Legal News

Playing Defense, Milberg Lands a Win

By Nathan Koppel

Well, over a year after the federal government wrapped up its prosecution of Milberg attorneys, including Mel Weiss (pictured) for paying kickbacks to firm clients, the new-look Milberg is still fending off civil litigation stemming from the criminal case. And it’s having some success.

But just before Christmas, the firm received largely good news in one such civil case. Former Milberg clients who served as plaintiffs in two securities class actions handled by Milberg filed civil RICO claims in New York alleging Milberg illegally paid lead plaintiffs in case and then did not adequately 'fess up to courts about the kickbacks.

But the plaintiffs were too slow to file their claims, New York federal judge Loretta Preska ruled on Dec. 23. Click here for the opinion.

In light of a ‘wave’ of newspaper articles about the Milberg prosecution starting in early 2002, Preska wrote, the 4-year limit for civil RICO lapsed about a year before the suit was filed in the summer of 2007. (In other words, hint hint, it pays to closely follow newspapers.) Here’s a story from the Courthouse News Service.

‘We are very pleased that virtually all of the claims have been thrown out,” Milberg said in a statement.

All was not lost for the plaintiffs. Preska let stand a breach-of-fiduciary duty claim in which the plaintiffs are demanding that Milberg cough up attorneys' fees in a California class action that involved alleged kickbacks.

“We continue to believe the pending claim is without merit,” Milberg said.

Full post as published by Law Blog - WSJ.com on January 04, 2010 (boomark / email).