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Thursday, October 06, 2005

Miers and the Erxleben litigation

I'm reprinting here a long and probably too-passionate comment that I just left in response to a post over at Confirm Them that republishes some absolutely trashy innuendo to the effect that Harriet Miers was "at the center" of a major "investment fraud." I'd seen a short reference to the underlying lawsuit involving Ms. Miers' firm on Prof. Bainbridge's blog on Monday, and left a similar comment there, but didn't post about it here or make a big deal of it because Prof. Bainbridge had been careful and quite proper to note in his post that "there is no allegation she took part in the fraud." I'm startled to note that the article linked over at Confirm Them was written for WorldNetDaily by none other than Jerome Corsi, the co-author with Houston lawyer John O'Neill of Unfit for Command last year. I very much wish that Dr. Corsi had gotten some insights from someone like Mr. O'Neill before publishing this stuff, because it's an outrageous smear — one that I hate to see even make the rounds, and that I'm embarrassed to have to link to here because it leaves me feeling soiled. Confirm Them writes of this, "it should give us all pause." Yes, precisely — pause to see whether you've been fair, or whether you're perpetuating and propagating an unjustifiable smear.

Herewith the reprint of my comments (slightly edited and expanded; emphasis in original):


This, frankly, is an outrageous smear. And this website ought to be ashamed to be spreading it.

Strong words, I know, and not the sort of condemnation I usually level against conservative bloggers I genuinely respect. But the suggestion that some sort of fraud is imputable to Harriet Miers over this is — well, it’s more outrageous than I can adequately express without slipping into profanity.

Every major law firm in the country has been sued on grounds like these at some time or another. If you have a contrary impression, you’re full of crap.

Why do law firms get sued in cases like these? For the same reason that banks, investment bankers, and insurance companies often do: Because they’re the deepest pockets left standing after a bad deal goes south.

Which firms pay out the biggest settlements? The very best ones. Why? Because they’ve been the lawyers involved in the biggest deals.

I am here to tell you, from my first-hand experience as a practicing lawyer from Texas, that during the hard times in the oil patch in the early 1980s, and during the S&L collapse around that same time, every major firm in Texas was sued repeatedly. Every one, without exception. Only a tiny, tiny percentage of those claims ever resulted in any proof of misconduct or impropriety. But they sure made life difficult for us. I still get a W-2 and a check for about $40 every year from a Dallas-based firm in which I was a partner in the early 1990s, as part of a refund over time out of some reserves set-aside that had been set up as part of some settlement. I have absolutely no clue what the underlying lawsuit was about, but whatever it was, I’m sure you could make charges against me with exactly the same credibility as the charges you’re peddling against Ms. Miers’ here — that is to say, with ZERO credibility.

I know some of the lawyers who were on the plaintiffs' side in this particular lawsuit, and they’re formidable. I’m sure that added a lot to the settlement value of the case — i.e., what they could basically extort from the law firm. But look at the facts, folks:

No fraud or other misconduct on the part of the law firm was ever proved. That remained an unproved allegation, an accusation never tested by any judge or jury. The firm denied that it had committed misconduct; the settlement, as is universal in such matters, repeated that denial and made very clear that no admission ought to be implied from it. And in fact, the key legal issue whose uncertainty also added to the settlement value of the case was whether law firms may be held liable for their non-negligent failure to catch and disclose a client's fraud. The plaintiffs were trying to recover, in other words, based on a theory under which they not only didn't have to show that the lawyers in Ms. Miers' firm participated in, or even knew about, the fraud, but instead had used the care that lawyers are ordinarily supposed to use and still got tricked by their client anyway!

The specific lawyers involved were apparently in a branch office of Ms. Miers' firm, not in either of the firm’s two main hubs (Dallas and Houston), and it appears that by the time of the settlement, they’d left the firm. Now, there’s always an argument to be made that the captain of any ship is responsible for his/her crew’s misconduct. I don't know anything about the circumstances of their leaving, and it may have been entirely unrelated to this lawsuit or these claims. But if you want to draw inferences and start speculating, I’d suggest that the appropriate inference is that Ms. Miers and the other top management of the firm did such housecleaning as may have been necessary, if there was any misconduct on the part of those branch-office lawyers. That’s a good thing, not a bad thing.

Unless you’re similarly willing to ride out of town on a rail the top management from every major bank and securities firm in the country — ’cause they’ve all been sued, and all paid out money to settle such lawsuits — you ought to rethink these allegations.

And ask yourself this: If you’re a conservative in favor of tort reform and curbing litigation abuse, what in a Justice’s background is likely to make him or her more receptive to the need for such things than having been targeted with bogus lawsuits?

Shame, shame guys and gals — you ought to know better than this, and if you didn’t, you ought to have asked a lawyer who did.

Posted by Beldar at 08:26 PM in Law (2006 & earlier) | Permalink


Other weblog posts, if any, whose authors have linked to Miers and the Erxleben litigation and sent a trackback ping are listed here:


(1) pat made the following comment | Oct 6, 2005 9:35:58 PM | Permalink

It's truly amazing to watch otherwise reasonable conservatives transform themselves into Ann Coulter clones over the Meirs nomination. I'm thankful your blog has risen to her defence, based on first-hand knowledge of the Texas legal scene. Me, I rather like her resume. An evangelical Southerner who packs heat, works 16 hour days, represents clients big and small, ran a large law firm (which must be like herding cats), and has been one of W's closest advisors for years. That resume sure balances up the Ivy League court, the like of which gave us Kelo and Campaign Finance Reform.

(2) Peggy made the following comment | Oct 7, 2005 9:34:03 AM | Permalink

Thanks for the facts on the lawsuit, Belder. Too many conservatives are using information piecemeal to attack Miers simply to forward their agenda of sinking her nomination. I have been astonished that men and women in the media whom I've respected and greatly appreciated have revealed themselves to be so petty and egotistical. Really, narcissistic in their tantruming over not getting the nomination they wanted. The visible process is changing forever my perception of these folks. That they are willing to go so far to salvage their sense of importance is unbelievable, and a terrible injustice to the public.

(3) Random Numbers (Brian Epps) made the following comment | Oct 7, 2005 2:56:39 PM | Permalink

Now, there’s always an argument to be made that the captain of any ship is responsible for his/her crew’s misconduct.

You might want to point out that, even if there was misconduct, it took place when she wasn't even a partner, let alone senior, in the firm.

A captain cannot be morally held responsible for the misconduct of another captain's crew.

(4) Quin HIllyer made the following comment | Oct 7, 2005 6:04:46 PM | Permalink

To Beldar -- I hope you saw that I offered a disclaimer when I repeated the post, and another in a follow-up comment, and yet another after that.... to the effect that I was NOT endorsing Corsi' conclusions, but merely making his column available with the note that I "do not know what to make of it." With great respect to you, I hope you don't think my post itself "smeared" Miers. If you think the Corsi column smeared her, that's fine. But I was very careful to just say, look, this is out there, and people need to take a look and see if the Left can make anything of it -- which I sure hope they can't. Again, best wishes, and with great respect... Quin

(5) Beldar made the following comment | Oct 7, 2005 6:21:26 PM | Permalink

Quin, I do appreciate the comment here, and yes I did see your comments on your own post at Confirm Them. It's welcome clarification.

Your original post, though -- which is all that quite a few of your readers will ever see -- is still headlined: "Fraud?!?" Your comment "I have no idea what to make of it" is very equivocal. When followed with "it should give us all pause," then you're certainly refusing to make any pronouncment that the allegations are bogus, and in fact you've swung from looking neutral to looking actively skeptical. Vital key facts -- for example, that no one has accused Ms. Miers of being personally involved -- you've completely omitted. (Of course, the only source you linked, Dr. Corsi, left that out of his "article" as well, and I'm quite confident that that was no oversight.)

Your fine-print disclaimers tucked away in your comments section notwithstanding -- and even those fail to condemn this as an unfair smear -- Confirm Them will be perceived by most of its casual readers as endorsing the proposition that Ms. Miers is guilty of fraud. Indeed, that's exactly the take-away message of almost all of your readers who'd commented before I posted my screed.

It's obviously not my place to tell y'all how to run your website. I suppose if you insist on making no judgment at all about these allegations, that's better than coming out with some explicit statement of support for them and condemnation of Ms. Miers. And if you choose to do nothing at all further, you're certainly within your rights to do so.

But if your goal was to seem neutral, you've failed -- not just a little, but miserably. And your suggestion in your comments that you were merely trying to warn people on the right about what kind of distortions the left might engage in with this material is an interesting proposition, but not terribly consistent with your original post.

If a mainstream media source had done exactly what your post has done, it would deserve a ruthless fisking and all the ridicule that the blogosphere could heap on it.

I hope you'll consider expressly disassociating yourself and your blog from this smear. But failing that, I hope you'll at least make conspicuous corrections consistent with what's now only in your fine print. Whether you ultimately support or oppose Ms. Miers' nomination — even if you decide to work actively against it — I hope that you and all your co-bloggers agree that the debate should be based on facts rather than malicious innuendo (which is exactly what Dr. Corsi has engaged in, to my continuing shock and dismay).

(6) DC made the following comment | Oct 8, 2005 12:30:46 AM | Permalink


As indicated, you make the fair point that it is entirely unfair for this episode to be used to smear Miers as being a participant in some sort of fraud. You never came back to close the loop, but here is my final comment on that thread:


You are correct in saying that the payout doesn’t mean the firm actually believed it was wrong. That’s a fair point. I should have said the firm was concerned about losing the case.

Indeed, the high dollar settlement does indicate the firm thought it was at risk … and for a tort that wasn’t even in existence? Of course, the firm’s conduct and likelihood such conduct can be proved is part of this analysis — the most important part of the analysis, I think.

Non-lawyers would draw an inference here, I am willing to bet. The firm thought it was at risk.

Again … and let me say this clearly … this doesn’t mean that Miers was involved in any wrongdoing. That’s an absolutely fair point. But it’s also a fair point to say that a lot of Miers’ qualifications are not as impressive as they are being marketed to the public by the WH. Her main achievements are political offices, including the managing partner position.

And the ABA? Don’t get me started.

The bottom line here is that: To the extent that her work as managing partner is used as a basis for her nomination to the SC (and I think this is no basis to be on the SC), then her management of the firm during this time would be relevant. It’s called “opening the door”. Frankly, when people start telling me to support some one b/c they were a managing partner and won the popularity contest that is the Texas Bar presidency, I have a hard time taking them seriously, though.

I asked you to tell me about other 8-figure settlements of similar cases in Texas. I am not aware of any. Are you? Nah, forget it. You are right. It’s not relevant.

You know why? Beldar, my main problem with her is that I have no idea where she stands on constitutional jurisprudence. And the mounting evidence I see indicates she is not a conservative."

(7) Mike on Hilton Head Island made the following comment | Oct 10, 2005 11:59:00 AM | Permalink

I'm tempted to ask Confirm Them to remove me from their blogroll.

Half the time I log on over there, I wonder if I didn't hit "Daily Kos" by mistake.

After reading much of what has been posted there, they may wish to change the name of the site to:

"Confirm Them Only if They Agree With Me 100%, Otherwise Toss the Republicans to the Wolves"

I'm getting tired of all the Right Whiners... I'd rather be a RIGHT WINNER!

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