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To mark our 30th anniversary, we’ve reached into our archives to highlight key events and players who made a difference since we made our debut. A version of the following article appeared in the May 2, 1983, edition…
Even Melvyn Weiss admits that “there is a negative connotation to being a plaintiffs’ lawyer in the class action field.” The image, he suspects, goes hand in hand with the term “strike suit,” which someone coined years ago to describe cases built on charges that were easy to make and very expensive to disprove. No firm has distanced itself from this negative image more successfully than New York’s Milberg Weiss Bershad Specthrie & Lerach. The firm, which Weiss and Lawrence Milberg began in 1965 and now has 29 lawyers in two cities, is unique. Apparently, no other firm has grown to this size specializing so heavily in as iffy a field as plaintiffs’ class actions, primarily securities cases. Milberg Weiss has achieved its status with a competence that even its adversaries admire. Carl Liggio, general counsel of Arthur Young & Co. in New York, an arch-critic of the plaintiffs’ class action bar, admitted, “I have nothing but the utmost respect for their abilities as a firm, and for Mel Weiss in particular. … He does a very, very credible job, no ifs, ands, or buts about it.” Other lawyers who have encountered Milberg Weiss in court and at the bargaining table agreed. The criticisms they voiced were directed not at the firm but at the class-action system that these plaintiffs’ lawyers exploit zealously but — the critics acknowledged — within the bounds of the law. The class action weapon often hits home, and although occasional misses are painful and expensive, Milberg Weiss lawyers say they are committed to continued use of this awkward but powerful artillery — in the service, as they see it, of little guys whose individual firearms hardly would make a dent. The firm represents defendants in “a smattering” of cases, “but we haven’t held ourselves out for that kind of work,” said Weiss. Occasionally, someone the firm represented previously as a plaintiff will call for defense help. The firm also handles cases in which a group of shareholders attempts to gain control or greater influence in a corporation, an area that the firm would like to develop further. NEW DOMAINS As the opposition recognizes, Milberg Weiss has been successful. How much more success the firm can garner, however, depends partly on the future of the class action in the nation’s courts. The future looks good in two respects, according to William Lerach, a partner in the firm’s San Diego office. The California Supreme Court has rendered decisions expressly stating a public policy favoring class actions and even has directed judges to be imaginative in perceiving opportunities for their use, Lerach said. Lower-court decisions in California like those in cases against Hertz and Fireman’s Fund do not dilute Lerach’s optimism. “You expect it,” he said. “The lower courts are still learning class action procedure. … You’ve got to go through a period of years … and build the experience of the lower courts.” Lerach also said that the U.S. Supreme Court’s recent decision in Herman & MacLean v. Huddleston was good news for securities plaintiffs, with its strong expression of support for private damage actions. “Huddleston makes it likely that the securities class action — our bread and butter — is going to thrive and flourish in the federal courts,” Lerach said.
Update: Melvyn Weiss and William Lerach remained partners for two more decades — and made millions in securities class actions. Their success, however, made them prime targets for tort reformers. Congress in the mid-1990s passed the Private Securities Litigation Reform Act as a response to Lerach’s success in securities cases. The relationship between the two men also frayed, and in 2004, Lerach left to form his own West Coast plaintiffs firm. Meanwhile, federal investigators were probing whether the firm was offering kickbacks to investors to serve as plaintiffs in securities cases. Last week, Lerach was sentenced to two years in jail for his role in the scheme. And Weiss was indicted in September by a federal grand jury in Los Angeles. He remains free on a $1 million bond.

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