Bill Lerach's Many Friends

With amici like these, a court ought to be wary.

Two House Democrats this week took the unusual step of submitting an amicus curiae brief to the Supreme Court, seeking to help the justices as they weigh a major investor-rights case.

Financial Services Chairman Barney Frank of Massachusetts and Judiciary Chairman John Conyers of Michigan support investors' rights sue bankers, accountants, lawyers and other deep-pocketed businesses for their knowing participation in a fraud.

The particular case under consideration involves a firm called Stoneridge Investment Partners. It will give the court a chance to determine whether investors in one company can also sue other companies they suspect of having facilitated a stock fraud.

The case involves Charter Communications, the big but troubled cable television company, and its former partners, among them Motorola Corp.

The most tantalizing details in legal briefs are often buried in the footnotes, and Frank's brief contains a whopper:

Footnote 1 discloses that lawyers on Frank's staff were assisted by three lawyers from the Washington law firm of Cuneo, Gilbert & LaDuca, which was founded by Jonathan W. Cuneo.

Cuneo, it turns out, is a longtime lobbyist for William S. Lerach, the hyperbolic class-action lawyer who is at once feared and reviled by corporate America. Cuneo is also co-counsel with Lerach in class action litigation against Enron -- and its banks.

Whatever the high court decides in Stoneridge will also determine the fate of his remaining claims in Lerach's $40 billion Enron class action.

In March, three investment banks that were underwriters to Enron won a reversal of a lower court ruling that they could be held accountable for the massive fraud, undoing Lerach's greatest win in the case. He sought an appeal with the Justices, but the Stoneridge case was taken for review first, leaving him on the sidelines for the arguments.

Cuneo and his firm offered assistance to Frank's lawyers, as they were free to do. There was no violation of the ethical rules that govern lawyers. But the move shows just how much Lerach and his colleagues want their voice heard before the high court, given that President Bush rejected the S.E.C.'s recommendation that the government file an amicus brief of its own in support of investors.

Frank's amicus brief is among the pile awaiting the Justices upon their return from summer break. Another is a brief from Cuneo's firm, filed on behalf of the AARP, Consumer Federation of America and U.S. Public Interest Research Group in one of the raft of amicus briefs before the high court.

Footnote 1 of the Frank brief says that much, and was required by Supreme Court rules that arguably require amicus curiae to disclose whether counsel for another party in the case authored the brief in whole or in part. But it does not mention Cuneo's work on the Enron class actions, a fact touted on the law firm's web site.

Deborah Silberman, senior counsel to the House Financial Services Committee and one of the staff lawyers who worked on the brief, said Supreme Court rules requires disclosure only of the participation of lawyers for opposing parties. "We are not ashamed of it," she said of the inclusion of lawyers from Cuneo's firm. "They assisted and we wanted to put it out there for full disclosure."

Other lawyers who specialize in Supreme Court practice disagree with her reading of the rule. They say it is meant to apply to counsel for other amici.

Calls to Cuneo about the Stoneridge case were not returned.

This kind of assistance is perfectly legal, but the roster of players is testament to the extraordinary muscle being exerted by powerful enemies -- corporate interests and trial lawyers -- to influence the outcome before the high court.

Lerach won an interim victory when Securities and Exchange Commission Chairman Christopher Cox broke ranks with his Republican colleagues at the agency, which voted 3 to 2 last month to file a brief supporting the investors.

Frank had ordered Cox and the entire commission for a grilling before his committee, but the questioning, after Cox's vote in Stoneridge, was decidedly gentle when Cox appeared at the June 26 hearing.

Pamela Gilbert, a name partner in Cuneo's firm who assisted him in the brief for Frank, was on hand for the hearing. At it, she distributed a press packet from the American Association for Justice, the new name for the American Trial Lawyers Association. It contained news clippings detailing the pressure on Cox to support the Stoneridge investors, and the push-back coming from Treasury Secretary Henry M. Paulson.

Trouble is, the S.E.C. cannot file a brief on its own: That is the province of the Solicitor General, who rejected the S.E.C.'s recommendation and let the June 11 deadline for amicus briefs supporting investors pass. Paulson's view ultimately won, but the president himself made the ultimate call.

On June 12, Allen Hubbard, director of the President's National Economic Council held a conference call with reporters telling them that President Bush weighed in with his own views on unnecessary lawsuits that harm the American economy.

"The Solicitor General's decision to follow the political and policy directives of the President rather than support the Commission's legal position plots a dangerous course," the Frank brief asserts.

The Frank brief follows another filed by Arthur Levitt and William Donaldson, two former S.E.C. chairmen, and Harvey Goldschmid, a former S.E.C. commissioner. And Senator Christopher Dodd, the Connecticut Democrat, remarked at a Senate Banking Committee hearing that he was considering filing his own brief in the case.

But the big question is whether the Solicitor General will file brief supporting the third-party defendants. And there's a full court press on to urge the Bush administration against filing an amicus on behalf of the defendants.

Enron victims held a news conference in Washington on Tuesday, featured on the AAJ website, www.peopleoverprofits.org, and released a letter to Bush signed by 21 Enron victims.

"They are all waiting to see what the S.G. is going to do," said Robert J. Giuffra Jr., a partner at Sullivan & Cromwell. "That's the Big Kahuna amicus brief. That's the one that virtually every Justice will read. That's why you are seeing all of these amicus briefs."

The Solicitor General is often referred to as "the 10th justice" because his credibility with the court is so great. "People on the plaintiffs' bar side are trying to undermine the S.G. by putting in briefs by former S.E.C. chairmen and members of Congress to show that the government is not speaking with one voice on this issue," Giuffra said.

by Karen Donovan