After two-plus years of a down economy, it’s not surprising many corporate lawyers in Orange County are seeing lagging demand for their services.
“Nobody has been immune from economic woes—both younger as well as more experienced attorneys have been facing layoffs,” said Lei Lei Wang Ekvall, a partner at Costa Mesa-based Weiland, Golden, Smiley, Wang, Ekvall & Strok.
But one segment of the local law business has held steady: plaintiffs lawyers.
“The practices of Orange County’s plaintiffs lawyers are proving to be very countercyclical,” said Ekvall, who’s also president-elect of the Orange County Bar Association. “We’re seeing demand remain relatively strong for their services.”
Wylie Aitken, founder of Santa Ana-based Aitken Aitken Cohn, agrees.
“To at least some degree, companies cutting corners to save costs or trying to take advantage of weakened competitors is resulting in more fraud and injury cases,” Aitken said.
Slow times also can make companies more resistant to quick settlements, said Mark Robinson, senior partner at Newport Beach-based Robinson, Calcagnie & Robinson Inc. and perhaps the county’s most well-known plaintiffs lawyer.
“But generally, our product liability practice has been fairly resilient to the recession,” he said.
Plaintiffs lawyers said their work nationally and even globally has helped cushion any slowdown from the economy.
Robinson said he’s been in the thick of product litigation against companies across the globe. That includes everything from cases involving faulty Firestone tires to health-related problems with drugs such as Merck & Co.’s Vioxx and Pfizer Inc.’s Celebrex.
In a national case with local ties, late last year Robinson sued Abbott Medical Optics Inc., a Santa Ana-based unit of Abbott Laboratories.
Robinson’s firm sued on behalf of consumers who purchased Complete MoisturePlus, a contact lens care solution that was recalled in 2007 by what then was Advanced Medical Optics Inc. after it was linked to a parasitic eye infection by the Centers for Disease Control and Prevention.
Abbott, based in the Chicago area, bought Advanced Medical Optics last year for $2.8 billion.
Aitken said his firm also is part of prominent cases across the U.S. and overseas. It just won a $12 million out-of-court settlement from an insurance company for a nine-year-old auto accident, he said.
In May, Aitken is set to go to trial in a case involving a former executive at Hyundai Motor America in Fountain Valley who fled the country after a 2005 hit-and-run death. He was extradited to Orange County following his arrest in South Korea.
A host of other cases are in the process of “coming through the door” or being researched, Aitken said.
“Whether it’s a company or a set of individuals, we hear from wronged parties no matter how the economy may be currently acting,” he said.
Lately, Robinson said he’s been busy tackling an ongoing class-action suit in California against tobacco companies. He’s also taking on Yaz birth control pills produced by the healthcare arm of Bayer AG and distributed by McKesson Corp.
“People are coming to us almost on a daily basis to sue Bayer,” Robinson said. “We expect to wind up with around 700 of those cases.”
Robinson came to national prominence in the late 1970s when he helped to take on Ford Motor Co. and its suspect gas tanks in the Pinto car.
Since then, his firm has been involved with more than 500 different product liability cases involving the auto industry.
Those have involved issues over roofs collapsing, seats falling apart and engine failures.
“We probably have around 20 auto-related cases we’re working on right now,” he said.
Thomas Cifarelli, a Santa Ana-based plaintiffs personal injury lawyer, said he’s busy dealing with child abuse and neglect cases.
His Cifarelli Law Firm LLP has filed suit against a local school district charging negligence regarding a teacher’s aide and alleged abuse of a mentally impaired child who was in a wheelchair.
“You’ve got to care about a case because they take so long and take so much work,” Cifarelli said. “You’ve got to be really committed to the cause.”
Although about half of Cifarelli’s firm’s business is devoted to child abuse and neglect cases, it also has worked around the country on employment litigation and class action and mass tort cases.
Like other plaintiffs lawyers, he works on a contingency basis. It can take years until his firm receives payment.
The long time frame makes his practice fairly resilient to adverse short-term economic cycles.
“Business is still strong right now, knock on wood,” he said. “We’ve got plenty of cases in the office. And there are plenty of others we’re looking at in the future.”
One effect of the downturn, according to Cifarelli: “A lot of companies are more reluctant to pay.”
That has forced Cifarelli’s firm to scrutinize potential cases more closely in the past two years, he said.
“With the economic downturn, an additional question keeps coming up—can the defendant pay a judgment?” he said. “If there’s no means of collecting for damages, it can be a real problem.”
Uncertainty over getting paid makes diversity within practices essential, lawyers said.
“Our firm has an interesting mix of business,” said Daniel Callahan, founder of Santa Ana-based Callahan & Blaine.
About 70% of the firm’s work is on business disputes, such as breach of contract, misappropriation of trade secrets and fraud, he said.
“That’s our typical client matter,” Callahan said.
But the firm also handles catastrophic injury cases, he said.
Callahan won a $934 million verdict in 2003 in a highly publicized business case that pitted Brea-based Beckman Coulter Inc. in a lawsuit against Singapore’s Flextronics International Ltd. over a breach of contract.
The award was the largest in county history.
The companies settled in late 2003 for $23 million.
Another high-profile case he has been working on involves representing delivery drivers working for the Orange County Register. In 2008, after a two-month jury trial, carriers were awarded a multimillion dollar judgment.
But the delivery drivers have been unable to get paid after the paper’s parent, Irvine-based Freedom Communications Inc., filed for bankruptcy in September.
Callahan said he figures his firm spent around $250,000 to hire outside bankruptcy lawyers and to investigate bankruptcy issues “so we could get the money for our clients” in the Freedom case.
Callahan even is chair of the unsecured creditors’ committee for the bankruptcy, which is playing out in Wilmington, Del.
“I’ve spent every waking moment doing this,” he said. “I’ve been involved in negotiations, conference calls and all sorts of activities every working day since the bankruptcy was filed.”
Callahan and other secured creditors face an uphill battle.
Freedom’s plan calls for turning over about 90% of the company to New York-based JPMorgan Chase & Co. and 26 other secured creditors.
Under the plan, unsecured creditors with claims of $300 million—including shareholders, former employees, the drivers and Callahan—are to split $5 million.
Late last year, the judge in the case gave the green light for unsecured creditors to propose their own restructuring plan.
Callahan said he’s optimistic.
“I think by February there’s a very good chance we’ll reach a settlement, which will come close to getting us a 100% recovery,” he said.
