The King of Torts

The King of Torts Page 29

The Hanna Portland Cement Company was founded in Reedsburg, Pennsylvania, in 1946, in time to catch the postwar explosion of new home construction. It immediately became the largest employer in the small town. The Hanna brothers ran it with iron fists, but they were fair to their workers, who were their neighbors as well. When business was good, the workers received generous wages. When things were slow, everybody tightened their belts and got by. Layoffs were rare and used only as a last resort. The workers were content and never unionized.

The Hannas plowed their profits back into the plant and equipment, and into the community. They built a civic center, a hospital, a theater, and the nicest high school football field in the area. Over the years, there was a temptation or two to sell out, to take serious cash and go play golf, but the Hanna brothers could never be sure that their factory would remain in Reedsburg. So they kept it.

After fifty years of sound management, the company employed four thousand of the eleven thousand residents of the town. Annual sales were $60 million, though profits had been elusive. Stiff competition from abroad and a slowdown in new housing starts were putting pressure on the income statement. It was a very cyclical business, something the younger Hannas had tried unsuccessfully to remedy by diversifying into related products. The balance sheet currently had more debt than normal.

Marcus Hanna was the current CEO, though he never used that title. He was just the boss, the number-one honcho. His father was one of the founders, and Marcus had spent his life at the plant. No less than eight other Hannas were in management, with several of the next generation out in the factory, sweeping floors and doing the same menial jobs their parents had been expected to do.

On the day the lawsuit arrived, Marcus was in a meeting with his first cousin, Joel Hanna, the unofficial in-house lawyer. A process server bullied his way past the receptionist and secretaries up front and presented himself to Marcus and Joel with a thick envelope.

"Are you Marcus Hanna?" the process server demanded.

"I am. Who are you?"

"A process server. Here's your lawsuit." He handed it over and left.

It was an action filed in Howard County, Maryland, seeking unspecified damages for a class of homeowners claiming damages due to defective Portland mortar cement manufactured by Hanna. Joel read it slowly and paraphrased it for Marcus, and when he finished, both men sat for a long time and cursed lawyers in general.

A quick search by a secretary found an impressive collection of recent articles about the plaintiffs' attorney, a certain Clay Carter from D.C.

It was no surprise that there was trouble in Howard County. A bad batch of their Portland cement had found its way there several years earlier. Through the normal channels, it had been used by various contractors to put bricks on new homes. The complaints were fresh; the company was trying to get a handle on the scope of the problem. Evidently, it took about three years for the mortar to weaken and then the bricks began to fall off. Both Marcus and Joel had been to Howard County and met with their suppliers and the contractors.

They had inspected several of the homes. Current thinking put the number of potential claims at five hundred, and the cost of repairing each unit at about $12,000. The company had product liability insurance that would cover the first $5 million in claims.

But the lawsuit purported to include a class of "at least two thousand potential claimants," each seeking $25,000 in actual damages.

"That's fifty million," Marcus said.

"And the damned lawyer will rake forty percent off the top," added Joel.

"He can't do that," Marcus said.

"They do it every day."

More generalized cursing of lawyers. Then some specifics aimed at Mr. Carter. Joel left with the lawsuit. He would notify their insurance carrier who would assign it to a litigation firm, probably one in Philadelphia. It happened at least once a year, but never one this big. Because the damages sought were much higher than the insurance coverage, Hanna would be forced to hire its own firm to work with the insurance company. None of the lawyers would be cheap.

The full-page ad in the Larkin Gazette caused quite a stir in the small town hidden from the world in the mountains of southwest Virginia. Because Larkin had three factories it had slightly more than ten thousand people, a regular population center in the mining country. Ten thousand was the threshold for full-page ads and Skinny Ben screening that Oscar Mulrooney had established. He had studied the advertising and arrived at the opinion that the smaller markets were being overlooked. His research had also revealed that rural women and Appalachian women were heavier than those in cities. Skinny Ben territory!

According to the ad, the screening would take place the following day at a motel north of town and would be conducted by a medical doctor, a real physician. It was free. It was available to any person who had taken benafoxadil, aka Skinny Bens. It was confidential. And it might lead to the recovery of some money from the manufacturer of the drug.

At the bottom of the page, in smaller print, the name, address, and phone number of the D.C. Law Offices of J. Clay Carter II were given, though by the time most readers got that far they had either quit or were too excited about the screening.

Nora Tackett lived in a mobile home a mile outside Larkin. She did not see the ad because she did not read newspapers. She read nothing. She watched television sixteen hours a day, most of the time while eating. Nora lived with the two stepchildren her ex-husband had left behind when he hit the road two years earlier. They were his kids, not hers, and she was still not sure exactly how she'd come to possess them. But he was gone; not a word, not a dime for child support, not a card or a letter or a phone call to check on the two brats he'd forgotten when he fled. And so she ate.

She became a client of J. Clay Carter when her sister saw the Larkin Gazette and arranged to come fetch her for the screening. Nora had taken Skinny Bens for a year, until her doctor had stopped prescribing the drug because it was no longer on the market. If she'd lost any weight with the pills, she couldn't tell.

Her sister loaded her into a minivan and thrust the full-page ad in front of her. "Read this," MaryBeth demanded. MaryBeth had started down the road to obesity twenty years earlier, but a stroke at the age of twenty-six had been her wake-up call. She was tired of preaching to Nora; they'd fought for years. And they began fighting as they drove through Larkin and headed for the motel.

The Village Inn had been selected by Oscar Mulrooney's secretary because it appeared to be the newest motel in town. It was the only one on the Internet, which hopefully meant something. Oscar had slept there the night before, and as he had an early breakfast in the motel's dirty cafe he wondered once again how he'd fallen so far so fast.

Third in his class at Yale Law School! Wined and dined by the blue-chip firms on Wall Street and the heavyweights in Washington. His father was a prominent doctor in Buffalo. His uncle was on the Vermont Supreme Court. His brother was a partner in one of the most lucrative entertainment law firms in Manhattan.

His wife was embarrassed that he was off again in the boondocks chasing cases. And so was he!

His tag-team partner was a Bolivian intern who spoke English but did so with an accent so thick even his "Good Mornings" were hard to understand. He was twenty-five and looked sixteen, even in his green hospital scrubs, which Oscar insisted he wear for credibility. Med school had been on the Caribbean island of Grenada. He'd found Dr. Livan in the want-ads and was paying him the stiff sum of $2,000 a day.

Oscar handled the front and Livan took care of the back. The motel's only meeting room had a flimsy folding partition that the two of them had fought with to unwrinkle and pull across the room, dividing it roughly in half. When Nora entered the front at eight forty-five, Oscar glanced at his watch, then said, as pleasantly as possible, "Good morning, ma'am." She was fifteen minutes early, but then they usually showed up before the starting time.

The "ma'am" was something he caught himself practicing as he drove around D.C. It was not a word he'd been raised with.

Money in the bank, he said to himself as he looked at Nora. At least three hundred pounds and probably pushing four hundred. Sad that he could guess their weight like a huckster at a carnival. Sad that he was actually doing it.

"You the lawyer?" MaryBeth asked, with great suspicion. Oscar had been through it a thousand times already.

"Yes ma'am, the doctor's in the back. I have some paperwork for you." He handed over a clipboard with questionnaires designed for the simplest of readers. "If you have any questions, just let me know."

MaryBeth and Nora backed into folding chairs. Nora fell heavily into hers; she was already sweating. They were soon lost in the forms. All was quiet until the door opened again and another large woman peered in. She immediately locked on to Nora, who was staring back, a deer in headlights. Two fatties caught in their quest for damages.

"Come in," Oscar said with a warm smile, very much the car salesman now. He coaxed her through the door, shoved the forms into her hands, and led her to the other side of the room. Between two hundred fifty and two hundred seventy-five pounds.

Each test cost $1,000. One out of ten would become a Skinny Ben client. The average case was worth between $150,000 and $200,000. And they were picking up the leftovers because 80 percent of the cases had already found their way into law offices around the country.

But the leftovers were still worth a fortune. Not Dyloft money, but millions anyway.

When the questions were answered, Nora managed to get to her feet. Oscar took the forms, reviewed them, made sure she'd actually taken Skinny Bens, then signed his name somewhere on the bottom. "Through that door, ma'am, and the doctor is waiting."

Nora walked through a large slit in the partition; MaryBeth stayed behind where she commenced to chat up the lawyer.

Livan introduced himself to Nora, who understood nothing of what he said. Nor could he understand her either. He took her blood pressure, and shook his head with displeasure - 180 over 140. Her pulse was a deadly 130 per minute. He pointed to a set of industrial meat scales, and she reluctantly stepped on - 388 pounds.

Forty-four years old. In her condition, she would be lucky to see her fiftieth birthday.

He opened a side door and led her outside where a medical van was parked and waiting. "We do the test in here," he said. The rear doors of the van were open; two sonographers were waiting, both in white jackets. They helped Nora into the van and arranged her on a bed.

"What's that?" she asked, terrified, pointing at the nearest device.

"It's an echocardiogram," one said, in English she could understand.

"We scan your chest with this," said the other, a woman, "and we take a digital picture of your heart. It'll be over in ten minutes."

"It's painless," added the other.

Nora closed her eyes and prayed that she would survive.

The Skinny Ben litigation was so lucrative because the evidence was so easy. Over time, the drug, which ultimately did little to help lose weight, weakened the aorta. And the damage was permanent. Aortic insufficiency, or mitral valve regurgitation, of at least 20 percent was an automatic lawsuit.

Dr. Livan read Nora's printout while she was still in prayer, and gave a thumbs-up to the sonographers: 22 percent. He took it up front where Oscar was shuffling paperwork for a whole room full of prospects. Oscar returned with him to the back, where Nora was now seated, looking pale and gulping orange juice. He wanted to say, "Congratulations, Ms. Tackett, your aorta has been sufficiently damaged," but the congratulations were only for the lawyers. MaryBeth was summoned and Oscar walked them through the litigation scenario, hitting only the high points.

The echocardiogram would be studied by a board-certified cardiologist whose report would be filed with the class-action administrator. The compensation scale had already been approved by the Judge.

"How much?" asked MaryBeth, who seemed more concerned about the money than her sister. Nora appeared to be praying again.

"Based on Nora's age, somewhere in the neighborhood of a hundred thousand dollars," Oscar said, omitting, for the moment, that 30 percent would go to the Law Offices of J. Clay Carter II.

Nora, wide awake, said, "A hundred thousand dollars!"

"Yes ma'am." Like a surgeon before a routine operation, Oscar had learned to lowball his chances of success. Keep their expectations low, that way the shock of the attorneys' fees wouldn't be so great.

Nora was thinking about a new double-wide trailer and a new satellite dish. MaryBeth was thinking about a truckload of Ultra Slim-Fast. The paperwork was completed and Oscar thanked them for coming.

"When do we get the money?" MaryBeth asked.

"We?" asked Nora.

"Within sixty days," Oscar said, leading them out the side door.

Unfortunately, the next seventeen had insufficient aortic damage and Oscar was looking for a drink. But he hit paydirt with number nineteen, a young man who jolted the scales at five hundred fifteen pounds. His echocardiogram was beautiful - 40 percent insufficiency. He'd taken Skinny Bens for two years. Because he was twenty-six years old, and, statistically at least, he would live for thirty-one more years with a bad heart, his case was worth at least $500,000.

Late in the afternoon there was an ugly incident. A hefty young lady became incensed when Dr. Livan informed her that her heart was fine. No damage whatsoever. But she'd heard around town that Nora Tackett was getting $100,000, heard it over at the beauty shop in fact, and, though she weighed less than Nora, she too had taken the pills and was entitled to the same settlement. "I really need the money," she insisted.

"Sorry," Dr. Livan kept saying.

Oscar was called for. The young lady became loud and vulgar, and to get her out of the motel he promised to have their cardiologist review her echocardiogram anyway. "We'll do a second workup and have the Washington doctors review it," he said, as if he knew what he was talking about. This settled her enough to move her along.

What am I doing here? Oscar kept asking himself. He doubted if anyone in Larkin had ever attended Yale, but he was frightened nonetheless. He'd be ruined if word got out. The money, just think of the money, he repeated over and over.

They tested forty-one Skinny Ben users in Larkin. Three made the cut. Oscar signed them up and left town with the bright prospect of about $200,000 in attorneys' fees. Not a bad outing. He raced away in his BMW and drove straight to D.C. His next foray into the heartland would be a similar secret trip into West Virginia. He had a dozen planned for the next month.

Just make the money. It's a racket. It has nothing to do with being a lawyer. Find 'em, sign 'em, settle 'em, take the money and run.