By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
In August 1998, the Dallas Observer published a lengthy story in which a former attorney and three former paralegals gave similar accounts to the one Treuter gives now. The paper published documents suggesting improper witness-coaching was not an isolated incident at Dallas' largest plaintiff's firm and that lawyers there also were involved in implanting memories and inventing testimony. Training-session notes taken by one lawyer, for example, read, "Warn [plaintiff] not to say you were around it--even if you were--after you knew it was dangerous."
Soon afterward, though, the matter seemed to die. Foes dropped away. Lawsuits withered. Criminal investigations begun by the county and the feds went nowhere.
Baron declared himself vindicated and moved into his new, 15,000-square-foot Preston Hollow estate. Last year, he assumed the presidency of the Association of Trial Lawyers of America and moved to Washington, D.C., where he'll try to influence policy on issues such as HMO and asbestos lawsuits and tort reform.
So how did Baron & Budd escape this embarrassing glimpse at the internal workings of the firm so cleanly? Why did several large corporations, judges, prosecutors and others let the matter drop?
While legal issues such as witness coaching are hardly clear-cut, critics wonder whether Baron & Budd's perfectly legal campaign contributions might have played a role in getting it off the hook.
Former U.S. Attorney Paul Coggins told the Observer recently he recused himself from participating in his office's investigation of the memo because of a conflict of interest posed by the firm's political contributions to his wife, Regina Montoya Coggins, in her run last year for Congress. He said contributions to his wife from the national trial lawyers group, where Baron earlier served as vice president, also drove his decision to remove himself from making decisions in the case.
Baron's critics question how vigorously Coggins' troops pursued Baron & Budd without support from the top, and whether Baron's massive fund raising for the Democrats, which stepped up in early 1998, might have influenced Coggins' superiors in Washington as well. "In my humble opinion," says one lawyer who provided information to the FBI, "that investigation was a joke."
In the past four years, Baron's firm gave $584,000 in soft money to the Democrats, according to the nonpartisan Center for Responsive Government, not counting several $10,000 donations to President Clinton's legal defense fund. Before the last two elections, Baron and his wife, Lisa Blue, hosted two $25,000-a-couple fund-raisers with Clinton at the couple's houses in Dallas and Aspen.
Concerns about influence, though, are speculative. Acting U.S. Attorney Richard Stephens, who Coggins said was in charge of the investigation, declined to comment on the case, which another knowledgeable source says has been closed.
More tangible reasons the matter died can be found in the firm's hard-nosed legal tactics, the zeal it took in punishing those who took the firm on, and the message sent to anyone who might do the same.
"I've never seen anything like them in my 17 years of practice," says Elizabeth Pfifer, one of three defense lawyers who challenged the firm over the memo. "Everyone understood that if we took them on, they would go after our clients."
She said she just didn't realize how effective Baron's firm could be or that the lawyers themselves would be made to pay.
To a degree many say puts Baron & Budd in its own league, the firm went after those who took issue with the memo. Targets included Bill Skepnek, a lawyer who tried to get the firm booted from representing asbestos clients in Dallas, and state District Judge John Marshall, who called the firm's coaching tactics "an affront to the integrity of the judicial system." He is the one who referred the script memo to criminal authorities.
When one side of a legal dispute gets slammed because the other has cultivated a friendly climate in its hometown, the lawyers have a name for it: homefrying. Baron's detractors say he and his firm are as adept as anyone at turning up the heat in Dallas, and it has served him well as he has defended himself in the memo flap.
For the last two years, G-1 Holdings Inc. (formerly GAF Corp.), a company in Wayne, New Jersey, that owns the stock of the nation's largest maker of roof shingles, has been sniffing around Dallas, trying to talk to former Baron & Budd lawyers and paralegals about the way the firm prepares its clients.
It hasn't had an easy time. In 1999 and again earlier this year, Baron & Budd caught wind of G-1's attempts and persuaded Dallas judges to order the company's investigations shut down.
The company, which earlier this year filed for Chapter 11 bankruptcy protection, citing a number of new asbestos claims, sued Baron & Budd and two other firms in January, accusing them of racketeering for bringing an avalanche of meritless asbestos claims. The suit, which included numerous references to the coaching memo, accused the firms of using a highly systemized method of recruiting and coaching plaintiffs and flooding the courts with hundreds of thousands of asbestos claims.
"Having largely exhausted the supply of plaintiffs who actually became sick as the result of prolonged exposure to asbestos," the suits allege, the firms "increasingly solicited non-sick claimants who can allege, merely, that they were exposed to asbestos at some point in time." As a result, 25 once-profitable companies have been driven into bankruptcy, despite paying tens of billions of dollars to settle 300,000 cases to date.