Large
settlements
negotiated by major law firms
secure little money for victims
while being funneled toward
“left-wing” agenda items
, according to a consumer watchdog.
Lawyers “generate money for left-wing priorities … even if no victims are helped” and can
often
end up helping the defendant, according to
Alliance for Consumers
Executive Director O.H. Skinner.
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Skinner explained that victim funds get diverted to left-wing causes by politically motivated trial lawyers structuring settlements that help themselves and, not coincidentally, the defendant. Several cases reviewed by the Washington Examiner confirmed that, showing lawyers who represent victims working with the defendants to increase their own paychecks while raising donations to politically liberal organizations or causes and allowing the defendants a public relations win.
Such settlement agreements allow for funds to be distributed to unrelated third parties, such as advocacy groups that have a tangential relation to the case. One
case against Google
, which involved its Street View cars collecting millions of nonconsenting consumers’ data, saw settlement dollars funneled to organizations like the American Civil Liberties Union.
The complaint was settled with a $13 million fund. Victims received nothing, while about $4 million went to attorneys fees and about $9 million went to unrelated third-party organizations, some of which had relationships with the victims’ lawyers and Google, according to a lawsuit filed challenging the settlement.
Twenty state attorneys general filed a July 7, 2022, brief with the Supreme Court asking it to review the challenge because agreements with third-party funding are “mutually beneficial” for the victims’ lawyers and the defendants but do not benefit the victims themselves.
They also create a “conflict of interest” between the victims and their lawyers because payments to third parties can increase the overall price of the victim fund, which increases attorney fees but not the amount on a check written to the victim, the attorneys general wrote.
By the end of the settlement, Google gained a “public relations benefit” because “defendants reap goodwill from the donation of monies to a good cause,” the brief stated.
Ted Frank, who challenges abusive class action settlements and currently has a case being considered by the Supreme Court for review, told the Washington Examiner that settlements like these are a “win-win for the lawyers and for the defendants.”
“Both sides have the incentive to create the illusion of relief, and if, in the course of doing that, they’re supporting a left-wing cause that they want to support anyway, all the better,” he explained. “The lawyers have a pot of money, and they can give it to the [victims], or they can give it to their favorite nonprofit organizations.”
The “underlying problem,” Frank said, is that victim attorneys and defendants can come to a settlement with no penalty for not reserving money for the victims.
Third-party payments are not the only way settlement funds can be diverted to benefit trial lawyers and their political leanings.
In the Alphabet sexual harassment suit, major law firm Cohen Milstein negotiated a
settlement
that funded a company diversity, equity, and inclusion office, and “whatever went to the actual people hurt was like a rounding error,” Skinner said.
This way, Skinner explained, companies can settle while law firms get paid and say they have helped people by funding initiatives that align with their political interests while not giving damages to actual victims.
The settlement noted that victims may have been able to recover $50 million to $65 million for sexual misconduct, but the lawyers and Alphabet preferred a $310 million DEI investment it says would “achieve much greater long-term value for investors and Alphabet employees.”
Afterward, a public relations campaign ensued with a Cohen Milstein
press release
stating, “These changes, along with the financial commitment to DEI initiatives, position Alphabet to lead as much in workplace equity as [it does] in technology and innovation.”
“It’s exactly what you would expect if you were expecting that these lawyers were putting themselves first,” Skinner said. “They’re very tied up in ideological litigation and generating money for left-wing priorities and making sure that they get paid for doing that, even if no victims are helped.”
Lawyers are seeking high fees, meaning they want a larger dollar sign on the overall settlement, and defendants are seeking the cheapest possible route, along with ulterior motives, Frank explained.
According to Frank, Alphabet obtained a “spending initiative that protects them from future lawsuits” because they can use their new DEI office and argue, “‘How can you say that we discriminate against women? Look, we spent $310 million on the DEI office.'”
In the backdrop of the settlement structures lies the
political activity
of major trial lawyer firms.
Skinner’s Alliance for Consumers recently published a
report
outlining the “absolutely off-the-charts level of partisan political commitment of these lawyers” through campaign contributions to Democrats and “left-wing” causes.
Contributions come from taxpayer funds by way of public contracts, setting up a “pipeline” of money out of public coffers into the campaigns of Democrats and other liberal agenda items, the report found.
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According to the report, 99% of overall contributions from the law firms went to “Democrats and allies.”
Some state attorneys general have already made moves away from these firms, with Montana Attorney General Austin Knudsen, Kansas Attorney General Kris Kobach, Iowa Attorney General Brenna Bird, and Oklahoma Attorney General Gentner Drummond, all Republicans, terminating contracts with major law firms.
