Melvyn I. Weiss, whose avalanche of class-action lawsuits made him a pariah to corporate America, a hero to plaintiffs, a catalyst for legal protections of investors and consumers, and finally a felon, died on Friday at his home in Boca Raton, Fla. He was 82.
The cause was amyotrophic lateral sclerosis, his son Stephen A. Weiss, a partner in the law firm Seeger Weiss, said.
Mr. Weiss was a pro bono lawyer for terrorism victims and other causes, a fund-raiser for Democrats and a leader of the Israel Policy Forum, which favors a two-state solution to the Palestinian conflict. He and his wife, the former Barbara Joan Kaplan, sponsored a program in public-interest law at his alma mater, New York University Law School.
But he was best known for building a fledgling law firm into a powerhouse that compelled miscreant and recalcitrant businesses to pay billions of dollars to aggrieved shareholders and customers.
He sued, or threatened lawsuits against, them or their advisers for securities fraud, phony accounting, environmental damage, false advertising and other misconduct.
Ironically, as an investor Mr. Weiss was himself a victim of Bernard L. Madoff’s Ponzi scheme, which claimed fictitious profits from Wall Street. Mr. Madoff was arrested in 2008 and convicted in what was described as the largest financial fraud in American history.
To corporate directors and legal reformers seeking to curb frivolous lawsuits, the firm that Mr. Weiss co-founded, which became Milberg Weiss Bershad Hynes & Lerach, was an exemplar of tort litigation gone amok. To clients, though, he was a white knight.
By 2004, the firm, which had as many as 200 partners and associates, estimated that it had recovered more than $20 billion for investors and consumers since it was founded in 1965. The firm had also spent as much as $100 million building cases and assembling plaintiffs to battle corporate behemoths and their lawyers.
Collaborating sometimes with government watchdogs, the firm sought damages from Adelphia, Columbia Savings & Loan, Drexel Burnham Lambert, Enron, Exxon, MetLife, Prudential, the Washington Public Power Supply System, Xerox and scores of banks.
Mr. Weiss He also represented Holocaust victims in suits against German companies that had profited from slave labor during World War II. And, pro bono, he argued on behalf of Holocaust survivors whose families had been cheated by Swiss banks, winning a $1.25 billion settlement.
His lawsuits sometimes led to more transparent corporate bookkeeping and greater accountability, including the election of additional independent directors to company boards.
A 1994 lawsuit against the tobacco company R. J. Reynolds was credited with helping to kill its advertising campaign built around the cartoon character Joe Camel, which industry critics argued was targeted at underage smokers.
Mr. Weiss found himself in the legal cross hairs in 2007, when federal prosecutors charged that in 150 cases across the country, Milberg, as his firm was known, had funneled $11.3 million in kickbacks to so-called figurehead investors so that they would be readily available as potential plaintiffs.
Their unbridled litigiousness gave Mr. Weiss and his partners an advantage by enabling them to file suit ahead of rival firms, get themselves appointed lead counsel and gain a greater share of legal fees.
According to prosecutors, the conspiracy generated more than $250 million in fees to Milberg — including $9.8 million for Mr. Weiss, who lived in a 12,200-square-foot waterfront mansion in Oyster Bay, N.Y., on Long Island, and owned 140 Picasso lithographs and etchings.
“The scheme was based in greed,” said Thomas P. O’Brien, the federal prosecutor for central California, “and it affected the integrity of the courts and the interests of an untold number of absent class members.”
One figurehead plaintiff, Dr. Steven Cooperman, presented himself as an injured party in so many Milberg cases that in 1993, dismissing a lawsuit against a chain of used-car dealers, a federal judge described the doctor as “one of the unluckiest and most victimized investors in the history of the securities business.”
While Mr. Weiss often fulminated against corporate greed — “Greed is a growth industry and it always will be,” he said — he acknowledged his own motivation.
“Am I in it for the money?” he said in a 2004 interview with The New York Times. “Yes.”
The federal charges against Mr. Weiss and his partners did not question the substance of their lawsuits, but only how the firm had contrived to increase its fees.
In 2008, facing 40 years in prison if convicted on all counts, Mr. Weiss pleaded guilty to racketeering.
After an outpouring of more than 250 letters to the court from supporters and a 125-page sentencing memorandum from his lawyer, Benjamin Brafman, Mr. Weiss was sentenced by United States District Judge John F. Walter to 30 months in prison and ordered to forfeit $9.75 million and pay a $250,000 fine. He served half his sentence in a federal correctional institution and the remainder confined at home.
“Mel Weiss did not invent securities class actions, but he brought them to a prominence and impact unmatched by any other lawyer of his time,” Federal District Judge Jed S. Rakoff of Manhattan said in an email on Monday.
“Perhaps it was this very success that led him to bend and ultimately break the rules, leading to his conviction,” Judge Rakoff added. “But even that serious mistake cannot detract from the role he played in helping bring to light substantial securities frauds that would otherwise have gone undetected and unrecompensed.”
Mr. Weiss was disbarred after his guilty plea and began working as a mediator in Florida in 2010. Shortly after his release, he told The New York Jewish Week that imprisonment had its plusses. “For every year you’re in,” he said, “you add two or three to your life because of all the health issues, all the exercise.”
Melvyn Irwin Weiss was born on Aug. 1, 1935, in the Bronx, a grandson of Jewish immigrants from Russia and the son of Joseph Weiss, an accountant, and the former Jean Bystock.
He grew up in the Hollis Hills section of Queens, graduating from Jamaica High School. He helped his father keep the books for small businesses while attending City College of New York, graduating in 1956. He earned his law degree from New York University in 1959 and served in the Army.
In addition to his son Stephen, he is survived by his wife; another son, Gary; a daughter, Leslie Weiss; a sister, Rita Fox; and seven grandchildren.
After working in two other law firms, Mr. Weiss joined Lawrence Milberg, a veteran litigator, in a new partnership in 1965. A year later, the partners gambled on a new federal court rule that facilitated class-action suits by one plaintiff on behalf of many.
The goal of the rule was to empower private lawyers to help the government enforce laws against civil rights violations and consumer fraud. Milberg exploited the rule to pioneer an aggressive legal strategy: On behalf of groups of investors, the firm sued corporations whose stock had plunged on the ground that the company had committed market fraud by overstating its revenue forecasts.
After 13 lean years of betting on future contingency fees, Milberg collected a $4.5 million bonanza in 1978 for settling a fraud case involving housing funding by the bankrupt United States Financial Corporation.
But in 1995, Congress targeted firms like Milberg with legislation to discourage frivolous suits. The new law required plaintiffs’ lawyers to demonstrate evidence of fraud before a case could proceed. And the lead plaintiff would be whoever suffered the greatest financial loss — not the party who got to the courthouse first.
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