“Strike King Strikes Out”

Something right had to happen on 20 April. Not only did I make the big 50 figure, chronologically, but Mr. William Serach of Milberg Weiss agreed to fork out some $50 million from his own pocket when the jury found him guilty of the “abuse of the legal process”. It couldn’t have happened to a better guy after enriching himself by “$100 million in the past decade churning out machinelike lawsuits against companies with volatile stock prices”, according to an editorial of the Wall Street Journal of 20 April.

Milberg Weiss is the same law firm that recently filed class action lawsuit against the apparel industry here. Interesting though that it never named defendants in its complaint for obvious reason: fear of retaliation by individuals or factories that it proves its case as litigated. The tactic is basically a modern day
Robinhood abusing the legal process for personal enrichment or what another well poised attorney called “legal extortion”.

Since the advent of the US Department of Interior’s racist policy against the apparel industry here fully supported by the textile labor unions and human rights groups, coupled with the recent filing of Milberg Weiss’s modern day Robinhood lawsuit, buyers have either gone elsewhere or made cuts in their orders quite significantly. And so there’s about a 25 percent drop in the total purchase, annually.

The WSJ editorial related that “what went around has come around with a stunning jury verdict of $45 million for malicious litigation on behalf of Daniel Fischel, dean of the University of Chicago Law School and cofounder of Lexecon, a consulting group that often tangled in court with the Lerach firm. Mr. Fischel held on for nearly a decade against the advice of friends and lawyers, maintaining that the real issue was the integrity of the law. His point was pretty well established when, after the verdict but before the jury could deliberate on punitive damages, Milberg Weiss agreed to his surrender terms, $50 million wired to his lawyer’s bank account immediately”.

The quick surrender by Milberg Weiss must be premised on the fear that “judges in the future would refuse to accept its lead role in the class-action lawsuits that are its bread and butter.” It’s the second blow “following Congress’s 1995 overhaul of the rules for federal securities suits.” It stipulated that the “investor with the biggest losses should pick the lead counsel.” It’s a provision “aimed squarely at Mr. Lerach, who typically brought suits in the names of figurehead shareholders on his roster who often own relatively few shares in the target company”.

“Indeed, the words ‘abuse of the legal process’ have a resonance beyond the lawsuit of Lexecon, a firm that had been successful in providing expert testimony to companies targeted by Mr. Lerach.” Mr. Lerach once boasted that he doesn’t have clients and holds on to the “greatest practice of law in the world”. But “it might be truer to say that he manufactures the client to suit the case, but a federal judge in Dallas cited the remark in stripping the firm of its lead role in a case three years ago under the new securities law.”

“It is an open secret that Mr. Lerach and friends make much of their living suing innocent companies with volatile share prices, mostly in the technology sector, extracting settlements from busy executives who can’t afford to waste time in legal maneuvering. John Doerr, one of Silicon Valley’s most admired venture capitalist and a backer of AOL, Netscape, Amazon.com, and Sun Microsystems, told us four years ago that ‘Bill Lerach is a cunning economic terrorist’. What he’s doing is certainly immoral, and just this side of illegal”.

“The Fischel dispute stems from the 1988 Nucorp Energy lawsuit, which Mr. Lerach had publicly boasted was going to be his biggest victory. Mr. Stuart Kadison, a distinguished LA lawyer who worked on Brown v. Board of Education testified how Mr. Lerach once pushed his way into a crowded elevator during the Nucorp trial and shouted, “Kadison, this case is going to bring an ignominious end to your mediocre career”. But Mr. Fischel’s testimony gutted Mr. Lerach’s arguments in Nucorp in what WSJ called a “victory for economics”. Well, Mr. Lerach became “apoplectic and, as the jury heard, threatened to ‘put the little expletive out of business’.”
Well, so much for the short-lived stint of a modern day Robinhood and shall we say adios to the expletive business too.

Strictly a personal view. John S. DelRosario Jr. is publisher of Saipan Tribune