Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘Bill Lerach’

“Lawsuits that benefit only lawyers”

Hard-hitting column by Stuart Taylor, Jr. on the destructiveness of the current legal actions

seeking more than $400 billion from companies that did business in South Africa during apartheid, [which] score high on what I call Taylor’s Index of Completely Worthless Lawsuit Indicators:

• The lawsuits will do victims of wrongdoing little or no good.

• They will penalize no human being who has done anything wrong.

• They will deter more conduct that is beneficial than harmful.

• The legal costs and any damages will come at the expense of the general public.

• The lawsuits therefore serve no purpose at all but to enrich lawyers and provide ideological power trips for some judges as well as lawyers.

American Isuzu Motors v. Ntsebeza, recently allowed to go forward, is being led by (among others) class-actioneer and frequent Overlawyered mentionee Michael Hausfeld.

The apartheid lawsuit is one of dozens seeking to pervert the Alien Tort Statute to mulct companies for ordinary commercial conduct in countries accused of human-rights violations. Caterpillar, for example, was sued for selling bulldozers that Israel used to destroy suspected Palestinian terrorists’ homes. (The case was dismissed.) “The American bar is actively soliciting alien plaintiffs” to try out novel theories, State Department legal adviser John Bellinger noted in a recent speech. Because so many federal judges have smiled on such suits, Bellinger added, foreign governments increasingly regard the U.S. judiciary “as something of a rogue actor.”

With added commentary on the Kivalina climate-change class action, Rhode Island lead paint, shareholder litigation, and Lerach, Weiss, and Scruggs. (National Journal, May 17, will rotate off page so catch it now).

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Sen. Cornyn introduces lessons-of-Lerach bill

The Texas Republican, a member of the Senate Judiciary Committee, is introducing legislation that

would make several key reforms to current securities class action law to increase the accountability of and transparency for attorneys filing these lawsuits and the institutional plaintiffs they often represent. Specifically, it would require:

DISCLOSURE OF PAYMENTS BETWEEN PLAINTIFFS AND ATTORNEYS

Plaintiffs and attorneys would submit sworn certifications identifying any direct or indirect payments, promises of such payments, and other conflicts of interest between them, as well as all political contributions made to elected officials with authority or influence over the appointment of counsel in the case.

COMPETITIVE BIDDING FOR LEAD COUNSEL

Courts would include a competitive bidding process as one of the factors for the selection and retention of lead counsel for a class of plaintiffs.

STUDY TO DETERMINE APPROPRIATE ATTORNEYS FEES

GAO would commission a study of the last 5 years of fee awards in securities class action cases to determine the average hourly rate for lead counsel.

(release, Congressional Record statement). (cross-posted from Point of Law). More: hailed by Lisa Rickard of U.S. Chamber.

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May 6 roundup

  • 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 16 roundup

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

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Enron lawyers want $695 million; Texas objects

Class action lawyers who went after the various deep pockets in the Enron Corp. collapse — the team was led by now-disgraced William Lerach — want what may be a world record fee for an action of the sort. Highlight: Columbia lawprof John Coffee, whom lawyers often bring in to testify for fee requests, says courts’ eventual rejection of the lawyers’ claims against banks and investment companies — after some had paid fortunes to avoid the risk of trial — is actually a reason to pay the lawyers more, ’cause it shows that they were being creative and taking risks:

The Columbia professor, who was hired to submit a declaration supporting the award of legal fees, said it was a testament to Lerach’s skills that he convinced large corporations to pay billions in a case that turned out to be fatally flawed. “We now know it was an extraordinarily high-risk case because, ultimately, you lost it,” he said.

Texas Attorney General Greg Abbott is among those objecting to the fees as excessive. (Josh Gerstein, “Judge To Mull $695 Million Legal Fee”, New York Sun, Feb. 29; “Texas Objects To Enron Fees”, Mar. 13).

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Torkelsen Lerach scandal, cont’d

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

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

  • 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

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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