The law firm Milberg Weiss has been one of the most prominent and successful legal firms in history, a firm that has been involved in many giant class-action lawsuits from Amazon.com to Vermont Teddy Bear and all points in between. Milberg Weiss sued over the Exxon Valdez disaster, they sued for more than $500 million in HMO cases. This is one of the biggest ambulance chaser legal firms in the world, one that has been immensely successful.
A federal grand jury returned an indictment alleging fraud, corruption, and kickbacks at the firm, which is being prosecuted under RICO statutes. The indictment notes that this firm carried a number of plaintiffs on retainer, according to the New York Sun:
Two top Milberg Weiss Bershad & Schlman LLP partners, David Bershad and Steven Schulman, were charged personally with criminal racketeering conspiracy. In addition, prosecutors are demanding that the firm forfeit $216.1 million, the sum Milberg Weiss earned in cases allegedly tainted by illegal kickbacks.These payments were used to get a jump on other legal firms in the drive to sue businesses, allowing them first access to file and thus win damages.
Ms. Yang said the secret payments to plaintiffs in Milberg Weiss securities cases totaled at least $11.3 million. "Because of the secret kickback arrangement, Milberg Weiss had a stable of individuals ready and willing to serve as paid plaintiffs," she said. The prosecutor said the scheme gave the firm an unfair advantage over its competitors, at least until 1995, when a change in the law reduced the importance of being among the first to file a specific case.The firm, a huge Democrat politician donor that gave over a million dollars to the Democrat party before such donations were banned in 2002, was quick to blame politics:
As Captain Ed notes in the Captains Quarters blog entry:
In an interview last night, an attorney for Milberg Weiss, William Taylor III, stopped just short of alleging that the indictment was political.
"It's very clear that cheering will be heard from Wall Street all the way to 1600 Pennsylvania Avenue," he said. "This plays into the hands of political demagogues who like to rail against trial lawyers as if they were responsible for all the miseries of society."
Perhaps this might convince people that we need to consider tort reform in order to take the lure of the monster paydays out of the legal process. The tort system exists to ensure that the wronged are made whole to the best extent possible, not to make attorneys richer than rock stars. Too often we see plaintiffs in these suits wind up with next to nothing even when the verdict goes their way, their reimbursement spread out over many people, while the attorneys take home millions of dollars paid by defendants with deep pockets. It's time to return our system of justice to the pursuit of justice, and not a slot machine exploited by shady lawyers.
Commenters made their case:
I was solicited as a plaintiff in a couple of class action suits. In one, the lawyers got millions, while the plaintiffs would receive $50.00 off closing costs - if they closed on a mortgage with the same bank within some fairly short period of time - i.e. 1-2 years. In other words, the lawyers got everything.
In another, my share of a judgement was going to be something like a dollar - but it would have cost me $1.32 to opt out - mail a letter to three different addresses...
Tort reform. Now. Preferably loser pays winner's legal fees.
Why exactly is it that all of the brilliant lawyer politiicians in the Democrat Party (e.g. Hillary!) have so many suggestions on how to reform our health care system, but so few ideas on how to reform our legal system?
Is it because it's working so well? And who is it working well for? Americans or greedy, thieving, counterproductive lawyers?
Hilllary doesn't know a damn thing about delivering health care, but presumably she knows something about our legal system. Maybe after tossing a battleship full of softball questions at Lady Hillary and other Democrat politician-attorneys, an antique media member can ask them about our broken legal system.
You're unfortunately conflating class action litigation with run-of-the-mill tort claims. The federal "Class Action Fairness Act" was enacted just last year. Hopefully, it will curb many of the abuses, but nothing is guaranteed.
With respect to regular personal injury claims, I think that it's kind of silly for conservatives to attack the notion of plaintiff's attorneys making money, because it's the plaintiff's attorneys that assume all the risk when taking a case on contingency. This means that the courthouse doors are open to those who otherwise could not afford a lawyer to purse relief for injuries that they suffer as the result of others' misfeasance or malfeasance.
The best tort reform would be for the States to appoint judges who follow the law, and who are willing to grant dismissal or summary judgment against meritless claims. But too many judges are afraid to grant dispositive motions because they are less likely to be reversed on appeal if they simply allow the case to proceed and push the parties toward settlement. This is the biggest problem in our current tort system, and it's not going to be solved by placing caps on damages or attorneys' fees.
"With respect to regular personal injury claims, I think that it's kind of silly for conservatives to attack the notion of plaintiff's attorneys making money, because it's the plaintiff's attorneys that assume all the risk when taking a case on contingency. This means that the courthouse doors are open to those who otherwise could not afford a lawyer to purse relief for injuries that they suffer as the result of others' misfeasance or malfeasance."
This is disingenuous at best. There is almost no risk borne by the plaintiff's attorney because the vast majority of cases are settled without a trial and the attorneys all know it. The cost of defending even a marginal or outright frivolous lawsuit is staggering.
Plaintiff's attorneys would love to have judges appointed. Instead of having to influence enough citizens to win an election to seat a particular attorney on the bench, they would only have to influence the governor or the appointing authority.
A big part of the answer is to require the losing party to pay reasonable attorney fees. Requiring the losing party to pay attorneys fees would not close the "courthouse doors" to an aggrieved party. It would just make plaintiff's lawyers much more careful in assessing potential cases.
Next time Barbara Boxer joins Diane F. in denouncing the Republican culture of corruption, will anyone remember that she takes money from Millberg Weiss and delivers by way of stout opposition to tort reform? Fat chance...
-by John Van Laer
Be interesting to see how much play this gets in the MSM. This kind of corruption touches, in one way or another, every American. For example, ambulance chasers have succeeded in driving medical specialists out of practice in some areas of the country simply because the docs can't afford the malpractice insurance premiums that have been driven through the roof by frivolous lawsuits.I'm not confident that this issue will get much play. For one thing, the MSM will assume that the issue is too complicated for the average American (who's mental ability, they think, is taxed to the utmost by trying to decide who to vote for on American Idol), and also because the trial lawyers are a major component of the liberal establishment. It's OK to try to connect ENRON to George Bush, but NO WAY are they going to chance connecting Milberg Weiss to DiFi or other prominent democrats.
*UPDATE: Added links to a few references