Judge rules in MCI/WorldCom case

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Published: February 23,2010

Tags: legal fees, telecommunications

JACKSON — A Mississippi circuit court judge has ruled that attorneys who represented the state in a tax battle with MCI/WorldCom are entitled to $14 million in fees because none of the money came from state funds.

Hinds County Circuit Court Judge Winston L. Kidd entered summary judgment in favor of Mississippi Attorney General Jim Hood and the individual attorneys and law firms that negotiated the settlement with MCI/WorldCom, including the Langston Law Firm of Booneville, Lundy & Davis of Jackson and Aylstock, Witkin, Kreis & Overholtz of Pensacola, Fla.

MCI/WorldCom agreed to a $100-million settlement with the state in 2005 to resolve claims over how it paid income and franchise taxes. The company also agreed to a separate payment of $14 million for the state’s outside law firms.

The fee payment was challenged more than two years later by then-Mississippi State Auditor Phil Bryant, who argued that the attorney fees paid by MCI/WorldCom were “public funds” and that private attorneys retained by the attorney general could only be paid through legislative appropriation. Bryant raised the issue after he began his campaign for lieutenant governor, and current State Auditor Stacey Pickering continued to pursue the claims leading up to the court’s ruling.

In his order, Judge Kidd ruled that the outside legal fee payments were “separate and apart from the $100-million settlement to the state” and denied Pickering’s motion.

“This matter has lingered on for far too long,” the judge wrote in his order. “Common sense dictates that this matter come to an end at this time.”

The lead counsel for the law firms involved in the dispute says he hopes the ruling will put an end to a “battle of politics.”

“The auditor’s ill-advised lawsuit against our clients was never about the law, the facts or what is fair and honorable – it was always about politics,” says attorney Fred Krutz of Forman Perry Watkins Krutz & Tardy, LLP. “This case should never have been filed by Mr. Bryant and it should never have been continued by Mr. Pickering. Pursuing this claim against our clients has been a tremendous waste of taxpayers’ money.”

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