In Re State Farm Fire & Casualty Co. , 254 F. App'x 408 ( 2007 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 19, 2007
No. 07-60771 Charles R. Fulbruge III
Clerk
In re: STATE FARM FIRE & CASUALTY COMPANY
Petitioner
Petition for Writ of Mandamus to the United States
District Court for the
Southern District of Mississippi, Gulfport
(06-CV-1080)
Before REAVLEY, SMITH, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Petitioner State Farm Fire & Casualty Company has requested a writ of
mandamus to require the district court to disqualify Richard F. Scruggs, the
Scruggs Law Firm, P.A., and the Scruggs Katrina Group from representing the
plaintiffs in the case of Thomas C. and Pamela McIntosh versus State Farm Fire
& Casualty Company, Case No. 1:06-CV-1080-LTS-RHW, presently pending
before Judge L.T. Senter, Jr., in the United States District Court for the
Southern District of Mississippi. The underlying lawsuit is an insurance
coverage dispute arising from damage to the plaintiffs’ home following Hurricane
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 07-60771
Katrina. Scruggs and his law firm also currently represent or have represented
hundreds of other plaintiffs against State Farm in similar lawsuits that are
either pending or have settled.
State Farm seeks the disqualification of Scruggs and his firm because it
contends that Scruggs violated the rules of ethics and committed professional
misconduct by communicating ex parte and receiving confidential claims-related
documents from two employees of E.A. Renfroe and Co., Inc., an independent
company that provided claims adjusters to State Farm following the devastation
of Hurricane Katrina. The district court determined that because State Farm
had known about Scruggs’ alleged improper conduct while it negotiated with
Scruggs in the other suits but made no complaint, State Farm had waived its
claim for disqualification. The court held that Scruggs should not be disqualified
in the underlying case or in any other similar lawsuits pending in the Southern
District of Mississippi.
State Farm argues that the district court’s refusal to disqualify Scruggs
was legal error and that its own delay in seeking disqualification does not justify
denial of the motion where its claims implicate the public perception of the legal
system. State Farm sets forth a list of alleged ethical violations by Scruggs.
A writ of mandamus is an extraordinary remedy that is appropriate only
“‘when the trial court has exceeded its jurisdiction or has declined to exercise it,
or when the trial court has so clearly and indisputably abused its discretion as
to compel prompt intervention by the appellate court.’” In re Dresser Indus.,
Inc., 972 F.2d 540, 543 (5th Cir. 1992) (citation omitted). “Merely showing that
the district court erred is insufficient to obtain mandamus relief.” In re Avantel,
S.A., 343 F.3d 311, 317 (5th Cir. 2003). Before issuing the writ, a court must
find the following: “(1) the party seeking issuance of the writ [must] have no
other adequate means to attain the relief he desires; (2) the petitioner must
satisfy the burden of showing that [his] right to issuance of the writ is clear and
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indisputable; and (3) even if the first two prerequisites have been met, the
issuing court, in the exercise of its discretion, must be satisfied that the writ is
appropriate under the circumstances.” In re United States, 397 F.3d 274, 282
(5th Cir. 2005) (alterations in original) (internal quotation marks and citation
omitted).
In light of all the circumstances in the instant case, State Farm fails to
show that its right to the writ is so clear and indisputable that intervention from
this court is necessary, and we are not persuaded that the writ is appropriate.
Denial of a motion to disqualify will rarely justify the issuance of a writ of
mandamus. In re American Airlines, Inc., 972 F.2d 605, 608 (5th Cir. 1992).
Although State Farm argues that the public interest in upholding ethical
violations is paramount here, attorney disqualification “is a sanction that must
not be imposed cavalierly.” FDIC v. U.S. Fire Ins. Co., 50 F.3d 1304, 1316 (5th
Cir. 1995). Without deciding the contested issue of ethics, we are satisfied that
Judge Senter has carefully weighed the balance between the need to ensure
ethical conduct on the part of lawyers and other social interests, including
litigants’ right to choose their counsel. See Woods v. Covington County Bank,
537 F.2d 804, 810 (5th Cir. 1976). State Farm has failed to show the
extraordinary circumstances necessary for relief.
Accordingly, IT IS ORDERED that the petition for writ of mandamus is
DENIED.
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