do that. For example, by creating tax incentives or something like that.
Rebut the Providence Journal's argument that "There is a word for the practice of targeting vulnerable businesses, and then by way of timely contributions, inducing the state to bring profitable lawsuits. And the word is extortion."
I would agree with that statement, but I don't think it fits any situation that I've ever been involved in. What attorney general would risk his career taking on the tobacco industry for some lawyer who had contributed to his campaign? Mike Moore would never do that. Mike Moore and I have been friends since the first day of law school. We're from the same hometown. That's why Mississippi took on the case, because he trusted me and I trusted him and we felt like we could do this, along with the other lawyers in our courtroom. I don't know of a single case where a lawyer made a timely contribution to an attorney general and got hired to sue a vulnerable industry. I mean, the tobacco industry was not vulnerable at that time.
How do you assess whether to take on an industry?
My criteria for taking a case is that the conduct being challenged has got to have a widespread effect on public health. Cigarettes and HMOs are sort of on different sides of that coin; tobacco makes people sick and puts them in the hospital; HMOs make people sick and keep them out of the hospital. Second, there has to be some threshold of outrage toward the industry's conduct. If somebody sells a product that turns out to hurt a lot of people, which satisfies the first criteria, but they just do it negligently-just screw up-then that doesn't satisfy my criteria. And the third criteria is that it has to be something that the courts are capable of fixing. There are a lot of social problems-gun control, for instance-that are not adjudicative. To me, the problem with guns is what do you do with 250 million guns that are already out there in people's hands. No court order is going to get rid of those guns.
Outline your basic argument in the hmo case. Why are you right, and why is the other side wrong?
Basically, we're saying that what the HMOs are guilty of is garden-variety consumer fraud. That you can gussy it up any way you want to, but they're selling something and not delivering. They promise you a parachute, if you will, of health-care benefits such that if you need them, the parachute will open and give you a soft landing. But what happens if you need them is you pull the rip cord and you either get a streamer or a much smaller canopy and a lot harder landing than you bargained for.
David Boies is in on the HMO case. You and he seem to be an odd couple. Do you get along? Is his fame an asset or a liability for your case?
David is bright. He's a gentleman. He's got a good sense of when to speak up and when not to speak up. He's extremely articulate and has the ability to reduce what seem to be complex legal and factual issues down to their essence and explain them in common language. He's a very fine lawyer. I think that he's an asset for all those reasons. His fame speaks for itself and is well deserved.
Why were you in two rival camps initially?
Well, we didn't know what his camp was doing, and they didn't know what our camp was doing. To go after the HMOs, I put together a team of lawyers I had worked with in the tobacco case and in earlier asbestos litigation. David got together another group of lawyers and went after HMOs on a parallel track. And when the cases were consolidated and sent to one court, we essentially didn't have any choice but to work together. There were some fits and starts and some rough edges, but not between David and me-more between people from rival law firms in our respective organizations.
On a scale of 1 to 10, with 1 being a sure loss and 10 being a sure win, can you rate your chances against the HMOs?
I'd say an 8.
Critics say the HMO case, if successful, could lead to higher insurance costs, meaning more uninsured Americans. Is that a worthwhile gamble?
Yes. The choice is, do you want to pay a dollar and get 25 to 30 cents of coverage, or do you want to pay a dollar and a quarter and get a dollar and a quarter's worth of coverage? That's the difference. It may cost more, but you'll get what you pay for.
The producers of The Insider cast Michael Moore to play himself but cast an actor to portray you. Does it bother you that you're not more famous?
No, not at all. If I am going to be that influential, I'd rather be less known. I get more done that way. Mike's just a lot more telegenic than I am. I went to dinner with [producer-director] Michael Mann and Al Pacino. It was in the middle of the legislative battle over tobacco in 1998, and Mann asked me to read some lines. For about half an hour or so we read from the script, then went out and had dinner. Mike Moore joined us. And he had not even read, he just joined us at dinner. After I'd bought the dinner, Mike Mann leans over and says, "You know, Dick, you did a great job of reading that script. I'm probably going to get a professional actor to play your part." So I said, "Well, thanks a lot. After I pick up the check, you fire me."
What's your review of the movie?
If you had to condense four years or more into a two-and-a-half-hour film, it did a great job. There was nothing in it that was wrong or untrue. I think that the orchestration of the deposition was a little overblown in the sense that it really wasn't orchestrated by [former 60 Minutes producer] Lowell [Bergman]. Although he was there, it wasn't like he sat back and masterminded it, like in the movie. But he deserves an awful lot of credit for being there.
You went up against a host of white-shoe firms during the tobacco case. Did you ever detect arrogance?
I did. I never encountered anybody who was outright rude, but I felt there was a contempt that those lawyers had for me and for all of us in tobacco litigation. They considered us to be small-time lawyers, unworthy adversaries who they would be able to dispatch with ease. They miscalculated.
Do you have legal heroes?
Morris Dees and Gerry Spence. I've never met Morris Dees, but the guy has got tenacity and skill, and he has been able to challenge what seemed to be overwhelming forces and use his wits to succeed. The same with Gerry Spence. I mean, Spence is just a natural lawyer. He sounds crazy when you see him on TV, but he's very shrewd, and he has a great sense of what his audience wants to hear. I mean-my God-he walked Imelda Marcos.
Are you a natural?
In some things. I think my talent is putting together coalitions of lawyers and keeping them working together toward the same goal-coming up with a sensible strategy on how to get there. That's what I do. I mean, I'm okay in the courtroom, but there are a lot of lawyers who make better arguments than I do. Boies, for example. My skill is more like that of a successful head coach than a successful quarterback.
What's your biggest weakness as a lawyer?
Gullibility. Sometimes I trust people's motives too much. I think I'm easy to fool once.
Tobacco is obviously a big win. What was your biggest loss?
It was early in my career, when I was in my second year out of law school. I was sent up to a rural, largely African-American county in Western Mississippi to defend-I was a defense lawyer when I first started practice-an electric power association against a claim by an itinerate black woman that the power company had somehow sent too much electricity to her house and set fire to it. Now, nobody was hurt, so she was suing for the value of the house. I didn't think I could lose, and I went up to try the case. Not only did I lose, but I had punitive damages returned against the company. It was an all-black jury, and all my witnesses were white men. They didn't do a very good job as witnesses, and I didn't do a very good job getting them prepared. We lost the case, and it was humiliating. The lawyer who beat me was a lawyer named Don Barrett-he and I became friends after he beat me. Don's family for several generations have been the dominant family in that rural county. The case was not won in the courtroom, it was won on the back roads. Don's family owned the bank; they own the whole county. And the jurors were not going to come back with a judgment against one of theirs. I was naïve enough to believe what happened in the courtroom was what mattered.
You were a fighter pilot during the height of the cold war. What did you learn about the law from that experience?
Flying off an aircraft carrier for two and a half years is about as stressful as it gets in this life, and I think that helped me deal with the stress of law school and later big-time litigation. I also developed a bit of a knack for trying to figure out a way to penetrate an impenetrable object, so to speak. I was in charge of developing a set of tactics that would enable carrier airplanes, fighters and bombers, to penetrate Russian radar and missile screens of ships and to successfully attack them before they could launch their cruise missiles. That's what success as a lawyer really is. It's problem-solving.
Tell me about your first law-firm job. You left in 1978 after just two years there.
I was a little older than most of the lawyers fresh out of law school. I'd been in the Navy for five years before I went to law school, and I went to a firm in Jackson, Mississippi, that had a crusty old senior partner. He didn't like me, and I didn't like him. We battled, and it got to the point where it was just an intolerable working relationship. He was the senior partner. It wasn't up to him to leave; it was up to me to leave, so I did. I went to another firm in Jackson, a similar firm, and did defense work. These were some of the more traditional law firms in the city, and after a year or so in the second firm, I was just dissatisfied with working in a harness.
What advice would you give to lawyers or law students who want to start their own practice? What's the biggest mistake to avoid?
I think the biggest mistake to avoid is taking too many cases just to pay the rent. Use your judgment. Take some good cases, and even if you have to take bad cases, don't take more than a few. Work hard, don't spread yourself so thin that you can't focus, and be prepared for every case you take on.
Mississippi has many casinos. Are you a gambling man?
Maybe once a year, my wife and I play a little blackjack, but I never bet more than $100 or $200. I always lose.
