It’s Time for Hearings into the Trial Bar’s Crimes

By May 2, 2008Briefly Legal

A recurring theme here at Shopfloor.org and with other advocates of tort reform — the American Tort Reform Association and The Examiner newspaper, for example — is the obvious need for Congress to conduct oversight hearings of the trial bar’s crimes and their costs to the U.S. economy. The time has now arrived. On May 19, Melvyn WeissWilliam Lerach is due to report to prison — following in the footsteps of his former partner, William Lerach — for his conviction in leading a decades-long conspiracy at Milberg-Weiss to pay kickbacks in the filing of class-action lawsuits.

Today, House Republican Leader John Boeher and Rep. Lamar Smith (R-TX), the ranking Republican on the House Judiciary Committee, sent a letter to Chairman John Conyers asking for such a hearing. (Copy of the letter here.) As the two note in their letter: “Mr. Lerach himself told the Wall Street Journal his illegal conduct and that of his law partners was an ‘industry practice.’ At his sentencing, one of his supporting letters quoted Mr. Lerach as saying, ‘Everybody was paying plaintiffs so they could bring their cases.'” More:

The Republican-led Congress responded aggressively to the Enron and WorldCom scandals earlier this decade. Now the Democrat-led Congress needs to do its job and examine the scandal at Milberg Weiss, which potentially has deeper and more far-reaching implications. Nearly three months have passed since Mr. Lerach was sentenced, but this Congress has yet to conduct even a single hearing to determine the extent to which crimes such as his are occurring in the rest of the industry.

If in fact the crimes committed by Mr. Lerach and his colleagues are an “industry practice,” as Mr. Lerach himself confessed, then the United States Congress is sitting idle while criminal behavior in the trial lawyer industry threatens American jobs and feeds like a parasite on the prosperity of working families. The American people deserve answers.

  • How many of these cases are brought as a result of illegal payments to plaintiffs?
  • What other types of conflicts exist between trial lawyers and the injured investors they purport to represent?
  • What reforms should Congress enact to eradicate these abuses from our judicial system?
  • We respectfully request that the House Committee on the Judiciary schedule a hearing by May 19 to begin the process of answering these questions in a complete and bipartisan way. Thank you for your attention to this important matter.

    We would be naive to think partisanship didn’t enter into this request. Trial lawyers represent a major political force within the Democratic party, much appreciated for their generosity in campaign contributions. If Chairman Conyers declines to hold a hearing, the Republicans will make an issue of it.

    But so what? Crimes were committed that wreaked great harm on the economy, damaged people’s reputations, and produced unjust results — all part of what did indeed appear to be an industrywide practice. The call for Congressional oversight stands on its own merits, and the public deserves an answer to the questions posed by Reps. Boehner and Smith.

    A hearing…now.

    UPDATE (12:26 p.m.): From Law.com: “John B. Torkelsen, a former expert witness in hundreds of shareholder derivative and class action cases for Milberg Weiss, pleaded guilty on Thursday to perjury charges.”

    Also, from Reuters: “Indicted U.S. law firm Milberg LLP is in settlement talks with federal prosecutors to resolve a long-running criminal case involving accusations it paid illegal kickbacks to clients, sources close to the talks said on Tuesday.”

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