The Milberg Settlement & Dealing With Unfair Stereotypes In The Legal Industry
As a former police officer and current New Jersey litigation attorney, I have worked in two of the most unfairly maligned professions in this nation. As an attorney, I have accepted the fact that unfair stereotypes are simply part of doing business in this day and age. However, every once in a while, I must stand in defense of our profession and counter the misinformation that the news media puts forth.
In today’s New York Times, we see an example of how the media, subtly but purposefully, chooses to gloss over important facts in favor of promoting stereotypes and broad-stroke generalizations about the legal profession. The June 17, 2008 article, entitled “Big Penalty Set for Law Firm, but Not a Trial” by Jonathan Glater, contains a sketch of the groundbreaking criminal prosecution of the large law firm Milberg Weiss, which comes on the heels of guilty pleas by some of that firm’s most prominent partners who, not coincidentally, were giants in the field of class action litigation before their recent, ignominious fall from grace. The bottom line of the article is that Milberg Weiss, a large law firm, will pay a $75 million settlement in exchange for dismissal of criminal charges against the entity. But the underlying current of the article evidences an almost vengeful attitude toward all “trial attorneys.” Mr. Glater’s tone is one of satisfaction that some trial lawyers “got their come-uppance.” I would like to present an alternative view – one that deals more in fact than stereotype.
Let me begin by setting the stage. It begins with the misguided mantra by some politicians that “trial lawyers” are destroying the country by suing people with frivolous lawsuits and obtaining outrageous judgments against otherwise innocent corporations. Of course, these “innocent corporations” also happen to pay millions of dollars in campaign contributions and lobbying fees to get these politicians to say these things. Unfortunately, in the sound-bite age of political discourse, this simplistic mantra has some superficial appeal to regular folks whose exposure to the legal system is limited to Law and Order re-runs and thinly researched media reports about allegedly frivolous lawsuits and multimillion dollar judgments against large companies.
What most people who ascribe to these stereotypes tend to ignore is the real, live people that we so-called “trial lawyers” represent -- victims of someone else’s misconduct. Often, these people are victims of the kind of corporate greed, misconduct, and unfair practices that makes us all shudder with contempt. Think Enron. Think Erin Brockovich.
What people must understand before they make broad judgments about our profession is that our nation, through its elected officials, legal scholars, and courts, collectively made a policy decision long ago that our system of democratic government requires trial lawyers to help keep our country safe and our corporations honest. That is to say, our forebears decided that, although Government must do its best to regulate certain aspects of business (like hospitals and public companies) as well as aspects of our daily lives (like workplace safety and driving on the highways), our society cannot rely solely on Government to address wrongs visited upon innocent people. Why? Because the volume of people harmed everyday is so enormous that Government would shut down if we had to rely on it to redress harms that befall us. Therefore, the civil justice system is an essential part of society as we know it, and it was created deliberately to benefit all of us, or at least those of us who have the misfortune of being injured by someone else’s thoughtlessness, greed, or even deliberate ill will.
Indeed, it is ironic that the same politicians and pundits who rail against “trial attorneys” are also the same people who claim to want smaller government and lower taxes. But if there were no “trial attorneys,” we would live in one of two expensive and inefficient worlds. The first option would be a world in which employees, patients, pedestrians, and any other victim would have no remedy when they are injured by someone else’s misdeeds. In this world, corporate miscreants, road-ragers, and law-breakers would be free to victimize all of us. It is no exaggeration to suggest that society would quickly descend into chaos in such a world. The second option would be a world in which Government is required to investigate and litigate on behalf of the millions of people harmed every year in this country by someone else’s negligence, recklessness, and purposeful misconduct. If you think your taxes are high now, imagine what they would be if we left it to Government to right all the wrongs visited upon our fellow citizens.
So, in essence, our society decided to “privatize” justice by creating the tort system, in which “trial attorneys” represent victims of other people’s misconduct. More often than not, these cases never see the inside of a courtroom, thereby saving taxpayer money. Indeed, the vast majority of cases are resolved after discussions between defense lawyers and lawyers for the injured parties, which is far more efficient than having public employees resolve every dispute. It would certainly be extremely expensive for all of us, not to mention incredibly inefficient, if victims were left to fend for themselves when they are injured due to the negligence of others, or, worse still, be required to wait in lines that would dwarf every DMV in the country combined. Under the current system, however, the costs of the injury and the litigation are generally borne by the wrongdoer – not the taxpayer, and not the victim. This is how it should be.
Like everyone else in our democratic society, lawyers must make a living. Accordingly, the system has created incentives for lawyers to represent people who have been harmed, many of whom could never afford to pay all the expenses related to litigating a civil lawsuit and certainly would not have the knowledge and experience to navigate the law. Sure, sometimes lawyers get paid a lot after a successful case, but what the media does not report is all the cases in which the attorneys’ costs far exceed their recovery. Of course, the trick to having a successful law practice is to minimize such losses, but it is certainly a myth that lawyers are becoming millionaires by filing frivolous lawsuits and otherwise manipulating the system. It simply isn’t true.
With respect to the New York Times article, I simply want to point out a few of the subtle pot-shots the reporter takes at the profession, and why I believe they are unfair. First, the reporter refers to a “certain legal culture of braggadocio and excess – always in the name of justice for the investors they represented.” This pot-shot is designed to raise the specter of lawyers trying to make a buck while falsely claiming to seek justice on behalf of their clients.
I certainly do not defend the conduct by the Milberg attorneys, but the reporter never really explains what they did or why it cannot be used to paint all trial attorneys with the same brush. Without getting into excruciating detail, what the Milberg attorneys did was manipulate the courts by positioning themselves as the representative of the “lead plaintiff” in several class action lawsuits. A class action is a case in which there were many victims of the same misconduct. So, for example, in the movie Erin Brockovich, the power company had poisoned several members of the community by deliberately dumping chemicals into the water and then lying about it. Those victims would be members of a “class” in a class action.
In class action lawsuits, there can be thousands of plaintiffs, and each has a right to be represented by an attorney. For efficiency purposes, the courts combine all the plaintiffs into a “class” so the court does not have to litigate every single case on its own. When the court “certifies” a class, it also identifies a “lead plaintiff,” whose lawyer will do most of the work in the case, will speak on behalf of the other plaintiffs, and will keep the other attorneys abreast of what’s going on. In exchange for performing all these additional tasks, the lead plaintiff’s attorney will get compensated for more hours of work at the end of the case than the other attorneys will receive.
What Milberg’s attorneys did was pay plaintiffs who were well suited to be “lead plaintiffs,” even before any wrongdoing had occurred. In most cases, these plaintiffs were shareholders of public companies which later did something to harm shareholders. Milberg then would argue to the court that Milberg’s clients should be considered the lead plaintiff, usually because Milberg was able to file suit first and was such a large firm that it could easily perform the function of lead plaintiff’s counsel. There is nothing wrong with arguing that one plaintiff should be lead plaintiff over others. What is wrong is not disclosing to the court that the attorneys have paid the plaintiff in advance, so that Milberg would be ready to file suit before other plaintiffs even retained attorneys. This created a conflict of interest that Milberg deliberately failed to disclose to the court.
However, this reporter, and many others who have referred to this case, fail to inform the public that Milberg attorneys did not manipulate the facts of the cases. These were still legitimate cases in which corporate actors deceived and harmed innocent shareholders. Yes, Milberg exploited a loophole for its own benefit, but at the end of the day, the plaintiffs were injured, and the corporations were wrong. It just so happens that the Milberg attorneys obtained a larger fraction of the overall judgment than they probably were entitled to. But, they are paying dearly for their dishonesty, and it was not a widespread practice.
But, it is patently inaccurate – and borderline fraudulent – for reporters and politicians to point to Milberg’s fraud upon the court as an example of corruption throughout the entire profession. Such simplistic stereotyping is just as shallow as asserting that all politicians solicit prostitutes, just because a few of them have.
Although certain lawmakers act like the sky is falling with respect to the tort system, the truth is that our system of civil justice, although imperfect in some respects, is working. And, while some members of Congress and state legislatures will always cater to their corporate friends by assailing trial attorneys, I encourage everyone to learn the facts and resist falling into the stereotype-trap.
If you have questions or comments about this article or the issues presented, please email Peter B. Paris, Esq. at pparis@lependorf.com or visit http://www.lependorfsilverstein.com and fill out one of our contact forms.
