It’s Trial Lawyers Vs. Trial Lawyers
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.

As New York plaintiffs’ lawyers fight a knock-down, drag-out legal battle, charges of greed, fraud, and harassment are flying. Tens of millions of dollars could ultimately be at stake, but this time the target is not a big-name corporation. The trial lawyers are after some of their own.
The increasingly ugly dispute pits the Great Neck, N.Y.-based Parker & Waichman against a Manhattan firm, Napoli Bern. The fight is over a substantial chunk of the record-breaking $13.6 billion that drugmaker Wyeth has paid out to settle claims over Fen-Phen, a diet drug recalled in 1997 after being linked to serious heart problems.
Napoli Bern rounded up Fen-Phen cases from lawyers across the country, including Parker & Waichman. The Manhattan firm ultimately gathered nearly 6,000 clients and used that bargaining power to strike a deal with Wyeth in 2001. The total amount of the New York Fen-Phen settlement has never been publicly revealed, but lawyers involved in the cases say it may have been close to $1 billion.
Two days after the settlement was approved by Helen Freedman, a New York Supreme Court judge, Parker & Waichman filed suit against Napoli Bern. Parker & Waichman accused Napoli Bern of deliberately directing larger shares of the settlement to clients it obtained independently, while sending smaller settlements to clients who were referred by outside firms. Under a referral agreement with Napoli Bern, Parker & Waichman stood to get 40% to 50% of the attorneys’ fees in its cases.
In essence, Parker & Waichman charged that Napoli Bern got greedy and manipulated the settlement to maximize its take of the fees.
“They defrauded my clients and they defrauded me out of tens of millions of dollars,” Jerrold Parker of Parker & Waichman said in an interview. “They’re going to get fried.”
“Baloney,” replied Marc Bern of Napoli Bern. “These cases were settled in accordance with the ethical rules for settlements. We did it all appropriately.”
The dispute drew little notice until a judge ruled last month that Parker & Waichman’s case against Napoli Bern should proceed. In his decision, Judge Charles Ramos noted that Judge Freedman and a mediator involved in the settlement had taken themselves off of the case.
“The allegation of less than equal treatment in the allocation of settlement benefits … deserve this court’s careful attention in light of the recusal of both the justice presiding and the special master,” Judge Ramos wrote.
The lawsuit also threatens to expose a world in which the claims of the allegedly injured are treated as mere commodities, to be bought and sold to the highest bidder. It’s also a world with its own vocabulary. Some firms are known as “advertisers,” others as “warehousers.” Batches of cases are referred to as “inventories” and are often sold en masse to other firms.
The internecine warfare among the various players in the plaintiffs’ bar has caught the attention of lawyers on the other side. “They’re starting to eat each other,” quipped a Los Angeles attorney who often defends pharmaceutical companies, Thomas Moore.
Mr. Moore said the way some plaintiffs’ lawyers sell and trade cases is unseemly. “They tend to get moved around like cattle,” he said. He also argued that percentages taken by lawyers at each stage of the process tend to reduce what plaintiffs receive.
“The more mouths you have to feed, ultimately, that has to have an impact in the way the case is litigated,” he said.
Some specialists in legal ethics also warn that settling cases in bulk can shortchange individual clients.
“There are enormous pressures to settle these cases. They have to settle,” said a law professor at Notre Dame, Jay Tidmarsh.
While courts have some rules to ensure fairness in so-called class actions, the standards for large batch settlements can be more murky.
“The ethical rules we have were really developed for one-on-one cases. What we have in this mass tort area are a very different animal,” Mr. Tidmarsh said. “It’s a significant problem.”
Parker & Waichman has complained to bar authorities that the Fen-Phen settlement violated ethics rules. No action has been taken on that complaint, but Parker & Waichman now finds its own ethics under assault.
In September, a former Parker & Waichman client filed a class-action lawsuit against the firm. In the suit, a 61-year-old woman from Roslyn, Victoria Birenbaum, alleged that Parker & Waichman never informed her that her Fen-Phen case would be “immediately referred” to another firm. The suit claims that Parker & Waichman broke New York law by collecting fees for cases on which it did no work.
“They’re spending tons of money advertising for mass tort cases,” said the lawyer who brought the class-action suit, A. Jude Avelino. “They’re doing a really great job of warehousing cases and they’re getting hundreds and thousands of cases and they’re farming them out without doing any work…. I really think it’s a black dot on the face of the whole legal community.”
In an interview, Mr. Bern launched into a similar tirade against Mr. Parker. “There has to be some way to control and monitor attorneys who do not practice law for all intents and purposes but are nothing more than advertisers,” Mr. Bern said. “I don’t call answering the phone work.”
Asked why he would agree to a 50-50 split of fees with a law firm that was little more than an answering service, Mr. Bern said he was duped. “We didn’t know that they were middlemen,” he said. “They claimed that they were going to do work. We were certainly misled.”
Mr. Parker angrily denied the charge that his firm, which owns the Web site www.yourlawyer.com, simply collects clients and ships their cases off. “It’s absolutely not true,” he said. “We did a lot of work. We were on the steering committee for the Fen-Phen litigation in New York State.”
Mr. Parker also said the class-action case against his firm was drummed up by Napoli Bern. “The case was really filed as a retaliatory effort,” he said. “The litigation makes no sense.”
Asked whether Napoli Bern instigated the class action, Mr. Bern said, “Our firm doesn’t have anything to do with that lawsuit.” However, a story describing Mr. Avelino’s suit against Parker & Waichman is the lead item on Napoli Bern’s Web page.
Mr. Avelino initially ridiculed Mr. Parker’s claim that Napoli Bern cooked up the class action. “They want to make it be this big conspiracy thing involving other disputes,” he said. When pressed about any ties to Napoli Bern, Mr. Avelino acknowledged two of significance: He is the brother-in-law of a Napoli Bern partner, Paul Napoli. Mr. Avalino also worked at the firm for three years.
In a telephone interview yesterday, Mrs. Birenbaum’s husband said the unusual class-action suit against lawyers was orchestrated by Mr. Napoli.
“It was done through Napoli, the attorney,” Mr. Birenbaum said. He said his wife received a settlement for injuries caused by Fen-Phen and knew little about the dispute between the law firms. “They asked her to sign some papers. That’s about it.”