As expected, former Milberg Weiss partner David Bershad copped a plea deal this week in which he pled guilty to a single count of conspiracy out of the 20 count indictment that he, the law firm and former Milberg partner, Steven G. Schulman, are facing (prior posts here). Bershad also agreed to “give back” $7.75 million (not clear to whom), pay a $250,000 fine, and to cooperate with the governmentís continuing investigation of other Milberg Weiss partners (presumably Mel Weiss) and at least one of its former partners, Bill Lerach. The conspiracy charge carries a maximum penalty of five years in prison, although it is unclear if Bershad will serve any jail time. His sentencing hearing is scheduled for about a year from now, June 23, 2008.
The reaction to the plea deal lit up the blawgosphere. Peter Lattman and Ashby Jones over at the WSJ Law Blog have been following the developments in the case closely (see also here), as has Kevin LaCroix, Peter Henning, and Roger Parloff, among others. This WSJ ($) editorial essentially concludes that the Bershad plea deal means that the case against the firm and the other targets is already over and that we ought to throw away the prison key for the entire bunch.
Count me as not so sure. Given the unpopularity of Lerach and Milberg Weiss generally among a substantial portion of the defense bar and the business community, the WSJ’s rush to embrace the prosecution’s case is not particularly surprising. But as Larry Ribstein has pointed out on numerous occasions, there is an important policy issue here that is easy to overlook in the rush to judgment. Is it wise to allow the government to pay witnesses for testimony so that it can convict Milberg Weiss for paying folks to serve as their lead plaintiffs? Bershad may be as pristine as the driven snow, but the fact of the matter is that he has protested his innocence for years until now. What has changed? Absent a plea deal, Bershad is a 67 year-old attorney facing an effective life prison sentence in a trial before a jury that will likely be hostile toward lawyers in general and rich plaintiffs’ lawyers, in particular. Is it really any surprise that he took the deal? And is it prudent to ruin the careers of the other defendants and targets, and irreparably damage their lives and families, based on the testimony of an admitted liar?
No one is suggesting that Milberg Weiss should get away with paying kickbacks, if that is indeed what happened. But as noted in this earlier post, these payments have been common knowledge for a long time. No opposing party in any of the class actions from which the payments derived ever requested that the federal courts that approved the settlements from which the payments derived disgorge the payments and refer Milberg Weiss to criminal authorities for failing to disclose the payments. Why have these matters been criminalized before that process has occurred? Could it be that the other parties in the class actions didn’t think they had much of a case for disgorgement and referral? If so, what does that say about the criminal case?
Milberg Weiss and Lerach face an imposing enough burden in defending themselves against the overwhelming prosecutorial advantage of the government without the mainstream media deciding that they are guilty before the case is even teed up for trial. Even unpopular lawyers deserve a fair chance. At this point, I’m not sure that Lerach and Milberg Weiss are getting one.
Update: The WSJ’s Law Blog interviews Professor Ribstein on the hypocrisy of the case against Milberg.