In the Shadow of Woburn

By Paul Kix | Boston Magazine |

This is Schlichtmann’s way now, settling outside the purview of the legal system. In fact, he’s been to trial only once since Woburn. Eric Green, one of the forefathers of mediation and a principal at Boston-based Resolutions LLC, calls Schlichtmann a "visionary" and says the cases he mediates have influenced other environmental lawyers to settle complex matters accordingly.

"Through Woburn," Schlichtmann says, "I found a fundamental thing about the system that I never truly appreciated: that it is very destructive." Then in a softer voice, he says, drawing out the words, "And there’s nothing. Fucking. Good about that."

Of course, it’s worth noting that Schlichtmann’s evangelism for settling cases quickly grew in its fervor at the same time that he needed money. According to public records, until 2003 he had numerous liens against him: property tax, state and federal income taxes. It’s been a long climb out of debt for Schlichtmann. What many lawyers in Boston don’t like about Schlichtmann is that his reputation as a public crusader for a better legal system masks a pursuit of hard cash.

For them, no case better demonstrates this than Poland Spring.

Around 2002, Schlichtmann heard that Poland Spring bottlers in Maine were not, in fact, gathering their water from springs. So he investigated. The water appeared to be coming primarily from ponds. So how to punish Poland Spring and its parent company, Nestlé? Sue them on behalf of Poland Spring’s competitors. Schlichtmann enlisted Tom Sobol, a Cambridge-based lawyer of the national law firm Hagens Berman Sobol Shapiro, which had won big cigarette cases, and Garve Ivey, a renowned class-action lawyer in Alabama. Both attorneys were friends of Schlichtmann’s. Sobol threw a bash for Schlichtmann’s 50th birthday.

Four competitors of Poland Spring agreed to sue the company. Schlichtmann and his team handled the proceedings his way: mediate-before-litigate, little court involvement.

While all this was going on, Schlichtmann enlisted a friend, Lori Ehrlich, to serve as a "punitive class member"—in essence, a person who would act as an assumed lead plaintiff if Schlichtmann filed a class-action lawsuit on behalf of consumers. Ehrlich’s role would be to serve as a bludgeon, threatening Nestlé with a class-action claim on behalf of everyone who drinks Poland Spring. So Schlichtmann had one suit on behalf of Poland Spring’s competitors, and the potential for another on behalf of Poland Spring’s consumers.

Max Stern, respected Boston practitioner, became the lawyer for the Poland Spring consumers. But he found Schlichtmann’s actions suspicious. Schlichtmann seemed to be using the consumers only as leverage to get Nestlé to settle quickly with the competitors. If Nestlé settled with the competitors for $20 million, the consumer class-action would effectively go away. That’s the way Schlichtmann was negotiating with Nestlé. His cut for the competitors’ settlement would be $9 million, or 45 percent, well more than the industry standard of 33 percent.

What Schlichtmann did was "fraudulent and dishonest," Stern later said in a deposition filed in court. So he, Sobol, and Ivey opened consumer class-action lawsuits before the competitor suit was settled. Nestlé promptly left the negotiating table. Schlichtmann sued the other attorneys for the $9 million he should have received. Sobol sued Schlichtmann for trying to reach a settlement with the competitors at the expense of the consumers. The case has had endless iterations—the competitors won a settlement in another court; Schlichtmann dropped Stern’s name from his suit—but continues today. Neither Sobol, Ivey, nor Stern would discuss the Poland Spring case with Boston. But Stern’s lawyer, J. Owen Todd, says of Schlichtmann: "If you’ve got clients and you’re going to favor one client over another—that’s a conflict. You can’t do that."

Schlichtmann says if he’s unethical, his former co-counselors are worse. They’re the ones who wanted to bring a class-action consumer suit because it could have drawn a bigger settlement—and a larger attorney fee.

If greed drove Schlichtmann in the Poland Spring case, it didn’t at all in the Danvers case, when a 2006 chemical leak caused an explosion that harmed 33 families in the town. Schlichtmann was upset that, because of insurance policies, he couldn’t get the victims more than $1.5 million total. So he took only 25 percent in attorney fees, less than he was contractually guaranteed to receive.

Moreover, three other law firms had been to Danvers before Schlichtmann took the case. They walked away because "there wasn’t any money in it," says Susan Tropeano, one of the Danvers victims. That Schlichtmann got the families anything doesn’t really reflect his conscience or immorality, his greed or his charity. It shows that, above all, he is haunted by the cases he accepts, to the point of mania. "He’s completely single-minded," former partner Kevin Conway says. "And he’s unlike any other attorney I’ve ever met for that reason."

He still pulls all-nighters. If the motion is important enough and the case big enough, he’ll even go 48 hours without sleep. Claudia Schlichtmann will look out the window in the middle of the night and see the lights in the home office burning. Sometimes she’ll call over there. You’re 58 years old, you know. You have three children. You can’t do this like you’re a kid. And he’ll say, Yeah, yeah. I’m almost done. She has worked hard to reform him. She knows she’s made a difference. "But then there are times," she says, "when I know there’s nothing I can say. He just has to go through it. It is an obsession. And sometimes obsessions—you have to see them to the end."