Washington's Ten Most Feared Lawyers
By Patrick J.Kiger
I
MICHAEL D. HAUSFELD
Chairman
Cohen, Milstein, Hausfeld & Toll
Michael Hausfeld recalls that his first job in the Washington legal world-an associate's position at Arent Fox Kintner Plotkin & Kahn-ended a bit, well, disastrously. "I was brought into a senior partner's office and told, obliquely, that there was no room for Ralph Nader types at the firm," he recalls. "My first reaction was, 'What's he talking about? I'm not Lebanese.'" Quick study that he is, of course, Hausfeld didn't have too much trouble grasping the firm's message: that a young lawyer with a passion for left-leaning causes and a perpetual sense of anger over government malfeasance and corporate greed wasn't likely to be a big moneymaker.
Several decades later, the George Washington University law school graduate has proven that prediction wrong, in spades. As the rainmaker at Cohen, Milstein, Hausfeld & Toll, one of the nation's most aggressive class-action litigation firms, he's made a career of tangling with some of the biggest, most powerful companies and institutions on the planet-from Exxon Corporation and Microsoft Corporation to super-secretive Swiss banks. More often than not, he's made the other side pay, big time-in the hundreds of millions, or even billions-for their alleged sins. The mild-mannered Brooklyn native has become the sort of avenging angel who puts fear into even the richest and most powerful. The Wall Street Journal's editorial page has denounced him as "a corporate shakedown artist," but Hausfeld prefers a different label.
"The best way to classify me is as a humanist," he says. "We have a variety of cases that cross particular fields of practice: civil rights, human rights, antitrust, environmental, mass tort litigation, product liability. I'm an activist, but I saw early on that you couldn't just operate a pure public-interest practice, that you had to balance justice with making money. We've been very fortunate to have an expertise and success areas that have turned out to be economically profitable. That's enabled us to take a good portion of those returns and put them back into social causes."
Indeed, over the years Hausfeld's cause-célèbre clients have ranged from native Alaskan fishermen who have been harmed by spilled oil to people who were imprisoned in Nazi slave-labor camps to African-American workers who claim they've been discriminated against on the job. He's gone after gun manufacturers, the tobacco industry, and companies that sold unsafe tires and heart-damaging diet remedies. He's sued Monsanto Company on behalf of environmental activists and family farmers who want more safety testing of genetically engineered crops. He's nailed baby-food manufacturers and vitamin companies for price-fixing. While his interests tend to be global, he's not above intervening in a local issue. After the operator of a hazardous-waste incinerator in East Liverpool, Ohio, tried to silence community critics with a defamation lawsuit three years ago, Hausfeld came to the activists' rescue, filing a countersuit against the company and forcing it to back down.
Hausfeld's most attention-getting case-and perhaps the best example of his brand of hardball tactics-was the race-discrimination suit he filed against Texaco, Inc., in 1994, with six black employees as named plaintiffs. Cyrus Mehri, then an associate at Hausfeld's firm, obtained a tape of a company meeting at which executives seemed to be making thinly veiled racial slurs. Hausfeld simultaneously submitted it to the court and leaked it to a reporter from The New York Times, whose front-page story hit Texaco so hard, image-wise, that the company's chairman, Peter I. Bijur, promptly issued a statement expressing dismay at Texaco's own behavior. It seemed like an opportune time to work out a deal, but the next day, Hausfeld angrily walked out of settlement negotiations. Hausfeld continued to play tough, reportedly hanging up on a Texaco lawyer who offered a $15 million settlement and responding to his $35 million offer the next day with the retort: "The value of Texaco stock just went down by a billion dollars. It's gonna get worse." Some questioned his wisdom, as Texaco made higher and higher offers-$95 million, $115 million-and he continued to reject them. But beneath the chutzpah, Hausfeld had a poker player's coolness. Finally, the day before a hearing on allegations that Texaco had destroyed documents, he told the company that it had twenty-four hours to settle. The result: a $176 million settlement, including $141 million in compensation for Texaco's black employees and $35 million to set up a company task force to curb further discrimination.
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