NMC – The Attorney General and the Securities Firm and the ghost of Dickie Scruggs

The question was which of two law firms could best represent the plaintiff class in a securities litigation involving Merrill Lynch. The opinion spends most of its length tossing about what seem to me relatively abstract questions about whether the United Mine Workers’ law firm had a potential conflict because they contracted to monitor the pension’s securities accounts for potential claims at no charge, with the payoff being a commitment to hire the firm should a lawsuit turn up.

The opinion has exactly the quality of the scenario Alfred Hitchcock used to describe how he builds tension: Two guys sitting at a table having a banal conversation and unaware that under the table is a suitcase with a ticking bomb.

And this time, the bomb goes off in the very last frame of the film!

There is, of course, another firm contending with the mine-workers. It seems that a lawyer in Mississippi happened upon this claim and brought it to the attention of the Attorney General. What was the AG’s response? Why, the AG’s response was to say, “Yes, I am interested in pursuing this claim! Let me introduce you to the lawyer who will take the lead while you carry his brief case!”

This is what happened with tobacco and Dickie Scruggs.

This is what happened with the MCI tax claim and Joey Langston.

And this is what happened with the Merrill Lynch litigation and the lawyer Mississippi’s Attorney General selected, Bernstein Litowitz.

So the opinion knocks along for its length worrying about an abstract possible conflict and then concludes with this footnote (yes! It’s in a footnote, with the law licenses of Joey Langston and Dickie Scruggs hanging over it like Banquo’s ghost!)

The Court in not unaware of disturbing allegations that state entities not unlike MissPERS [the Mississippi state retirement system], and law firms not unlike Bernstein Litowitz, have engaged in “pay-for-play” arrangements, by which such an entity will not even consider hiring such a law firm unless the law firm has contributed to the campaign fund of the relevant state elected official, such as the attorney general. See, e.g. John C. Coffee, Jr., ‘Pay-to-Play’ Reform: What, How, and Why, New York Law Journal, May 21, 2009, p. 5. But no such allegations are presently before the Court in this case.

Here is the opinion

NMC
5/28/9