Earlier this week, the Milberg law firm agreed to pay $75 million in return for dismissal of federal charges that they disbursed millions in illegal kickbacks to teams of “professional plaintiffs.” The firm—whose former partners, Bill Lerach and Mel Weiss, were recently convicted for their roles in the scandal—was accused of pocketing $250 million over the past two decades by being the first to file class action lawsuits against major companies on behalf of their roster of ready-made plaintiffs.
I’m guessing most members of the plaintiffs’ trial bar are eager to put the Milberg kickback scandal behind them. Yet, as an editorial in today’s Examiner points out, this case “should only be the first step in exposing the corruption that is rife in the plaintiffs’ bar.”
The fact is, since Bill Lerach continues to insist that the practice of providing illegal kickbacks is an “industry practice,” the Milberg settlement leaves us with more questions than answers. The Examiner outlines a number of outstanding issues including:
What assurance is there that the bribery, obstruction of justice and fraud exposed by the Milberg Weiss scandal are not the rule, rather than the exception, in class-action securities litigation?
One former Milberg Weiss partner who left the firm after the firm’s federal indictment in 2007 has sued disgraced former partners Lerach, Melvyn Weiss and Steven Schulman. What about the defendants in the 165 cases prosecutors identified as involving Milberg Weiss corruption? Do those defendants now have grounds for damage suits against the firm and its former partners?
As I’ve written previously, instead of refuting Lerach’s claim that it is an “industry practice” to illegally pay off plaintiffs, the trial bar is playing possum and hoping to ride out the news cycle. If the trial bar won’t police itself, maybe it is time for Congress to step in and expose these corrupt actions.