OTR Interviews

How a Big Corporate Boston Law Firm Got Special Treatment from Congress and a $214M Bailout

Is a patent overhaul bill a bailout for an influential law firm?

 

This is a rush transcript from "On the Record," September 15, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Is a big corporate law firm in Boston getting special treatment from Congress? And is the president going to sign off on that special treatment tomorrow?

Now, the politically connected firm, Wilmerhale, was hired to represent a drug manufacturer. Now, they were supposed to apply for a patent extension for one of the drug company's products, but they missed the deadline. That's called legal malpractice. The firm got sued by the client and the firm then agreed to pay $214 million for its malpractice unless it either won an appeal or if the firm could successfully use its political connections to get special treatment from your Congress.

And tomorrow, President Obama signs off on the special treatment for this politically connected law firm. Senator Jeff Sessions says this is not right. Here's Senator Sessions.

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Senator, nice to see you, sir.

SEN. JEFF SESSIONS, R-ALA.: Thank you.

VAN SUSTEREN: Well, I guess unless the American people really flood the White House switchboard between now and tomorrow, in your words, a well-connected law firm is going to get a big bailout.

SESSIONS: Well, I think that's correct. You know, throughout the legal system, every day people file lawsuits. And they file -- if they file them one day late, the average Joe is thrown out of court by some big law firm who knows the time limits on filing actions. And so when this firm and the big client that they represent missed their deadline, I just did not feel they needed a special act of Congress to, you know, protect them from their error.

VAN SUSTEREN: All right, let's talk about it. It's Wilmerhale, big Boston law firm, and they were on the hook for a $214 million malpractice claim unless Congress passed a particular amendment. It passed in the House. And then you tried to fight it here in the Senate, but you didn't make it.

SESSIONS: No. You know, it passed -- it didn't pass in the first vote in the House. They had a second vote and it failed by one vote. And then it passed by just a few votes. Then it came here.

I had been blocking it for 10 years. This has been going on for 10 years. Lobbyists all over town have been engaged in working for this special interest. And to me, Greta -- you're a lawyer, and you know the legal system must be objective and fair. And the oath a judge take -- the judges take is to do equal justice to the poor and the rich.

And I do believe that this was a circumstance that should have been decided in the courts as to whether or not they missed the statute of limitations. And the United States Congress should not have been involved in giving a special alteration of the statute of limitations for a special interest.

VAN SUSTEREN: All right, now, it's part of a big statute, the patent -- the new patent law that the president's going to sign tomorrow. And as I understand it, is that it was sort of slipped in, that this little hanky- panky in terms of -- that's my word -- of how the amendment got slipped in in the House. How did that happen?

SESSIONS: I don't know what happened in the House exactly. The first vote, it failed by one vote. Amendment was brought up. The bill that was...

VAN SUSTEREN: Same day?

SESSIONS: Same day. It was brought out of committee without this language in it. Chairman Smith did not support this language. They got a second vote through some mechanism, and it passed by a few votes the second time. It came here with that language in it, and I moved to take the language out. We had a lot of supporters, but it wasn't enough. People said, Well, if we don't pass it, the bill would have to be revoted in the House. But it would have passed the House again. There was no problem with that, in my opinion. But that became the basis for some people not to support the legislation -- the amendment.

VAN SUSTEREN: Well, you know, a lot of Americans are unhappy with these special deals and these earmarks. And they see a well-connected firm get this, they're even more offended. And the firm would have been on the hook, as I noted, for $214 million. But the other side of the issue is, is that had this not happened, the -- if the Congress weren't giving protection to the law firm, giving the bailout, in your terms, is that there would be almost $500 million to a billion dollars that the drug company would have lost, which would have been savings to the consumer.

SESSIONS: The consumer would probably have gotten less expensive drugs. And the Commerce Department under President Bush explicitly opposed the legislation. They wrote a letter to us explaining those kind of costs, and I guess the basic principle of the statute of limitations.

To me, as a lawyer, that's just basic. You miss the statute of limitations, you're out. And an argument was made that this is unfair. There's a special mechanism in the Congress to deal with these special unfairnesses, that if they exist, but you can't do that if the matter is still in litigation. This matter was still in litigation when Congress passed a special act.

VAN SUSTEREN: Well, it's interesting because you have "Mother Jones" and Ralph Nader who agree with you, no special bailout for a rich connected law firm. Do you think President Obama is aware of the fact that when he signs that tomorrow, this law firm is basically off the hook for their mistake that, frankly, nobody else gets that special deal?

SESSIONS: Well, I think it's an opportunity for him to think through this matter and maybe take a strong action because the patent bill will pass again. It has strong support. I supported the underlying patent bill and do support it. So I think it would -- it'd be a strong thing. It'd be a good opportunity for him to be counted on an important issue of principle.

VAN SUSTEREN: So the big winners are the drug company -- the drug company, the law firm, the lawyers and lobbyists who pushed for it.

SESSIONS: And the insurance companies...

VAN SUSTEREN: And the insurance companies.

SESSIONS: ... that insured the law firm. I mean, law firms have insurance for their errors and omissions. And so all of those probably were the ones that would have shared the loss. It wouldn't have fallen on probably any one of them totally. We don't know. But whatever. You know, to whom much is given, much is required. This is a great law firm, no doubt. I hear good things about them. But that's not the question. The question is, should they...

VAN SUSTEREN: It's not fair!

SESSIONS: ... be given special...

VAN SUSTEREN: It's not fair! Right? I mean, (INAUDIBLE) fundamentally, it's not fair?

SESSIONS: I agree with that. That's my feeling.

VAN SUSTEREN: All right, lobbyists -- any big name lobbyists manage to maneuver this through?

SESSIONS: I think every lobbyist I know in the last 10 years has come by at one time or another. That's perhaps an -- that is an exaggeration, but we did have a lot of people work this issue hard. And they made a lot of good arguments. But when you come to the bottom line of it, the matter was in litigation. They had an opportunity to defend themselves if they were right. And it's just up to the -- I just think it would be up to the courts first to decide the matter. And then if they want a special bill, a relief act, let them bring it under the right procedures.

But it was tacked onto a bill that most people wanted to see pass, the patent bill. There's a lot of support for the patent bill. And by getting it on that bill, it was the train that carried this amendment.

VAN SUSTEREN: Disgraceful?

SESSIONS: I think it was very wrong.

VAN SUSTEREN: Thank you, Senator.

SESSIONS: Thank you.

(END VIDEOTAPE)