A Jackson law firm has sued millionaire trial attorney Richard Scruggs for allegedly withholding money it claims it was owed for working on Hurricane Katrina insurance-related litigation.

The lawsuit was filed March 15 in Lafayette County Circuit Court by Grady F. Tollison Jr. on behalf of the Jones, Funderburg, Sessums, Peterson & Lee law firm in Jackson. No court date has been set for the lawsuit.

Tollison has requested a jury trial. Tollison was not in his office Tuesday and was not immediately available for comment.

Scruggs is one of the nation's wealthiest trial attorneys. In the late 1990s, his Mississippi-based firm earned nearly $1 billion in fees for his part in reaching a landmark $250 billion settlement with tobacco companies. He used that windfall to finance lawsuits against insurance companies for denying thousands of policyholders' claims after Katrina destroyed their homes.

Scruggs created a legal team, called the Scruggs Katrina Group, to represent the policyholders. SKG's work led to a settlement with State Farm Fire & Casualty Co. that will earn the attorneys about $26 million. Those legal fees are at the crux of the lawsuit.

Zach Scruggs of Oxford, Scruggs' son and law partner, said Tuesday that he could not immediately comment on the lawsuit. Also named as defendants in the lawsuit are other members of the SKG team.

The lawsuit, which gives only one side of the legal argument, alleges that senior partner John G. Jones and other members of the Jackson law firm deposed witnesses, handled briefs, filed motions and other tasks for Scruggs' group.

Specifically, the lawsuit mentions Jones and his law firm's work on a July 2006 lawsuit, filed by SKG on behalf of Pascagoula police officer Paul Leonard against Nationwide Mutual Insurance Co. over denial of Leonard's claim.

Jones participated in the questioning of witnesses in that lawsuit. The lawsuit notes that the agreement with SKG did not specify a percentage of fees that each participating law firm would receive.

The exception was a Ridgeland law firm that had agreed to finance part of the SKG joint venture.

The lawsuit alleges Scruggs and other conspired to "freeze out" the Jones firm and offered it a "ridiculously low figure" for its "substantial" work. Jones claimed his firm was offered a $1 million payment and was told it would get nothing from the legal fees to be paid by State Farm, according to the lawsuit.

Jones contends Scruggs declined to negotiate or enter into arbitration to settle the fees issue and kept Jones' law firm out of any other lawsuits filed by SKG. The Jones firm claims it is entitled to 20 percent of all past attorney fees collected by SKG and 20 percent of all future attorney fees SKG collects. The lawsuit also asks for unspecified punitive damages.

BP America, landlord of the Lakin Law Firm, intends to evict the firm from its office in Wood River in about 90 days.

The Lakin firm intends to stay. The firm filed a complaint in Madison County circuit court March 21, seeking to extend its lease at 301 Evans Avenue for five years.

For the Lakin firm, Charles Chapman wrote that, "Plaintiff will suffer irreparable injury if this Court does not enter an injunction prohibiting Defendant from taking any actions to evict Plaintiff from the Leased Premises on or after June 30."

The property once served as office and warehouse for a refinery, and it looks more like an industrial plant than headquarters of a famous law firm.

Petrochemical pipes point toward the building. Docking structures stand by it. Three pairs of railroad tracks run by it.

At a bend in Evans Avenue, a broad asphalt apron leads to an entrance that the Lakin firm shares with oil company Atlantic Richfield.

According to Chapman's complaint, law firm founder Tom Lakin signed a 10-year lease with Amoco Petroleum Additives Company in 1996.

Amoco Petroleum Additives did not own the property, but leased it from Amoco Oil Company.

The lease gave Lakin 29,000 square feet of warehouse space and 22,000 square feet of office space, for a total of 51,000 square feet.

Rent started at $105,000 a year, a bargain rate at $2.06 per square foot.

The lease provided annual consumer price adjustments.

It gave the Lakin firm options for two five year extensions.

The lease began to run July 1, 1997. At some point, it passed to Amoco Remediation Management Services Corporation.

According to Chapman, the firm sent an option notice to Amoco Oil in Wood River in March 2006, and Amoco Oil forwarded it to Elizabeth Yordanoff, BP America managing attorney in Warrenville, Illinois.

He wrote, "Defendant did not respond to the option notice until Feb. 9, 2007, when defendant advised plaintiff, via a telephone call, that defendant was not interested in a long term lease and will not consent to the option…"

He wrote that on Feb. 23, Yordanoff advised the firm that BP America would not extend the lease because it planned to sell the property.

He wrote that Yordanoff offered to extend the lease to Dec. 31.

Chapman asked for declaratory judgment extending the lease to 2012. He wrote, "Plaintiff has complied with all prerequisites to exercise the option."

He wrote, "…the parties reasonably expected that plaintiff would exercise the option and that defendant would consent to the option."

He wrote that by delaying a response to the option notice for a year, BP America waived a provision conditioning the option on its consent.

Chapman also claimed breach of contract.

He wrote, "Plaintiff has sustained damages and will sustain damages if it is forced to move out of the premises at issue before June 30, 2012."

Chapman filed the suit on the miscellaneous remedies docket. Unelected associate judges hear "MR" cases.

As of March 26, Chief Judge Ann Callis had not assigned a judge.

If BP America dislodges the Lakin firm, Chapman will have to leave too.

He practices in the Lakin building, not as a member of the firm but as Charles W. Chapman, Chartered.

Canadian drug company Biovail Corp. has fired Kasowitz Benson Torres & Friedman LLP, the law firm that engineered the company's high-profile lawsuit that claimed hedge funds and research analysts colluded to depress its stock price.

Kasowitz Benson, which is based in New York, is embroiled in a legal controversy over whether it willfully violated a protective order when it used information subpoenaed from Banc of America Securities in a shareholder suit in New York Federal court. That information was used to draft Biovail's February 2006 complaint against SAC Capital Management LLC, Sigma Capital Management LLC, Gradient Analytics Inc., Gerson Lehrman Group, former Banc of America Securities analyst David Maris and others.

Judge Richard Owen presides over the shareholder suit filed against Biovail in 2003. For the last month, Owen has been presiding over hearings to probe the violation of the protective order. Those hearings are scheduled to resume in early April.

Biovail's public relations firm Sitrick & Co. said in an e-mail statement that the company terminated Kasowitz Benson because of "issues arising from proceedings before Judge Owen." Biovail said it "maintains confidence in its pending lawsuits."

A spokesman for Kasowitz Benson had no comment.

A lawyer defending Kasowitz Benson during the hearings in front of Owen earlier this week disclosed documents against Biovail's will. The lawyer argued in court that Kasowitz Benson had a right to disclose the information because the firm was being accused of wrongful conduct.

"We have asked Biovail to come forward and clarify the record. They have declined to do so to date," said John Siffert of Lankler Siffert & Whohl LLP. "We are not saying that Biovail had an appreciation for the protective order barring what we did anymore than we did, but at least they knew about the protective order and didn't tell us," Siffert said.

Evidence introduced in court shows that Kasowitz Benson lawyers continued to use and share material obtained from Banc of America after they were told about a March 2005 court order preventing its use in other venues.

According to evidence that came up during hearings in front of Owen, Kasowitz Benson drafted and circulated to several law firms a shareholder complaint that was later filed against SAC and others in New Jersey federal court. That complaint closely mirrors the one filed by Biovail against the same defendants a month earlier and uses some of the same information obtained from Banc of America.

Lawyers representing shareholders suing Biovail in New York federal court argued in a letter sent to Judge Owen last week that Biovail's lawyers drafted and caused the filing of the New Jersey shareholder complaint to hamper class certification in New York.

Kasowitz Benson also represents Fairfax Financial Holdings, a Canadian insurer who sued some of the same defendants and alleges a similar conspiracy to depress its stock.

Last June, Kasowitz Benson partner Marc Kasowitz testified in front of a Senate hearing about hedge funds, alleging that supposedly "independent" research reports are routinely bought and paid for by short-selling hedge funds, and warned lawmakers that "the potential for gross fraud and abuse is stunning."

James Paone, a partner at Lomurro, Davison, Eastman and Munoz in Freehold, N.J., said that the firm's insurer -- The Chubb Corp. -- said several weeks ago that it would not add the blog to the existing policy. "We were in the process of beginning to set up a blog, having internal discussions about what areas of law would be the subjects," he said. "We wanted to cover the first base, which is Chubb's coverage. Our insurance carrier said a blog is not a risk they were interested in insuring. The entire discussion stopped."

Paone said his firm contacted Chubb to ask about insurance coverage in case someone tried to sue it over content in the blog. Now, the law firm is in the process of setting up a meeting with Chubb "so we can understand what their rationale is for saying they weren't interested in covering that kind of risk," Paone said.

Chubb did not immediately respond to a request for comment.

The Community Rights Counsel (CRC) said Wednesday that the new Judicial Conference Policy on Judges' Attendance at Privately Funded Educational Programs has not yet produced any public disclosures of travel expenses on judicial websites. According to the Judicial Conference:

The Judicial Conference adopted a private seminars disclosure reporting policy that requires educational program providers and judges to disclose certain information relevant to judges' attendance at privately-funded educational programs.

The disclosure policy takes effect on January 1, 2007. This means that any organization covered by the policy that issues an invitation on or after January 1, 2007 (for a program commencing after that date), to a federal judge to attend an educational program as a speaker, panelist, or attendee and offers to pay for or reimburse that judge, in excess of $305, must disclose financial and programmatic information.

The policy requires disclosure within 30 days, but CRC, a judicial ethics watchdog group, conducted a review and found that "80 days after the January 1, 2007 effective date of the new policy, not a single junket has been reported." The CRC criticized the Administrative Office for the US Courts for "applying the policy in a way that seems designed to delay the reporting of information as long as possible" by determining that the policy only applies to invitations issued on or after January 1, 2007.

The Judicial Conference of the United States is the policy-making body of the federal court system and is led by Chief Justice John Roberts. A court spokesperson said Wednesday that effective implementation of the new system could take some time.

A law firm that is suing the tobacco industry over the marketing of "light" cigarettes said Wednesday it will not oppose plans by Philip Morris USA''s parent company, Altria Group Inc., to spin off its Kraft Foods business.

The law firm Cohen, Milstein, Hausfeld and Toll has filed a class action suit against several tobacco companies in Federal District Court in Brooklyn, alleging they deceived smokers about the safety of their "light" cigarettes.

Attorney Michael Hausfeld previously said he would consider filing an injunction to stop Altria from divesting Kraft if it would leave the company unable to pay the $200 billion in damages he is seeking for his clients.

Hausfeld''s firm said Wednesday that the spinoff could actually strengthen Altria financially, and thus "may prove in the best interests of our clients."
New York City-based Altria Group Inc. plans to spin off packaged food maker Kraft next week. Altria currently owns 88.9 percent of Kraft''s outstanding shares.