Three years ago, West Palm Beach, Fla., plaintiffs attorney Jack Scarola was coming off a big civil fraud suit against Prudential Insurance in which three of his clients had received only $66,106 in damages and nine others had received nothing. At the time, a dejected Scarola described the verdict as “the highest-profile defeat I’ve sustained.”
But last week, Scarola more than recovered, with an $850 million punitive damages verdict in financier Ronald O. Perelman’s civil fraud suit against New York-based Morgan Stanley, the world’s largest securities firm. A few days earlier, Scarola had won a $604.3 million compensatory damages verdict in the case.
When he heard the news, David C. Prather, the president of the Palm Beach County Trial Lawyers Association, called Scarola right away.
“‘You’re back on top,'” Prather said he told Scarola. “‘You’re the man.'”
Two days after the giant punitive damages verdict, Scarola was sitting at an open-air restaurant table near his waterfront office building as the sun glinted off his white BMW convertible in the parking lot. At 57, the father of five and the grandfather of seven, his win in the huge case has left Jack Scarola at high tide.
He admits that he was nervous during the case, given its national profile, considerable stakes and the fact that everyone expected him to win following Palm Beach Circuit Judge Elizabeth T. Maass’ key pretrial ruling against Morgan Stanley.
“I would rather win the case that nobody thinks I can win than lose the case that everybody is certain I’ll win,” Scarola said over coffee and an English muffin.
Most observers familiar with the case expect a settlement rather than a full-blown appellate battle, which likely would center on Maass’ controversial pretrial ruling. But the size of the total award, $1.45 billion — one of the largest damage awards in U.S. history in something other than a class action — is bound to prolong any settlement discussions.
Scarola declined to discuss settlement negotiations. The likelihood is that any settlement will be worked out either directly between Perelman’s organization in New York and Morgan Stanley, or that it will be handled by Scarola’s co-counsel in the Perelman case, Chicago’s Jenner & Block.
It was Jenner & Block attorneys who drafted the detailed complaint in the case. Scarola was the legal team’s courtroom gunslinger.
Morgan Stanley’s main counsel, Washington, D.C.-based Kellogg Huber Hansen Todd Evans & Figel, declined to comment for this article. Joseph Ianello, a shareholder at Carlton Fields in West Palm Beach who served as local counsel for Morgan Stanley, was not available for comment.