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If you ever called an 800 number advertised on late night television to pursue a possible product liability claim, this might be where that call leads you.
The ugly underbelly of the business of law is exposed in a recently filed lawsuit by a former employee who says he wasn't paid for his work obtaining millions in litigation financing. The lawsuit reveals the quest to aggregate clients who become no more than "commodities," including transvaginal mesh claims filed by thousands of women.
In the lawsuit, filed by 30-year-old Amir Shenaq in Harris County District Court, Texas.
The former financier claims Houston high-volume law firm, AkinMears, owes him more than $4.2 million in commissions for securing funding for the firm. Shenaq says he raised $100 million from a hedge fund that provides dollars to purchase thousands of claims from other law firms.
The lawsuits are then bundled and traded among attorneys like home mortgages, reports Bloomberg here.
The complaint, (Case No. 2015-57942), which was sealed, reinforces the idea that all of these cases are just bargaining chips to be run down an assembly line.
“AkinMears is not run like a traditional plaintiff’s law office, and the Firm’s lawyers do not do the types of things that regular trial lawyers do,” like meet clients, file pleadings and motions, attend depositions “or, heaven forbid, try a lawsuit,” Shenaq claims in his suit. "The firm charges 40% for its services which do not include the mundane chores of actually practicing law," the suit claims.
After lowering the interest on monies borrowed by the firm from 24% to 16% interest, Mr. Akin bought a fifth interest in a Phenom 300 corporate jet for $1.5 million, according to the Forbes story here.
The firm, AkinMears, run by Truett Akin IV and Michelle Mears, uses television and Internet ads to recruit clients who they sign to litigation.
Mr. Shenaq calls the firm a “glorified claims processing center,” because it spent thousands on television ads to run up the numbers of potential clients. Others clients have taken Lipitor, have hip implants or the asbestos exposure disease, mesothelioma.
Shenaq was also reportedly negotiating arrangements with a Dallas lawyer affiliated with four firms calling themselves Alpha Law. Dallas lawyer, Mazin Sbati, was affiliated with the group which had close to 14,000 transvaginal mesh cases.
AkinMears reportedly purchased the cases for $45 million along with another 160 mesh cases. The cases cost about $3,000 each but yielded attorneys’ fees of $15,000. Bloomberg reports it’s not clear where these cases stand or which Defendant mesh makers they name.
The firm hoped to gain anywhere from $130 million to $200 million in profit from the transvaginal mesh lawsuits.
AkinMears initially wanted the complaint sealed because it revealed the business model:
“Borrow as much money as possible; (ii) buy as many television ads and/or faceless clients as possible; (iii) wait on real lawyers somewhere to establish liability against somebody for something; (iv) use those faceless clients to borrow even more money or buy even more cases; (v) hire attorneys to settle the cases for whatever they can get; (vi) take a plump 40% of the settlement from the thousands and thousands of people its lawyers never met or had any interest in meeting; and (vii) lather, rinse, and repeat.”
When it came time to pay commissions, Shenaq was fired. “Akin and Mears didn’t pay Shenaq for one reason and one reason only, he says: "They didn’t pay him because they didn’t feel like it.”
The Alpha group is said to be behind much of the lawyer advertising that has diluted the pool of valid transvaginal mesh cases adding many who just have a mesh in place.
AkinMears says it has clients involved in power morcellator, testosterone, Xarelto, Mirena, and Risperdal cases, among others. #
Here is the lawsuit, Shenaq v. Akin, petition has been temporarily sealed in October. Case No. 2015-57942
NYT, October 22, 2015, Should You Be Allowed to Invest in a Lawsuit?
http://www.nytimes.com/2015/10/25/magazine/should-you-be-allowed-to-invest-in-a-lawsuit.html?_r=1
Litigation and Trial Blog, Maxwell Kennerly
http://www.litigationandtrial.com/2015/11/articles/product-liability-2/lucrative-mass-torts-scam/
