In the Shadow of Woburn

Schlichtmann says now, by way of explanation, “I was at war with myself.”

Even today, Claudia’s not completely sure why she came back. But pretty soon they were looking for another place, this time in Beverly. They found one with a beautiful view of the ocean, a secluded spot with the house built right on the cliff. The home itself was in disrepair, the yard overgrown with briars and poison sumac. But Schlichtmann had always viewed his home as a measure of his standing in the world. His condo in the 1980s, with its breathtaking views of Boston, showed his towering achievements. This home in Beverly would be no different.

As he cleared it of weeds one night, he had an epiphany: He saw the land as a metaphor for all it could teach him about himself. The bedrock on which he stood—this was among the remnants of the Ice Age, Schlichtmann thought. The land emerged transformed—literally starting over. Schlichtmann thought he, too, could start over. He could show the scars of his failures, but he could live a life that didn’t dwell on them. Better still, he could learn from them.

Viewed this way, Woburn wasn’t a defeat to be relived until he died. It was a lesson, and it could teach him until that day came. “Coming to this place absolutely saved my life,” Schlichtmann says.

This redemption benefited from fortuitous timing. Jonathan Harr’s A Civil Action came out in 1995, and became a bestseller. When the story was optioned, Disney paid Schlichtmann $250,000 for the right to portray him in the film. (After John Travolta accepted the role, Schlichtmann said, “John Travolta made more money playing me than I ever did playing me.”) The book was soon required reading in law schools across the country, and Schlichtmann began lecturing about the case. The fame, and the money accompanying it, allowed the Schlichtmanns to put a down payment on their Beverly home, now valued at $1.9 million.

But what the book really allowed Schlichtmann to do was put his epiphany into practice. At the center of civil law is the need to resolve differences. And yet the system seeks resolution through conflict: one side suing the other, saying everything the opposition claims is a lie. This does not engender goodwill, let alone resolution. Schlichtmann thought to have the sides meet before a lawsuit was filed. They could then understand each other’s differences, rather than simply try to undermine them. Without the threat of a lawsuit, Schlichtmann thought, the supposed parties would be more interested in resolution.

One of the first cases to test Schlichtmann’s theory was Toms River, which was Woburn writ large: a cancer cluster in a bucolic New Jersey town where, between 1979 and 1995, 90 children developed various forms of the disease, a rate that was 74 percent higher than in other towns its size. Many of the children died. The fault appeared to lie with the nearby dye manufacturing plant Ciba-Geigy. Or Union Carbide, which had dumped waste on the site. Or the local water company, which had mishandled the contaminated water.

Linda Gillick, whose son had cancer, organized the aching families. She’d read A Civil Action, and picked Schlichtmann and a firm from Philadelphia to represent the families.

Schlichtmann had to first convince his legal team and his clients of his plan. Mark Cuker, his co-counsel, knew the case would be tough. Woburn was now a precedent—notorious both for its failings and its pioneering spirit—and it had dealt with contaminants in parts per billion. Toms River was parts per trillion. Cuker called the Union Carbide attorney very early on, when Cuker’s firm began its own discovery of Toms River. “You better watch yourself,” the attorney said, “or you’ll end up like that guy from A Civil Action.” Cuker didn’t tell him that that guy was now his co-counsel.

But the words stuck with Cuker, and so he was willing to try Schlichtmann’s plan: mediation before litigation. The families weren’t as convinced. “I actually wanted my day in court,” Gillick says. Yet as Schlichtmann sat one evening with eight of the 69 families affected, Gillick scanned the room. Some of these people can’t afford to buy milk, she thought. They need the money now. She ultimately changed her position, and the families decided to follow Schlichtmann’s novel method for settlement.

It took four years—four years, and scientific experts with competing claims similar to those in Woburn. But this time they shared their expertise in conference rooms, over PowerPoint presentations. The process was not as adversarial. The lawyers weren’t looking to one-up each other. At the end, in 2002, the attorneys reached a nondisclosed settlement. All 69 families agreed to it. The judge approved it.

So, it took four years. But Woburn had taken nine. The difference was, after those four years, Schlichtmann’s clients were happy, and he was sane. Through its methods, the case pushed the limits of mediation just as much as Woburn had expanded the reach of environmental law. Schlichtmann was a pioneer once more. “Jan and I thought we might be nominated for the Nobel Peace Prize,” Cuker says, with a laugh.

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.”

Schlichtmann’s greatest obsession, by far, is the Cadle Company. Bill Crowley refers to it, with a snicker and a shake of the head, as “the Cadle Wars.”
It goes back to the time just after Woburn. The firm was still struggling. By 1990 it badly needed money to stay afloat. Over the course of six months it took out three loans with Boston Trade Bank, totaling $235,000. As collateral, the young lawyers offered a security interest in the firm’s assets, in particular the money they were to receive from a case that was about to settle, a polluted-water case in Groton. When the firm got its money, the bank would see its loans repaid.

Schlichtmann then went to Hawaii, returned, put in more time trying to settle the Groton case, and came to hold the majority of the Groton fee because of his work. Meanwhile, Boston Trade Bank went belly up. The debts from the firm were sold to a debt collection agency in Ohio, the Cadle Company.
In 1995 the Groton settlement, worth more than $800,000, went into effect. Schlichtmann received roughly $200,000. But he refused to pay Cadle: He didn’t think that a debt collection agency had the rights to a defunct bank’s interest in his assets. So Cadle sued.

That’s when things turned ugly. Cadle alleged that Schlichtmann had withheld $500,000 in earnings from his bankruptcy filing, meaning he’d committed fraud. The U.S. Trustee’s Office ultimately ruled that he had done nothing wrong, but he felt that the allegation was extortion—a feeling that even today fuels his undying rage.

The lawsuit went to trial in November 1999. Schlichtmann won. Cadle appealed and won, revealing itself to be just as obdurate an opponent as he was.

Schlichtmann fought back. In 2002, he found out that Cadle was selling large chunks of the debt it owned at a public auction in Tarrant County, Texas. A portion of that debt was Schlichtmann’s. So he flew to Fort Worth, and bought his own debt at a steep discount: $52,000.

Schlichtmann now owned the debt that Cadle was trying to get him to repay. Cadle no longer had grounds for a case. The Cadle Wars had gone on for 10 years, and Schlichtmann had won. But Schlichtmann wasn’t done with Cadle.

He had learned from a lawyer in Texas that Cadle hadn’t owned Schlichtmann’s debt outright, but had serviced it on behalf of another company. Schlichtmann filed new motions in Massachusetts alleging that Cadle had fraudulently represented itself in court. Those motions went nowhere. The fight with Cadle should have ended a second time. Once again, Schlichtmann did not stop.

Instead, he spurred the offices of the Massachusetts secretary of state, the Massachusetts Division of Banks, and the Massachusetts attorney general to investigate Cadle, according to a subsequent judge’s ruling. Schlichtmann also started a website, Truth About Cadle, where he slammed the company’s practices and talked often with the press about the firm’s bullying tactics.

Cadle sued Schlichtmann for defamation. “It’s like poking a tiger in the eye,” a person close to Cadle says. The suit goes to trial next year, 18 years after it started. But not even this defamation suit has stopped Schlichtmann’s feud with Cadle. Beginning in 2004 and ending last year, he filed three class-action lawsuits against the company, representing 18 debtors who had been treated similarly to him. In a February 2007 hearing for the class-action claim in Massachusetts Superior Court, Judge Ralph Gants made it clear that he was shocked at how far Schlichtmann had taken the matter. Near the end, Judge Gants said, according to a transcript of the hearing, “All right. Enough. You’ve lost your way, Mr. Schlichtmann. I think you need to step back and consider whether or not your judgment in this case is so—has been so affected by your personal vendetta with…Cadle that you have begun to exercise poor judgment.”

Two years later, the Cadle lawyers wonder the same thing. The class-action claim is settled. But Cadle’s lawyers now say the company doesn’t have to honor the “so-called” settlement, according to court documents. They say Schlichtmann violated the agreement the lawyers reached by appealing old claims on behalf of the debtors. Like Woburn before it, Cadle is a case in which Schlichtmann is just as interested in making his point as winning. And, as with Woburn, people who have observed Schlichtmann throughout the Cadle Wars believe his obsession hurts his clients. “He had the settlement,” one person close to Cadle says.

That’s the real lesson of Woburn: Jan Schlichtmann didn’t learn every lesson he should have. His zealotry remains unbound. He will fight for his clients, for their version of the truth—at times to the exclusion of their benefit, if you believe the detractors. He will fight to the exclusion of his benefit, too, of his sanity, if you believe his wife. He may take on more cases these days, and settle more, than he ever did as a young lawyer. He may be greedier or more altruistic than he ever was during Woburn. But Schlichtmann’s focus for each case remains just as narrow, and just as unending. That’s the one lesson he didn’t learn.

Schlichtmann is in a playful mood as he clicks through PDFs of the Turnpike Authority case on his computer. It’s six days after the hearing where he shrieked at the Turnpike’s attorney, and Schlichtmann’s glasses sit low on his nose, a schoolmaster about to impart another lesson.

“Ah, this is great,” he says. “They are so upset with this.” He smiles and shakes his head. Schlichtmann trolls through the minutiae of Turnpike Authority material until he finds what he wants, internal documents citing “a secret toll equity working group.” A May 2008 draft policy paper from the group states that because 72 percent of the agency’s roads are not tolled, drivers on I-90 are distinctly disadvantaged. Exactly what he needs: the Turnpike Authority’s own secret documents making his argument. This document and others like it were the reason he filed the suit this spring, Schlichtmann says, staring at his Mac.

Nevertheless, one week after this jubilant computer presentation, his case suffers a major setback. On that day, Judge Smith enters his ruling, denying Schlichtmann’s motion for injunctive relief. It is a blistering opinion. Smith says that road tolls are fees and not unconstitutional taxes, because the toll payers are choosing to take those roads. If they want to avoid the fees, they can take an alternate route. Smith then indicates how he’ll rule as the case proceeds, saying the plaintiffs’ argument, as presented, has a “relatively low chance of success.”

The next afternoon, Schlichtmann answers the phone in a foul mood. “This is not over, not at all,” he says. He plans to keep fighting, and already he’s begun. He stayed up all night writing an appeal.

A few weeks later, that appeal is denied. No matter. Jan Schlichtmann vows to fight on.