Are Lawyers Running America?

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Most of these lawyers grew up working class or as outsiders. Scruggs and most members of his tobacco and HMO litigation teams were born in the small-town South. Jamail is the son of Lebanese immigrants. Levin is the son of a Jewish pawnbroker. Angelos, a child of Greek immigrants, put himself through law school working in his family's tavern. Most started out small. Reaud began by representing workers in the East Texas petrochemical industry who had smashed their fingers and toes at work. In Levin's first case, he won a $50,000 verdict against an insurance company for a woman whose house had burned down.

But something changed in the '70s: the awards began to get a lot larger. In 1978 Jamail brought a case against Remington for defects in a gun that injured a man in a hunting accident. The $6.8 million settlement landed him in the Guinness Book of World Records. Furth won his clients $70 million in 1973 on an antitrust price-fixing case against gypsum-wallboard manufacturers (and got a $4.3 million fee).

The supersize awards didn't just make victims and lawyers rich. They also got corporations to take notice--and to change their conduct. The Ford Pinto, alleged to be prone to erupt in flames after rear-end collisions, was taken off the market. Drugs with severe side effects, such as "phen-fen," were yanked from pharmacy shelves. A $1.8 million verdict in 1980 on behalf of a four-year-old girl who had been badly burned in 1970 persuaded a manufacturer to stop making flammable pajamas--and helped spur more rigorous federal regulations on children's sleepwear.

But it was asbestos that really demonstrated the power of lawsuits to reshape an entire industry. In the 1970s, lawyers started suing on behalf of victims of asbestosis, a deadly inflammation of the lungs caused by inhaling loose asbestos fibers that were widely used for insulation and fireproofing in shipbuilding and other industries. In addition to winning billions in damages, the lawsuits sharply reduced the amount of asbestos to which Americans are now exposed. After the asbestos litigation, trial lawyers had the expertise to bring complex lawsuits, and the huge fees--Scruggs' firm alone took in $25 million from asbestos--meant they could fund research, expert witnesses and trial preparation. They were ready for a new target.

That's when Scruggs and Mississippi attorney general Michael Moore--a classmate from the University of Mississippi Law School--decided to go after tobacco. There had long been a major obstacle: cigarette companies defended themselves by arguing that smokers knew about the dangers and assumed the risk. Scruggs and Moore decided to try to get around these "personal responsibility" defenses by suing on behalf of states, not individuals, seeking reimbursement for the Medicaid money the states had paid out for smoking-related illnesses.

Scruggs took the lead and organized the tobacco litigation with military efficiency. He selected law firms to join the team, assessed each firm a share of the expenses, doled out work assignments and figured out in advance how any fees would be distributed. Scruggs functioned "like a CEO," says Paul Minor, a trial lawyer in Biloxi, Miss. "He's our general and chief strategist, the leader and manager of all these law firms and big egos."