Peter Lattman throws open the question (Jun. 13) whether indicted Milberg Weiss should be kept on in lead counsel in class actions. The fun arrives with comments #4 through #15, entered in quick succession under twelve different names between 11:12 a.m. and 11:19, more than one per minute, each of which defends Milberg and deplores the indictment in tones that are, well, you might say, curiously consistent with one another. An employee comment-swarm? A prankster? Pure coincidence? If it was an instance of Astroturf commenting, it certainly could have been done more skillfully.
Posts Tagged ‘Milberg Weiss’
It’s only fair, the GOP had Enron
“The embattled securities class-action law firm Milberg Weiss Bershad & Schulman received some political backing last week with the release of a statement signed by four Democrats from the House of Representatives condemning last month’s indictment in Los Angeles of the firm on criminal charges. … The statement was signed by three representatives from New York — Charles Rangel, Carolyn McCarthy and Gary Ackerman — and Robert Wexler from Florida. One of the founders of the law firm, Melvyn Weiss, is a high-profile fund-raiser for the Democratic Party.” (Julie Creswell, New York Times/Wilmington (N.C.) Star-News, Jun. 12).
TheLawyer.com, based in the United Kingdom, fumbles the story badly by reporting that Milberg “has picked up a powerful ally in the shape of the US Congress”. (Joanne Harris, “US Congress slams Milberg Weiss indictment”, Jun. 13, note the equally erroneous headline). In fact, the four representatives who signed the letter are hardly typical members even of the Democratic caucus in the House, let alone of the Congress as a whole (which, someone should tell TheLawyer.com, is controlled by Republicans). See, for example, Jeremy Pelofsky, “Democrats returning money to two Milberg lawyers”, Reuters, Jun. 9 (Democratic National Committee, perhaps wiser than Reps. Rangel, McCarthy et al., seek to distance themselves from firm by returning some of its donations, a step already taken by New York’s Eliot Spitzer). More: Prof. Bainbridge, Jun. 12.
“$1 Billion Legal Fee Eyed in Enron Suit”
That’s what Bill Lerach, late of Milberg Weiss, could bag as Enron settlements mount toward $10 bmillion. It seems Lerach has a sliding-scale contingency-fee arrangement with his lead plaintiff, the University of California, starting at 8 percent and going upward from there. And — this is the beauty part — it seems there’s a good chance courts will simply extend the percentage rates to apply to the many other investors in the plaintiff class, even though they never signed up to be Lerach clients or were given a chance to negotiate fees with him. No wonder class-action lawyers are so concerned to butter up the universities, pension funds, unions and other big institutional plaintiffs who serve as their stalking horses in these actions. The university, it seems, did not employ competitive bidding to invite participation by other potential counsel.
A critic of class action litigation, Lawrence Schonbrun, said he is suspicious of the university’s claims that it has vigilantly overseen the Enron case. A retired judge the university hired as a consultant on the case, J. Lawrence Irving, was paid more than $1.4 million by the state school, before being hired this month as a consultant by Lerach Coughlin. “This was not the ideal choice to monitor plaintiffs’ counsel,” Mr. Schonbrun said.
(Josh Gerstein, New York Sun, May 31).
Milberg Weiss partners bail out
They’re “rushing out the door”, reports Justin Scheck in The Recorder (“Top Milberg Weiss Partners Head for the Exits”, May 30).
NYT snoozes through Milberg scandal
I’ve got details at Point of Law, where there is also much additional Milberg coverage.
On the other hand, the Times today continues to show admirable persistence in tracking the Anthony Pellicano scandal, even though that one (unlike Milberg’s) doesn’t have its roots in New York. (David M. Halbfinger and Allison Hope Weiner, “Pellicano Case Casts Harsh Light on Hollywood Entertainment Lawyers”, May 23).
Also at Point of Law this week, in the “Featured Discussion” section, Jonathan B. Wilson and Larry Ribstein debate whether licensing lawyers makes sense.
Welcome visitors
My observations on the Milberg indictment drew comments from, among others, Tom Kirkendall, Steve Bainbridge, Jonathan Adler, James DeLong, and Larry Ribstein.
“Trial Lawyers are Down”
Kevin Hassett asks why the Milberg Weiss indictments and silicosis scandal aren’t resulting in sensible liability reforms when the publicity over the Enron scandal created the rush to pass Sarbanes-Oxley.
“Inside Milberg’s Credenza”
I’ve got a lengthy op-ed in today’s Wall Street Journal (sub-only) discussing the indictment of Milberg Weiss. A few excerpts:
Since such payoffs are baldly illegal, prosecutors claim the firm took elaborate steps to keep them concealed from judges and others. They say Milberg funneled much of the money through law-firm cut-outs and other channels, including casinos, and drew on a stash of money kept in a safe located in a credenza in partner David Bershad’s New York office, “to which access was strictly limited.” Again and again, prosecutors add, the firm submitted sworn statements on behalf of its clients denying any receipt of the sorts of payments they were in fact receiving. …
With other class members absent, named plaintiffs are one of the few watchdogs against self-dealing or misconduct by the lawyers — specifically, the pursuit of settlements that result in high legal fees, whether or not they serve the interest of the class. … if the Justice Department’s allegations are correct, Milberg was taking no chances on the watchdogs staying pacified: It threw regular chunks of raw liver into their cages. …
The two celebrity lawyers who made Milberg famous, Melvyn Weiss and the now-departed William Lerach, have thus far escaped indictment: Of course, if they were prosecuting such a case, they would miss no opportunity to insinuate that misconduct by part of a team of top executives must have been at least tolerated by the others, that the rot goes straight to the top, that senior partners turned a convenient blind eye to signs of misconduct because they profited handsomely from that misconduct, and so forth. Messrs. Weiss and Lerach must count themselves lucky that such reasoning did not lead to their inclusion as defendants.
The Journal also has an editorial today on the subject.
Our earlier coverage: May 20 and links from there, May 21, as well as many posts at Point of Law. When The Economist profiled Melvyn Weiss three years ago, I told them, “A distinguishing characteristic of the Milberg Weiss approach is that the clients became tokens to be moved around a game board” (Jan. 17, 2002).
Dept. of ill-timed announcements
The Drum Major Institute for Public Policy (“DMI”) is proud to announce the selection of Cyrus Dugger as the first Milberg Weiss Legal Fellow at DMI. The newly created Milberg Weiss Legal Fellowship will focus on developing a new generation of lawyers who are committed to working in a legal and public policy capacity to preserve access to the courts and our civil justice system….As a Milberg Weiss Senior Fellow, Mr. Dugger will focus his efforts on preserving access to the courts at a time in which persons with limited financial means are finding it difficult to pursue remedy through the legal system.
— from the Milberg Weiss website, May 9.
Update: Milberg Weiss indicted
Following a six-year investigation, the nation’s best-known plaintiff’s law firm is the subject of a 102-page federal indictment charging it paid millions in illegal kickbacks to a stable of docile “named plaintiffs” in its suits, and engaged in elaborate concealment and deception to keep the details of the scheme from coming to the attention of courts, class members and others. (“Top Law Firm Indicted in Alleged Scheme to Pay Plaintiffs for Class-Action Suits”, AP/FoxNews.com, May 19; Julie Creswell, “Milberg Weiss Is Charged With Bribery and Fraud”, New York Times, May 18; Josh Gerstein, “Criminal Charges Levied Against Big Tort Law Firm”, New York Sun, May 19).
Blog reaction: Stephen Bainbridge; Tom Kirkendall; Evan Schaeffer; Greg Mitchell; Jonathan B. Wilson.
Our extensive earlier coverage: Apr. 7, Nov. 18 and links from there.