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Sunday, April 1, 2007

The Money Lawyers: The No-Holds-Barred World of Today’s Richest and Most Powerful Lawyers

Truman Talley Books • 2005 • 396 pages • $27.95

In good times or bad, whether Republicans or Democrats are in power, trial lawyers are up to no good. But who are these people? What sort of lawyer would devote his life to making millions from class-action suits?

Joseph C. Goulden’s The Money Lawyers is an excellent guide to the lives and ideas of the megalawyers who wage war against American corporations. Goulden is an experienced author who is best known for The Superlawyers, a 1972 bestseller that showed what life was like inside major law firms.

Goulden, who describes himself as a “quasi libertarian,” is a fair-minded writer and persuaded several trial lawyers to talk to him. Chapters in this book include profiles of Washington insider Tommy Boggs, Microsoft- basher David Boies, and securities lawyers William Lerach and Melvyn Weiss.

Two of Goulden’s chapters, however, are about two of the most notorious class-action suits of the 1990s: breast implants and the diet-drug combination “fen-phen.” Here Goulden shows why class-action suits don’t solve the problems they are meant to correct.

In the breast-implants case, lawyers could show that the companies that made silicone-based implants tried to make the membranes as thin as possible in order to make sure that the implants were as life-like as possible. Because these membranes were thin, they leaked 4–6 percent of the time. Dow Corning, the major manufacturer, was understandably reluctant to reveal this; a 1975 memo from a Dow Corning salesman noted, “I don’t know who is responsible for this decision [to sell leaky implants], but it has to be right up there with the Pinto gas tank.”

But no one was able to show that the leaked silicone harmed women. That didn’t stop trial lawyers from raking in millions by persuading juries that the women they represented had illnesses caused by silicone. Trial lawyers also had allies, such as Dr. Sidney Wolfe, head of the Nader-founded Public Citizen and a relentless advocate for bigger government. Journalists also used the “evidence” gathered by class-action lawyers as a basis for sensational stories; most notoriously, Connie Chung charged in 1990 that silicone was “an ooze of slimy gelatin that could be poisoning women.”

Goulden sees trial lawyers as having a better record in the fen-phen case, as plaintiffs were able to show that taking fenfluramine and phentermine for long periods did substantially increase the risk of heart disease and stroke. Because of that risk, Goulden believes the jury’s decision that these drugs were unsafe was correct.

But when the $2.5 billion settlement with American Home Products was announced in 1999, the plaintiffs expected about 300,000 victims would qualify for payments. Instead of that, millions of victims demanded their share of the billions. Many of these “victims,” Judge Harvey Bartle III ruled, were found to be “sick” after only a brief exam by a doctor in Kansas City or another one in New York City . Judge Bartle ruled that the Kansas City doctor was reading up to 165 electrocardiograms a day, and that “her practice resembled a mass production operation that would have been the envy of Henry Ford.” As the result of this chicanery, payment to fen-phen victims—and their lawyers—was held up for years.

At least the fen-phen case had victims. Goulden shows that securities lawyers often win lawsuits against corporations whose stock price suddenly falls, even if they couldn’t show that insider trading or any other illegal activity caused the drop. Moreover, trial lawyers miraculously find investors who make bad investments and eagerly sue again and again. In one three-year period in the early 1990s, one investor was lead plaintiff in over 300 suits in California courts (each one against a separate company) charging that his investment had lost value because of illegal corporate behavior.

In his conclusions, Goulden doesn’t hold out much hope that tort reform will curb the trial lawyers since most politicians are lawyers and aren’t willing to enact changes that would substantially reduce lawyers’ incomes. Rather, he sees the best hope in strengthening the virtues of individual responsibility and self-reliance. For example, he notes that one reason why juries haven’t convicted fast-food companies of making kids fat is that most jurors rightly wonder why parents allow their children to get heavier and heavier eating junk food.

“Modern law,” Goulden concludes, “has produced a system that is a de facto welfare state, with all of us compelled to pay (through higher prices) for whatever woes befell other persons.”

Anyone interested in curbing the growth of the trial-lawyer-driven welfare state needs to read Joseph Goulden’s very fine book.

  • Martin Morse Wooster is a visiting fellow at the Capital Research Center, a contributing editor to Philanthropy, and a education book reviewer of The Washington Times.