The King of Torts (22 page)

“I saw the ad the first night it was on,” said Bernie somebody from Boston. “Never heard of Dyloft. So I call your hot line, get a nice guy on the other end. I tell him I’ve been taking the drug, feed him the line, you know. I go to the Web site. It was brilliant. I said to myself, ‘I’ve been ambushed.’ Three days later I’m on the air with my own damned Dyloft hot line.”

They all laughed, probably because they could each tell similar stories. It had never occurred to Clay that other lawyers would call his hot line and use his Web site in order to steer away cases. But why did this surprise him?

When the admiration was finally over, French said there were a few things to discuss before dinner, which, by the way, would include a fabulous selection of Australian wines. Clay was already dizzy from the fine Cuban cigar and the first double vodka bomb. He was by far the youngest lawyer there, and he felt like a rookie in every way. Especially when it came to drinking. He was in the presence of some professionals.

Youngest lawyer. Smallest jet. No war tales. Weakest liver. Clay decided it was time to grow up.

They crowded around French, who lived for moments like this. He began, “As you know, I’ve spent a lot of time with Wicks, the in-house guy at Ackerman Labs. Bottom line is they’re going to settle, and do it quickly. They’re getting hit from every direction, and they want this to go away as soon as possible. Their stock is so low now they’re afraid of a takeover. The vultures, including us, are moving in for the kill. If they know how much Dyloft will cost them, then they can restructure some debt and maybe hang on. What they don’t want is protracted litigation on many fronts, with verdicts landing everywhere. Neither do they want to fork over tens of millions for defense.”

“Poor guys,” someone said.

“
Business Week
mentioned bankruptcy,” someone else said. “Have they used that threat?”

“Not yet. And I don’t expect them to. Ackerman has far too many assets. We’ve just completed the financial analysis—we’ll crunch the numbers in the morning—and our boys think that the company has between two and three billion to settle Dyloft.”

“How much insurance coverage is on the table?”

“Only three hundred million. The company has had its cosmetics division on the market for a year. They want a billion. The real value is about three-fourths of that. They could unload it for half a billion and have enough cash to satisfy our clients.”

Clay had noticed that the clients were rarely mentioned.

The vultures squeezed around French, who continued: “We need to determine two things. First, how many potential plaintiffs are out there. Second, the value of each case.”

“Let’s add ’em up,” drawled someone from Texas. “I got a thousand.”

“I have eighteen hundred,” French said. “Carlos.”

“Two thousand,” Hernández said as he began taking notes.

“Wes?”

“Nine hundred.”

The lawyer from Topeka had six hundred, the lowest. Two thousand was the highest until French saved the best for last. “Clay?” he said, and everyone listened intently.

“Thirty-two hundred,” Clay said, managing a grim poker face. His newly found brethren, however, were quite pleased. Or at least they appeared to be.

“Attaboy,” someone said.

Clay suspected that just under their toothy smiles and “Attaboys!” were some very envious people.

“That’s twenty-four thousand,” Carlos said, doing the quick math.

“We can safely double that, which gets close to fifty, the number Ackerman has pegged. Fifty thousand into two billion is forty thousand bucks per case. Not a bad starting place.”

Clay did some quick math of his own—$40,000 times his 3,200 cases came to something over $120 million. And one third of that, well, his brain froze and his knees went weak.

“Does the company know how many of these cases involve malignant tumors?” asked Bernie from Boston.

“No, they don’t. Their best guess is about one percent.”

“That’s five hundred cases.”

“At a minimum of a million bucks each.”

“That’s another half billion.”

“A million bucks is a joke.”

“Five million a pop in Seattle.”

“We’re talking wrongful death, here.”

Not surprisingly, each lawyer had an opinion to offer and they did so simultaneously. When French restored order, he said, “Gentlemen, let’s eat.”

__________

DINNER WAS a fiasco. The dining room table was a slab of polished wood that came from one tree, one grand and majestic red maple that had stood for centuries until it was needed by wealthy America. At least forty people could eat around it at one time. There were eighteen for dinner, and wisely they had been spread out. Otherwise, someone might have thrown a punch.

In a room full of flamboyant egos, where everyone
was the greatest lawyer God created, the most obnoxious windbag was Victor K. Brennan, a loud and twangy Texan from Houston. On the third or fourth wine, about halfway through the thick steaks, Brennan began complaining about such low expectations for each individual case. He had a forty-year-old client who made big bucks and now had malignant tumors, thanks to Dyloft. “I can get ten million actual and twenty million punitive from any jury in Texas,” he boasted. Most of the others agreed with this. Some even one-upped by claiming that they could get more on their home turf. French held firm with the theory that if a few got millions then the masses would get little. Brennan didn’t buy this but had trouble countering the argument. He had a vague notion that Ackerman Labs had much more cash than it was showing.

The group divided on this point, but the lines shifted so fast and the loyalties were so temporary that Clay had trouble determining where most of them stood. French challenged Brennan on his claim that punitive damages would be so easy to prove. “You got the documents, right?” Brennan asked.

“Clay has provided some documents. Ackerman doesn’t know it yet. You boys have not seen them. And maybe you won’t if you don’t stay in the class.”

The knives and forks stopped as all seventeen (Clay excluded) started yelling at once. The waiters left the room. Clay could almost see them back in the kitchen, hunkering low behind the prep tables. Brennan wanted to fight someone. Wes Saulsberry wasn’t backing down. The language deteriorated. And in the midst of the
ruckus, Clay looked at the end of the table and saw Patton French sniff a wineglass, take a sip, close his eyes, and evaluate yet another new wine.

How many of these fights had French sat through? Probably a hundred. Clay cut a bite of steak.

When things settled down, Bernie from Boston told a joke about a Catholic priest and the room erupted in laughter. Food and wine were enjoyed for about five minutes until Albert from Topeka suggested the strategy of forcing Ackerman Labs into bankruptcy. He had done it twice, to other companies, with satisfactory results. Both times the target companies had used the bankruptcy laws to screw their banks and other creditors, thus providing more cash for Albert and his thousands of clients. Those opposed voiced their concerns, to which Albert took offense, and soon there was another fight.

They fought over everything—documents again, whether or not to press for a trial while ignoring a quick settlement, turf, false advertising, how to round up the other cases, expenses, fees. Clay’s stomach was in knots and he never said a word. The rest seemed to enjoy their food immensely while carrying on two or three arguments simultaneously.

Experience, Clay told himself.

After the longest dinner of Clay’s life, French led them downstairs, back to the billiards room where the cognac and more cigars were waiting. Those who had been swearing at each other for three hours were now drinking and laughing like fraternity brothers. At the
first opportunity, Clay sneaked away and, after considerable effort, found his room.

__________

THE BARRY and Harry Show was scheduled for 10 A.M. Saturday morning, time for everyone to sleep off the hangovers and choke down a heavy breakfast. French had made available trout fishing and skeet shooting, neither of which drew a single lawyer.

Barry and Harry had a company in New York that did nothing but analyze the finances of target companies. They had sources and contacts and spies and a reputation for peeling back the skin and finding the real truth. French had flown them in for a one-hour presentation. “Costs us two hundred grand,” he whispered proudly to Clay, “and we’ll make Ackerman Labs reimburse us. Imagine that.”

Their routine was a tag team, Barry doing the graphics, Harry with the pointer, two professors at the lectern. Both stood at the front of the small theater, one level below the billiards room. The lawyers, for once, were silent.

Ackerman Labs had insurance coverage of at least $500 million—$300 million from their liability carrier, and another $200 million from a reinsurer. The cashflow analysis was dense and took both Harry and Barry talking at once to complete. Numbers and percentages spewed forth and soon drowned everyone else in the room.

They talked about Ackerman’s cosmetics division, which might fetch $600 million at a fire sale. There was
a plastics division in Mexico that the company wanted to unload for $200 million. The company’s debt structure took fifteen minutes to explain.

Barry and Harry were also lawyers, and so were quite adept at assessing a company’s likely response to a mass tort disaster like Dyloft. It would be wise for Ackerman to settle quickly, in stages. “A pancake settlement,” Harry said.

Clay was certain that he was the only person in the room who had no idea what a pancake settlement was.

“Stage one would be two billion for all level-one plaintiffs,” Harry continued, mercifully laying out the elements of such a plan.

“We think they might do this within ninety days,” Barry added.

“Stage two would be half a billion for level-two plaintiffs, those with malignancy who don’t die.”

“And stage three would be left open for five years to cover the death cases.”

“We think Ackerman can pay around two-point-five to three billion over the next year, then another half-billion over five years.”

“Anything beyond that, and you could be looking at a chapter eleven.”

“Which is not advisable for this company. Too many banks have too many priority liens.”

“And a bankruptcy would seriously choke off the flow of money. It would take from three to five years to get a decent settlement.”

Of course the lawyers wanted to argue for a while. Vincent from Pittsburgh was especially determined to
impress the rest with his financial acumen, but Harry and Barry soon put him back in his place. After an hour, they left to go fishing.

French took their place at the front of the room. All arguments had been completed. The fighting had stopped. It was time to agree on a plan.

Step one was to round up the other cases. Every man for himself. No holds barred. Since they accounted for half of the total, there were still plenty of Dyloft plaintiffs out there. Let’s find them. Search out the small-time lawyers with only twenty or thirty cases, bring them into the fold. Do whatever it takes to get the cases.

Step two would be a settlement conference with Ackerman Labs in sixty days. The Plaintiffs’ Steering Committee would schedule it and send notices.

Step three would be an all-out effort to keep everyone in the class. Strength in numbers. Those who “opted out” of the class and wanted to have their own trial would not have access to the deadly documents. It was as simple as that. Hardball, but it was litigation.

Every lawyer in the room objected to some part of the plan, but the alliance held. Dyloft looked as if it would be the quickest settlement in mass tort history, and the lawyers were smelling the money.

   CHAPTER 21   

The young firm’s next reorganization occurred in the same chaotic fashion as the previous ones, and for the same reasons—too many new clients, too much new paperwork, not enough manpower, an unclear chain of command, and a very uncertain management style because no one at the top had ever managed before, maybe with the exception of Miss Glick. Three days after Clay returned from Ketchum, Paulette and Jonah confronted him in his office with a long list of urgent problems. Mutiny was in the air. Nerves were frayed and the fatigue made bad matters worse.

According to the best estimate, the firm now had 3,320 Dyloft cases, and since the cases were brand-new they all needed immediate attention. Not counting Paulette, who was reluctantly assuming the role of office manager, and not counting Jonah, who was spending ten hours a day on a computer system to keep up
with the cases, and, of course, not counting Clay because he was the boss and had to give interviews and travel to Idaho, the firm had hired two lawyers and now had ten paralegals, none of whom had more than three months’ experience, except for Rodney. “I can’t tell a good one from a bad one,” Paulette said. “It’s too early.”

She estimated that each paralegal could handle between one hundred and two hundred cases. “These clients are scared,” she said. “They’re scared because they have these tumors. They’re scared because Dyloft is all over the press. Hell, they’re scared because we’ve scared the hell out of them.”

“They want to be talked to,” Jonah said. “And they want a lawyer on the other end of the phone, not some frantic paralegal on an assembly line. I’m afraid we’ll be losing clients real soon.”

“We’re not going to lose clients,” Clay said, thinking of all those nice sharks he’d just met out in Idaho and how happy they’d be to pick up his disgruntled clients.

“We’re drowning in paperwork,” Paulette said, taking the tag from Jonah and ignoring Clay. “Every preliminary medical test has got to be analyzed, then verified with a follow-up. Right now, we think we have about four hundred people who need further testing. These could be the serious cases; these people could be dying, Clay. But somebody has to coordinate their medical care with the doctors. It isn’t getting done, Clay, okay?”

“I’m listening,” he said. “How many lawyers do we need?”

Paulette cast a weary look at Jonah. The two had no answer. “Ten?” she said.