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July 10th, 2013

California’s Dangerous Litigation Leads to Multi-Billion Dollar Tort Tax

This week out of California, which tops the latest ranking of Judicial Hellholes, comes another troubling account of the impact that the state’s runaway litigation has on its citizens’ wallets and pocketbooks. A column published in the Orange County Register also criticizes former class-action kingpin Bill Lerach, whose former law firm, Milberg Weiss Bershad Hynes & Lerach, sucked over $4 billion out of ” deep-pocket corporations,”  mostly through ginned-up shareholder class-action lawsuits.

Lerach and his firm successfully handled over 400 class-action suits that never made it to court. The Register column highlights Lerach’s lack of remorse over his brazenly illegal litigation tactics and pompous display of his luxurious seaside mansion in a recent edition of the Wall Street Journal:

“Lerach told the Journal, ‘I’m proud of the work we did,’ ignoring the fact that he pled guilty to obstruction of justice for concealment of his firm’s unlawful payments to plaintiffs; despite being ordered to pay an $8 million penalty for his lawbreaking; despite being sentenced to two years in prison; and despite being disbarred by the state of California.”

The litigation system in California effectively imposes a $33.5 billion hidden tax – or $883 per taxpayer – just from the costs of  lawsuits settled in 2013, reports Register columnist Joseph Perkins. “Perhaps Bill Lerach’s billionaire La Jolla Farms neighbors can easily afford California’s tort tax. But certainly not the other 99 percent of us,” Perkins concludes.

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