Michael Hausfeld is suing all the executives in America and the horses they rode in on. Plus the saddle makers, and the company that made those boots and the guy who designed that hat. Spurs Inc. is next.
Or so it appears. In recent months, Hausfeld has partaken in enough history-making litigation to busy a whole firm. He played a role in the vitamin price-fixing case, which yielded a $1.17 billion settlement, and he was one of the lead attorneys in the fen-phen diet pill suit, which was resolved last month when drug maker American Home Products Corp. agreed to hand over about $3.75 billion.
The lawsuits against German industry by victims of Nazi slave labor camps? That's Hausfeld's baby, too. So are the possible lawsuits targeting the multinational Monsanto Co. for its so-called "terminator" seed. Meanwhile, he's trying to nail the nation's largest music labels for allegedly fixing the prices of compact discs and has a hand in fraud suits against HMOs.
Of course, this serious, soft-spoken lawyer had plenty of co-counsel in all these cases. The fen-phen suit, for instance, involved dozens of lawyers. The vitamin suit was the brainchild of lawyers Jonathan Schiller and David Boies. And let's not forget the 35 partners and associates at his firm, Cohen, Milstein, Hausfeld & Toll.
Still, Hausfeld is Washington's lawyer of the moment. He even popped up recently on the Wall Street Journal's editorial page, which regularly complains about the alleged evils of class-action suits, and singled out Hausfeld in September as a "corporate shakedown artist" and the leader of a plague of lawyers. Among those who heard that particular body blow was Hausfeld's mother.
"She said, `Why are they picking on you for this? There's nothing wrong with these cases,'" says Hausfeld, sipping a Cherry Coke in his office Wednesday afternoon. "And that's what we felt."
Born in Brooklyn 53 years ago, Hausfeld is not the flamboyant, blustery type. Slightly built with graying hair and glasses, he doesn't taunt his opponents or threaten to pound them mercilessly in court. When corporations rebuff him, he believes they are making a mistake, one that is grossly unfair to his clients and perhaps an affront to justice in general. He is professorial and projects just a hint of piety.
How does he win? Associates say that as a negotiator he is tireless, and his firm's coffers are now large enough to finance lengthy fights and hire economists that smaller firms couldn't afford. Like any good trend-spotter, Hausfeld also has a keen eye for leaping into hot lawsuits early, then nimbly collecting enough plaintiffs to get a seat at the table. Understanding what cases will generate publicity helps too.
Hausfeld rarely engages in hand-to-hand courtroom combat, which irks his more combative colleagues. "My take is that he's a compromiser," said one former co-counsel, who asked not to be identified. "He's soft. He wants to get in the game and then begin a series of compromises."
Regardless, his style has made him a very wealthy man. After graduating from George Washington Law School in 1969, Hausfeld lasted just six months at Arent, Fox, where his taste for left-leaning -- and unprofitable -- cases led partners to politely invite him to exit the premises. Landing at an earlier version of his present firm, Hausfeld began his run of headline verdicts.
He and colleagues sued women's fashion designers for colluding on the length of hemlines. (They settled out of court after agreeing to offer some variety.) There followed multimillion-dollar price-fixing suits against sugar makers, corrugated box manufacturers and the producers of the antibiotic ampicillin.
More recently, he sued oil companies. He represented native Alaskans after the Exxon Valdez spill, earning a share of a $5 billion verdict, which is still on appeal. When Texaco Inc. executives were caught on audiotape uttering what sounded like racial slurs, Hausfeld quickly wrested $176 million from the company. It was the second time he'd battled the oil giant: In 1992, he sued Texaco for an underground oil leak in his hometown of Fairfax, a dispute that ended with him pocketing millions in fees and the company paying about $200 million to local homeowners.
While clients think Hausfeld is on the side of the angels, he is the embodiment of a recurring nightmare for plenty of executives, some of whom tag him as an irresponsible opportunist. The criticism irks Hausfeld, who is tired of getting lumped together with the crass swashbucklers of the plaintiffs' bar. Done correctly, he says, his style of lawsuit keeps companies honest, and his personal take of any winnings is hardly a secret.
"Whatever fee you request has to be reviewed and approved by the court after an opportunity for public criticism," he says. "When you match that on top of cases that are well-thought-out and prosecuted, you get a tremendous benefit to consumers."
Roberts to the Rescue
With all the legal talent assembled in the Washington office of Jones, Day, Reavis & Pogue you'd think someone in the place would have enough skill and experience to litigate in D.C. Superior Court. There are, after all, 175 lawyers at the firm.
But last week, Jones, Day hired local attorney Michelle Roberts to help client R.J. Reynolds Tobacco fight a handful of sick smoker lawsuits scheduled for trial in a few months. What gives? Hearsay would understand if Jones, Day lacked the in-house talent to, say, perform heart surgery or design a house. But why go outside the building for a lawyer?
Without question, Roberts is superb; indeed, Hearsay picked her a few months ago as one of the city's finest. She just happens to be African American as well. Jones, Day would hardly be the first corporate firm to retain an African American before appearing before a Washington jury, calculating that a black lawyer will get a better reception before black jurors. Indeed, it happens all the time and it points to an enduring problem: There are woefully few African Americans in corporate firms.
So, was Jones, Day worried about defending the tobacco giant in the District with an all-white squad of lawyers?
No, said Peter Biersteker, a Jones, Day partner. Calling Roberts the "Johnnie Cochran of the local bar," he explained that "because of the nature of her practice she's more familiar with D.C. Superior than many of us. Even though we reside here, our practice often takes us elsewhere." Biersteker also pointed out that Roberts is hugely gifted.
The plaintiffs' attorney who filed the cases, Wayne Cohen of Cohen & Cohen, was unphased by Roberts's hiring. "I suppose now they'll send 41 lawyers instead of 40," he quipped.
Ernst & Young is inching closer to the legal business. Last week, William S. McKee and William F. Nelson, previously in the D.C. office of King & Spaulding, announced the launch of a new law firm, McKee Nelson Ernst & Young. Though it will remain independent and won't share fees or profits with the Big Five accounting firm, McKee Nelson will have access to Ernst & Young's clients and will be an independent affiliate within Ernst & Young's global network.
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