Cut from the same cloth: the men behind the millions

The SE Texas Record Oct. 15, 2008, 9:12am


BEAUMONT, Texas – Pictures of Southeast Texas attorney Walter Umphrey's 70th birthday party bear closer resemblance to paparazzi shots at a Hollywood extravaganza than a celebration of an accomplished law partner.

Umphrey pushed aside his private airplane to use its enormous hangar to host the extravaganza in 2006. He and his wife greeted friends and associates as rock legend Jerry Lee Lewis performed. A Marilyn Monroe look-a-like helped Umphrey blow out the candles on the large and ornate birthday cake.

The lavish celebration strikes a contrast to the ceremony on Oct. 2 honoring Orange, Texas, attorney Ward Stephenson, who won both the first asbestos case and the landmark case that paved the way for Umphrey's staggering success. Lamar University and the Beaumont Foundation of America hosted the event that endowed a $100,000 university scholarship in Stephenson's name.

Stephenson is best known for filing the first asbestos lawsuit back in 1965. The case, in which Stephenson sought damages for a single plaintiff, Claude Tomplait, who suffered from mesothelioma, dragged on for seven years. After losing on appeal, Stephenson eventually won his client $37,500 in damages. Stephenson's fee of $30,000 failed to cover his expenses.

Stephenson could not have anticipated what he had begun. His second landmark asbestos-related case gave rise to four decades of asbestos litigation that in many ways seem incongruous with Stephenson's legal intent.

Critics say asbestos litigation has become a depersonalized business machine in which hundreds of thousands of plaintiffs, many with virtually no proof of actual harm, are consolidated into monolithic class-action lawsuits that have earned billions in settlements. The vast sum of cases has been characterized by the U.S. Supreme Court as an "elephantine mass" badly in need of reform.

Stephenson's meager but determined legal victory now seems completely foreign to the "scandal" Cordoza Law School Professor Lester Brickman described in his foremost legal article on asbestos litigation.

"When the complete and unexpurgated history of asbestos litigation is finally written," Brickman wrote, "that litigation will surely come to be considered for entry into the pantheon of … great American scandals."

But, the masterminds behind the legal quagmire are not cartoon characters. Many are instead, men much like Stephenson, full of Texas scrappiness.

As William Tucker wrote in a 2003 Weekly Standard story, "Trial lawyers are self-made men (and they are nearly all men). With eerie predictability, they rise from humble beginnings and blue-collar background in the central portions of the country."

Tucker describes these lawyers as social conservatives who are generally disdainful of Ivy League and East Coast pedigree. They often have Texas-sized chips on their shoulders, even as they have built law firms with an entrepreneurial flair and business-acumen unmatched in legal history.

Just like Stephenson, many of the most successful plaintiff lawyers grew up in Southeast Texas, never left and today have their names on buildings, state parks and endowed scholarships.

Unlike Stephenson, the lawyers that followed him saw a level of financial success few thought possible before them. Of the 16 highest grossing plaintiff firms in America in 2003, several are based in Texas, including the Southeast Texas firms of Reaud, Morgan and Quinn and Provost & Umphrey, the Houston-based firm of O'Quinn, Laminack & Pirtle and the Dallas-based firm of Baron & Budd. Each firm had to gross more than $50 million annually to make the list.


Stephenson was unusual from many of today's most successful Texas trial lawyers in that he was a lawyer's son. His father, K.W. Stephenson was a trial lawyer who encouraged his son to go to the law library and find answers to his legal questions, according to press release announcing the endowment given in Stephenson's name.

Stephenson was the original trendsetter in this group. His last significant case, Borel v. Fireboard, set the legal precedence upon which all other asbestos cases were built on.

The Fifth U.S. Circuit Court of Appeals ruled unanimously in favor of Stephenson, "effectively demolishing the moat and castle walls that historically protected the asbestos industry," wrote investigative reporter John Wylie.

The case set the stage for more companies being liable for asbestos problems, according to Wylie, by removing the barrier of the statue of limitations and refusing to remove all liability -- even if the plaintiff bore some responsibility for his illness.

Jeffery White, senior counsel for the American Association of Justice, wrote in a 2000 article for Trial magazine the Borel v. Fireboard case was one of the 10 most significant legal decisions of the millennium.

Stephenson was dying of bone cancer when he argued the case in 1971. Though he won, the significance of the victory wasn't realized until it was upheld by the District Court in 1973. Stephenson, who died four days before the court formally announced the decision, was told of the outcome by a federal clerk who knew of his grave condition.

"Ward was a superb trial lawyer and I learned quite a bit from him," Jack Smith, a former partner in Stephenson's firm said at the Lamar University scholarship ceremony. "He was very innovative, very creative and wasn't afraid to try something new. He was ahead of his time."

This description aptly explains the success of many other Texas trial lawyers. Houston billionaire John O'Quinn pioneered breast implant litigation. But, O'Quinn nearly followed in the footsteps of his father when he was trained as a GM Mister Goodwrench mechanic before heading off to law school, according to published reports.

This spirit of innovation led these men to build their firms much like the success of the billion-dollar corporations they so often sued. It was a completely new approach, according to Wayne Reaud, founding partner of Reaud, Morgan and Quinn.

"We're the first generation to approach the law from an entrepreneurial perspective," Reaud said in 2003 interview. "It used to be that a lawyer would win one big case and then buy a hundred acres in West Texas and watch his cows grow. We were the first to put our winnings back into the next case. That made it possible to do a lot of things that hadn't been done before."

Like O'Quinn, Reaud is also a self-made billionaire. His father was a pipe fitter.

When Forbes magazine listed its top earners in 2001, it noted that trial lawyers had begun to regularly decorate the list.

"Cigarette money alone put these lawyers on the top-earning list – and it's likely to keep them there for the next 25 years," the article stated. "They're using the booty to sue HMOs, chemical companies, Firestone and even to run for office."

Reaud, who joined forces with Umphrey and O'Quinn to pool resources in major class actions in tobacco litigation, said the plaintiff attorneys had to risk everything to bring victory.

"The tobacco companies had never lost a case," Reaud said, "partly because they were experts as making plaintiffs spend all their money."

The victory was worth it, Tucker wrote. "The 80-odd law firms that won the 1998 settlement divided fees of $20 billion – money that is now available for new pursuits."

But not all plaintiff attorneys agree with the new trends established by these wildly successful Texas lawyers. Kansas-based plaintiff attorney William Skepnek joined the asbestos wars when he agreed to become the attorney for Raymark Industries, a company bankrupted by asbestos settlements. He discovered there were defense attorneys willing to settle cases, but still earning millions in fees, while plaintiff attorneys made their billions.

Skepnek said this way of providing legal counsel, while lucrative did not serve either the actual plaintiffs or defendants very well.

"It's a matter of ethics," he said in a recent interview. "If the lawyer is just a businessman looking at the bottom line then it doesn't make any difference to him."

Skepnek victories against the likes of Fred Baron, Umphrey and Reaud cost him dearly. He was soon the subject of numerous lawsuits, causing him to spend more than $100,000 personally to defend himself.

"Baron (and other plaintiff lawyers) recognized the threat," tort-reform expert Theodore Frank said of Skepnek's efforts, "(they) went after him, and did their damnedest to destroy him, which certainly sent a message to other attorneys that trying to contest on fraud would be hazardous to their careers."

The entrepreneurial lawyers used their wealth and influence to fight Skepnek, just as they had once seen large corporations do the same to them.

"I was involved for a brief time, stirred things up and they went after me," Skepnek said.

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