In a decision released yesterday, a Jefferson County judge ordered Scrushy to pay HealthSouth $2.87 billion, finding that he had orchestrated a massive financial fraud at the company.
Just one day earlier, a federal appeals court rejected Scrushy's challenge to a $445-million settlement between HealthSouth and some of its investors.
If you look beneath the surface in both of these cases, they are about more than huge financial obligations for Scrushy. They also are about a troubled justice system that cannot be trusted to handle small matters correctly, much less cases involving billions of dollars.
Why is this subplot important in the Scrushy cases? It's because public documents indicate there are reasons to question the integrity of key decision-makers in both cases.
In the state-court case, Jefferson County Circuit Judge Allwin Horn oversaw a bench trial, without a jury. We already have shown here at Legal Schnauzer that Horn is corrupt.
How do I know Horn is corrupt? I've seen it with my own eyes. If you want to see if with your own eyes, go to the clerk's office in the Jefferson County Courthouse and call up the following case on one of the public computers: Roger Shuler v. Richard Poff, CV 05-3826.
That is my legal malpractice claim against Birmingham lawyer Richard Poff. Documents in the file will clearly show how Horn butchered the case and cheated me in order to protect a member of the legal community. Poff, by the way, has gone through an ugly divorce, a bankruptcy, and has faced other legal malpractice claims besides mine. Public documents indicate that gambling debts were major issues in both the divorce and bankruptcy cases.
How did Horn conduct the Shuler v. Poff case? Here is how we described it in an earlier post:
Remember, Horn is the judge who was too lazy to look up the actual law in my legal malpractice case against Birmingham attorney Richard Poff. Horn said that if I didn't like the way he ruled, "you can appeal me," never mind the taxpayer dollars that would be wasted on an issue that didn't need to be appealed.
To top it off, Horn showed that he was too lazy to read documents that had been put under his nose, and he couldn't even manage to follow his own orders. Horn ordered Poff to present a certified copy of his bankruptcy case to prove that I had not been included as a creditor in that case. That, of course, was unnecessary because Poff had already admitted in documents submitted to Horn that I wasn't listed as a creditor in the bankruptcy case.
Then when Poff failed to appear for a hearing in Horn's office, and failed to produce the documents he had been ordered to produce, Horn let him get away with it and dismissed my case--even though, by law, it could not be dismissed.
In terms of the law, how did Horn screw up my case? Here's our report:
The law in my legal-malpractice case could not have been more clear or more easy to follow. Horn insisted that I had to go to bankruptcy court and get permission to proceed with my legal-malpractice claim in state court. But Poff had not included me as a creditor in his bankruptcy case, so I had no standing to do anything in that court.
In fact, as we showed in a post about one year ago, Horn stood the actual law on its head. The controlling case law can be found at Watson v. Parker (264 B.R., 685, 2001). Under Watson, the burden was on Poff, not me, to reopen his case in bankruptcy court if he wanted to try to have my claim discharged. If Poff didn't do that, under the law, my case was to proceed in state court.
Want some irony? Here is a quote from Horn about his findings in the Scrushy case:
"Scrushy knew about the fraud and was an active participant in the fraud and consciously and willfully breached his fiduciary duties as CEO. Scrushy was the CEO of the fraud."
That's an interesting choice of words. In my legal-malpractice case, Horn was "the CEO of a fraud." Specifically, he consciously and willfully ruled contrary to law and used the U.S. mail in furtherance of a scheme to breach his duties as a judge. That's a classic definition of honest-services mail fraud.
Speaking of fraud, that's exactly what a whistleblower says is going on at Performance Group LLC, a company partly owned by Homewood attorney Rob Riley (the son of Alabama Governor Bob Riley).
Why does that matter in the Scrushy cases? Riley is co-liaison counsel for stockholder lead plaintiffs in the federal HealthSouth/Scrushy case. The other liaison counsel in that case is Birmingham lawyer and former Clinton-era U.S. attorney G. Douglas Jones.
We have raised questions about apparent conflicts Jones and Riley had because of their connections to both the Scrushy federal lawsuit and the criminal case involving Scrushy and Siegelman.
Do Riley and Jones stand to benefit financially from those possible conflicts? Sure looks like it, based on a motion for attorney fees they recently helped file in the federal HealthSouth litigation.
Here is an interesting connection between the state and federal Scrushy cases. The lead plaintiffs' firm in the state case was the Birmingham firm of Hare Wynn Newell & Newton. A source tells us that just happens to be the firm where Rob Riley began his legal career before going on to start his own firm, Riley & Jackson.
Was there some note-swapping going on between lawyers in the two cases? Did inside information from the Siegelman/Scrushy criminal case contribute to the $2.87 billion judgment in the state Scrushy case? Good questions.
So let's review:
* Is Richard Scrushy a major scoundrel who knowingly engineered a massive fraud at HealthSouth? It's possible. But he was not a public official, and I'm not aware of any oaths he took to uphold the law.
* Allwin Horn is an elected public official who has taken an oath to uphold the law. He also is an officer of the court. He has demonstrably committed a federal crime, honest-services mail fraud.
* Rob Riley is an officer of the court, and as son of the governor, has unusual access to our state's highest public office. A whistleblower has charged that a company Riley owns has engaged in health-care fraud.
* Doug Jones is an officer of the court and a former appointed public official. His behavior in recent years raises this important question: Did Jones parlay his inside knowledge of the Siegelman/Scrushy criminal case into a massive payday in the HealthSouth/Scrushy civil case?
The HealthSouth fraud was a serious matter, without question. But who in this crowd is doing the greatest harm to the overall public welfare?