Milberg Weiss’ No-Win Situation

As L.A. federal prosecutors try to work out a deferred prosecution agreement with Milberg Weiss, a central fact has defense lawyers perturbed: it doesn’t matter whether the feds win at trial, since a mere indictment of the firm will likely break it apart. That extra leverage is a good thing for the government, considering that the case is somewhat sparse in victims — the alleged kickback scheme would have given Milberg a competitive advantage over other plaintiff firms, and it’s unlikely that the government would try to paint other class action lawyers as trod upon.

That leaves as lone victim the court — to whom Milberg and its clients allegedly lied, according to one client’s recent guilty plea. That promises to be an issue if any Milberg lawyers go to trial. But for the firm, indictment alone could be the end.

Lopsided government power levied against a business entity has drawn the ire of many defense lawyers in recent years — they say overzealous prosecutions of corporate wrongdoing leave innocent workers jobless. But as a big Democratic donor and enemy of the country’s top corporations, Milberg Weiss, said Peter Henning, a Wayne State University School of Law professor and moderator of the white-collar crime prof blog, is unlikely to gain sympathy points with the current administration.

“No one’s going to shed a tear of Milberg Weiss goes away,” he said.

— Justin Scheck

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One Response to “Milberg Weiss’ No-Win Situation”

  1. Charles D. Chalmers Says:

    Breaking up the Milberg firm could be a serious setback to protection for investor and consumer interests. That firm, together with its breakaway, Lerach, have the strength to stand toe to toe with any defendant. I believe this results in better class settlements, and I think studies confirm this in the securities field.

    I have been vigorously opposed to these firms in my practice, and have successfully complained about their fees. I think they are also capable of agreeing to less than adequate settlements. But I have also seen what happens when less well financed, or staffed, class action firms represent the class.

    The practices involved in this history deserve condemnation and sanction for those involved. At the same time the “first to file” rule was deeply flawed and that it spawned this activity is certainly no surprise.

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