Posts tagged as:

Milberg Weiss

Patricia Hynes, who spent 24 years at now-disgraced Milberg Weiss Bershad Hynes & Lerach and more than ten on its executive committee, is now slated to become the next president of the New York City bar association. The favorable assumption is that Hynes, a former prosecutor who became a name partner in the firm, was systematically duped by her former colleagues, as Roger Parloff at Fortune notes:

While being a dupe is not unethical, and certainly not illegal, it’s no badge of honor, either. For idealistic young law students making their career choices, it must have been reassuring if not inspirational to see former Manhattan executive assistant U.S. attorney Pat Hynes’s name so prominently displayed on Milberg’s letterhead. It vouched for the integrity of the whole operation. Whether she knew it or not, part of what she was being paid to do there for 24 years was to lend the firm an aura of integrity that, judging from three top partners’ guilty pleas, it didn’t deserve.

Before assuming the high professional honor of a bar presidency, Parloff wonders, shouldn’t Hynes be more willing to answer questions about her time at Milberg? (cross-posted from Point of Law).

{ 1 comment }

The Alliance for a New America is an “independent” campaign organization running television ads in Iowa on behalf of John Edwards—whose ability to spend money himself in Iowa is restricted because he is taking taxpayer money as campaign funds (all while bashing other candidates for taking money from “lobbyists”, even as he takes millions from trial lawyers and his finance chair is the former head of lobbying group ATLA).

Via Kaus, though Paul Krugman calls the Alliance for a New America a “labor 527″, it turns out that a third of its money comes from Rachel Mellon, of the Mellon family fortune. (Though one wonders why Krugman is willing to defend the 527 as a labor 527. It’s not like SEIU, which also heavily funds the Alliance for a New America, doesn’t lobby the government for special-interest legislation. If, as Edwards says, lobbyists are bad, they don’t suddenly become good because you agree with them. And if lobbyists you do agree with are good, then why isn’t the issue the underlying policy proposal rather than the fact of the lobbying, as Edwards tries to demagogue?)

Here’s the thing: Mellon is 96 years old. There are certainly competent 96-year-olds out there, and it’s possible that Mellon really likes John Edwards. But what we do know is that a New York trust attorney who holds the power of attorney for Mellon and the Mellon-related LLC that is fronting the money is a big fund-raiser for Edwards. Does Mellon know that she’s funnelling hundreds of thousands of dollars to John Edwards through her attorney through multiple 527s? Or is there something else going on? One expects Obama to complain:

According to the available records, which go back to 1980, she has never donated to a political candidate until a contribution was made in her name to John Edwards this year. Mellon’s involvement in the decision to donate to the Edwards campaign is unknown. The Washington Post reported yesterday that Alexander Forger, who has power for attorney for Mrs. Mellon, is a major supporter of John Edwards’ candidacy. Crain’s Business Journal reported in February that Forger and “a group of prominent New York lawyers” hosted a fund-raiser for Edwards at Essex House — the Central Park South address where his office is located. Forger has also personally donated $4,600 to Edwards’ campaign, according to FEC records. This is not the first time Forger has used Oak Springs Farms to support Edwards; in 2006, he made a $250,000 contribution to Edwards’ One America 527 group.

And even Daily Kos is asking questions.

(If there is something fishy, it wouldn’t be the first time lawyers have engaged in campaign finance shenanigans for John Edwards. See the case of Tab Turner. There’s the pending Fieger indictment, though Edwards and Fieger profess innocence. And Edwards still hasn’t returned all of the Milberg Weiss money, despite several guilty pleas and a pending indictment.)

Speaking of Edwards and demagoguery: he’s dropped references to the Mellons from his stump talks.

{ 4 comments }

Scruggs indictment IX

by Walter Olson on December 12, 2007

Yes, it seems there were wiretaps. Defendants will be seeing evidence from the prosecution momentarily which might (or might not) be the trigger for further flipping and early plea deals, if such there will be.

There is enormous curiosity (e.g.) about P.L. Blake, to whom Scruggs says he paid $10 million (and tens of millions more in future payments) for vaguely described intelligence services aimed at swaying political influentials during the tobacco caper. Per a 1997 account posted at Y’All Politics, “Blake pleaded ‘no contest’ in 1988 to a federal charge that he conspired to bribe officials of the now-defunct Mississippi Bank to secure favorable loan terms.” The same article, citing reporting in the Jackson Clarion-Ledger, reports that Blake was in close phone contact between 1994 and 1996 with eventually-disgraced state Auditor Steve Patterson, who after leaving office went into partnership with Timothy Balducci and is one of the five indicted in the current Scruggs affair. Per AP, “Patterson was a banker at Mississippi Bank before his 1984-1987 tenure as head of the Mississippi Democratic Party.”

David Rossmiller, as so often, is out front with a report filling in background on two other controversies involving Blake. One arose from a venture into the grain storage business which landed him in a Texas dispute in which his attorney was none other than Fred Thompson, later a Tennessee senator and presidential candidate. The other arose from his cordial dealings with a former chief of staff to Sen. Trent Lott (R-Mississippi).

Harper’s blogger Scott Horton has now published his take, as is his wont heavily dependent on hush-hush (but no doubt wholly trustworthy) confidential sources who float all sorts of theories about scoundrelly doings by the highly placed. He winds up with a theory that would pull Sen. Lott into it (though with no allegation of criminality) by way of the Acker contempt matter, as distinct from either the Balducci/Lackey bribery attempt or, say, the Paul Minor affair. Of Horton’s many anonymously sourced speculations, the one that caught my eye was tucked into a footnote: “A law enforcement official I interviewed, who for professional reasons asked to remain anonymous, told me that Scruggs’s junior partner Sidney Backstrom might take the same road as Balducci.” Now that is news a rumor (more). (Update Tues. evening: Backstrom’s attorney Frank Trapp flatly denies that anything of the sort is in the works: Patsy R. Brumfield, “Backstrom firm on innocence, his attorney says”, Northeast Mississippi Daily Journal, Dec. 12.)

This is probably a good place to apprise readers who aren’t aware of it that 25-odd years ago, while first gaining a footing in the policy world, I worked briefly on Capitol Hill drafting research papers for a committee then headed by Mr. Lott. We only talked a couple of times, I had never set foot in the state of Mississippi at the time, and I’m pretty sure he wouldn’t recognize me on the street, but if you’re a conspiracy theorist about such matters, there you have it.

At Y’All Politics, commenter “lawdoctor1960″ has some speculation as to why the remarkable deposition of Scruggs in the Luckey case didn’t get more media or political attention at the time.

Welcome Andrew Sullivan, David Rossmiller, Y’All Politics readers.

Attorney Tim Balducci’s role as deputized lawyer for the state of Mississippi in the MCI and Zyprexa cases is drawing public scrutiny, and may result in pressure for reform of AG outside contracting.

We’ve started a new “Scandals” category for readers who want quick access to coverage of the Mississippi mess, also stocked with some earlier links to coverage of such earlier blow-ups as Milberg Weiss/Lerach, Kentucky fen-phen, the Paul Minor affair, etc. For those who are following Scruggs posts in sequence, be aware that yesterday’s first and second posts fell outside the numbering scheme.

{ 2 comments }

December 5 roundup

by Walter Olson on December 5, 2007

  • Fear of “retribution” and “legal action” among reasons docs don’t report hazardous colleagues and conditions [WaPo on new Annals of Internal Medicine study]
  • Judge rips Milberg for high Chiron fee proposal, questions Skadden’s conflict [The Recorder]
  • Felony murder rule is an American exception with results that can be hard to defend [Liptak, NYT]
  • UK: “Man broke girlfriend’s leg in damages fraud” [Times Online]
  • Often driven by defensive medicine, CAT scans may pose their own risks to patients who undergo them [Newsday on NEJM study]
  • Commentator is glad post offices are lawyering up their Operation Santa gift programs [McDonough, CalLaw LegalPad; earlier; possibly related]
  • Quebec judge nixes suit by Concordia University mass murderer against former colleagues [Canadian Press]
  • Update on Kennewick man and Indian-remains legislation [WashTimes; earlier]
  • Magic of compound interest? Uncollected 1977 award for victim of Evel Knievel attack said to have mounted by now to $100 million [AP/Yahoo]
  • School discipline now a heavily lawyer-driven affair [Charleston Post & Courier courtesy Common Good]
  • Complaint: Cleveland housing authority should have done more renovations to accommodate extremely obese tenant [four years ago on Overlawyered]

{ 16 comments }

The plaintiff’s lawyers — which include Milberg Weiss as well as Grant & Eisenhofer and Schiffrin Barroway — are asking a court to approve $460 million in fees, plus about $29 million in expenses. They say they spent 488,000 hours on the litigation, and you’d better not express any skepticism about that figure unless you were in the room watching or something. (WSJ law blog, Nov. 1).

{ 3 comments }

Ted has already mentioned today’s front-pager on Milberg Weiss campaign donations, which is kind enough to quote me. I was particularly glad that reporter Mike McIntire took note of some of Milberg’s connections on Capitol Hill, which tend to get less attention than its Presidential campaign donations:

Beyond campaign contributions, Milberg Weiss became deeply ingrained in the financial firmament of the Democratic Party in other ways. Members of the firm gave $500,000 toward construction of a new Democratic National Committee headquarters, and some became partners in a private investment venture with several prominent Democrats. They included former Senator Robert G. Torricelli of New Jersey, who is a fund-raiser for Mrs. Clinton, and Leonard Barrack, a Philadelphia trial lawyer who was once the national fund-raising chairman for the Democratic Party.

Along the way, as Milberg Weiss’s brass-knuckles legal strategy made it a target for Republicans advocating limits on class action suits, it usually could count on Democrats in Washington to protect its interests. After federal prosecutors indicted the firm in May 2006, four Democratic congressmen issued a joint statement, posted on Milberg Weiss’s Web site, accusing the Bush administration of persecuting lawyers who take on big businesses.

The statement, signed by Representatives Gary L. Ackerman, Carolyn McCarthy and Charles B. Rangel, all of New York, and Robert Wexler of Florida, contained several passages that appear to be lifted directly from a “class action press kit” distributed by a national trial lawyers group. All but Mr. Wexler have received campaign contributions from Milberg Weiss partners.

(Mike McIntire, “Accused Law Firm Continues Giving To Democrats”, New York Times, Oct. 18).

{ 1 comment }

The New York Times finally gets around to exploring the ties between indicted Milberg Weiss, convicted Bill Lerach, and John Edwards and the Clintons (as well as the four Democrat representatives who parroted statements about Milberg’s supposed innocence). Walter is quoted. (Mike McIntre, “Accused Law Firm Continues Giving to Democrats”, Oct. 18). Regular readers of Overlawyered and Point of Law knew all this months ago. Useful comparison: MSM mentions of Enron ties to the Republican party compared to the much-more culpable Milberg Weiss much-more extensive ties to the Democrats—especially given the political favors done for the parasitical law firm that have allowed it to extract billions of dollars from investors.

October 3 roundup

by Walter Olson on October 3, 2007

  • Yet another Apple suit, this time on behalf of user who wishes iPod and iTunes were more compatible with other song vendors and devices [Miami Herald/ILR]

  • Fairview Heights, Ill. alderman says town was “deceived” into serving as lead plaintiff in class action against Orbitz, Priceline, Expedia and other online travel firms [Madison County Record]; More: here and here.

  • “Evasive”, “bad faith”: federal judge slams health insurance lawyers for stalling suit by docs [Phila. Inquirer; Plus: their side @ Law.com]

  • Plastic water guns draw ire of politicos in Albany, N.Y. [Times-Union via Nobody's Business]

  • High lawyers’ fees said to be pricing middle class Canadians out of the justice system, but it must be said the numbers cited sound pretty low by U.S. standards [Maclean's]

  • Flickr makes it easy to grab and reuse strangers’ photos, and legal sorrows ensue [NY Times]

  • Jack Thompson tries to get federal judge Jordan removed from hearing one of his lawsuits against the Florida Bar [GamePolitics.com; & yet more]

  • New at Point of Law: trial lawyers deem “slanderous” ads featuring fictional law firm of Sooem, Settle & Kashin; Business Week cover story on wage/hour suits; John Edwards comes out again for “certificate of merit” med-mal reform; replace your old kitchen cabinets and get lead paint companies to pay; and much more;

  • Some New York lawmakers think secondhand smoke is just as bad for you as actually being a smoker [Siegel via Sullum; more on recent smoking bans, complete with culturally-sensitive hookah exception]

  • “Disability Math” video explores paradox of how employment fell among handicapped after enactment of the ADA [Dubner, Freakonomics; more (now with more direct Freakonomics link)]

  • Class-action lawyers sue over kids’ Pokémon card trading craze, claiming it’s illegal gambling [Eight years ago on Overlawyered; Milberg Weiss angle here]

Feds indict Mel Weiss

by Walter Olson on September 21, 2007

Critics long derided the federal investigation of Milberg Weiss as slow to produce results, but things are moving along at a brisk clip now, with an indictment charging the nation’s best-known class-action securities lawyer with conspiracy, racketeering, obstruction of justice and making false statements, just after his best-known former colleague at the firm, William Lerach, agreed to cop a plea deal. “In addition, Steven G. Schulman, a former senior partner at the Milberg Weiss firm, agreed to plead guilty to a racketeering conspiracy charge, prosecutors said.” (AP/Business Week; Jurist “Paper Chase”; ABA Journal first and second stories. Documents, all PDF: Milberg Weiss superseding indictment; Schulman charge, plea, press release).

The Sirota & Sirota law blog, an “unfriendly competitor” of Milberg Weiss in the class-action biz, has this post from June offering some perspective on the ongoing investigation.

{ 1 comment }

September 18 roundup

by Walter Olson on September 18, 2007

{ 2 comments }

Law.com reports in its summary:

Renowned plaintiffs attorney William Lerach, lead partner at Lerach Coughlin, announced Tuesday he’s stepping down from the firm he started when he split off the West Coast offices of what is now Milberg Weiss. Lerach said he’s planning to take some time off. That could include going to prison, or at least the U.S. Attorney’s Office. Lerach is said to be nearing a deal with federal prosecutors related to legally questionable payments Milberg Weiss made to its lead plaintiffs and a former expert witness.

The WSJ Law Blog similarly reports that “Lerach has not been charged, but he is in advanced talks with prosecutors on a plea deal that could be announced in September and involve serving prison time, according to two people familiar with the investigation.” It also has Lerach’s departure memo to colleagues at the law firm that will now be known as Coughlin Stoia Geller Rudman & Robbins (cross-posted from Point of Law).

What took so long?

by Ted Frank on August 3, 2007

I was wondering when former class members represented by Milberg Weiss would take a speculative flyer to convince a court that Federal Rule of Civil Procedure 60(b) does not preclude relief and sue the law firm over its kickback scandal and Peter Lattman reports that that has happened. Alas for schadenfreude, I am utterly unpersuaded by the complaint, which makes no attempt to jump that procedural hurdle: Fed. R. Civ. Proc. 60(b) prohibits reopening even judgments procured by fraud more than a year after they close, and I’m unaware of courts permitting end-arounds of the rule through collateral lawsuits. But perhaps the plaintiffs have an undisclosed legal trick up their sleeve for when the motion to dismiss comes.

Lattman’s blog posts on Milberg Weiss always attract an interesting flood of anonymous comments defending the firm, and this one is no different: one such comment suggests, perhaps libelously, that the suing law firm has its own history of kickbacks.

{ 2 comments }

Class acting

by Ron Coleman on July 13, 2007

More on the story Walter only teased us with earlier today: The Associated Press reports on the fall of a mighty class action plaintiffs’ lawyer — the managing partner and third name in the firm now known only as Milberg Weiss:

A former partner of a major New York law firm pleaded guilty to conspiracy Monday in connection with kickbacks the firm is accused of paying to plaintiffs in class action and shareholder lawsuits.

David J. Bershad, 67, of Montclair, N.J., pleaded guilty in federal court to one count of conspiracy that includes obstruction of justice and making false statements under oath.

…Prosecutors believe the firm, now known as Milberg Weiss, received more than $200 million in fees from such lawsuits filed over the past 20 years. Bershad was responsible for overseeing the firm’s accounting department and financial affairs….

Bershad could face up to five years in federal prison when he is sentenced on June 23, 2008.

Grisly. According to the New York Law Journal, Bershad himself made — sit down for this part — $160 million as a Milberg Weiss partner over the last twenty years, so that $8 million (why so low?) should not be all that painful, financially; but this is not the style in which to go out for a Columbia Law man.

Here is the stipulated statement of facts in support of the plea agreement, from the Law Journal. If you have trouble following what he did wrong — the rules regarding class actions and fees are fairly arcane — in short, if you represent a class, you’re not allowed to secretly share attorneys’ fees with favored class members. Such payments create conflicts of interest between the paid plaintiffs and the rest of the class members the lawyers represent. As the statement says:

By entering into such secret payment arrangements, BERSHAD and the other Conspiring Partners were able to secure a reliable source of individuals who were ready, willing, and able to serve as named plaintiffs in Class Actions that Milberg Weiss wanted to bring. In addition, some of these individuals would investigate and propose to BERSHAD and other Conspiring Partners potential Class Actions for Milberg Weiss to bring. Such payment arrangements generally enabled Milberg Weiss to file more Class Actions and to file them more quickly than would be possible absent such arrangements. Filing Class Actions more quickly than other competing plaintiffs’ law firms enhanced Milberg Weiss’s ability to obtain lead counsel status in cases, before and after the passage of the Private Securities Litigation Reform Act of 1995. Lead counsel generally obtained a larger share of the attorneys’ fees awarded in a Class Action than other counsel.

The statement of facts goes on to lay out a Byzantine arrangement of cash flow, everything short of a hollowed-out pumpkin. It describes the sort of thing that, well, crooks do. At this point, the crooks have names in the court filings such as Partner A, Partner B, down through the alphabet — and, just like Little Cats A through Z in The Cat in the Hat, they all cleaned up.

So, how long will this 67-year-old man sit in jail? I imagine he had something more like Miami in mind. But it could get even hotter — for his partners. Bershad is surely going to spill his guts even more. As the story continues:

Legal experts believe Bershad’s plea appears to be an effort to reduce his possible prison sentence in exchange for testimony.

Meanwhile, the good work of the firm goes on:

In its statement Monday, the firm said: “We remain confident that [Mr. Bershad's] actions will have no effect on the firm’s commitment to its clients and its ongoing work to protect public shareholders and consumers.”

{ 2 comments }

To stockbrokers who could help bring in plaintiffs, Milberg Weiss could be very nice. (Parloff, Jul. 12)(cross-posted from Point of Law).

As I have repeatedly noted, the only reason the Chungs can be said to have been vindicated is that Judge Roy Pearson is more delusional and less sinister than the typical trial-lawyer extortionist. Had Judge Pearson accepted the $12,000 settlement the Chungs felt forced to offer between the expense of litigation and the small risk of Pearson mounting a case that successfully resulted in the giant fines imposed by DC consumer-fraud law, Pearson would have had a five-digit profit, and the Chungs would be out tens of thousands of dollars in litigation and settlement expense without any hope of recoupment. As Michael Greve demonstrates in “Harm-Less Lawsuits”, this is more than hypothetical: in consumer-fraud lawsuits alone, billions of dollars have been extracted from innocent defendants.

DMI’s Kia Franklin’s defense of her claim that the travesty of justice we have seen in Pearson shows that the system works? “Now, had Pearson collected the $12,000 settlement, we would have a whole new hypothetical and a whole new set of questions about the terms of the settlement (Would we have known the settlement amount? Would they have been able to publicize this? What were the lawyers’ strategies?) and the consequences thereof. So we can’t prematurely say that it would pay off for him.” Franklin goes on to deny that trial lawyer abuse even exists—a perhaps necessary position for her to take, given that the top of any list of abusers would include the indicted law firm Milberg Weiss, which funds her fellowship, in part from the successful extortion of billions of dollars using the same in terrorem tactics as Pearson.

As Peter Nordberg notes in the Overlawyered comments, “If [Pearson] is indeed representative, there should be thousands of cases just like it, and we may as well get to discussing those.” And indeed we should.

{ 9 comments }

I’d like to make a correction. In my earlier post, I suggested that Milberg Weiss Justice Fellow Kia Franklin thought that Judge Roy Pearson’s $67 million lawsuit over a pair of pants was frivolous. I appear to have been mistaken in attributing such a common-sense view to her. Franklin has a lengthy post protesting that, while she thinks Pearson’s lawsuit is “ridiculous” and “crazy” (she has also called it “obscene”), she does not think it is “frivolous.” We regret the error.

But it is a useful illustration: when those who oppose civil justice reform say they don’t think frivolous litigation is a problem, it is because they define “frivolous litigation” so narrowly that even Roy Pearson’s lawsuit is not frivolous in their eyes. Well, that’s one way to make problems go away, by using doublespeak or narrow technical legal definitions to pretend they don’t exist instead of suggesting that there is a problem with the narrow technical legal definition.

[click to continue…]

{ 7 comments }

June 5 roundup

by Walter Olson on June 5, 2007

  • Everyone’s got an opinion on Dr. Flea’s trial-blogging fiasco [Beldar, Childs, Adler @ Volokh (lively comments including Ted), Turkewitz (who also provides huge link roundups here and here), KevinMD]
  • Sidebar: some other doctor-bloggers have shut down or curtailed posting lately amid pressures from disapproving employers and patient-privacy legal worries [KevinMD first, second posts; Distractible Mind, Blogaholic]
  • Amusement park unwisely allows “extremely large” woman to occupy two seats on the roller coaster, and everyone lands with a thump in court [Morris County, N.J. Daily Record via Childs]
  • Prosecutors all over are trying to live down the “Duke effect” [NLJ]; how to prevent the next such debacle [Cernovich]
  • Bad for their image: trial lawyers’ AAJ (formerly ATLA) files ethics complaint against Judge Roy Pearson Jr., of $65 million lost-pants-suit infamy [Legal Times]
  • More suits assert rights to “virtual property” in Second Life, World of Warcraft online simulations [Parloff]
  • Plea deals and immunity in the Conrad Black affair [Steyn, OC Register]
  • Another round in case of local blog sent nastygram for allegedly defaming the city of Pomona, Calif. [Foothill Cities; earlier]
  • “There once was a guy named Lerach…” — Milberg prosecution has reached the limerick stage [WSJ Law Blog comments]
  • Government of India plans to fight Americans’ claims of intellectual property over yoga postures [Times Online; earlier here and here]
  • After car-deer collision, lawyer goes after local residents who allegedly made accident more likely by feeding the creatures [seven years ago on Overlawyered]

{ 12 comments }

Here’s a free tip for trial lawyers out there: if you’re going to engage hired-gun experts witness to tell the court what you need it to hear, make sure you first tell the experts what you need the court to hear.

We’ve been covering the ongoing scandal in which class action law firm Milberg Weiss is accused of paying kickbacks to its clients in class action lawsuits (see, e.g. May 2006 and links from there). In addition to the firm, prosecutors have been going after the clients who accepted kickbacks (Feb. 2007, Jun. 2005). One of those clients, Seymour Lazar, has been trying to escape prosecution by claiming to be ill, trotting out doctors to testify to a “litany of ailments,” including “heart disease, stroke, cancer, diabetes, and gout.” But there’s more: he also claimed to be suffering from a “mental condition [that] could make following significant events of the trial impossible,” as well as “major depression, memory loss, and fatigue.” And, he’s mentally incompetent.

That was two weeks ago… Now he’s all better. Turns out that if he were mentally incompetent, the prosecution could lock him up for up to four months to determine whether he would become competent in the future. Whoops! That wasn’t what defense attorneys wanted. So they had to repudiate their own expert’s testimony:

A psychologist who testified that a defendant was not competent to stand trial in a federal criminal case against a leading class action law firm now says that assertion was mistaken.

[...]

“I believe that I testified in error when I stated that he is not competent,” the psychologist retained by the defense, William Jones, wrote in a declaration filed Monday in federal court in Los Angeles.

Yes, or maybe, like the Monty Python peasant who claimed to have been turned into a newt, Lazar mysteriously “got better.”