Lawyers on Trial

Want to know why there has never been serious action on tort reform? Follow the money. From Chuck "the ambulance chaser" Schumer to Hillary Clinton to John Edwards, the Federal government is made up of lawyers who became millionares engaging in the business of frivolous lawsuits. Edwards, who reported a net worth of around $60 million during the 2004 campaign actually used to "channel" dead children to help him convince juries to award obscene amounts of money.

Now this, from IBD:
Posted 5/19/2006

Litigation: America's most feared class-action law firm is charged with paying millions in kickbacks to sign on people as plaintiffs. Just why do "victims" have to be paid to sue the companies that supposedly hurt them?
With more than 120 attorneys and offices in New York, Washington, Los Angeles and Florida, Milberg Weiss Bershad & Schulman calls itself "the most respected and effective plaintiff law firm in the United States." It's pulled in more than $45 billion in recoveries since its founding in 1965, going after everyone from Michael Milken to the tobacco industry.

In 2005 alone, the firm sued at least 75 companies for securities fraud, including General Motors. Milberg Weiss brags it has "set benchmarks in terms of case theories, organization, discovery, trial results, methods of settlement, and amounts recovered and distributed to clients and class members."

In other words, they built the model for modern class-action strategy. What Babe Ruth was to the home run, Milberg Weiss is to shaking down businesses.

For this giant among trial lawyer institutions to be slapped by a federal grand jury with 20 counts of criminality, including bribery, fraud, perjury, racketeering, filing false tax returns and obstructing justice — offenses that carry prison terms in some cases of up to 20 years — has implications for all who use litigation to harass business.

Kickbacks were involved in more than 150 of the firm's class-action and shareholder derivative-action lawsuits, according to the indictment, for which Milberg Weiss was paid "well over $200 million in attorneys' fees" over 20 years.

So this behavior seems integral to the firm's success. Kickbacks can persuade a lead plaintiff to settle, which can be against the interests of the other plaintiffs — but the lawyers still make out handsomely.

The larger scandal here is clear, and it goes right to the heart of the purported noble purpose these legal sharks claim as their motivation. With obese people suing fast-food restaurants for damages, there's no sign of frivolous lawsuits ebbing.

Just how many other trial lawyers have to engage in secret criminal activity to make this kind of scam work? And how many hundreds of thousands of jobs are lost in America when firms have to pay billions after losing or settling lawsuits with no merit?

It's interesting to see that Milberg Weiss contributed more than $80,000 to the 2006 gubernatorial campaign of New York State Attorney General Eliot Spitzer, money that Spitzer is now tripping over himself to return, as reported by the New York Sun. Spitzer has been suing brokerages, investment banks, insurance firms and mutual fund companies — in other words, he's the public-sector version of Milberg Weiss.

Trial lawyers such as those at Milberg Weiss, of course, give many millions to the liberal Democrats who then pass laws making it easy to sue companies and who appoint judges that use the courts to redistribute income.

Putting Milberg Weiss's lawyers on the stand will help expose this whole racket. It may also lead to the kind of tort reform in Congress that will end this longtime abuse.