Plaintiff Bar
Plaintiff Bar Gone Too Far
Looking for what to do next? Find out at the end of this article.
The plaintiffs’ bar arrived at its influential position not through traditional channels but through excesses piled on top of each other. It has a long record of extreme and ruthless behavior.
Buying Lawmakers
Members of the plaintiffs’ bar are generous contributors to political campaigns. Or, put another way, they use their wealth to exert significant influence on the lawmaking process in this country.
Few groups have as much political clout as the plaintiffs’ bar. The American Association for Justice is the fifth-ranking donor among group contributions. According to Center for Responsive Politics, an organization that tracks money in the political system, plaintiffs’ attorneys have given more than $31 million since the 1990 election cycle. That includes a high of $4.25 million in the 2002 cycle.
“A lobbying heavyweight, the association has been battling any attempt at tort reform, including recent proposals to cap awards in medical malpractice lawsuits,” says the Center for Responsive Politics’ Web site opensecrets.org.
“AAJ also lobbies Congress on any legislation that may inhibit the ability of consumers to bring lawsuits, particularly against health care providers, asbestos companies or insurance companies processing claims related to terrorism. The association favors Democrats, who oppose most attempts to initiate tort reform.”
Buying Laws
For all the cash the plaintiffs’ bar pours into the political process, it gets results.
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In early 2009, Congress passed the Lilly Ledbetter Fair Pay Act. The Point of Law blog said the law would invite a “flood of lawsuits on old, unprovable but potentially expensive claims that employers would find it hard to defend against.” The Wall Street Journal called it a potential “trial lawyer bonanza."
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In 2008, the Washington Examiner reported that there were 48 separate pieces of federal legislation that were of benefit to the plaintiffs’ bar. The Examiner reported that of the 55 lead sponsors of the pro-plaintiffs’ lawyer legislation, “39 had received substantial” campaign donations from plaintiffs’ attorneys.
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Plaintiffs’ lawyers have long lobbied for the ability to sue telecommunications companies for their participation in the anti-terrorism warrantless surveillance program.
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The 2008 Renewable Energy and Job Creation Act cut taxes on lawyers.
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The plaintiffs’ bar has lobbied hard for a $1.6 billion tax cut. The lawyers could get the break by immediately deducting from their taxes the money they spend in filing speculative lawsuits.
- The plaintiffs’ bar has also successfully lobbied Congress to write bills that would increase the opportunities to file asbestos-related suits. Another bill, co-sponsored by lawmakers who received big donations from the plaintiffs’ bar, would make it easier to sue over commercial maritime accidents.
“It is really unprecedented what (the plaintiffs’ lobby) is doing” in regard to pressing its case for friendly laws, Ted Frank, legal analyst at the American Enterprise Institute said in 2008. “Every time I talk to somebody on the Hill, I learn about a new bill that has a giveaway for trial lawyers.”
Lawyers Getting Rich
Plaintiffs’ attorneys get a sizeable chunk of jury awards. In class-action suits, the plaintiffs, sometimes hundreds or thousands of them, typically get only 50 percent of the award or settlement.
In some cases, plaintiffs’ lawyers walk away with far more than the clients they represent. They get millions while the plaintiffs get pennies.
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When Blockbuster settled a class-action suit in 2001, the lawyers got $9.3 million in fees. The plaintiffs, however, did not receive cash in the settlement. Each was offered certificates that good for free rentals and $1 off non-food items.
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The plaintiffs in a case against Cheerios each took home a box of cereal. Their attorneys received nearly $2 million.
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Every class member in a suit against the Bank of Boston was awarded $8.64 each. Each was charged $90 in attorney fees.
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In 2002, the Columbia House record club settled two lawsuits that challenged the way it presented its shipping and handling charges by providing each class member a discount voucher for a single CD or tape. The company paid the lawyers more than $5 million.
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When 300 plaintiffs’ attorneys reached a deal in 1998 with the tobacco companies on behalf of the government, they were awarded $30 billion.
- When a class-action suit against Citibank was settled in 2004, lawyers walked away with $7.2 million. Some plaintiffs literally received a few cents, others a few dollars.
When Plaintiffs’ Lawyers Are Convicted
It doesn’t always end well for plaintiffs’ attorneys. In some cases, after years of raking in big paydays, lawyers have found themselves in prison
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Dickie Scruggs, one of the richest plaintiffs’ attorneys in the country, was sentenced to five years in federal prison last year for conspiring to bribe a judge. Prosecutors said the Mississippi lawyer was looking for a favorable ruling in $26.5 million case and willing to pay a circuit court judge $50,000.
At the sentencing, U.S. District Judge Neal Biggers Jr. said he felt “perhaps this was not the first time you did this because you did it so easily. And there is evidence before the court that you have done it before." Scruggs pleaded guilty again in February 2009 to more bribery charges and was sentenced to seven years in prison.
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Scruggs’ son Zach and Sidney Backstrom, a Scruggs partner, were also given federal prison sentences for their role in the bribery scheme. Scruggs was one of the lawyers involved in the 1998 tobacco settlement.
Steven Schulman, David Bershad, William Lerach and Melvyn Weiss pleaded guilty to a number of federal charges in 2008. The federal indictment said their firm secretly paid plaintiffs $11.4 million to file lawsuits. And, Fortune magazine reported in 2006, they repeatedly lied to the courts about doing so.
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All four were partners in Milberg Weiss, now known a Milberg LLP, a large plaintiffs’ law firm based in New York City. In 2005, the firm was responsible for 57 percent of all securities class-action settlements. Weiss was sentenced to 30 months in prison and ordered to pay $10 million in restitution. Lerach received a two-year prison sentence. Bershad was sentenced to six months in federal prison. Schulman was sentenced to six months, as well.
- Former Texas attorney general Dan Morales was sentenced to four years in federal prison in 2003. According to triallawyersinc.com, he “was accused of trying to funnel hundreds of millions of dollars from the Texas tobacco settlement to a friend and converting campaign contributions to personal use.” The Associated Press said Morales and his friend Marc Murr, a Houston attorney who lawyers argued “had done little work on the case,” tried “to fraudulently obtain hundreds of millions of dollars in legal fees from a state settlement with tobacco companies.”
Plaintiffs’ attorneys are known for their excesses in filing litigation. But their excesses clearly are not limited to lawsuits.
Now What Do We Do?
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