- D.C. Circuit’s en banc decision upholding constitutionality of CFPB disappointing but not surprising. On to SCOTUS [Ilya Shapiro, Aaron Nielson, Jonathan Adler]
- Big thinking under way at the SEC could replace securities class action sector with free contract: “The SEC should authorize mandatory arbitration of shareholder class action lawsuits” [Bainbridge, Benjamin Bain/Bloomberg News (noting that broker dealers have long been free to use arbitration clauses)]
- Milberg Weiss founder Melvyn Weiss dies at 82 [ABA Journal, our coverage over the years of Weiss and his firm, @PaulHorwitz (“Give generously, and to the right people, so that your NYT obit can be a glowing apologia despite a few inconvenient facts.”)]
- Here come the shareholder derivative suits over sleazy-boss #MeToo scandals [Kevin LaCroix] “NERA: 2017 Securities Suits Filed at ‘Record Pace'” [same]
- Rogoff rebuttals: “More Evidence of the High Collateral Damage of a War on Cash” [Lawrence White, Cato, earlier] “Money as coined liberty” [David R. Henderson]
- Quotas/targets for percentages of women, disabled and indigenous persons on Canadian corporate boards? [Terence Corcoran/Financial Post, more]
- Ted Frank, crusader against class action abuse and formerly a contributor to this blog, profiled [Caleb Hannan, Bloomberg]
- Judge: “Milberg attorneys engaged in an elaborate scheme of deceptive conduct” in qui tam relator case [Bailey McGowan/WLF, opinion in Leysock v. Forest Labs]
- “One way to help save the subways: Repeal the Scaffold Law” [Mike Elmendorf, New York Post]
- Not for the first (or eighth) time, U.S. Senate looking like a graveyard for liability reform bills [Bruce Kaufman, Bloomberg]
- Illinois: “it has not been unusual over the years to learn that insurers don’t want to write policies in Madison County because of the litigation factor.” [Madison County Record]
- “Data-Breach Plaintiffs’ Lawyers Concoct New ‘Overpayment’ Harm Theory, with Mixed Results” [Greg Herbers, WLF]
Daniel Fisher at Forbes explains:
…The rise of the “confidential witness” can be traced to the Public Securities Litigation Reform Act and subsequent Supreme Court rulings, under which class-action lawyers are required to do more than just point out the obvious, that a stock price fell. They need to state “particularized facts” giving a strong inference that somebody in management, not just a faceless corporate entity, did something he or she knew was fraudulent.
To get over this hurdle, class-action lawyers frequently call upon nameless “confidential witnesses” who apparently are willing to speak with plaintiff lawyers but live in fear of their identities being revealed to anyone else.
Funny thing is, the testimony of these confidential witnesses on eventually reaching the light of day keeps not backing up the propositions the lawyers said it did. The newest embarrassment afflicts Robbins Geller, a successor law firm to Bill Lerach’s Coughlin Stoia. More: ABA Journal; City of Livonia Employees Retirement System v. Boeing.
…The authors explain in their Prologue that initially, Dillon had intended to co-author a book with Lerach, but that project got waylaid when it became clear that Lerach’s legal difficulties were serious. …
Lerach’s skill and his excesses emerged in his first successful case in San Diego, in which he represented a group of retirees against the Methodist Church. Lerach’s legal performance was by all accounts brilliant, and produced a great result for his clients. But, the authors note, “along with the good came the other things: the hubris, the taunting, the acrimony with the opposing side, the hyperpartisanship borne of the Manichean world view.” …
The authors also methodically show how so much of Lerach’s crusading activities depending on his firm’s corrupt system for procuring plaintiffs on whose behalf to bring the suit, as well as on the testimony of a corrupt expert witness.
…Bill Lerach did not invent the criminal conspiracy; he joined it in progress. His “full cooperation” fails to name names and take numbers. … Lerach knows, but he isn’t telling, because the statute of limitations has not yet run for all of his crimes. …
Nevertheless, “Circle of Greed” is a must-read for lawyers and judges because even a “limited hang-out” by Bill Lerach reveals far more than he intended.
An excerpt from the book is at Politics Daily. LaCroix also interviews the authors (who note that while Lerach encouraged stories about a supposed conspiracy to get him, the Milberg prosecution “was managed by a dedicated civil servant in the Los Angeles U.S. attorney’s office named Richard Robinson who is not only a career prosecutor, but a Democrat.”) And San Diego public broadcasting outlet KPBS runs its Dillon-and-Lerach interview under the gag-worthy headline, “The Story Of Bill Lerach’s Fighting For Consumers.”
All four have completed their sentences and don’t seem to have it so bad, judging by a March 19 Bloomberg story. William Lerach is going to teach at a law school and work for a “progressive think-tank.” And for the Milberg law firm itself? “Over the past couple of years, while everybody has been laying off lawyers and cutting pay, we’ve been giving lawyers raises and extra bonuses.”
- Greenwich, Connecticut real estate board may discipline member whose blog (often linked in this space) regularly pokes fun at overpriced houses. Antitrust/First Amendment problem? [Chris Fountain, For What It’s Worth]
- “Religious group sued for allegedly inciting harm through prayers” [USA Today]
- Legally driven waste of water in parched California should reopen Endangered Species Act debate [Max Schulz, American Spectator] “More Unintended Consequences — Endangered Species Edition” [Ronald Bailey, Reason; related AEI panel]
- “Apple v Woolworth re Apple Logos In Australia” [Trademark Blog]
- Speaking of Australia, Consumers Union’s Consumerist site publishes fake “Aussie McDonald’s fraud plot” memo as real — revises post later, but without mentioning it was taken in by hoax [HardArticle]
- Pennsylvania couple learns about squatter’s-rights law the hard way [Hazleton Standard Speaker]
- Maybe Saratoga Springs, N.Y. will let middle schoolers bike — or even walk! — to school [Albany Times-Union, Lenore Skenazy/Free Range Kids, Patrick at Popehat, Doug Mataconis/Liberty Papers]
- Milberg, the disgraced class action firm of Mel Weiss and Bill Lerach fame, is hot again [NLJ]
Economist John Torkelsen, a star expert witness for Milberg Weiss in many cases, declared in a sworn deposition that he was working for an hourly fee in a case in which he estimated damages to class clients to be more than $165 million in one of Milberg’s cases against casino operator Lakes Entertainment. In reality, Torkelsen had a concealed contingency fee arrangement with Milberg that helped ensure his incentives would be lined up in favor of a high damages estimate. Now Lakes wants its settlement back with treble damages, saying it would never have offered such a high settlement had Torkelsen’s true relationship to the law firm been disclosed (cross-posted from Point of Law).
Last year New York trial judge Herman Cahn ruled in favor of class-action giant Milberg in a high-profile dispute over whether it could share its winnings from past cases with disgraced felon and former name partner Melvyn Weiss, the firm’s former driving force. Judge Cahn stepped down from the New York bench in December, and now it develops has been hired by Milberg as its “distinguished” new attorney. And you — with the Wall Street Journal’s editorialists today — certainly have a suspicious mind. There probably won’t be any shortage of funds with which to pay the former jurist: an American Lawyer headline last month read “Milberg Among Plaintiffs Firms Awarded $120 Million in Xerox Class Action”.
A week ago I briefly noted that now-imprisoned securities class action king Mel Weiss appeared on the list of Bernard Madoff victims (163-pp. PDF courtesy WSJ, via Christopher Fountain) and observed how ironic it seemed that someone who made great claims to expertise in sniffing out stock fraud should have been taken in by it.
According to correspondence from New York securities lawyer (and longtime Weiss critic) Howard Sirota, however, there might be to the story than that:
I wouldn’t be so quick to jump to the conclusion that Mel Weiss [fouled] up investing with Madoff.
Weiss’ wife and son Stephen A. Weiss invested with Madoff, as did [Milberg Weiss partners] David Bershad and Pat Hynes.
In addition, convicted serial Milberg plaintiff Howard Vogel invested with Madoff.
Buchbinder Tunick, Milberg’s accountants and ironically Milberg’s principal forensic accounting experts, appear on the list, although the entries may be clients of the Buchbinder firm.
Class action firms Wolf Popper and Wolf Haldenstein also appear.
Sirota believes that other persons and entities on the Madoff victims list have also served as lead plaintiffs in securities litigation or as plaintiffs in other litigation handled by class-action firms. All of which could be mere coincidence, or could suggest that either Madoff himself or others in his circle might have played some role in funneling lead plaintiffs to the class-action bar. (Particularly in the “race to the courthouse” era that preceded the Private Securities Litigation Reform Act, having a stable of cooperative repeat plaintiffs was vital to the success of many plaintiff’s firms.)
One way to check this thesis, Sirota suggests, would be to check the names on the Madoff victims list against those on the list of plaintiffs maintained by the Stanford Law School securities class action clearinghouse to see whether there are any other noteworthy matches and if so whether they follow any particular pattern. He also asks whether some of the law firms that have been organizing task forces to recruit and represent plaintiffs in the Madoff scandals — they include the Milberg firm and Wolf Haldenstein — have adequately disclosed to potential clients in their literature that their firms’ own names figure on the Madoff victims list. More: Gary Weiss, Larry Ribstein.
Further: Yet more views. And in comments, a visitor says Wolf Haldenstein is on the list because clients of the firm invested with Madoff, not because the firm itself did.
American Lawyer has the story (more: AmLaw Daily, ABA Journal). Because, if you asked why the former dean of the shareholder class-action plaintiff’s bar deserved those hundreds of millions in court-ordered fees, you would have been told that society needed to reward his unsurpassed skills at sniffing out securities fraud. Can you imagine how Weiss as a lawyer would have shredded some hapless middleman financial defendant who thought it wasn’t necessary to do due diligence on an investment manager in placing funds because, well, he seemed like a nice guy at the time?
Weiss is in jail now on unrelated charges, of course, but he might make a fun person to name as lead plaintiff in a suit against Madoff.