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May 29, 2003

The “golden age” of law is becoming tarnished of late

American civil litigation has been protecting the rights of the powerless and impoverished for much of the last half-century, said high-profile securities attorney William S. Lerach. But that golden age of American law has been tempered recently by a widespread and growing assault on the individual legal rights of U.S. citizens.

“There have been changes in the past few years that alarm me,” Lerach told the Pitt law school Class of 2003 at their May 24 graduation exercises in Soldiers and Sailors Memorial auditorium. “I fear that before our very eyes, but with too few of us seeing it, that American law has been transmogrified into a weapon of oppression.”

A partner in Milberg Weiss Bershad Hynes & Lerach LLP in San Diego, Calif., Lerach is best known for leading the prosecution of hundreds of securities civil class actions and stockholder-derivative actions that have resulted in billions of dollars in recovered money for defrauded stockholders.

Recently, he has led many of the largest class action suits against large corporations with questionable practices, including Enron, Dynegy, Qwest and WorldCom.

Lerach spoke to the Pitt law graduates on “American Law: Instrument of Social Progress or Weapon of Repression?”

Answering the title’s question, Lerach maintained that American law has been both, and that the chief task of new attorneys should be to see that law becomes more of the former and less of the latter.

“For most of its history, the law has been an instrument of the rich, the powerful and the state to serve their mutual ends. It has been a weapon of oppression,” said the 1970 Pitt law graduate.

His own law school days, however, were filled with optimism, he said, as most of his classmates viewed American law as a dynamic force for positive change, driven by lawyers who cared.

“In the early 1970s, we were still in the wake of the great 1938 amendments to the federal rules of civil procedure, which simplified litigation and which were supposed to make justice more accessible to all litigants, large and small. During much of my life in the law I’ve seen how individuals, aided by courageous lawyers, were able to stimulate change that never could have been achieved legislatively.”

As evidence, Lerach cited several landmark cases, including:

• Brown v. Board of Education. This was a class action suit by black parents, who used the civil justice system to achieve their goal of desegregated American schools, “thereby overcoming decades of shameful legal precedent,” Lerach said. “This soon forced fundamental progress that was completely impossible to be achieved through legislative action because those with political power prevented it. Today, no one, outside of a few cranks, thinks that our country is not immeasurably better with the elimination of school segregation.”

• Baker v. Carr. This was a class action suit that challenged the control of state legislatures by rural legislators, who drew legislative districts based on their own interests, rather than population distribution. “Legislators were perpetuating their own political control while denying to millions of American voters their right of equal representation,” he said. “Again, courageous lawyers [ensured] the equitable re-distribution of power, which never could have been achieved by legislation.”

• Griswold v. Connecticut. In this case, Lerach said, “lawyers were able to overturn state laws that were nothing more than the oppressive exercise of religious power and dogma, and begin the process of how Americans could engage in family planning and even indulge in their sexuality.”

• Roe v. Wade. Lerach called this case “a class action suit by which women took back their reproductive rights from male, religiously-dominated legislatures.”

Lerach also cited examples of civil litigation leading to improved consumer safety, including suits against:

• The automobile industry. “I can still remember … when automobiles were death-traps: no padded dashboards, no decent door handles, no airbags, no seatbelts; rigid steering wheels and columns that impaled or crushed countless drivers; fragile windshields that decapitated passengers.

“It was civil litigation that exposed those defects and drove the automobile industry to make safer cars with the result of countless lives saved and incalculable suffering avoided.”

• The tobacco companies. Civil litigation “exposed how craven tobacco executives deliberately targeted our children, hoping to get them hooked and to separate them from thousands of dollars in cigarette purchases, until, ironically, the very product they peddled would end so many of those lives prematurely.”

Despite more recent successes at holding corrupt corporations accountable through civil litigation that recovered billions of dollars for their innocent stockholders, “no good deed goes unpunished,” Lerach said.

“Ironically, because of these suits, corporate and Wall Street interests and the accounting firms went to Congress for assistance, and Congress caved in. New laws from 1995 to 1998 severely curtailed the right of American investors to protect themselves through legal action, and quickly market miscreants were emboldened,” he said.

Amid a “a feast of cooked books, within just a few years, our nation was awash in the greatest upsurge of financial fraud since the 1920s.”

Corporate chicanery contributed to huge losses for ordinary, unsuspecting investors, he said. “These are scars that our financial system has not yet even begun to recover from. So much for the fruits of this recent legislative foray into that euphemism we call ‘tort reform.’”

Yet despite that debacle, there is an unremitting assault by corporate interests on the right of ordinary citizens to use the legal system to vindicate their rights, Lerach said.

“We’ve witnessed an assault on class action suits in a national legislative campaign to kill them. We’ve witnessed an unremitting assault on medical malpractice suits, which would limit the [damages] of even the most grotesque mistakes.

“Ask yourself,” he told the Pitt law graduates:

• Will reducing accountability of drug manufacturers and medical care providers improve the quality of health care?

• Will restricting the legal rights of people injured by defective products encourage the manufacturer to make safer ones?

• Will curtailing the ability of citizens to use class actions to call corporations to account stimulate more responsible corporate behavior?

“Well, did reducing the corporate executives’ and Wall Street financiers’ accountability for securities fraud make our financial markets any safer?” he asked rhetorically.

But it’s not only corporate interests and wrongheaded legislation that should be feared, but also the power of the government itself, Lerach said.

“In the politically popular name of fighting terrorism, we have witnessed a vast curtailment of individual rights in this country recently.” Americans are now subject to clandestine communications monitoring and secret arrest, confinement and trial — in other words, constitutionally protected rights are eroding.

“I don’t sanction terrorism, but if we think the government will not abuse these new powers to the detriment of individual citizens, we ignore history. The government will take from you as many of your rights as you let the government take, and once they’re gone, they’re ever so hard to get back.”

Lerach said that Americans have enjoyed the luxury of freedom for so long they’ve forgotten how fragile and precious American liberties are.

“I fear a rapid swing of a very big pendulum, going way too fast, way too far,” he said.

“What does this have to do with you?” he asked the newly minted law grads. “Everything! Each of you has the opportunity in countless ways, by litigating, writing, teaching, shaping public opinion, shaping legislative policies, even as judges, to make law the instrument of social progress and not a weapon of repression.

“I hope at least some of you will work to overturn policies that allow police searches and arrests on the flimsiest grounds, that allow individuals to be at the mercy of a state criminal justice system without any warning of their constitutional rights, or even the presence of a lawyer.”

—Peter Hart

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