Commentary Inspired by Weiss, Lerach, Scruggs

By March 24, 2008Briefly Legal

From Dan Pero of the American Justice Partnership at the blog, American Courthouse.

[Melvyn] Weiss and [William] Lerach conspired to provide cash kickbacks to plaintiff/frontmen in an effort to seize control of mega class actions and win huge fees in 150 cases over 20 years.

Prosecutors say these illegal kickbacks helped the firm reap at least $216 million in legal fees. Milberg Weiss has taken in more than $1 billion in total legal fees by dragging American companies into court.

Companies have paid more than $45 billion in damages because of Milberg Weiss cases – including $600 million from Lucent Technologies and $460 million from Raytheon.

That’s $45 billion that did NOT go into medical research … $45 billion that did NOT go toward creating new jobs … $45 billion that did NOT build a single factory.

The only people that benefited were two corrupt trial lawyers and their frontmen.

From The New York Sun, “Weiss’s Plea.”

Mr. Weiss and his partners made their careers, and their fortunes, casting those they were suing — insurance and tobacco executives, Swiss bankers — as crooks. Some of them may have been, though many were not. Now these lawyers are admitting to the court that they are crooks, too. From where we sit, what should be illegal is not paying plaintiffs, but trial lawyers exacting enormous costs on the economy, and winning enormous fees, by launching actions that undermine the notion of individual responsibility. As so often is the case, the scandal isn’t what’s illegal, but what’s legal.

Prosecutors can do their best to root out illegal behavior, as they have in this case. Congress has already acted to reform the class-action system from the “first-to-file” system that engendered the Milberg Weiss abuses. But until Congress and the state legislatures act further to reform the civil litigation system, the costs of Weiss’s career will be borne by all of us.

The Daily Oklahoman’s editorialists draw lessons for Gov. Brad Henry, who last year vetoed tort reform legislation despite having campaigned on the issue:

Before he antes up further resistance to reasonable tort reform in Oklahoma, Gov. Brad Henry ought to consider that the real beneficiaries of the tort tax aren’t the little people he seeks to protect from damage caps but the Dickie Scruggs of the world.

Leave a Reply