A Fifth Milberg Weiss Judge Recuses Himself From Trying Case

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

As the criminal case against a leading class action law firm, Milberg Weiss Bershad & Schulman LLP, makes its refugee-like trek through the federal courts in Los Angeles, a fifth judge has declined to preside over a possible trial of the firm on charges it conspired to make illegal payments to plaintiffs in securities cases.

On Friday, Judge Robert Klausner begged off the Milberg Weiss case. His stated reasons for doing so were not immediately available. The case was reassigned to Judge John Walter.

A professor of securities law at Stanford and former member of the Securities and Exchange Commission, Joseph Grundfest, laughed heartily when told by a reporter that the case was moved on to a sixth judge.

“It’s not surprising given the large number of cases brought by the firm and the large number of judges before whom they appeared,” Mr. Grundfest said. He also noted that judges usually worked previously in private law practices, where they may have had dealings with Milberg Weiss.

“There’s a sense in which it’s good the judges are being careful not to do anything which could lead to their impartiality being questioned,” he said.

Two judges withdrew from the case last year when the only named defendants were a perennial plaintiff in Milberg Weiss cases, Seymour Lazar, and his personal attorney, Paul Selzer.

Since the indictment of Milberg Weiss and two of its name partners, David Bershad and Steven Schulman, on May 18, three other judges have declined to take the case. Most have cited the fact that they previously oversaw litigation brought by Milberg Weiss, which once claimed to account for half of all securities law cases filed in America.

The latest jurist assigned to the case, Judge Walter, was appointed to the bench in 2002 by President Bush.

Messrs. Lazar and Selzer have pleaded not guilty. Due in part to the difficulty in finding a trial judge, the firm and its partners have yet to be arraigned. All of the defendants have denied wrongdoing and said they intend to contest the charges.

In a separate development, a legal newspaper, the New York Law Journal, reports in today’s editions that two former partners at Milberg Weiss claim that the firm owes them millions of dollars in legal fees and returned capital. The former partners, Robert Sugarman and Alan Schulman, who is not related to Steven Schulman, were not charged with any crimes and reportedly have been cooperating with prosecutors.

The financial disagreement became public after the two former partners filed a legal action in state court in Manhattan, seeking to force arbitration of the dispute, the newspaper said. Some of the financial complexities stem from 2004, when Milberg Weiss effectively split in two. Dozens of lawyers, including one of the firm’s best known partners, William Lerach, departed.

According to the Law Journal, a former federal judge who had been selected to resolve the financial dispute, J. Lawrence Irving, abruptly withdrew in December. The New York Sun reported recently that last month Mr. Irving joined the payroll of Mr. Lerach’s new firm, Lerach Coughlin Stoia Geller Rudman & Robbins LLP, as a consultant on major cases.


The New York Sun

© 2024 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  create a free account

By continuing you agree to our Privacy Policy and Terms of Use