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Coughlin Stoia

Daniel Fisher at Forbes explains:

…The rise of the “confidential witness” can be traced to the Public Securities Litigation Reform Act and subsequent Supreme Court rulings, under which class-action lawyers are required to do more than just point out the obvious, that a stock price fell. They need to state “particularized facts” giving a strong inference that somebody in management, not just a faceless corporate entity, did something he or she knew was fraudulent.

To get over this hurdle, class-action lawyers frequently call upon nameless “confidential witnesses” who apparently are willing to speak with plaintiff lawyers but live in fear of their identities being revealed to anyone else.

Funny thing is, the testimony of these confidential witnesses on eventually reaching the light of day keeps not backing up the propositions the lawyers said it did. The newest embarrassment afflicts Robbins Geller, a successor law firm to Bill Lerach’s Coughlin Stoia. More: ABA Journal; City of Livonia Employees Retirement System v. Boeing.

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All four have completed their sentences and don’t seem to have it so bad, judging by a March 19 Bloomberg story. William Lerach is going to teach at a law school and work for a “progressive think-tank.” And for the Milberg law firm itself? “Over the past couple of years, while everybody has been laying off lawyers and cutting pay, we’ve been giving lawyers raises and extra bonuses.”

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Class action lawyering is nothing if not an active culture. [California Civil Justice Blog]

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As longtime trial lawyer ally Phil Angelides gears up his banker-bashing hearings, the law firm formerly known as Lerach Coughlin (yes, that Lerach) has reason to smile [WSJ, WSJ Law Blog] Earlier at Point of Law here, here, and here.

More background reading on the Draconian consumer product safety law:

  • Fear of losing even more high-quality German toy suppliers [Kathy + Matt Take Milwaukee]
  • Mattel will pay $13 million to 20 plaintiff’s firms TheTown2to resolve class action over toy recalls; claimed value of settlement to class (vouchers, etc.) is something like $37 million [National Law Journal, Coughlin Stoia release; earlier] Note also Rick Woldenberg’s March analysis of one recall (recall of 436,000 units premised on two cans of bad paint).
  • New law “has added several new tasks [to the CPSC], many of which most charitably can be described as marginal in the overall pursuit of product safety that will divert staff and financial resources from more important safety issues.” [attorney Michael Brown, quoted at Handmade Toy Alliance Blog]
  • Alarmist reporting on Boston’s WBZ affords a glimpse of MaryHadLamb2“the scary people behind the law” [Woldenberg]
  • Effort to help move blogger Kevin Drum up the CPSIA learning curve [Coyote]
  • “The “Resale Round-up,” launched by the CPSC, finally limits the power of these merchants of death who recklessly barter second-hand toys to unsuspecting civilians at low prices…. The only question now is how did any of us survive this long?” [David Harsanyi, Denver Post]
  • Among its other effects, the statute “will boost opportunities for mass-tort suits” [Crain's Chicago Business]
  • Law’s “continuing disaster for small business” illustrates MaryHadLamb3difference between crony capitalism and the real kind [James DeLong, The American, with kind words for a certain "indispensable" website that's covered the law]

PUBLIC DOMAIN IMAGES from Ethel Everett, illustrator, Nursery Rhymes (1900), courtesy ChildrensLibrary.org.

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Class action impresario Bill Lerach’s old Lerach Coughlin firm, now renamed Coughlin Stoia, continues to prosper mightily despite the imprisonment of its former principal, but federal judge James Rosenbaum in Minnesota has now knocked $45 million off a $110 million fee request in a settlement of a class action against UnitedHealth, saying the firm would probably not have been selected as lead counsel had Lerach “timely and fully” disclosed to the court his status as a target of federal investigation. The lead plaintiff in the case was CALPERS, the California public employee pension fund that has long enjoyed cozy relations with politicians, unions and prominent class-actioneers. [Dan Levine, The Recorder/Law.com]

David Giacalone figures that at least the jaw-dropper fee cases serve one useful purpose: they remind judges, the public and the legal profession itself “that we really do have a ban on unreasonable fees and expense charges — we [lawyers] can’t agree on them, charge them, or collect them”. With discussion of the Coughlin Stoia/Coke, Lawrence v. Miller, and certain lawyers’ willingness to bill two clients full freight for the same hour on the clock. (f/k/a, Nov. 21).

November 26 roundup

by Walter Olson on November 26, 2008

  • Businesswoman takes to her blog to criticize the business practices of a video-production firm, and then the lawsuit arrives [Inc. magazine via MediaBloggers; Vision Media Television v. Leslie Richard/Oko Box]
  • Litigious Minneapolis strip club owner “sued a one-time housemate for, among other things, not returning some pillows and a coat rack.” [Star-Tribune via Obscure Store]
  • Really now, says judge to Coughlin Stoia class-actioneers, $1,365.95/night in travel expenses is a bit rich in this Coke settlement [Krauss, PoL]
  • L.A. attorney Terry Christensen sentenced to three years in Pellicano wiretap scandal [AP/Variety] Did L.A. Times skew coverage toward Pellicano defense? [Patterico, more]
  • New Louisiana lawyer-ad rules: would they restrain lawyers from blogging or posting on Facebook/Twitter? [Coleman, Ribstein vs. O'Keefe vs. Greenfield]
  • Electing public defenders is bad idea to start with, and things get particularly dicey when the local cops throw their support to one candidate [Balko, Reason "Hit and Run"; Jacksonville, Fla.]
  • Online carpooling service? Great idea until the bus authorities get you closed down [Save PickUpPal in Ontario via Coyote; Canada]
  • Horizon Blue Cross agrees to settle suit over coverage of eating disorders, will pay $1.18 million to some policyholders to cover extended bulimia and anorexia treatments, and $2.45 million to class action lawyers led by Bruce Nagel of Roseland, N.J. [NJLJ]

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Yesterday, updating a Tuesday post, I expressed some annoyance that AmLaw Daily’s coverage of the $688 million Enron fee award extensively quoted Columbia lawprof Jack Coffee in support of the fee’s fairness — even casting him as a “frequent class action critic” whose praise for the fee was more credible because “unlikely” — without informing readers that Prof. Coffee had in fact been hired by the plaintiff’s lawyers to support their fee application, a role he has served in earlier cases as well. Now the publication has “updated [the post] with new information” reflecting that relationship. Journalism professor Mark Obbie of Syracuse’s Carnegie Legal Reporting Program is kind enough to credit my criticism with making a difference.

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Coughlin Stoia Geller Rudman & Robbins, formerly of Bill Lerach fame, and other law firms sued to pin the blame on banks, auditors, and other outside deep-pocket third parties, as well as on directors; defendants collectively paid $7.2 billion. Giving the plaintiff’s lawyers $688 million of that is very “fair and reasonable” and involves no “windfall”, per U.S. District Judge Melinda Harmon. (Bloomberg, Sept. 8).

More: OK, so maybe Brian Baxter of AmLaw Daily is just pursuing a reasonable news angle when he quotes the Coughlin Stoia lawyers doing a little victory lap and waving to the crowd. But if he’s going to quote Prof. John Coffee at such length as his big authority in support of the fee’s fairness, shouldn’t he go beyond identifying Coffee as “a professor at Columbia Law School and frequent class action critic” to spell out a little more explicitly that, you know, Coffee was hired by the plaintiff’s lawyers in this case to defend their fee request? Doesn’t that make it less surprising that Patrick Coughlin “welcomes the positive feedback” from these supposedly “unlikely legal circles” to support his case? (more background, yet more).

Update Thurs. a.m.: by yesterday evening American Lawyer had substantially “updated [the post] with new information” to reflect the Coffee relationship, and Prof. Obbie is kind enough to give me some credit for that happening.

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Plaintiffs firm Berman DeValerio sued attorneys Eran and Susan Boltz Rubenstein, former Coughlin Stoia attorneys, for breach of contract; in their counterclaim, the Rubensteins claim they were hired on a contingent fee basis to wrangle international clients to serve as plaintiffs in securities class actions. Lyle Roberts has the details, and the complaint and counterclaim. Alas, the case settled before details of this interesting arrangement came to light in discovery or other court filings, and it is perhaps too much to ask for questions to be asked in the nonexistent Congressional investigation of the practices of the securities class action bar.

Milberg settles

by Ted Frank on June 16, 2008

Jonathan D. Glater reports that the former Milberg Weiss will pay $75 million over five years; the government will release a statement saying no current attorneys committed wrongdoing. (“Firm to Settle Class-Action Case for $75 Million”, NY Times, Jun. 17; also W$J). The W$J says the firm will admit that it committed wrongdoing in the past, but will not actually plead guilty–i.e., the same sort of deferred prosecution agreement that the NY Times recently condemned in the context of business. (To be clear: I’m not objecting to a deferred prosecution agreement here. Felony convictions for entities are usually effectively death sentences, and that is pointless if the guilty parties have actually left the building.)

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April 16 roundup

by Ted Frank on April 16, 2008

  • Schadenfreude overload: Eliot Spitzer fighting with Bill Lerach’s old law firm. You see, Spitzer returned Lerach firm’s money after the indictment (unlike many other Democrats); when Lerach left the firm, Spitzer hit them up for cash again; now, they’re the ones seeking money. [WSJ Law Blog; NY Sun]
  • Breakthrough on Keisler nomination. [Levey]
  • Sued for accurately saying government employee was a Mexican. [Volokh]
  • Global warming lawsuit finds conspiracy in free speech. [Pero]
  • Yet another free speech lawsuit: 50-Cent sued for “promoting gangsta lifestyle.” [Torts Prof]
  • 3-2 decision in NY Appellate Division: Not a design defect for tobacco companies to sell cigarettes that aren’t light cigarettes. [Rose v. Brown & Williamson Tobacco Co.; NYLJ/law.com via Prince]
  • Meanwhile, tobacco companies are also being sued over light cigarettes. Second Circuit tosses Judge Weinstein’s novel class certification (Point of Law); Supreme Court grants cert in Altria Group v. Good.
  • Defensive medicine one of many reasons that health-care costs so much in US [New York Times]
  • Eyewitness testimony: you can’t always believe your eyes. [Chapman]
  • First-hand report on Obama’s views on guns. [Lott]
  • Ethical problem for law firm to be representing judges in litigation seeking pay raise? [Turkewitz]

April 2 roundup

by Walter Olson on April 2, 2008

  • Judge expresses surprise at how many law firms want in on fees in Visa/MasterCard issuer settlement [NYSun]
  • Mississippi bill would require a lawyer’s presence at real estate escrow closings; so rude to cite the profession’s self-interest as a factor [Clarion-Ledger]
  • Following Coughlin Stoia’s lead, Mark Lanier announces he’s expanding into intellectual property litigation [The Recorder]
  • Maryland legislation would require state-aided colleges and universities to report on what they’re doing to advance “cultural diversity” [Examiner via Bader/Open Market]
  • New era at UK pubs? Under new directive, “employers will risk being sued if a bar worker or waitress complains of being called ‘love’ or ‘darling’, or if staff overhear customers telling sexist jokes.” [Daily Mail]
  • ACLU just sued city of San Diego and snagged $900K in legal fees, but that’s no impediment to the city’s council’s enacting a special day of tribute to the group [House of Eratosthenes]
  • George Wallace, who’s guestblogged here, hosts twin editions of Blawg Review #153 at his blogs Declarations & Exclusions and A Fool in the Forest, on piratical and Punchinello themes;
  • Obama won’t support lowering drinking age [Newsweek]
  • Such a shame for entrepreneurial plaintiffs, post-Proposition 64 if you want to sue a California business you might actually need to have been injured [CalBizLit]
  • Time mag appeals $100 million Suharto libel ruling [IHT]
  • Hey, no fair enforcing that fine print disclaiming liability for sweepstakes misprints [three years ago on Overlawyered]

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March 25 roundup

by Walter Olson on March 25, 2008

  • Speaking of patients who act against medical advice and sue anyway: doctor who advised against home birth is cleared by Ohio jury in $13 million suit [Plain Dealer and earlier via KevinMD]
  • UK: “A feud over a 4ft-wide strip of land has seen neighbours rack up £300,000 in lawyers’ bills, and left one family effectively homeless.” [Telegraph]
  • Last of the Scruggs judicial bribery defendants without a plea deal, Dickie’s son Zack, takes one [Folo]
  • By reader acclaim: securities trader sues over injury from lap dancer’s attentions [AP/NY Sun]
  • Amid the talk of FISA and retroactive telecom immunity, it would be nice to hear more about the actual lawsuits [Obbie]
  • Australian worker loses suit over firing despite a doctor’s note vouching that stress of worrying about upcoming football game made it medically necessary for him to take day off to go see it [Stumblng Tumblr]
  • Megan McArdle and Tyler Cowen toss around the question of federal FDA pre-emption of drug liability suits, as raised by Medtronic;
  • Should Coughlin Stoia have bought those stolen Coke documents? For one lawprof, question’s a real head-scratcher [David McGowan (San Diego), Legal Ethics Forum] And WSJ news side is oddly unskeptical of trial lawyers’ line that the affair just proves their power to go on fishing expeditions should never have been curtailed [Jones/Slater]
  • Dashboard-cam caught Tennessee cops red-handed planting marijuana on suspect, or so Jonathan Turley suggests — but could it be a little more complicated than that? [WSMV, AP/WATE] (& Greenfield)
  • “Heck Baptists don’t even sue you for disagreeing with them,” though no doubt there are exceptions [Instapundit; NYT on Danish cartoons; Ezra Levant with more on those Canadian speech tribunals]
  • Bestselling authors who sue their critics [four years ago on Overlawyered]

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Do they often do business this way? The law firm of Coughlin Stoia, known as Lerach Coughlin before the departure of now-disgraced Bill Lerach, has been vying for lead counsel status in a shareholder class action against Coca-Cola. Now Roger Parloff at Fortune “Legal Pad” (Feb. 28) reports that a special master on the case has recommended that the firm be disqualified for “extremely troubling” conduct which it then defended after exposure using “pretextual” arguments. It seems two former Coke executives approached the law firm of Milberg Weiss (predecessor before its split of Coughlin Stoia), one of them in possession of more than 3,000 company documents he’d taken on departure, many stamped “confidential”. The law firm then agreed to pay the execs at least $75,000 to serve as “consultants”, part of the deal consisting of access to the documents, which it then used in its complaint.

When the consulting agreement came to light more than a year ago, Coughlin Stoia lawyers backed [Greg] Petro’s claim that neither he nor they had thought he was taking Coke documents without authority because, among other things, Petro had been ordered, when terminated, to “clean out his office.” Special Master [Hunter] Hughes found that such a command could not “rationally be construed to authorize Petro to walk off with company documents, any more than it authorized him to take the company’s desk, chairs, and computer.”

Hughes also rejected arguments that the firm was not really buying the documents, just entering into a consulting agreement, and a public-policy style argument that Petro’s conduct should be condoned because he was a whistleblower trying to expose corporate wrongdoing.

In a footnote, Hughes found that public policy arguments weighed in the other direction: “On a very practical level, for the Court to give Plaintiffs’ counsel a pass on this conduct, would simply invite terminated employees, particularly of public companies, to on a wholesale basis remove company documents following their termination in hopes they can sell them should the company be sued.”

More: San Diego Union-Tribune, ABA Journal, WSJ law blog (where several comments defend the law firm’s conduct).

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Plaintiff Trish Wiener “believes Dannon misled her, and she wants to milk it for all it’s worth”, reports the Los Angeles Times. The paper’s reporter seems almost disrespectful of this very serious legal action, which claims the bacterial cultures in Activia and DanActive yogurt aren’t really as salubrious as the ad puffery would have you believe. Most dramatic-irony-freighted quote, from a lawyer with the California firm of Coughlin Stoia, which is representing Wiener: “Companies are getting more and more aggressive in their advertising claims. They end up playing off people’s general fears and concerns.” Just to clarify, that’s a quote by a lawyer from Coughlin Stoia, and not a quote about that law firm, which is best known for until recently (in its Lerach Coughlin incarnation) being the home base of disgraced felon William Lerach. (Alana Semuels, “Yogurt maker sued for claims”, Jan. 24).

Meanwhile, Michael Krauss at Point of Law (Jan. 24) discusses the recent settlement of a class action against Bed Bath and Beyond over disputed bedding thread counts.

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September 4 roundup

by Walter Olson on September 4, 2007

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