Posts tagged as:

Milberg Weiss

May 19 roundup

by Walter Olson on May 19, 2008

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May 6 roundup

by Walter Olson on May 6, 2008

  • 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]

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April 17 roundup

by Walter Olson on April 17, 2008

  • “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]

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Quoted in today’s Times

by Walter Olson on March 21, 2008

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.

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Mel Weiss to plead guilty

by Walter Olson on March 20, 2008

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.

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New at Point of Law

by Walter Olson on March 20, 2008

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.

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Torkelsen Lerach scandal, cont’d

by Walter Olson on March 7, 2008

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).

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Special master: Coughlin Stoia paid for “stolen” Coke documents

by Walter Olson on March 4, 2008

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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March 4 roundup

by Walter Olson on March 4, 2008

  • 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.

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Milberg expert Torkelsen pleads guilty to perjury

by Walter Olson on March 3, 2008

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.

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The fall of William Lerach… in Mother Jones?!

by Ted Frank on February 18, 2008

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.

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February 14 roundup

by Walter Olson on February 14, 2008

  • 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 mohammed_cartoon_bomb.jpg 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]

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Lerach sentenced to two years

by Walter Olson on February 12, 2008

Over decades, the class-action titan paid secret kickbacks to pliant “representative” plaintiffs, then systematically falsified the nature of his relations to those plaintiffs the better to deceive judges, opponents, competing class action lawyers, and class members. He and his defenders are now portraying his offenses — even the systematic lying to courts — as minor and victimless. For some indications of why our legal system takes a very different view, see my WSJ op-ed of a year and a half back. Per Peter Lattman’s story/interview in today’s WSJ, “Mr. Lerach has requested, and the judge will recommend, that he be sent to Lompoc, a low-security federal penitentiary in Southern California often called a ‘country-club prison’ or ‘Club Fed.’”

Yesterday’s L.A. Times piece by Molly Selvin takes note of Lerach’s “trademark vitriol — he famously threatened to “destroy” companies that balked at settling”. Selvin also quotes NYU legal ethicist Stephen Gillers expressing concern that the spate of Milberg Weiss prosecutions “has to worry [lawyers] even if they’re doing nothing wrong because the Justice Department has shown its willingness to look into how they do business”. Gillers offers no examples of any Milberg lawyers who have been prosecuted despite “doing nothing wrong”, nor does he explore the question of how lawyers might exploit the impunity they would enjoy if the Justice Department permanently refused to “look into how they do business”. Indeed, if Lerach is right when he says kickbacks to named plaintiffs were industry practice in the class-action biz, it would seem that DoJ should have started “looking into how they do business” long before it did.

With fine understatement, Andrew Perlman at Legal Ethics Forum observes that it would “send the wrong message to students” for Lerach to be permitted to set up teaching legal ethics to law students at the University of Pittsburgh as part of his sentence. And taking a contrarian view, Larry Ribstein (via Bainbridge) says an appropriate comparison for Lerach would be to Michael Milken (Drexel Burnham) or Jeff Skilling (Enron) — but in the good sense.

More: This morning’s New York Times, a paper in whose columns Milberg Weiss long enjoyed cordial if not deferent coverage, buries the Lerach sentencing on an inside page of the business section. The paper’s “Dealbook” blog covers the story here. And The Economist recalls a “shouting match” in 2006 between Lerach and a leading British corporate governance advocate over whether litigation was the best way to address shareholder/manager conflicts. Plus: Charles Cooper, CNet.

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Lerach: “Everybody was paying plaintiffs”

by Walter Olson on February 11, 2008

“A prominent class-action lawyer facing sentencing today for secretly paying plaintiffs to file securities lawsuits, William Lerach, is suggesting that the under-the-table practice was widespread and was not isolated to the firm he helped run for decades, Milberg Weiss. … Despite the highly publicized travails of what was once America’s leading class-action law firm, there has been little public discussion of whether other firms may have emulated the secret payment scheme Lerach and other Milberg lawyers devised.” Notwithstanding a request by Lerach’s lawyers that the letters from his friends and supporters asking clemency be sealed from public inspection, most of the letters have become public, revealing the identities of such entirely unsurprising Lerach backers as Ralph Nader (who in this one particular case did not favor prison for white-collar criminality) and Ben Stein, known to readers of these pages (though apparently not to many readers of his New York Times column) as an expert witness hired repeatedly by Lerach to help portray sued companies’ conduct in the harshest possible light. (Josh Gerstein, “Lerach Says Payoffs Were Widespread”, New York Sun, Feb. 11). Another letter writer: Sen. Carl Levin (D-Mich.) And the list of letter-writers (PDF) includes “two redacted names in between Gordon Churchill and Charles Cohen”, leading to speculation that one or both surnames might be “Clinton”. It seems unlikely, though, that either prominent ex-White House resident would have risked the sort of negative publicity involved even as a gesture to acknowledge Lerach’s past favors. (CalLaw “Legal Pad”, Feb. 8)(corrected shortly after posting to reflect release of most letters by stipulation of parties, not judicial order). Update 4 p.m. EST: sentence is 24 months.

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Exclusive: New details in Milberg Weiss obstruction of justice case

by Ted Frank on February 7, 2008

The government accuses Mel Weiss of withholding a fax responsive to a subpoena that would have corroborated Hillel Cooperman’s claims of kickbacks hidden as options to purchase art. From the National Law Journal ($):

Prosecutors claim that Bershad, in response to the government’s 2002 subpoena, called Weiss to his office after discovering the fax and other documents in his desk drawer. “Weiss took them from Bershad, falsely stating, ‘David, you had nothing to do with the art option,’” prosecutors claimed in their recent motion. “Weiss then put the documents in his safe, concealing them from Milberg Weiss’ document custodian who was searching for documents responsive to the subpoena.”

Weiss then allegedly locked the documents in his safe. David Bershad has pled guilty, and is presumably the source for this conversation. Given the role of fundraising the law firm plays in Democratic politics (including for the two leading contenders for the Democratic nomination, Hillary Clinton and Barack Obama, and for John Edwards), one wonders why the only coverage of the ongoing scandal is in for-subscription legal papers. We have uploaded the government’s brief in opposition to Milberg Weiss’s motion to dismiss the obstruction-of-justice charge:

[click to continue…]

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Thread-count class action

by Walter Olson on February 3, 2008

The New Yorker’s “Talk of the Town” has a look at that class action against Bed Bath & Beyond over misleading bedding thread counts which resulted in “a series of refunds and discount certificates” to consumers — coupons from Bed Bath & Beyond, imagine that! — $2,500 for the named client, and up to $290,000 for the plaintiff’s counsel, led by Edith M. Kallas (formerly of Milberg Weiss), the whole contretemps summed up as a “dry goods Enron”. (Lauren Collins, “Splitting Threads”, Jan. 28). See also Michael Krauss at PoL; and Peter Lattman got to it first.

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Lerach: keep my sentencing briefs under seal

by Ted Frank on February 3, 2008

Ah, the hypocritical irony: Bill Lerach moves to keep his sentencing documents for the Milberg Weiss kickback scandal under seal, perhaps to protect the identities of the 150 people who wrote on his behalf. [NY Sun] Any politicians we should know about? Portfolio has the briefing; the DC Examiner comments. Prosecutors have asked for 24 months (out of a possible 33-month maximum under the Guidelines); sentencing is February 11. (Crossposted from Point of Law.)

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Milberg Weiss scandal: plaintiff-for-pay sentenced

by Walter Olson on January 29, 2008

Elderly (80) and ailing, retired entertainment lawyer Seymour Lazar drew an unusually light sentence of six months home detention after having “pled guilty to taking secret payments from Milberg Weiss for helping to bring dozens of securities lawsuits by serving as a plaintiff or arranging for his relatives to do so. Three former Milberg partners, William Lerach, David Bershad, and Steven Schulman, have also pled guilty in the scheme,” while the law firm itself and founder Mel Weiss continue to fight the charges and are expected to face trial later this year. “According to a statement from the prosecution, [federal judge John] Walter said he would have sentenced Lazar to a substantial prison term if he were younger and healthier.” (Josh Gerstein, New York Sun, Jan. 29).

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