By Ralph Nader
February 14, 2018
I first heard about William M. Shernoff in the mid-nineteen seventies when he was pioneering a field of law known as insurance bad faith litigation. That ‘bad faith’ occurs is when insurance companies deny legitimate claims or try to use deceptive fine print clauses to escape policy coverage. He was starting to collect both compensation for his clients and large punitive damages when the evidence showed insurance companies were imposing these abuses on many thousands of their customers.
One day I called Attorney Shernoff and said that if he would match my $25,000 donation, we could start the National Insurance Consumer Organization (NICO) headed by the former Federal Insurance Commissioner, J. Robert Hunter, the pro-consumer actuary who served under both Presidents Ford and Carter.
NICO’s Bob Hunter thereafter became the single greatest advocate for consumers against the insurance giants that they have ever encountered. He knew their fraudulent complexities, translated those complexities into plain English, and brought his expertise and pleasing personality to legislatures, courtrooms, and agencies in all fifty states. During the mid-eighties he visited all the states in a little over one year, rebutting the savage industry attack on wrongfully injured persons’ right to have their day in court. The insurance lobbyists have never seen such a whirlwind for justice who defeated them time and time again.
Bill Shernoff was instrumental in putting Bob Hunter, a force of nature, in motion. But this low-key attorney from Claremont, California was just getting underway. He blazed the trail for rejected insurance consumers and became a feared private regulator of insurers denying claims by winning cases before judges and juries. He won multimillion dollar verdicts for a roofer whose disability payments were cut off, for a Samoan government involving hurricane damage, and for a paraplegic Marine whose insurance company rejected his physician on the medical necessity of his 109-day hospital stay. He secured a bad faith settlement on behalf of Northridge, California earthquake victims and even a $50 million settlement in 1981 for Southern California Physicians over a malpractice insurance policy that overcharged on premiums.
Not wanting to be a lone ranger, Shernoff went around the country conducting seminars training attorneys to bring insurance bad faith lawsuits. It became a movement of sort, filling in for the notoriously weak state regulation of insurance.
But, Shernoff was interested in more than representing specific aggrieved clients. He was an educational leader who furthered consumer education by writing, lecturing, and appearing in mass media. Besides co-authoring a legal textbook on his specialty, he wrote books like, How to Make Insurance Companies Pay Your Claim: And What to Do If They Don’t , Payment Refused, and Fight Back and Win: How to Get HMOs and Health Insurance to Pay Up.
One day he called me up and said he wanted to start a Consumer Law Clinic at his alma mater—the University of Wisconsin Law School. The Clinic is in its twenty-seventh year and has trained scores of students in consumer advocacy law. Its students represent real clients fighting unfair debt collection, repossession, home improvement fraud, credit fraud, and other unscrupulous business practices. There are also William Shernoff Health and Consumer Law Fellowships to work for health care reform.
This small law firm of Shernoff, Bidart, and Echeverria welcome their responsibilities as “officers of the court” as well as their broader duties to build institutions of justice that provide powerless people ever more access to justice. They are major contributors to Consumer Watchdog, a leading California advocacy association, and to Public Justice, a large public-interest, non-profit law firm. They are also major contributors to the American Museum of Tort Law, which as a volunteer, I established as an educational institution dedicated to informing the public about the law of wrongful injuries.
Whenever there are insurance industry-indentured legislators—state or federal— pressing for cruel laws to stifle wronged Americans from their day in court or before regulatory agencies, chances are this firm is there either in person or with donations to fight them or over-rule them with statewide referendums. One victory was Prop. 103 in California that regulated the property/casualty insurance companies thirty years ago, which saved California consumers over $100 billion since that voter revolt.
Of course, there are still many obstacles to the exercise of consumer rights and remedies, such as the Federal ERISA pension law’s massive preemption of tort claims. But if there were more firms doing what Shernoff’s firm does, millions of people would be receiving judicial or regulatory justice for their costly injuries or illnesses.
My best guess is that not more than 25 plaintiff personal injury firms are sharing, training and helping to build consumer protection institutions either in their state or nationally. However, proportionate to their relative size, few of them have packed the continual wallop of Shernoff’s law firm.
How does Shernoff, Bidart, and Echeverria do it? For starters, they have the right sensitive and generous values that are necessary for the work. Moreover, they recognize that they have to be both attorneys for clients and lawyers for the broader institutional advances of justice so that more people can use the laws meant for them.
How do they get underway? They make calls and above all return calls—a practice over ninety percent of their peers have not deigned to do when citizen groups want to initiate ways and means for a more just rule of law, as if people matter first.
Around the country plaintiff lawyers vary in their resolve to push back the corporate predators who want to repeal the American Revolution and its subsequent Bill of Rights for the people, especially the Constitution’s Seventh Amendment securing the right of trial by jury. For instance, the repeated failure of the major Texas trial lawyers to ward off the tort “deformers” contrasts with efforts by their counterparts in New York to hold the fort in Albany.
Years ago Dr. Sidney Wolfe of Public Citizen’s Health Research Group published the popular, widely used book, “Worst Pills, Best Pills.” All these drugs were licensed by the Food and Drug Administration, but some had bad side effects and others were much safer. Maybe it is time to have a list of the “Worst Lawyers, Best Lawyers.” All of these lawyers would be licensed to practice, but widely differ in their commitment to defend, preserve, and expand the civil justice system, under relentless attack by the corporate lobbies, that they and their forebears built.