Are Lawyers Running America?

  • MARK RICHARDS FOR TIME

    FRED FURTH: When he isn't winning antitrust cases, he's making wine at his 1,200-acre Chalk Hill vineyard in Sonoma County, Calif.

    (2 of 4)

    DANNY TURNER FOR TIME
    JOE JAMAIL: The Texas tort king, with a net worth of about $1.2 billion, is widely considered the world's richest lawyer

    The top trial lawyers in the U.S. are living large. Texas tort king Joe Jamail is widely known as the world's richest lawyer, with a net worth of $1.2 billion. When Frederick Furth, a top San Francisco trial lawyer, isn't litigating antitrust cases, he is engaging his passion for wine at his 1,200-acre Chalk Hill vineyard in Sonoma County, Calif. Wayne Reaud (pronounced Ree-oh) has used his hundreds of millions of dollars in fees from asbestos and other "toxic tort" litigation to buy the local newspaper and a chunk of downtown real estate in his hometown of Beaumont, Texas. Maryland trial lawyer Peter Angelos, who has been involved in asbestos and tobacco litigation, owns the Baltimore Orioles.

    Despite the luxe, most of them are populists at heart. Reaud has a photograph in his office lobby of one of his heroes, firebrand United Mine Workers president John L. Lewis. Levin says one of his formative experiences was being part of the first racially integrated class at the University of Florida Law School. Furth, whose father was a union steelworker, is a fervent New Dealer who drives a Rolls-Royce with the license plate ROBEY ST. to remind him of his humble beginnings on the far South Side of Chicago.

    Most of these lawyers grew up working class or as outsiders. Scruggs and most members of his tobacco and HMO litigation teams were born in the small-town South. Jamail is the son of Lebanese immigrants. Levin is the son of a Jewish pawnbroker. Angelos, a child of Greek immigrants, put himself through law school working in his family's tavern. Most started out small. Reaud began by representing workers in the East Texas petrochemical industry who had smashed their fingers and toes at work. In Levin's first case, he won a $50,000 verdict against an insurance company for a woman whose house had burned down.

    But something changed in the '70s: the awards began to get a lot larger. In 1978 Jamail brought a case against Remington for defects in a gun that injured a man in a hunting accident. The $6.8 million settlement landed him in the Guinness Book of World Records. Furth won his clients $70 million in 1973 on an antitrust price-fixing case against gypsum-wallboard manufacturers (and got a $4.3 million fee).

    The supersize awards didn't just make victims and lawyers rich. They also got corporations to take notice--and to change their conduct. The Ford Pinto, alleged to be prone to erupt in flames after rear-end collisions, was taken off the market. Drugs with severe side effects, such as "phen-fen," were yanked from pharmacy shelves. A $1.8 million verdict in 1980 on behalf of a four-year-old girl who had been badly burned in 1970 persuaded a manufacturer to stop making flammable pajamas--and helped spur more rigorous federal regulations on children's sleepwear.

    But it was asbestos that really demonstrated the power of lawsuits to reshape an entire industry. In the 1970s, lawyers started suing on behalf of victims of asbestosis, a deadly inflammation of the lungs caused by inhaling loose asbestos fibers that were widely used for insulation and fireproofing in shipbuilding and other industries. In addition to winning billions in damages, the lawsuits sharply reduced the amount of asbestos to which Americans are now exposed. After the asbestos litigation, trial lawyers had the expertise to bring complex lawsuits, and the huge fees--Scruggs' firm alone took in $25 million from asbestos--meant they could fund research, expert witnesses and trial preparation. They were ready for a new target.

    That's when Scruggs and Mississippi attorney general Michael Moore--a classmate from the University of Mississippi Law School--decided to go after tobacco. There had long been a major obstacle: cigarette companies defended themselves by arguing that smokers knew about the dangers and assumed the risk. Scruggs and Moore decided to try to get around these "personal responsibility" defenses by suing on behalf of states, not individuals, seeking reimbursement for the Medicaid money the states had paid out for smoking-related illnesses.

    Scruggs took the lead and organized the tobacco litigation with military efficiency. He selected law firms to join the team, assessed each firm a share of the expenses, doled out work assignments and figured out in advance how any fees would be distributed. Scruggs functioned "like a CEO," says Paul Minor, a trial lawyer in Biloxi, Miss. "He's our general and chief strategist, the leader and manager of all these law firms and big egos."

    The state tobacco litigation succeeded beyond anyone's expectations. A whistle-blower, former Brown & Williamson chemist Jeffrey Wigand, turned up with damning testimony and internal documents. In the end, Big Tobacco folded, accepting a settlement that included major restrictions on advertising--no billboards, for example--and $246 billion in damages, to be paid to the states over 25 years.

    The lawsuits on behalf of individual smokers that have been filed across the country may ultimately prove even more costly. In Florida a jury last year found that tobacco companies had engaged in "extreme and outrageous conduct" by selling a product it knew to be dangerous. The jurors are now considering damages. The tobacco companies are worried that the total bill could be as high as $300 billion. They have said the case could bankrupt them--a result even Scruggs and Moore would hate to see. "An unregulated black market in tobacco," Moore says, "would not be in the public interest."

    1. 1
    2. 2
    3. 3
    4. 4