Corrupt Attorneys

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Judges Slam More and More Plaintiffs’ Attorneys for Corruption

March 13, 2014

Peasants in Leon, Nicaragua, march in 2007 to denounce the use of harmful pesticides at banana plantations

Photograph by Miguel Alvarez/AFP via Getty Images

http://www.businessweek.com/articles/2014-03-13/judges-slam-more-and-more-plaintiffs-attorneys-for-corruption#p1

Peasants in Leon, Nicaragua, march in 2007 to denounce the use of harmful pesticides at banana plantations

On March 7 a California appellate court upheld a trial judge’s finding that what had been billed as a watershed liability verdict against Dole Food over pesticide use in Nicaragua was actually the product of a conspiracy by corrupt plaintiffs’ lawyers. That decision came only three days after a federal judge in New York ruled that a multibillion-dollar pollution judgment against Chevron (CVX) in 2011 was so tainted by bribery and coercion that it wasn’t worth the paper it was written on.

Meanwhile, in Texas, a prominent class-action injury lawyer faces mounting woes because of allegations that he faked thousands of damage claims against BP (BP)related to the 2010 Gulf of Mexico oil spill. When you combine these cases with the criminal convictions several years ago of plaintiffs-bar titans Mel Weiss, Bill Lerach, and Dickie Scruggs—all of whom served time for corrupting the civil justice system—it’s hard to deny that there’s deep dysfunction within a powerful portion of the legal profession that claims to fight corporate abuse on behalf of the little guy.

A look at the Dole ruling illustrates the point. The California Court of Appeal in Los Angeles affirmed dismissal of one of a series of suits filed against Dole, alleging the company’s use of pesticides in Nicaragua left banana workers sterile in the late 1970s. In all, these suits resulted in billions of dollars in judgments against Dole.

The case at issue in the March 7 ruling, known as Tellez, went to trial in 2008 and produced a multimillion-dollar verdict for workers. That verdict was thrown out when Dole’s attorneys proved that many of the plaintiffs never worked for the company and weren’t, in fact, sterile. Witnesses and investigators were intimidated in Nicaragua, and plaintiffs were coached to concoct false stories. One supposed victim testified that he was instructed to memorize and repeat phony evidence “like a parrot.”

Plaintiffs’ lawyers and law firms are major political contributors, particularly to Democrats

The California appellate court said the trial judge correctly sent the Tellez plaintiffs packing. The ruling was a win for the Los Angeles firm Gibson, Dunn & Crutcher, which has engineered the negation of multiple pesticide verdicts against Dole. That accomplishment prompted Chevron to hire Gibson Dunn to fight back against a $19 billion oil-contamination judgment imposed by an Ecuadorean court in 2011. In the Chevron case, U.S. District Judge Lewis Kaplan of New York ruled on March 4 that plaintiffs’ attorney Steven Donziger turned his Ecuadorean lawsuit against the oil company into a racketeering scheme, complete with extortion, bribery of judges, and fabrication of evidence. Donziger has denied wrongdoing and vowed to appeal.

Mass-tort and class-action securities-fraud suits reached their apogee in the 1990s, fueled in part by the energy and ingenuity of an elite fraternity of plaintiffs’ firms and individual lawyers, some of whom became phenomenally wealthy as a result of their success. There’s nothing necessarily wrong, of course, with plaintiffs’ attorneys doing well along the path to doing good, just as there’s nothing necessarily improper with corporate-defense lawyers getting richly paid.

But as the plaintiffs’ bar achieved lucrative triumphs in asbestos litigation and the tobacco cases, some of its leaders lost their bearings. Scruggs, who earned a fortune in both of those arenas, pleaded guilty in 2008 to crimes related to a judicial bribery scheme. Weiss and Lerach, impresarios of securities-fraud class actions, went to prison for paying kickbacks to shareholder plaintiffs-for-hire. Last year the Kentucky Supreme Court upheld the disbarment of Stanley Chesley, a scourge of the pharmaceuticals and chemicals industries, among others. Chesley allegedly sought “unreasonable” fees in the settlement of a diet drug class action against Wyeth, now part of Pfizer (PFE).

Mikal Watts of San Antonio ranks among the nation’s most feared mass-injury lawyers. In the wake of the BP oil spill four years ago, his firm filed some 40,000 claims on behalf of deckhands and others alleging economic harm from the disaster that killed 11 rig workers and sullied the Gulf Coast. Last December, BP hit back, accusing Watts of seeking to shake down the company by filing claims for thousands of “phantom” clients who didn’t fit his description of them or didn’t exist at all. Then, in January, another well-known mass-tort attorney, Danny Becnel of Louisiana, filed a separate suit against Watts on behalf of Vietnamese American fishermen and business owners who say Watts used their names without authorization. Watts last year resigned from the plaintiffs’ steering committee helping to direct the litigation against BP after media reports that federal agents had searched his offices in connection with the phantom-claims scandal. The federal criminal probe is continuing. Watts, a major fundraiser for the presidential campaigns of Barack Obama, has denied any wrongdoing—civil or criminal. His lawyers have said all his filings against BP were made in good faith.

Despite the egregiousness of the plaintiffs’ bar abuses, there’s little chance that Congress will enact tort reform anytime soon, says Victor Schwartz, a lobbyist for business on the issue and a partner in Washington with law firm Shook, Hardy & Bacon. Plaintiffs’ lawyers and law firms are major political contributors, particularly to Democrats, who have fought attempts to cap settlements in big corporate liability cases and class actions. Lawyers spent about $135 million in 2012 helping to elect Democrats, compared with $56 million for Republican candidates, according to the Center for Responsive Politics, which tracks political money. “There have been no major business civil justice victories [in Congress] for almost a decade,” Schwartz says. Likewise, President Obama has shown little interest in taking on attorneys who invested $28 million in his reelection effort in 2012, more than twice what they gave Mitt Romney, according to the center. And bar associations and state attorneys general rarely seek to prosecute litigation fraud, which is expensive to pursue and politically fraught. As a result, says Sherman Joyce, president of the corporate-funded American Tort Reform Association, “too many plaintiffs’ lawyers believe there’s not much risk in filing fraudulent suits.”

The bottom line: Dole and Chevron have won major court victories after federal judges ruled that plaintiffs’ lawyers engaged in fraud.

Barrett_190
Barrett is an assistant managing editor and senior writer at Bloomberg Businessweek. His new book, Law of the Jungle, which tells the story of the Chevron oil pollution case in Ecuador, will be published by Crown in September 2014. His most recent book is GLOCK: The Rise of America’s Gun.
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UPL ADVISORY OPINION

FINAL VERSION
277 Ga. 472
In the Supreme Court of Georgia
Decided: November 10, 2003
S03U1451. IN RE UPL ADVISORY OPINION 2003-2.
PER CURIAM.
We granted the State Bar of Georgia’s petition for discretionary review to consider the opinion of the Standing Committee on the Unlicensed Practice of Law that the preparation and execution of a deed of conveyance on behalf of another and facilitation of its execution by anyone other than a duly licensed Georgia attorney constitutes the unauthorized practice of law. UPL Advisory Opinion No. 2003-2 (April 22, 2003). 1 See State Bar Rule 14-9.1 (g) (3) (authorizing this Court to grant petition for discretionary review or review an opinion on its own motion). Because we agree with the UPL Standing Committee that only a licensed Georgia attorney may prepare or facilitate the execution of a deed of conveyance, we approve UPL Advisory Opinion 2003-2. It is well established that this Court has the inherent and exclusive authority to govern the practice of law in Georgia, including jurisdiction over the unlicensed practice of law. Eckles v. Atlanta Tech. Group, 267 Ga. 801, 804 (2) (485 SE2d 22) (1997). See also GRECAA v. Omni Title Services, Ga. (Case No. S03A1030, decided 11/* /03); Huber v. State, 234 Ga. 357, 359 (216 SE2d 73) (1975); State Bar Rule 14-1.1. In this regard, we have issued formal advisory opinions which confirmed that a lawyer cannot delegate responsibility
for the closing of a real estate transaction to a non-lawyer and required the physical presence of an attorney for the preparation and execution of a deed of conveyance

*1 State Bar Rule 14-9.1 (b) empowers the Standing Committee on the Unlicensed Practice of Law to address inquiries regarding the unauthorized practice of law.

(including, but not limited to, a warranty deed, limited warranty deed, quitclaim deed, security deed, and deed to secure debt). In other words, we have consistently held that it is the unauthorized practice of law for someone other than a duly-licensed Georgia attorney to close a real estate transaction or to prepare or facilitate the execution of such deed(s) for the benefit of a seller, borrower, or lender. See, e.g., Formal Advisory Op. No. 86-5 (86-R9) (May 12, 1989); Formal Advisory Op. No. 00-3 (Feb. 11, 2000).
The proponents of lay conveyancing, *2 or witness-only closings, *3 urge this Court to overturn UPL Advisory Opinion 2003-2 because, they contend, requiring the services of Georgia lawyers for real estate closings and the execution of deeds of conveyances needlessly harms the public interest by increasing price and decreasing choice for consumers. Recognizing that adherence to the public interest is “the foremost obligation of the practitioner,” First Bank & Trust v. Zagoria, 250 Ga. 844, 845 (302 SE2d 674) (1983), as it distinguishes a professional service from a purely commercial enterprise, we continue to believe that the public interest is best protected when a licensed Georgia attorney, trained to recognize the rights at issue during a property conveyance, oversees the entire transaction. If the attorney fails in his or her responsibility in the closing, the

*2 “Lay conveyancing,” authorized by statute in some states, is generally defined as the practice by which non-lawyers close real estate transactions, provide settlement services, or select, prepare and complete certain real estate closing documents. See Va. Code. Ann. §§ 6.1-2.19 (2003) (consumer protection statute uthorizing lay settlement services); Colo. Rev. Stat. § 38-35-125 (2002) (recognizing authority of nonlawyers to close real estate transactions); Minn. Stat. §§ 481.02 (2002) (exempting non-lawyer real estate closings from statutory definition of unauthorized practice of law). In Georgia, non-lawyers may conduct pro se those transactions set out in OCGA § 15-19-50 and to which they are a party.                                                     *3  “Witness-only closings” occur when notaries, signing agents and other individuals who are not a party to the real estate closing preside “over the execution of the deeds of conveyance and other closing documents, but purport to do so merely as a witness and notary, not as someone who is practicing law.” UPL Advisory Opinion 2003-2, p.5.

attorney may be held accountable through a malpractice or bar disciplinary action. In
contrast, the public has little or no recourse if a non-lawyer fails to close the transaction
properly. It is thus clear that true protection of the public interest in Georgia requires that an attorney licensed in Georgia participate in the real estate transaction.

Although it is within this Court’s exclusive authority to determine the scope of the practice of law, we note that since at least 1932 it has been the statutory policy in the State of Georgia that only attorneys properly licensed in Georgia are authorized to close real estate transactions. See OCGA § 15-19-50 (practice of law includes conveyancing, preparation of legal instruments of all kinds whereby legal right is secured, rendering of opinions as to the validity or invalidity of titles to real or personal property, and giving of any legal advice). See also Georgia Bar Association v. Lawyers Title Insurance Corp., 222 Ga. 657 (151 SE2d 718) (1966). Although the language of this statute does not control the practice of law in Georgia, we find it is “in aid of the judiciary in the performance of its functions,” Huber, 234 Ga. at 360, and is consistent with our holding that only an attorney duly licensed in this State can prepare and facilitate the execution of a deed of conveyance. This policy was enacted and continues to exist for the benefit of the public and we are unpersuaded that the time has come to change the policy with regard to lay conveyances or witness-only closings. Accordingly, we hereby approve UPL Advisory Opinion 2003-2.

UPL Advisory Opinion approved. All the Justices concur.
Decided November 10, 2003 – Reconsideration denied December 12, 2003.