William Lerach, the brilliant legal mind who helped create the class-action lawsuit industry, has pleaded guilty to a conspiracy charge for arranging kickbacks to people who agreed to be early plaintiffs in the legal attacks against businesses. The San Diego Union-Tribune covered Lerach’s court appearance and plea in Los Angeles, as did The Los Angeles Times. Lerach is the eighth person to plead guilty in connection with the conspiracy, and as the Times reports:
The government has been investigating the New York firm where Lerach once worked — Milberg Weiss — for seven years. According to a 2006 indictment, the firm paid $11.3 million in kickbacks to plaintiffs in lawsuits targeting huge companies, including AT&T Inc., Lucent, WorldCom, Microsoft Corp. and Prudential Insurance.
The early, paid-off plaintiffs gave Milberg Weiss the ability to shape their legal cases to their own advantage and increasing their take of the payouts.
Lucrative. Corrupt. And all from a law firm that helped create the modern class-action shakedown industry, contributing to a broken system of civil litigation that imposes an estimated $865 billion cost to the U.S. economy every year.
It is time for high-profile investigations and oversight hearings from Congress into the lawsuit industry, demanding accountability from these spoilers. Let’s investigate their impact on the economy, the abusive model that Milberg-Weiss established, and the harm their predations do to the children. Make the witnesses take the Fifth, if it comes to that. At the very least, the public shaming will serve an educational and deterrent effect.
What a tremendous opportunity for the chairmen of the respective committees. Surely oversight hearings are just around the corner.
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