• Sure enough, former Milberg lawyers sue the convicted ex-Milberg lawyers for breach of fiduciary duty. I was wondering when that was going to happen. [WSJ Law Blog; NYLJ/law.com; earlier]
• “Schneider said others in the legal community initially had a hard time understanding why he had filed a grievance against a fellow attorney.” After all, she had only stolen $200,000 from clients. [Las Vegas Review-Journal via ABA]
• Judge: No evidence of wrongdoing by Kenneth Pasternak. Too bad he can’t get his three years back. Meanwhile SEC keeps bringing enforcement cases on same repeatedly rejected theory of liability. [WSJ; Law Blog]
  
• “What the AP and The New York Times’ Hansell don’t seem to realize is how hostile an act it is to send lawyer letters to individuals.” [Jarvis via Patterico]
• “When judges act like politicians, the judicial selection process – elected or appointed – becomes increasingly political. Action and reaction. The politicization of the court led to the politicization of the elections for justices. … When justices arrogate political policymaking to themselves, they should not be surprised when they are held to the same standards as politicians.” [Wisconsin Policy Research Institute via American Courthouse; I said that, too]
• Even Susan Estrich finds the Alex Kozinski web site mini-to-do as evidence of media bias. [Estrich; Patterico link roundup]
• Senator McCaskill shows her ignorance on the Anheuser-Busch merger and corporate officer duties. [Hodak]
• A clever attorney will already have a fill-in-the-blanks product liability complaint drafted against Lego. [Childs]
• Hugo Chavez expropriates wealth to consolidate dictatorship. American lawyer helps. Somehow I don’t think we’ll see an Alien Tort Claims Act suit against his law firm. [AmLaw Daily]

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.)

Continue Reading »

• High school graduation got rained out in Gilbert, Ariz., and a dad wants $400 from the school district for that [Arizona Republic]
• Happens all the time in one-way fee shift awards, but still worth noting: lawyer in police-misconduct case “billed 22 hours at $480 an hour — a total of $10,560 — just to figure out how much his fees are going to be” [Seattle Times]
• We get to decide and that’s that: New York judge orders that salaries of New York judges including his own be raised [PoL, Bader] Also at Point of Law: white-shoe Clifford Chance throws a party for New York lefties, should anyone be surprised? outsourcing of interrogation to profit-minded private contractors is bad when it’s Blackwater, good when it’s Motley Rice; tax break for trial lawyers said to be blocked for now.
• One firefighter killed in Boston restaurant blaze had sky-high .27 blood alcohol level, the other traces of cocaine, which probably won’t impede the inevitable lawsuit against the restaurant and other defendants [Globe, background]
• Writing again on U.S. exceptionalism, Adam Liptak contrasts our First Amendment with Canadian speech trials; James Taranto thinks he’s siding with the Canadians, but the piece looks pretty balanced to me [NYTimes, WSJ Best of the Web]
• Milberg said to be on verge of deferred prosecution agreement deal with feds involving $75 million payment and admissions of wrongdoing [NLJ]
• Courts in Australian state of Victoria, emulating a model tried in Canada, will resort more to mediation of intractable disputes [Victoria AG Rob Hulls/Melbourne Age]
• Great moments in international human rights: KGB spy on the lam sues British government for confiscating royalties he was hoping to make from his autobiography [five years ago on Overlawyered]

The judge chose to go near the high end of the plea-negotiated range of 18 to 33 months. (Bloomberg; earlier guilty plea, letters asking leniency from Arthur Miller et al., background).

• Screening firm hired by Beaumont, Tex.’s Provost Umphrey to do mass silicosis x-rays at Pennsylvania hotels is fined $80,500 for breaking various state rules, like the one requiring that a medical professional be on hand [Childs]
• Milberg Weiss’s special way of obtaining perfectly pliant clients — that is to say by bribing them under the table — harmed other class members by increasing fees but not settlement sums, suggests a new study by St. John’s lawprof Michael Perino for Ted’s project at AEI [Carter Wood @ PoL]
• Time for Texas to join many other states in requiring lawyers to inform clients when practicing without professional liability insurance [SE Texas Record; earlier here, here and here]
• Lawyers, in concert with their public pension fund allies, jockey for control of securities case against Bear Stearns [Gerstein/NY Sun]
• Another court, this time in California, rules that a screw maker can’t sue a law firm on the claim that its solicitation of potential claimants wrongly portrayed the company’s products as defective; amicus brief from state trial lawyers group and Sen. Sheila Kuehl says relevant provisions of state’s “SLAPP” law were “meant to protect plaintiffs groups, not companies” [The Recorder via ABA Journal; earlier case from Tennessee]
• Most lucrative Google AdSense words still dominated by asbestos and other personal injury practice, the top terms being “mesothelioma treatment options” ($69.10 per click, and the point of obtaining the click is not to provide treatment options), “mesothelioma risk” ($66.46), and “personal injury lawyer michigan” ($65.85) [CyberWyre via NAM "Shop Floor"; more here, here, etc.]

Mel Weiss — yes, that Melvyn Weiss, of Milberg Weiss, the one who ran a corrupt but lucrative kickback scheme premised on systematic lies to judges over decades, then stonewalled its disclosure through years of investigation — “deserves recognition as ‘one of the greatest humanitarians of our time,’ according to a sentencing memo his lawyer filed Friday.” (Ben Hallman, “Urging Leniency, Big Names Go to Bat for Mel Weiss”, American Lawyer, May 28).

Included were more than 240 supportive letters filed by friends and well-wishers of the famously piratical class-actioneer. It’s hard to read the WSJ law blog’s excerpts from these letters without shedding a tear of admiration:

“Donald Kempf, the former chief legal officer at Morgan Stanley says that after an unexpected on-the-street encounter, Weiss offered to help Kempf find a certain kind of watch. “And he did.”

According to a letter submitted by a friend and art dealer in Sun Valley, Idaho, in a “spontaneous” gesture while in Vienna, Weiss bought the art dealer’s wife an expensive pair of boots.

(WSJ law blog, May 27). The roster (PDF) of character vouchers and pleaders for leniency includes many names familiar to readers of this site, including Stephen Susman, Benedict Morelli (president of the New York State Trial Lawyers Association), David Boies, Stan Chesley, Edward Labaton, and Christopher Seeger; the list is headed by lawprof and frequent Milberg Weiss expert witness Arthur Miller. We commented in February on the similar batch of letters on behalf of Weiss’s felonious collaborator Bill Lerach.

• No imprisonment for debt, except when owed to a lawyer? Texas man who didn’t pay $1,750 attorney fee jailed for 30 days [ABA Journal; Jonathan Skero]
• Exploding-bra claim against Victoria’s Secret “does not specify how the injury occurred” [Greenville, S.C. News]
• We’re all set to close on your mortgage refinance, and while we’re at it could I interest you in a class action over courier fees? [Madison County Record]
• So long we elect state court judges, they’ll never escape taint associated with need to campaign [J.D. Hull, What About Clients?]
• Milberg now argues any forfeiture of proceeds from tainted cases should be confined to its actual net profits, not gross fee revenue — would it have let off defendants it sued so easily? [Gerstein, NY Sun]
• Tom Goldstein of Akin Gump (SCOTUSblog) has a spoof “Call 1-CER-TIORARI” TV ad hawking his Supreme Court advocacy [YouTube]
• New at Point of Law: Colorado unions’ revenge initiatives; Dennis Quaid at Congressional hearing on federal pre-emption; guess why Orlando isn’t getting commuter rail; drafting docs for ER duty; court green-lights suit blaming U.S. business for South African apartheid; what we can learn from defunct causes of action; Rhode Island high court mulls lead paint suit; and Ted on Massachusetts med-mal study and on reversal of $32 million Garza v. Merck Vioxx verdict.
• Managers at Tim Horton may have been ninnies to fire worker who quieted crying child by giving out free mini-donut, but today’s law does tend to ninnyize those in authority [Cosh/National Post, Canada]
• Jonathan Rauch isn’t overjoyed at California high court marriage ruling [Independent Gay Forum; more from Kmiec, Lederman and others at Slate and from Eugene Volokh] More: Steve Chapman via Sullivan and Dale Carpenter @ Volokh.
• Road delayed at £1million expense, and then great crested newt turned out not to be there [Leicester, U.K.; Ananova]
• Why trial lawyers were pleased when Boeing moved its HQ from Seattle to Chicago [seven years ago on Overlawyered]

• Raelyn Campbell briefly captured national spotlight (”Today” show, MSNBC) with $54 million suit against Best Buy for losing laptop, but it’s now been dismissed [Shop Floor; earlier]
• Charmed life of Florida litigators Stanley and Susan Rosenblatt continues as Miami judge awards them $218 million for class action lawsuit they lost [Daily Business Report, Krauss @ PoL; earlier here, here, and here]
• Lerach said kickbacks were “industry practice” and “everybody was paying plaintiffs”. True? Top House GOPer Boehner wants hearings to find out [NAM "Shop Floor", WSJ law blog]
• It’s Dannimal House! An “office rife with booze, profanity, inappropriate sexual activity, misuse of state vehicles and on-the-job threats involving the Mafia” — must be Ohio AG Marc Dann, of NYT “next Eliot Spitzer” fame [AP/NOLA, Adler @ Volokh, Above the Law, Wood @ PoL; earlier]
• Sorry, Caplin & Drysdale, but you can’t charge full hourly rates for time spent traveling but not working on that asbestos bankruptcy [NLJ] More: Elefant.
• Fire employee after rudely asking if she’s had a face-lift? Not unless you’ve got $1.7 million to spare [Chicago Tribune]
• Daniel Schwartz has more analysis of that Stamford, Ct. disabled-firefighter case (May 1); if you want a fire captain to be able to read quickly at emergency scene, better spell that out explicitly in the job description [Ct Emp Law Blog]
• As expected, star Milberg expert John Torkelsen pleads guilty to perjury arising from lies he told to conceal his contingent compensation arrangements [NLJ; earlier]
• Case of deconstructionist prof who plans to sue her Dartmouth students makes the WSJ [Joseph Rago, op-ed page, Mindles H. Dreck @ TigerHawk; earlier]
• How’d I do, mom? No violation of fair trial for judge’s mother to be one of the jurors [ABA Journal]
• First sell the company’s stock short, then sue it and watch its share price drop. You mean there’s some ethical problem with that? [three years ago on Overlawyered]

• “I did not know what kind of monster we were dealing with”: dramatic testimony from Judge Lackey on Scruggs corruption [Folo; and repercussions too]
• New at Point of Law: Pork-barreling Albany lawmakers shell out for just what NY needs, three more law schools; Sarbanes-Oxley unconstitutional? Ted goes after JAMA on Vioxx; sadly, appeals court overturns Santa Clara opinion that nailed ethical problems with govt.-paid contingency fee; legal aid lawyers, to subprime borrowers’ rescue? and much more;
• Cadbury claim: we own the color purple as it relates to chocolate [Coleman]
• A world gone mad: Innocence Project directors include… Janet Reno? [Bernstein @ Volokh]
• Not unrelatedly: Can a California prosecutor be held liable for wrongful murder conviction of man freed after 24 years? [Van de Kamp versus Goldstein, L.A. Times via Greenfield]
• With all his lawyer chums from Milberg-witness days, you’d think Ben Stein could have saved the makers of his creationist movie from stumbling into textbook IP infringements [Myers, again, WSJ law blog]
• Groggy from dental anesthesia, plus a half a glass to drink: then came the three felony DUI counts [Phoenix New Times, Balko via Reynolds]
• Shell says boaters had years of notice that mandated ethanol in fuel was incompatible with fiberglass marine gas tanks, which hasn’t stopped the filing of a class action [L.A. Times via ABA Journal]
• Terrorism asymmetry: “They say ‘Allahu Akbar!’ we say ‘Imagine the liability!’” [McCarthy/Lopez, NRO]
• Deborah Jeane Palfrey convicted [WaPo; earlier]
• David Neiwert truly born yesterday if he thinks Kevin Phillips is noteworthy for his record of being right [Firedoglake; some correctives]

I’m quoted on the Melvyn Weiss guilty plea, and on the way certain crooks have successfully been passing themselves off as white knights in press coverage of shareholder and consumer litigation. (Jonathan D. Glater, “High-Profile Trial Lawyer Agrees to Guilty Plea”, New York Times, Mar. 21). For more on Weiss’s plea, see yesterday’s post.

More Weiss reactions include a NY Sun editorial:

Mr. Weiss and his partners made their careers, and their fortunes, casting those they were suing — insurance and tobacco executives, Swiss bankers — as crooks. Some of them may have been, though many were not. Now these lawyers are admitting to the court that they are crooks, too. … Congress has already acted to reform the class-action system from the “first-to-file” system that engendered the Milberg Weiss abuses. But until Congress and the state legislatures act further to reform the civil litigation system, the costs of Weiss’s career will be borne by all of us.

Interviewed by the L.A. Times, Columbia lawprof Jack Coffee (who’s done a lot of work for Milberg, right?) thinks Mel Weiss got a “uniquely good deal” in the plea. Similarly: Greenfield.

WSJ: “Melvyn Weiss, the onetime powerhouse shareholders lawyer, has struck a deal to agree to plead guilty in a case alleging improper kickbacks, according to a person familiar with the investigation.” We’ve been covering the Milberg Weiss scandals on this site since they broke; my WSJ op-ed “Inside Milberg’s Credenza” is here. More:

According to a statement released Thursday by the defense lawyer, Benjamin Brafman, Mr. Weiss will plead guilty to participating in a criminal conspiracy to pay a share of legal fees to plaintiffs in shareholder suits brought by Milberg Weiss. Such kickbacks are improper because they give plaintiffs representing a class of all shareholders an incentive to accept a deal that might not be best for the class.

Under the terms of the plea agreement, Mr. Weiss faces a sentence of up to 33 months in prison. Mr. Weiss has also agreed to pay a total of $10 million in fines and penalties, according to the statement.

(Jonathan Glater, NYT). More at WSJ law blog (Weiss: “I deeply regret my conduct”) including a copy of the plea agreement and government statement, both PDF.

The firm of Milberg Weiss, formerly Milberg Weiss Bershad & Schulman LLP, famous for shedding indicted names as an ecdysiast sheds clothes on stage, is now down to plain old Milberg LLP, and will presumably be able to stop there, the Milberg after whom it was named being nearly twenty years deceased. (Bumped 1:50 p.m.)

And: World-class chutzpah morsel from the NYLJ: “If Mr. Weiss had proceeded to trial, his defense was expected to argue that he was so preoccupied with humanitarian and charity work during the charged period that Messrs. Bershad and Schulman had been able to carry on the kickback scheme without his knowledge.” In the plea agreement, Weiss stipulates that he was in effective control of the firm and its operations and party to the conspiracy, and agrees to forfeit a sum of nearly $10 million which he acknowledges is less than what he gained from the illegal conduct.

Plus: Portfolio:

Weiss made staggering profits from the kickback scheme. According to the indictment, his share of the law firms profits from 1983 to 2005 amounted to more than $209 million. …

Sanford Dumain, a member of the Milberg L.L.P. executive committee, said, “Having previously believed former leaders’ assurances of their innocence, the firm is now seeking to find a fair and appropriate resolution of remaining issues so that we can continue to work on behalf of injured investors and consumers.”

The firm added in a statement: “Milberg L.L.P. apologizes to all judges, lawyers, clients, and class members, who deserve full and complete adherence to all legal and ethical norms.”

Portfolio also reports that the Milberg firm is intent on obtaining a deferred prosecution agreement: “If the firm pleaded guilty to a federal criminal offense, it is highly unlikely that a judge would approve the law firm to serve as lead counsel for the plaintiff in a class action.” More on the firm’s renaming: Lat. And Carter Wood at NAM notes the silly encomia with which Weiss’s lawyer is still attempting to gild his crooked client.

If you’re not keeping up with our sister site, you’re missing out on stories about how expert evidence standards help plaintiffs too (and more); animal rights more voguish at many law schools than those dull old humans; Ohio Supreme Court commended; implications of recent plunge in carpal tunnel cases; 93% enrollment in Vioxx settlement; attorney faces criminal charges after his clients quit their nursing jobs; extensive coverage of Gov. Spitzer’s downfall; more trouble for Florida lawyer accused of bribing defendant’s adjuster to obtain settlement target numbers; ballot measure would abolish employment at will in Colorado; judicial seminars by the securities class action bar; and much more.

Turns out when Bill Lerach cut his plea deal with the feds, they not only agreed to spare him prosecution on other matters, but also agreed not to press charges against former Milberg lawyers (and current Coughlin Stoia partners) Patrick Coughlin and Keith Park over their dealings with Torkelsen. Another sign, perhaps, that Lerach managed to cut himself and his circle a good deal in the plea negotiations. (WSJ law blog, Mar. 6; earlier).

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).

• Judge allows lawsuit to go forward as class action claiming consumers defrauded because gasoline expands in summer heat and so there’s less in a “gallon” [KC Star, TodaysTrucking.com; earlier at PoL]
• Online speech: when a lawprof says it silences someone not to let them sue for defamation, it’s time to check definitions [Reynolds, Bainbridge, Volokh]
• Should a law school invite Lerach of all people to teach legal ethics? [Massey/Faculty Lounge; earlier] Plus: Congress should investigate how widespread Lerach-style abuses were at other law firms [Columbus Dispatch editorial]
• Usually no one gets hurt when a physician dodges having to deal with a litigious patient, but then there are those emergencies [Brain Blogger]
• A lesson for Canada: judged by results in places like Kansas, the American approach to hate speech (i.e., not banning it) seems to work pretty well [Gardner/Ottawa Citizen]
• “Way way too egocentric”: a marketing expert’s critique of injury law firm websites [Rotbart/LFOMA via ABA Journal]
• More students are winding up in court after parodying their teachers on the Internet [Christian Science Monitor]
• Money in the air? It happens the quiet little Alaskan Native village suing over global warming is being represented by some lawyers involved in the great tobacco heist [NY Times]
• Ninth Circuit panel hands Navy partial defeat in enviro whale sonar suit; ditto federal court in Hawaii [Examiner; earlier]
• Le Canard Noir “Quackometer” flays pseudo-science, some of its targets complain to ISP which then yanks the site: “We do not wish to be in a position where we could be taken to court” [Orac; earlier]
• Hans Bader guestblogged at Point of Law last week, on such subjects as: courts that decide punishment before damages; presumed guilty of child abuse? inconsistent straight/gay treatment in sexual harassment law; and signs that today’s Supreme Court doesn’t exactly show a pro-business bias in discrimination cases.

This looks pretty major, pattern-and-practice-wise:

John B. Torkelsen, a former expert witness for Milberg Weiss, has agreed to plead guilty to perjury, admitting he lied to a federal court judge in a securities class action case about how he was getting paid.

Prosecutors in the Milberg Weiss case have been eyeing Torkelsen for years.

I wonder whether this will put a crimp in the image rehabilitation op-ed stylings of Bill “My Only Sin Was To Love the People Too Much” Lerach. The implications could ripple out to other class-action firms as well: “In an announcement about the plea agreement on Thursday, prosecutors claim that Torkelsen was retained by several firms” and that the other firms engaged in misbehavior akin to that of Torkelsen’s handlers at Milberg. (Amanda Bronstad, “Former Milberg Weiss Expert Witness Agrees to Plead Guilty to Perjury”, National Law Journal, Feb. 29). Our earlier coverage of Torkelsen is here.

Stephanie Mencimer (via NAMblog) writes in Mother Jones Feb. 14:

Large corporations have long argued that class action lawyers are nothing more than extortionists who shake down big companies every time their stocks fall, forcing them to settle or risk fiscal ruin from a big jury verdict. Given what’s known now about how Lerach operated his law firm, it’s hard to say that the perception is only spin.

Mencimer, though, gives too much credit to Lerach’s self-serving “corporate crime fighter” identity. Lerach sued indiscriminately. To the extent that a small proportion of the defendants in Milberg Weiss cases were actual wrongdoers, it was a function of a stopped clock being right twice a day. It was because Lerach sued so often without actual evidence of wrongdoing that his early suit against Enron was dismissed: when faced with the biggest corporate scandal in history, Lerach couldn’t actually make the case until after the fact. Given that the decades of jail time Enron and WorldCom executives are facing, and the fact that a Lerach suit was at least as likely to be against the innocent as the guilty, it’s hard to say that the Lerachs of the world added much in the way of deterrence of corporate wrongdoing, as opposed to the deterrence of corporate investment. All Milberg Weiss and its successors accomplished was to transfer wealth from investors to their own pockets, with a taste for the politicians like Bill Clinton and other Democrats who helped weaken or block efforts to reform the securities laws. Ken Lay raised a fraction as much money for Republicans without any sort of quid pro quo, yet his relationship to Bush has gotten far more attention than Lerach’s relationship to the Democrats and the favors they did for him at the expense of everyday investors.

• Examiner newspaper begins series on how Milberg Weiss used nonprofit foundation to project its clout among judges, academics, influentials [Institute for Law & Economic Policy, three-parter]
• Judge Canute, or just reporter’s awkward wording? Australian jurist with great eyeglasses bans screening of TV drama in state of Victoria; “Under the order, all internet material relating to the series is also banned.” [Herald Sun] (More explanation on the court order: The Australian).
• Times Square’s Naked Cowboy sues over M & M candy ad playing off his image [NY Post]
• Bite mark testimony makes another chapter in catalogue of dubious prosecutorial forensics [Folo's NMC on two Mississippi Innocence Project cases]
• Update: Pennsylvania court upholds disputed fees in Kia-brake class action [Legal Intelligencer; earlier]
• Best not take McCain too literally when he says he’d demand that judicial nominees have a proven record on Constitutional interpretation [Beldar]
• Expert witness coaching …. by the Royal Society for the Prevention of Cruelty to Animals? [Nordberg; earlier]
• For some reason many Boston residents feel menaced by city’s plan for police to go door to door asking “voluntary,” “friendly” permission to search premises for guns [Globe]
• Lots and lots of publications print Mohammed cartoon in solidarity with Danish cartoonist and assassination-plot target Kurt Westergaard [CNN; Malkin]
• Calgary Muslim leader withdraws official complaint against Ezra Levant over his publication of Mohammed cartoons [National Post; earlier]
• Steyn, relatedly: critics dragging my book before Canadian tribunals wish not to “start a debate”, but to cut one off [National Post]