Berman
PHILADELPHIA – A prominent law firm that brought baseless birth-defect lawsuits is now in the crosshairs of the U.S. Department of Justice, as a Philadelphia federal judge has found his court’s findings “more than warrant investigation.”
“A judge has a duty to notify the proper authorities if he felt a crime was being committed in his courtroom,” Judge Paul Diamond wrote, citing a 1985 case. His Tuesday order affects Hagens Berman, a class action firm based in Seattle, and firm co-founder Steve Berman.
Hagens Berman has long been at the forefront of plaintiff litigation and was part of the massive tobacco settlement of the 1990s that resulted in billions of dollars in fees for private attorneys representing states. In recent years, it has targeted Amazon over its business practices but in September lost an antitrust case against Amazon and Apple after the plaintiff sought to withdraw, leading to those companies asking Hagens Berman to pay $2 million in legal fees.
The punishment stemming from the Philadelphia case could be more severe if the DOJ agrees with a special master who found in 2023 the firm’s conduct was “bordering on the criminal.”
Judge Diamond on Aug. 5 told Hagens Berman to show cause why it shouldn't be sanctioned for bringing frivolous lawsuits over the morning-sickness drug thalidomide.
A group of 52 plaintiffs sued companies like GlaxoSmithKline alleging the drug, used decades ago, caused birth defects. But those plaintiffs had either already sued or suffered genetic problems, and Berman and others are accused of not thoroughly reviewing their clients' cases before filing them.
Hagens Berman also scores government contracts to push litigation over issues like opioids and PFAS, but its pursuit of a thalidomide mass tort was undone about a decade ago.
Confronted with this reality (and a $145,000 sanction in 2015), Hagens Berman dismissed many of the suits in what a special master described as a “suspicious” arrangement under which Glaxo also dropped its request for sanctions.
Then in a further development, the law firm informed the court one of its lawyers had falsified a medical expert’s report to convince a client to drop her claims. It has also settled a lawsuit by one disgruntled former client who accused the firm of selling her out to protect its own reputation.
Special master William Hangley was brought on board in 2014 after Hagens Berman obstructed the defendants' efforts to discover whether the cases were barred by the statute of limitations. It seemed the firm did not know when its clients knew thalidomide was possibly to blame for their injuries.
In one case, defendants introduced evidence Mary Sells' injuries were genetic in nature during a deposition. It was the first Hagens Berman had heard of it, Diamond wrote.
"That same Hagens Berman lawyer testified that even if she had seen the records before the deposition, she would not have 'understood the[ir] ramifications' given her lack of medical knowledge," Diamond wrote.
"The firm does not dispute these facts. Accordingly, the firm and Mr. Berman were plainly unaware of Ms. Sells' medical history when they accepted her case because they failed to conduct an adequate pre-suit investigation."
The firm filed cases despite no recent scientific research that could prove causation, Diamond wrote. William Hangley, the special master, also recommended sanctions for attempts to "bully the special master, demonize the Court in the eyes of the plaintiff-witnesses, and intimidate the court reporter."
Diamond did not rule on the request for sanctions, which could potentially have the firm paying the other side’s legal bills for more than 10 years.
