NEW YORK -- As a seasoned plaintiffs' lawyer, Paul Rheingold has invested in a lot of disasters. Lately, he has put his money into diet pills.
Long before the marketer of Redux and fenfluramine (the "fen" in the fen-phen combination) pulled the drugs because of safety concerns, Mr. Rheingold decided to get in on the litigation ground floor.
To attract clients, he ran ads in TV Guide and other publications. To spread his costs and reduce the risk of failure, he activated a network of trial-bar colleagues, who began sharing documents and referring potential plaintiffs to one another. He also hit the talk-show circuit, published a scholarly legal article and wangled an invitation to head a national diet-pill conference.
Mr. Rheingold's enterprise has won him leads on more than a hundred possible plaintiffs, plus a shot at an even more lucrative prize: membership on the legal "steering committee" that will be formed if a federal court, as expected, eventually consolidates all the diet-pill litigation.
"I'm trying to get out in front on this one," the 63-year-old lawyer says.
Barely a month after the recall, drugs that once excited dieters now electrify trial lawyers. For them, diet pills have become a major business opportunity. Lawsuits are piling up across the land.
Although linking a product to an injury is often a challenge -- witness the breast-implant cases -- diet-pill lawyers say they have rarely seen such strong evidence so early. "Bingo!" exults Ronald Benjamin, a lawyer in Binghamton, N.Y., who has filed 60 diet-pill suits already.
The Opposition
Not that winning damages will be a breeze. The defendants, including American Home Products Corp. and Interneuron Pharmaceuticals Inc., also have plenty of high-powered legal help. It includes Arnold & Porter, a Washington firm that defends the tobacco industry, and Skadden, Arps, Slate, Meagher & Flom in New York, which has picked apart plaintiffs' arguments in the breast-implant litigation.
Right now, though, Mr. Rheingold is worrying less about defense arguments to come than about the sharp elbows of other plaintiffs' lawyers who also want this business. Among them are law firms that are just as aggressive as he but take a slightly different approach, pushing immediately for class-action litigation instead of handling cases one by one.
Mr. Rheingold first mused about suing the diet-pill companies last year, after reading in the New England Journal of Medicine -- he is a longtime subscriber -- about links between the drugs and a rare but often-fatal lung condition. Then early this past July, while he was vacationing at his lakeside retreat in New Hampshire, "the light bulb went on," he says, when he read a newspaper account of a Mayo Clinic study that found serious heart-valve leaks in some fen-phen users.
Help From His Friends
A few days later, in San Diego for a convention of the Association of Trial Lawyers of America, Mr. Rheingold printed up signs and called a meeting of lawyers curious about the diet-pill situation. The "Fen-Phen Litigation Group" was born in the hotel cocktail lounge. About 100 lawyers eventually agreed to swap intelligence they found. One member, for example, used the Freedom of Information Act to unearth Food and Drug Administration documents in which the agency's staff expresses misgivings before approving Redux, saving Mr. Rheingold and others the time and expense of going through the FOIA process.
Back in New York, Mr. Rheingold turned his family law firm, located in a brownstone row house decorated with 19th-century medicine bottles, into a hub of diet-pill activity. "This is Mr. Fen-Phen," he says, introducing a paralegal who sits in the basement handling calls to a toll-free line Mr. Rheingold set up.
The line is jammed by former users of diet pills, including a woman who claims they led her, in an uncharacteristic rage, to take a knife to her husband. Mr. Rheingold isn't sure whether he wants to try proving a claim like that. To help him assess alleged injuries and interpret medical records, he has put a nurse practitioner and a retired cardiologist on staff.
His eight-lawyer firm, Rheingold, Valet & Rheingold, includes his Harvard M.B.A. wife, Joyce, as business manager and their son David as a partner. Another son, Ted, who works for a California technology company, tends the firm's Web site, which features a diet-pill litigation pitch.
In August, Mr. Rheingold scored a breakthrough, landing a serious case to which he could plausibly attach big damages. He sued in state court in Brooklyn seeking $10 million for a diet-pill user who ended up with not one but two failing heart valves, which she had replaced in March. She found his firm through a friend who was a satisfied client in a different kind of suit.
"It is a great case," Mr. Rheingold says. "And we got it first." Besides the potential payoff -- his firm will get one-third of any damages it wins her, under a standard contingency-fee arrangement -- the filing was written up in Newsday, the Long Island newspaper, spreading the word to still more diet-pill users.
"I keep telling other lawyers to get your cases and then worry about what you are going to do with them," he says.
Scoring With Tryptophan
Mr. Rheingold speaks from experience. In the 1960s, he won one of the first punitive-damage awards in a product-liability case, over an early cholesterol-lowering drug called Mer/29. More recently, he was part of a legal team that won $1 billion from a Japanese chemicals company accused of producing a contaminated batch of a dietary supplement known as L-tryptophan, resulting in a rare blood disorder. Although Mr. Rheingold won't discuss his fees, in the tryptophan cases they ran into the millions.
Over the years, Mr. Rheingold has shown a nose for emerging disasters, combining intellectual curiosity with the hustle of a carnival barker. A Harvard-trained lawyer, he writes law-review articles and has ties to think tanks, such as the Rand Institute for Civil Justice in Santa Monica, Calif., where he will be a visiting scholar next year. He diligently scans the medical journals for bad news. "Paul may know as much about medicine and the drug industry as any human being alive," says law-school classmate Arthur Miller, a Harvard law professor who has consulted for both plaintiffs and defendants.
But book learning alone doesn't bring cases. By late summer, Mr. Rheingold was orchestrating a multimedia marketing blitz. He bought ads in TV Guide and Newsday, prompting hundreds of calls. Then he splurged on a $24,000 quarter-page ad in USA Today, which paid off by bringing in another heart-valve plaintiff -- from Idaho.
Later, Mr. Rheingold got some mileage out of a cable-TV segment hosted by O.J. Simpson lawyer Johnnie Cochran, to which Mr. Rheingold brought along one of his fen-phen clients for dramatic emphasis. Son David also made several TV appearances, advocating the rights of alleged diet-pill victims, whom he solemnly describes as among "the road kill of corporate America."
His Man in Montana
By September, the marketing and networking were paying off, as attorneys from around the country called to offer Mr. Rheingold a percentage of their lawsuit take if he would lend his expertise. A Florida firm has solicited his help in about 60 diet-pill cases. Mr. Rheingold, in turn, has sent a case to a Beverly Hills, Calif., lawyer, after hearing from a California diet-pill taker who preferred local representation. Under New York law, Mr. Rheingold may -- and will -- collect up to one-third of the California lawyer's fee for the referral.
No jurisdiction is too remote. "He called me and said he wanted me to be his man in Montana," says James Ranney, a Missoula lawyer who got to know Mr. Rheingold in a case over a defective asthma inhalant, and remembers the New York lawyer buying him a steak dinner.
Drug makers and other companies facing suits by the likes of Mr. Rheingold charge that plaintiffs' lawyers are practicing a sophisticated brand of extortion, using the sheer volume of lawsuits as leverage. "The real purpose ... is to achieve a certain critical mass of litigation which so threatens the defense that it wants to settle the case," contends David Bernick, a Chicago lawyer who handled breast-implant suits for Dow Corning Corp. -- a company that now operates under Chapter 11 bankruptcy-law protection. According to Mr. Bernick, mass-injury lawyers with massive caseloads aren't interested in actually bringing them to trial. "That is a person investing in litigation rather than pursuing it," he says.
Mr. Rheingold doesn't dispute the investing point. But "these are seriously injured and really mad women," he says, referring to his nearly all-female clientele. "We have a right to gang up."
Some more-traditional plaintiffs' attorneys join industry in decrying those who search for trouble in a systematic way. "That appalls me," says Ralph Knowles, an Atlanta lawyer active in breast-implant cases. He believes plaintiffs' attorneys should, at the least, win a case or two before signing up dozens of clients.
The Class-Action Approach
But Mr. Rheingold's competitors aren't hesitating. Large class-action law firms came on the scene as early as he did. These firms' strategy is to file suit on behalf of a few people and ask the court to declare the case an action representing everybody in the same class or situation, whether or not they have yet been identified. If these law firms get control of the diet-pill litigation, Mr. Rheingold and other individual lawyers will have to pay them huge sums for the pretrial deposition and "discovery" work they do. That would cut deeply into Mr. Rheingold's fees.
Already, the competition in diet-pill litigation is intense. Seats on a future court-appointed legal steering committee -- whose members would be well-rewarded financially at settlement time -- will probably be distributed according to such factors as a lawyer's experience, financial muscle and client base.
The San Francisco law firm of Lieff, Cabraser, Heimann & Bernstein is making a strong pitch, based partly on timing; it filed a suit seeking class-action status on July 9 -- exactly one day after news broke of the Mayo Clinic study on diet pills and heart valves. Leeds & Colby, a Miami firm that says it already has more than 1,000 diet-pill clients, argues that a court in South Florida would be a convenient venue. Nationally, more than 20 diet-pill suits have already been filed that seek class-action status. Most seek mainly regular medical checkups for pill takers who haven't been diagnosed with any illness.
Mr. Rheingold, sticking with his custom of litigating cases one by one, contends that in class-action suits, individual plaintiffs often win little, and that the presence of so many people in the class diminishes the money available for those whose injuries are truly serious. But the class-action lawyers say they represent the most efficient way to handle cases where millions of people are affected. They also contend that clients of contingent-fee lawyers such as Mr. Rheingold inevitably are overcharged, compared with class-action rates, which are set by a court.
In the tryptophan case, Mr. Rheingold and some trial-bar pals beat out the class-action specialists by agreeing not to charge extra for work they did on the litigation steering committee. That impressed the judge and got them the job.
Now, the same lawyers may try to pull off another coup. One member of the Rheingold circle has recruited as a witness a Maryland pulmonary specialist who worked on the diet-pill study published in the New England Journal of Medicine 14 months ago, strengthening links between appetite suppressants and the serious lung condition.
Many things could go awry. The pills could turn out to be not so risky after all. Ailments suffered by pill-takers "could be the world's greatest coincidence," Mr. Rheingold says -- although he doubts it.
As for the critics who say such lawyers are in it for the greater good of their bank accounts, not of clients, Mr. Rheingold argues that without trial lawyers like him, victims would have nowhere to turn. And to traditionalists who decry the practice of lawyers ferreting out new troubles to capitalize on, Mr. Rheingold says he is merely delivering a service according to the realities of the legal marketplace, at a time when demand is high.
"This just reflects the fact that we are in a business," he says, "and this is just another opportunity that comes along."
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