Thursday, January 31, 2008, 1/31/2008 07:42:00 AM

Mississippi Trade Secrets Mess

Mississippi state courts are in an unholy uproar over a bribery scandal relating to one of the state's top plaintiff's lawyers, Dickie Scruggs, and claims of payoffs to state judges. (The New York Times had a lengthy recent -- and eye-opening -- article on the scandal.)

Now, from the Jackson Clarion-Ledger, comes the fall-out in the trade secrets world. The issue concerns a Special Master appointed in a case in which Eaton Corp. sued North Carolina-based Jeffry Frisby and other former Eaton employees, alleging they stole trade secrets and took them to their new jobs in North Carolina. A federal grand jury later indicted the employees on the same accusations. (Our story on that case, from Christmas Day 2006, can be found here.)

In any event, figures tangential to the roaring scandal, former District Attorney Ed Peters and his "protégé," presiding trial judge Bobby DeLaughter, are spilling over into the Eaton case. The claim is that Peters, working on behalf of Eaton, secretly interceded with his pal Judge DeLaughter to get one Larry Latham appointed as Special Master in the Eaton case in place of previously-appointed Special Master. (Special Masters, of course, can be important in trade secrets cases where even the lawyers don't necessarily get to see all the evidence.)

Latham, upon learning of all this, promptly resigned as Special Master.

Frisby's attorneys said they learned of Peters' possible involvement in aiding Eaton in the case last year when he inadvertently e-mailed one of their secretaries. Eaton's lawyers say this was the first they heard of it.

According to Matt Steffey, a professor at the Mississippi College School of Law, the fact that "Peters was allegedly aiding Eaton at the same time he was helping to get a special master - and yet concealing his involvement - is troubling." In most jurisdictions, one-on-one conversations with a judge about a case -- lawyers call them ex parte communications -- are prohibited under the rules of ethics.

All in all, it's another black eye for the system of justice in Mississippi.

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