California trial lawyer William Lerach, the “innovator” behind class-action lawsuits, turns out to have been involved in a long-term scheme to recruit lead plaintiffs by paying them illegally, a total of some $11.8 million. He agreed to plead guilty to one count of obstruction, and now Lerach and his former partner at Milberg Weiss, Steven Schulman, must enter their pleas by Oct. 12th, a judge has ruled.
Lerach’s comeuppance? Perhaps two years behind bars and forfeiture of some $8 million. And he doesn’t have to help prosecutors uncover other wrongdoings. (!!!) No wonder the talk is that he got off easy. From The Examiner’s editorial today, “Lerach gets the last laugh.”
When Lerach departs prison to return to his lavish San Diego mansion in a year or two, he will find it still stuffed with fine furniture and decor, his fancy cars will remain in the driveway, his substantial investments will continue fattening his wallet, and, despite losing his law license, he will be a highly sought and well-paid speaker, consultant and media expert. That’s some punishment for admitting to being a key player in an alleged long-running fraud upon the American people and their legal system. Lerach’s alleged fraud ultimately cost thousands of people their jobs, ruined the reputations of countless honest executives and deprived millions of investors of deserved returns.
We highlight that last sentence because the usual dismissive, scornful response from some circles when business calls for tort reform is that corporations simply want to escape responsibility for their transgressions. But that’s not it at all. Out-of-control class action lawsuits too often punish people and companies only tangentially related to any wrongdoing (that is, if any wrongdoing occurred at all). In addition, the favored tactic of the trial attorneys in the process is to destroy the reputations of honest businessmen and women, to paint entire industries as evil. Of course that’s resented.
Bill Lerach helped pioneer this invidious, economy-sapping brand of litigation. And, his sentence and penalties aside, he’ll be doing just fine .
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