The editors at Conde Nast Portfolio were kind enough to invite me to contribute a rebuttal, which is now online, to William Lerach’s egregious apologia pro crookery sua. The allotted space permits me to address briefly only a couple of Lerach’s worst howlers, in particular his bald assertions that his concealed kickbacks did no harm to class members or to competing lawyers. (It’s true that named class representatives do a very poor job at their intended mission of standing in for other class members’ interests, but secretly aligning their incentives with the size of fee awards, rather than the value of the settlement to the class, is a corruption meant to keep them from ever living up to their theoretical watchdog role.)

For a more extended look at what’s wrong with Lerach’s article, let me recommend Joseph Nocera’s excellent column a week ago in the Times:

In the article, Mr. Lerach expresses zero remorse, positions his crimes as having hurt no one while serving a greater good and makes the absurd claim that he was railroaded by his political opponents.

It is a brazen, shameful piece of work — and it must infuriate the prosecutors who made the plea agreement with him, and the judge who accepted it, especially since Mr. Lerach wrote his own remorseful letter to the judge ahead of his sentencing. It also ought to infuriate anyone who cares about the law. Plenty of criminals head to prison still believing they’re above the law, but Mr. Lerach takes the cake.

Ted Frank has some further thoughts on that point. And note (from Nocera) that Lerach’s “everyone did it” swipes at his colleagues — which many, including we, have read as grounds for an investigation — are by no means passing without contradiction from colleagues:

Mr. Lerach’s statement has infuriated other plaintiffs’ lawyers. “It would just be unthinkable” to give kickbacks to lead plaintiffs, said Max Berger, of the firm Bernstein, Litowitz, Berger & Grossman. Added Sean Coffey, another Bernstein, Litowitz partner: “It is bad enough that this confessed criminal cheated for years to get an unfair advantage over his rival firms. But for this guy, on his way to prison, to say that everyone does it is just beyond the pale.”

(cross-posted from Point of Law; & welcome San Diego Union-Tribune blog readers).

P.S.: For another example of just how slippery Lerach’s careful phrasings can be, check this Roger Parloff post from an earlier point in the scandal. And Stephanie Mencimer, whose writings are nearly always criticized in this space, deserves due credit for seeing through Lerach’s “liberal folk-hero status” to the “pretty sleazy” realities beneath in this February article.

Stephanie Mencimer: “That’s when the surprise came: Baptist Health argued that Luke had given up her right to sue back in 1997 when the hospital presented the arbitration agreement—even though she’d refused to sign. Simply by continuing to show up for work, Baptist’s lawyers said, she’d agreed to the terms. Acting contrary to established contract law, which requires both parties to consent to a contract before it becomes binding, a federal judge accepted the hospital’s argument.” Shocking, huh? But not true. Mencimer gets both the facts and the law wrong:

• Baptist Health’s argument didn’t come out of nowhere: it was expressly told to Luke at the time that “the program is binding on all employees” and her decision to “continue her current employment, after receiving notice of this Program, will mean that you have agreed to and are bound by the terms of this Program.”

• Luke agreed in court that she had notice of the program, that she understood the program, and that she continued working at the hospital.

• The court thus found that Luke consented to the agreement; in doing so, it didn’t act “contrary to established law” at all; several Alabama Supreme Court opinions recognized that continued employment is sufficient consideration to support an arbitration agreement, and that agreeing to remain employed by an employer with a mandatory arbitration program is conclusive evidence of assent. (Of course, under Erie, federal courts are bound by state supreme court interpretations of state law.)
• The district court’s opinion was affirmed per curiam by a three-judge panel of the Eleventh Circuit that included two Clinton appointees and a Carter/GHW Bush appointee.
• And, oh, by the way, Luke began arbitrating her case before the court even ruled, showing that she understood where the law actually was, though now she claims otherwise.

Luke, having received the benefit of an employment agreement that was able to offer her higher wages because of her agreement to arbitrate employment disputes, sought to rewrite the contract after already taking advantage of it. (Update: a commenter ironically signing him- or herself as the Multistate Bar Exam has a nice cite to the Restatement.)

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.

Stephanie Mencimer jumps on the Jamie Leigh Jones bandwagon against arbitration (Dec. 12, Dec. 20) and carefully makes a misleading case:

Employment lawyer Cathy Ventrell-Monsees testified before Congress in October that AAA data show that between January 2003 and March 31, 2007, of the 39 Halliburton cases that went all the way to a decision, Halliburton won 32, a win rate of 82 percent. Plaintiffs in employment litigation face a high bar in court trials as well, but even so, that figure is very high. Employers win about 64 percent of all employment cases at trial in federal court and about half in state court, according to data from the Justice Department’s Bureau of Justice Statistics (BJS).

The problem here is that this is apples and oranges: the 32 arbitration cases include cases that are dismissed on summary judgment, whereas the employment discrimination trials (which constitute well under 10% of all employment discrimination claims brought in court) necessarily omit the decisions where the plaintiffs lost on summary judgment. Moreover, it excludes the 96% of cases submitted to ADR that do not result in a full-fledged arbitration because the employee received a favorable result in mediation. (And that’s before we get to the fact that an arbitration decision is final, while the BJS statistics have no follow-up to see what happens on appeal to those larger plaintiff victories.) As multiple studies show, the typical employment plaintiff does far better in arbitration than in court, for far less expense.

Mencimer also repeats the canard that arbitration is problematic because it is “secretive,” though her ability to retell the case of Jamie Jones refutes that. I also note that earlier this week, I sent a request to Jones’s attorney, Todd Kelly, for a copy of her arbitration filings. (Recall that Jones moved for summary judgment in the arbitration, and only filed in court after helping to choose an arbitrator and spending fifteen months of discovery litigating the arbitration.) He hasn’t responded. If Jones’s arbitration is secret, it’s because she has chosen to make it so.

Let us imagine a writer for a left-wing magazine, we’ll call her Mephanie Stencimer, who wants to buy a car. But she has particular tastes: she doesn’t just want any old car. She wants a three-wheeled vehicle, perhaps because the feng shui is better, perhaps because she wants to spend less money on tires forced upon her by Big Rubber. She goes from car-dealer to car-dealer around town, but every single one of the dastardly businessmen insist that her only choice is a four-wheeled vehicle. She patiently explains the aesthetics of the triangular approach, but they shrug their shoulders and tell her it’s out of their hands and she has to have a four-wheeled car or nothing. Finally, she surrenders her preference for the three-wheeled vehicle, and takes a model with the extra wheel.

If you were to take seriously the arguments of Stephanie Mencimer at Mother Jones and the commenters there, and perhaps the occasional judge, this is an outrageous “contract of adhesion” that should be outlawed: Stencimer didn’t have a choice, didn’t have the bargaining power to make the auto-dealer sell her a three-wheeled car, and was forced to buy an extra wheel. But is this really a problematic failure of the market that requires government intervention?

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In response to my post below about inadequate sanctions in the Econo Lodge case, Stephanie Mencimer asks how the costs of frivolous litigation can be so oppressive, how it can cost millions of dollars to defend against them, given that — in her view — the defendants can just hire paralegals to prepare boilerplate responses.

Well — as Ted points out in the comments to her post — I had said “thousands,” not “millions.” But the bigger problem with what she wrote is that she dramatically underestimates the burden and cost of litigation. We’ll put aside the fact that her proposal — to have paralegals file boilerplate responses — would constitute legal malpractice on the part of the defense attorney. Of course it’s cheaper when cases can be decided (as Mencimer suggests) “with no discovery, no depositions and apparently not even a court appearance” — although it’s not clear from the Econo Lodge case that in fact there were no court appearances. But other cases, even ones that are completely meritless, require a lot more before the defendant can be vindicated.

Case in point: Kinderstart v. Google. The complaint was yet another attempt to sue Google over its rankings of web pages for search results. (Another suit along those same lines: Mar 1) Only part of the case was frivolous (the federal judge awarded sanctions against the plaintiff on two points (PDF of sanctions decision), but the entire case was meritless, as the court ruled (PDF). Google is a private business, and the courts keep rejecting the notion that lawyers should decide how Google can rank websites. Every claim made by Kinderstart was resoundingly rejected; Eric Goldman has the gory details.

But even though the case was dismissed before discovery even began, that didn’t make it — contrary to the beliefs of so many anti-tort reformers such as Mencimer — quick. In fact, it took a full year to dismiss the case (and there’s always the possibility of appeal). So why, if it was such a loser, did it take so long? Because after the court dismissed it the first time, the judge allowed the plaintiffs to amend the complaint; in all there three versions of the complaint filed. Google had to respond to each one, and there were in-court hearings each time Google moved to dismiss the case. Google also had to file an anti-SLAPP motion, a motion to strike the complaint, and a motion for sanctions.

Google “won” this case, and even won a yet-to-be-calculated sanctions award. But in the end, it took a year and Google spent, conservatively, tens of thousands of dollars to do it, even without discovery. Now, I don’t expect every non-lawyer to realize how long and expensive the legal process is — but Mencimer holds herself out as a pundit on tort reform; you’d think she’d have a little more of a sense of how the system works.

(Previous mention of this case, Oct. 2006.)

Stephanie Mencimer, in a trolling post I really should just ignore, suggests that reformers are just “overprivileged white guys” who have “never flipped a burger” or driven an American car and whose “private schooling and Ivy League bona fides” mean we just want to stick it to the little guy.

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We’ve previously covered lawyers who file hundreds of lawsuits alleging discrimination against the disabled over alleged technical violations of the law, and then extort settlements at thousands of dollars a pop. (E.g., Nov. 4; Aug. 28; May 31, 2005). The Sacramento Bee recently ran an extensive series on the issue. (Marjie Lundstrom and Sam Stanton, “Visionary law’s litigious legacy”, Nov. 15 ; Id., “Frequent filers”, Nov. 16; Id., “Targeting entire towns”, Nov. 12; Bullet-point summary).

A California court has interpreted that state’s Unruh Civil Rights Act to only provide $4000 penalties in the case of intentional violations of the law; while this is a good public policy result in the abstract, I’m personally wary of the court using its judicial power to rewrite the poor legislation. It also doesn’t fix the problem with the federal law. (Gunther v. Lin; Wendy Thomas Russell, “Court ruling puts crimp in disability lawsuits”, Long Beach Press Telegram, Nov. 19). And in Florida, the press is just getting around to noticing the drive-by problem because of Robert Cohen’s 300 suits. (Kelli Kennedy, “‘Drive by’ suits rake in dough for attorneys”, AP/Miami Herald, Nov. 28 (h/t W.F.)). Even reflexive reform opponent Stephanie Mencimer takes notice and can’t defend the parasitic lawyering involved, but manages to spin the issue to implausibly blame the Republicans for the problem—though the ADA’s civil remedies were drafted by Democrats when they controlled Congress in 1991.

That’s Stephanie Mencimer explaining (Nov. 28) why trial lawyers should buy multiple copies of her forthcoming book, entitled Blocking the Courthouse Door: How the Republican Party and Its Corporate Allies Are Taking Away Your Right to Sue, expressing views antipodal to our own.

Mencimer, a frequent contributor to such journals as Mother Jones and the Washington Monthly (see Jan. 19, 2005), has set up a website (previously noted by Ted) to promote her new book. It’s not unproductive of chuckles, in its way. For example, in one post earlier this month (Nov. 10), criticizing media coverage of patent hellhole Marshall, Texas, she piously avers that reporters should disclose who fed them tips. A fascinating idea! Does this mean she’ll be sure to disclose in her own writings who fed her tips? Or is this new standard only supposed to apply to journalism she disapproves of?

I’ve been mostly out of commission owing to one of the bugs that’s been going around, so although there are a lot of great items in the pipeline, I expect they’ll have to wait a bit. Ted will be posting, though.

In the mean time, for readers who followed Stuart Taylor’s refutation (posted here Jan. 19, with comment) of Stephanie Mencimer’s tendentious Washington Monthly article of last October, the Washington Monthly has at length notified its online readers of Taylor’s response, and posted a (to me, very lame) defense by Mencimer of her article (Feb. 15).

Over the past year journalist Stephanie Mencimer, a frequent contributor to such publications as Mother Jones and the Washington Monthly, has written a series of articles intended to rebut what she calls “The Myth of the Frivolous Lawsuit”. In the course of these articles, Mencimer assails a wide range of writers, publications and institutions that have taken a visible public role criticizing excessive litigation, myself and this site included. Her research often seems to consist of little but the uncritical recycling of allegations circulated by the Litigation Lobby, some of them fifteen or twenty years old and many of them both baldly inaccurate and nastily ad hominem in tone.

I don’t make it a practice to respond to Mencimer’s writings, but the distinguished legal journalist Stuart Taylor, Jr., who writes an influential column for National Journal and contributes to Newsweek, was outraged by her attacks on his work in an article she wrote for the October Washington Monthly and took the time to craft a lengthy, devastating point-by-point rebuttal. He sent it on December 16 to the editors of the Washington Monthly including editor-in-chief Paul Glastris.

Remarkably, in the month since then, the Washington Monthly editors have neither posted the letter for their readers’ benefit nor made any attempt to rebut it. Now Taylor has generously consented to let me post his letter here. Readers can draw their own conclusions about how much of Mencimer’s credibility is left standing after his thorough dissection — and about what it means for the Washington Monthly’s reputation that it seems intent on stonewalling on her behalf. Update Feb. 16: Washington Monthly and Mencimer reply.