Several legal experts, including one of Milberg’s own lawyers, said they expected other defendants to seek discovery orders like the one sought by an insurance company Milberg is suing. That tactic, if successful, could tie up the Milberg firm in so much litigation that it might have difficulty pursuing the hundreds of cases it has filed nationwide.
The insurer, American United Life Insurance, sought the financial disclosure order after a federal grand jury in California indicted Milberg Weiss in May, accusing it of paying $11 million to people to be plaintiffs in class-action suits.
The Milberg firm has denied the criminal charges.
American United Life wants to know if Milberg Weiss paid, or promised to pay, four plaintiffs who sued the insurer, accusing it of improperly selling tax-deferred annuities wrapped in retirement accounts that were themselves tax-deferred.
Burt Neuborne, a professor at New York University Law School who is representing Milberg Weiss, said it was common practice for law firms to pay lead plaintiffs in class actions for their time and trouble, but such payments should be disclosed.
The order, made public Thursday by Judge Kim Van Valer Shilts in Superior Court, would require the four plaintiffs to disclose their financial records since 1998 and then, in a second phase, require that Milberg Weiss disclose its financial records since 1998 unless the judge concluded that there was no reason to pursue the matter.
Under Indiana court rules the order by Judge Shilts cannot be appealed, but she may narrow the discovery order at a future hearing.
Lawyers for Milberg opposed the disclosure of all financial records as overly broad and intrusive. They also asked that any records be sealed, court papers show.
“We believe that discovery is unjustified under these circumstances,” said Marina Ein, a spokeswoman for the law firm. “There has been no allegation whatsoever of misconduct by the firm or its clients in this case.”