HealthSouth Founder Sues Paper for Libel
HealthSouth Corp. founder Richard Scrushy, who faces a criminal fraud trial next month, sued an Alabama newspaper Monday over articles and cartoons that Scrushy claims are defamatory.
The libel suit claims the Birmingham News, which is owned by Newhouse Publications Inc., is trying to convict Scrushy in the press with its coverage of his accounting fraud trial, Scrushy’s lawyer said.
Scrushy, 52, goes on trial next month on charges that he masterminded a $2.7-billion fraud at his former company, the largest U.S. operator of rehabilitation hospitals. Scrushy denies allegations he told employees to inflate income and earnings.
“It is outrageous, intolerable, mean-spirited and beyond the bounds of decency what the Birmingham News has done to an honorable man during the last 21 months,” lawyer Julian McPhillips said.
Birmingham News editor Tom Scarritt directed questions to the paper’s lawyer, Gilbert Johnston.
“The Birmingham News intends to defend its reporting on these matters,” Johnston said.
Scrushy’s lawyer listed 12 objectionable phrases and editorial cartoons, including one depicting the “Richard M. Scrushy Correctional Facility.”
“The Birmingham News not only owes Richard Scrushy a huge public apology, but it also owes him substantial damages for the wrong it has perpetrated upon him,” McPhillips said.
The suit seeks at least millions of dollars in damages.
Seventeen former executives at Birmingham-based HealthSouth have pleaded guilty in connection with accounting fraud at the company. Jury selection in Scrushy’s case begins Jan. 5 in U.S. District Court.
