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Legal News

: Lawbeat

Did Katrina-litigation reporters hide sources' motives?

By Mark Obbie

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The imprisoned former personal-injury star lawyer Dickie Scruggs still has investigators -- and Fortune's Roger Parloff -- on his trail. Parloff wrote a long, powerful feature on Scruggs' case in April. And now he's used his blog, Legal Pad, to track what's happened since -- as he phrases it, to "put that new evidence in some context, add some original reporting, and mention a few things that look important to me that haven’t been noted yet." This is Roger Parloff we're talking about, so it's no off-the-cuff, winging-it update. It's in seven takes, a total of more than 5,200 words, starting here. It's interesting stuff to Scruggsologists, and Parloff has attached various legal documents he refers to. Most interesting to LawBeat readers is Part VI, where Parloff asks whether reporters for ABC News, CBS News, Associated Press, and The New York Times reported fully and fairly on the allegations by Scruggs against State Farm in the dispute over Hurricane Katrina damages -- a case that ultimately brought the super-lawyer down. State Farm has since revealed that Scruggs leaked sealed court documents to the reporters. Those documents revealed that the former State Farm employees serving as sources for the stories were also plaintiffs in a whisteblower case. Parloff explains:

Obviously, as a reporter I’m all in favor of sources leaking sealed documents to reporters, so I’m having trouble working up much outrage over this particular transgression.On the other hand, it is obvious that the reporters in this case were faced with a dilemma and, in some cases, the public was misled as a result. Once the reporters saw the legal caption on the papers they should have realized that the Rigsbys were not wholly disinterested Good Samaritans, but also plaintiffs who had an enormous pecuniary stake — potentially tens of millions of dollars in whistleblower recoveries (see Part V of this series) — in interpreting State Farm’s conduct in the worst conceivable light. While the reporter would want to disclose that potential source of bias to the reader, the fact that the case was sealed made it impossible to do so. (It would get the source, Scruggs, in trouble.) So reporters faced a quandary: either don’t use the source at all, or use the source without revealing the huge potential bias.

Parloff admits he might have used the source without disclosing the source's bias, under those circumstances. But he's right to wonder how honest that's being with readers, and how fair to the other side. In the sterile environment of after-the-fact analysis, I agree that it's a little too dishonest, or incomplete, for comfort. But I also agree with Parloff that anyone who's done this sort of reporting knows that it would be mighty difficult to walk away from those kinds of allegations supported by so much evidence, even with all of the strings attached. In fact, I can imagine myself seeing the sealed pleadings as corroboration -- the sources, after all, were willing to test their claims in court, and our libel lawyers would be happy to have a privileged (though compromised by court seal) document to rely on. This is a messy riddle, deserving of exposure and more thought. Based on what I know, I don't think those reporters committed any journalistic felonies -- so long as they eventually set the record straight about their sources' motives.

Full post as published by Lawbeat on August 25, 2008 (boomark / email).