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Attorney William Lerach, the putative king of the class action, has notified the nation that he will not be indicted as a part of the U.S. Department of Justice’s ongoing investigation of class action misconduct. That leaves Seymour Lazar, a frequent class action plaintiff, as the current focus of the Justice Department’s investigation. However, the high-profile federal indictment of Lazar (himself an attorney) has yet to focus the attention of our nation’s legal community on what appears to be serious misconduct among the plaintiffs’ class action bar. It should come as no surprise that the renowned class action-the noble idea for redressing the little wrongs suffered by America’s consumers-has been transformed into a pig’s trough of attorney fees for lawyers. It now appears to have been transformed into a pig’s trough of fees for certain representative plaintiffs as well. Pennies for class members Examples of the dysfunctional class action system-worthless coupons for class members and millions of dollars in attorney fees for lawyers-are endless. The system works like this: Class action attorneys file a lawsuit against a corporation for misbehavior. The plaintiff and defendant lawyers do their legal dance for a couple of years, and the case settles with class members getting pennies on the dollar for their damages or useless coupons. Based upon the legal fiction of “benefit to the class,” our nation’s judges award the plaintiffs’ lawyers millions, if not tens of millions, of dollars in attorney fees. Yes, the plaintiffs’ bar can point to the Enrons and WorldComs, but coupon settlements, charge card credits for 80 cents and checks for $5.30 (with 10 pages of Internal Revenue Service instructions on how to report the income) dominate the class action field. Now it appears that what has escaped the notice of our nation’s judiciary for the past 20 years has been brought to the public’s attention by the Justice Department’s indictment of Lazar for allegedly getting millions of dollars in kickbacks from Lerach’s previous firm, Milberg Weiss Bershad Hynes & Lerach, for acting as “their” class representative in dozens of cases. How many others have received secret payments from the nation’s most prestigious class action law firms is unknown and seemingly of no concern to the nation’s legal establishment. The plaintiffs’ class action bar, never at a loss to sue American business over its transgressions, is uncharacteristically silent about this long-running fraud. They might claim that the Justice Department’s investigation will distract attention from egregious corporate misconduct, but such an argument would ignore the egregious law firm misconduct which brought about the indictment. A disgraceful silence As someone who has been fighting this system of peanuts for the class and millions for the lawyers, I find this silence on the part of the legal establishment disgraceful. Where are all the law professors who regularly act as experts pontificating on the misconduct of corporation defendants? Where are all the judges, retired or acting as private mediators, who presided over these cases expressing their outrage at the deceit practiced in their courtrooms? How could this 20-year-old, multimillion-dollar payoff scheme have escaped judicial and bar attention? What is really going on in our nation’s courtrooms? Equally troubling, if what Milberg Weiss did was wrong, why do our courts regularly award representative plaintiffs thousands of dollars for “protecting” the class’s interest in cases in which class members typically receive next to nothing? The endless rip-offs that characterize the class action system continue to occur despite two congressional attempts at reform. Little has been done to reduce huge plaintiffs’ lawyers’ payoffs that take advantage of the public’s indifference to class action lawyers’ disingenuous championing of the “little guy,” while stuffing their pockets with the “little guy’s” money. Our nation’s judges remain asleep at the switch while class action lawyers (along with the businesses they sue) pick the pockets of American consumers. When will our nation’s legal establishment awaken from its slumber? Lawrence W. Schonbrun is executive director of Class Action Watch, a nonprofit foundation based in Oakland, Calif.

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