“Any lawyer who tells you he’s never lost a case hasn’t really tried that many cases.”
Posted Mar 1, 2009 11:40 PM CST
By Mark Curriden
Bernie Nussbaum remembers the conversation as if it were yesterday. Thirty-five years ago, the U.S. House Judiciary Committee hired the New York City trial lawyer to lead its effort to impeach President Richard Nixon.
Nussbaum was driving his team of young lawyers to their apartments in his Oldsmobile Toronado, when one mentioned her boyfriend from Yale Law was visiting the next day. “What is his law firm?” Nussbaum inquired.
“No law firm,” the lawyer responded. “He’s moving back to Arkansas to run for state attorney general.”
“That’s crazy,” Nussbaum responded. “He should get a good job with a New York law firm.”
“Well, he’s thinking about running for governor,” she continued, “because one day he’s going to be president of the United States.”
Nussbaum immediately stopped the car.
“I started yelling at her, and I mean literally screaming, ‘That is stupid. That is absolutely crazy. That is not going to happen.’ ”
The junior staffer was Hillary Rodham and her boyfriend, of course, was Bill Clinton. The Clintons obviously didn’t hold a grudge against Nussbaum, as President Clinton named him White House counsel in 1993. And displayed prominently in his 31st-floor Midtown Manhattan office is a 1974 photo of him with young Rodham—a photo taken within a few days of his outburst.
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image from the Watergate
Photo courtesy of Bernie Nussbaum.
Still, Nussbaum, who is 72, starts many conversations about himself by deflecting attention to his senior partner Herb Wachtell.
“I joined Wachtell Lipton when I was 28 and Herb Wachtell and Marty Lipton were 33,” he says. “They seemed so old to me back then. Hell, they still seem old to me. Compared to them, I’m still a junior partner.
“Really, we’re still just a small, quiet law firm,” he continues, far too modestly. “We do a will here, an estate there. Nothing too big.”
Nothing too big includes the multibillion-dollar jury verdict Nussbaum won in 2004 in the historic World Trade Center insurance case. Or the $4 billion trial he won in Delaware for his client, IBP Inc., in 2001. Or the billion-dollar case he won in 1997 in Nevada for Hilton Hotels.
Nussbaum has two trials scheduled for 2009. He represents Philip Morris Tobacco Co. in a lawsuit against the state attorneys general that aims to scale back billions of dollars in payments the states claim the company owes from the 1998 settlement. And he represents longtime New York Chief Judge Judith Kaye and the state judiciary in a constitutional battle against the New York governor and legislature seeking to increase judicial pay.
“I had dozens of highly successful lawyers offer to represent us,” says Kaye, who retired Jan. 1. “But I called Bernie for two reasons: He’s the best trial lawyer I know, and I needed someone who would provide me with independent advice and judgment.”
Kaye and Nussbaum have a history. They met more than 50 years ago, when the two were editors of their college newspapers—Kaye at the Barnard Bulletin and Nussbaum at the Columbia Spectator.
Nussbaum filed the judicial pay lawsuit in 2008, claiming that the executive and legislative branches of state government have unconstitutionally deprived New York judges of the pay they need and deserve.
“What we are doing to our judges is horrendous,” says Nussbaum, coming out of his chair, waving his arms. “First-year associates at many New York firms make $160,000, while New York judges make $136,000.
In 1909, New York paid its judges $17,000 a year, which is equal to $406,000 today. In 1936, we paid judges $25,000, which is $390,000 today. Back then, we paid judges on par with what partners made.
“Now, we have judges resigning every month because they need to go back to the law practice in order to pay for their kids to go to college,” he says. “The inevitable consequence is that we diminish the quality of the bench, which diminishes the quality of justice.”
Kaye says Nussbaum’s brief summarizing the legal arguments in the case is “the best legal writing I have ever seen.” She describes him as a “fast thinker and an even faster talker.”
He’s also capable of overcoming his modesty. As the allotted time for an interview lapses, Nussbaum tells his assistant to move back his next appointment. “We’re discussing my favorite subject,” he says. “Me.”
FROM THE LOWER EAST SIDE TO MORNINGSIDE DRIVE
Bernard W. Nussbaum was born in 1937. His parents were Polish immigrants who moved to the Lower East Side of Manhattan. His father was a garment worker who spoke more Yiddish than English. Nussbaum went to college at Columbia University, where he decided to become a journalist.
“I had every intent to live a life as a person of disrepute, as a journalist, but my parents would have none of it,” he says.
Harvard Law School was next, followed by a year checking out the world via the Frederick Sheldon Traveling Fellowship, a prize awarded to top graduates to allow them to experience foreign travel.
Mention of the Sheldon Fellowship triggers Nussbaum’s recollection of a discussion he had with U.S. Supreme Court Justice Antonin Scalia at a party a few years ago:
“Do you know who followed you as editor of the Harvard Law Review?” Nussbaum asked.
“You did,” Scalia replied.
“Do you know who followed you with the Sheldon Fellowship?” Nussbaum inquired.
“Why, I think you did, Bernie,” Scalia replied.
“So, when are you going to step down from the Supreme Court thing?”
“Oh, no,” Scalia responded. “I may be here for a while.”
Nussbaum received job offers from several top law firms, but chose to work for the legendary Robert Morgenthau as a prosecutor in the Manhattan U.S. attorney’s office. From 1962 to 1966, Nussbaum tried dozens of major cases involving a range of matters—from drugs, financial fraud and embezzlement to political corruption and bribery.
“If you really want to be a trial lawyer, I strongly encourage you to spend a few years as a prosecutor,” he says. “The experience you get from trying major, complex criminal cases at age 25 is something you can never get from a big law firm—or probably from any law firm.”
In 1966, Nussbaum received a phone call from a high school classmate, George Kern, who was starting a new law firm with six lawyers, including a couple guys named Wachtell and Lipton.
There was absolutely no thought back then that the firm would emerge as the most prominent and financially successful corporate legal practice in New York.
Nussbaum was gaining status as a New York litigator, but leading the House impeachment case against Nixon catapulted him to the ranks of the elite. And his reputation continued to grow.
Nussbaum says good settlements hinge on the opponent realizing that you are not afraid to take the case to trial, as well as your own client recognizing the risks that come with a trial.
For example, in March 1992 Nussbaum was hired by Kaye, Scholer, Fierman, Hays & Handler after federal charges were brought against the prominent Manhattan law firm for its role in advising Charles Keating and Lincoln Savings & Loan. The government sought $275 million in penalties and moved to freeze the firm’s assets—an action Nussbaum contends would have put it out of business.
The $41 million settlement he reached with the Office of Thrift Supervision saved the firm from having to close its doors. But he says it wasn’t easy seeing his client have to fork over that much money.
“Any lawyer who tells you he’s never lost a case hasn’t really tried that many cases,” he says.
In 1993, Nussbaum crossed paths with the Clintons again, when the president asked him to be his first White House counsel. His tenure as the president’s top lawyer saw many highs and lows.
A STORMY STINT IN THE CLINTON WHITE HOUSE
Nussbaum was blamed for the Zoe Baird and Kimba Wood fiascos (two attorney general candidates who had hired workers with immigration issues), even though he had little to do with their selection. And he received very little credit for the appointments of Attorney General Janet Reno and Supreme Court Justice Ruth Bader Ginsburg, though he was directly involved in picking and vetting both.
The national news media constantly cited “White House sources” criticizing Nussbaum for being too confrontational. “He’s a litigator in a corporate counsel’s job,” the Washington Post opined.
Nussbaum took the most heat when news broke that he advised President Clinton against appointing an independent counsel to investigate Whitewater.
“I argued with the president vigorously,” recalls Nussbaum. “I told him, ‘If you do this, this is an evil institution that will be investigating you and your family long after Whitewater is pronounced bogus.’ But he did it over my vehement objection.”
In March 1994, Clinton told Nussbaum “it might be a good time to leave.”
“Do you really think this is about me?” Nussbaum asked.
“Oh, Bernie, if you leave, there will be peace and we will finally get health care passed,” the president replied.
“If I thought my quitting would help, I would do it,” Nussbaum told his boss. “But if you throw me—your most loyal advocate—overboard, no one will feel obligated to be loyal to you.”
Nussbaum says Clinton seemed to agree. But a couple hours later, White House Chief of Staff Mack McLarty and his deputy, Harold Ickes, brought a letter to Nussbaum’s office that the president had received from a U.S. senator. The letter told Clinton that Nussbaum was giving him bad advice, and that Clinton needed to get rid of him.
“The president told you to show me this letter?” Nussbaum asked.
“Yes,” McLarty answered.
“Then tell the president I will resign.” He did so that night.
Nussbaum remains close to the Clintons. He says Hillary Clinton used him as a reference when the Obama administration was vetting her for secretary of state.
“The FBI called me and asked me the most bizarre questions,” chuckles Nussbaum: “Does she have good oral communication skills? Would you hire her again?”
In 1997, Nussbaum found himself in a Nevada state court in a case in which both sides agreed several billion dollars was at stake. Nussbaum’s client, Hilton Hotels, had made a tender offer for ITT—a bid ITT executives didn’t want and took steps to avoid.
SHOWTIME IN VEGAS
Nussbaum filed a lawsuit seeking to force ITT to proceed with its annual shareholders meeting and sought an injunction to prevent ITT from formalizing its decision to recapitalize the company in order to avoid the takeover.
“Your honor, I have always wanted to star in a Vegas show, and I would like to start by singing a song,” Nussbaum told the judge.
“That’s fine, Mr. Nussbaum,” the judge interrupted. “But I must tell you that, three weeks ago, another person stood where you are standing and started singing a song. I sentenced him to 15 years.”
“Judge, I will take my chance,” Nussbaum countered. Then, he began: “It’s a long, long time, from May to December, but the days grow short when you reach September.”
The song made Nussbaum’s point that ITT could not legally continue to postpone its shareholders meeting. The judge issued the injunction and ITT went on the auction block.
In 2001, Dakota Dunes, S.D.-based IBP hired Nussbaum after Tyson Foods suddenly backed out of an agreement to buy IBP for $4.7 billion. That very day, Tyson sued IBP in an Arkansas court, claiming that IBP had committed fraud as part of its negotiation. IBP’s stock plunged more than $1 billion.
But Nussbaum believed that Springdale, Ark.-based Tyson was simply trying to keep the venue in its home state. The next morning, Nussbaum sued in Delaware, asking for a speedy trial. Tyson countered in Arkansas by seeking an even speedier trial.
FACING A HOME-COURT ADVANTAGE
“I flew down to Arkansas the next day, and I knew it would be tough on Tyson’s home court,” he says. “I couldn’t find local counsel because every civil litigator had some connection to Tyson. I finally hired a lawyer who handled traffic cases to act as my local counsel.”
But Nussbaum won the day when the Arkansas judge refused to set a trial date prior to the trial scheduled in Delaware.
Five weeks after the lawsuit was filed, a two-week bench trial began in Delaware Chancery Court. Nussbaum argued that there was no fraud, that Tyson simply had buyer’s remorse—and that Tyson should be forced to honor its agreement.
“At the end of the day, we convinced the judge that we were the good guys and that they were the bad guys,” he says. “Most cases, despite all the technicalities, come down to that: Did your client act in good faith or bad faith?”
The Delaware court agreed, ordering that Tyson complete the deal.
In 2004, Nussbaum stood before a Manhattan jury to argue the World Trade Center insurance case—the biggest and most emotional case of his career.
Nussbaum represented Larry Silverstein, who in July 2001 had entered into a $3.2 billion, 99-year lease agreement with the Port Authority of New York and New Jersey, allowing him to manage the Twin Towers. Silverstein purchased $3.5 billion of insurance from two dozen different insurers to cover his property.
TWIN TOWERS RECOVERY
Weeks after the Sept. 11 attack, the insurance companies informed Silverstein, who wanted to rebuild at ground zero, that it considered the destruction of the World Trade Center towers to be only one attack and one incident, thus providing only one, limited claim. That meant half as much money with which to rebuild.
Leading a massive effort by Wachtell Lipton, Nussbaum sued the insurers, claiming these were two separate incidents and thus seeking to double the recovery.
“The jury research done by both sides told us that this was an unwinnable case because people believed, coming into the trial, that they knew everything about the Trade Center attacks,” he says. “And people were evenly split on whether it was one or two attacks. Jury research showed that neither side would ever be able to get a unanimous verdict required under New York law.”
But Nussbaum kept his case simple: There were two separate towers, two separate planes, two separate strikes, two separate fires and two separate collapses. The collapse of the first tower did not cause the collapse of the second.
The insurance companies argued that it was one terrorist attack, and, as a result, only one occurrence and one insurance claim.
The key moment in the case came when Nussbaum cross-examined William Guernsey, a claims director for Travelers Insurance who handled the World Trade Center case.
Under intense questioning from Nussbaum, Guernsey admitted that on the very day of the attacks Travelers won a favorable court decision in California. In that case, a single arsonist had set fire to four courthouses in Contra Costa County, including three on a single day. Two of the fires were set 200 yards apart and within six minutes of each other.
In that case, Nussbaum pointed out that Travelers had argued that the arson attacks were four separate occurrences because four separate deductibles were triggered—a position the 9th U.S. Circuit Court of Appeals at San Francisco adopted in a ruling issued Sept. 11, 2001.
Under cross-examination, Guernsey said that he and his superiors joked only a couple of hours after the World Trade Center towers collapsed, “Gee, I wish we hadn’t pressed that position” in the California case.
“We felt it was ironic that that case would come down on the date that the 9/11 catastrophe occurred,” Guernsey testified.
The jury, which included multiple Ph.Ds and a school administrator, deliberated for three weeks before handing Nussbaum and his client a $2.2 billion victory.
“The other side never recovered from that testimony,” he says. “Our victory in this case was a major contribution in the rebuilding of the World Trade Center site. We are very proud of our work.”
BERNARD W. NUSSBAUM
Born 1937 in New York City.
Firm Partner at Wachtell, Lipton, Rosen & Katz in New York City.
Law school Harvard.
1992—Represented Kaye, Scholer, Fierman, Hays & Handler, which faced $275 million in fines for its involvement with Lincoln Savings & Loan. The fine was reduced to $41 million.
1997—Represented Hilton Hotels in a multibillion-dollar hostile takeover of ITT.
2001—Represented IBP Inc. against fraud charges brought by Tyson Foods involving $4.7 billion.
2004—Won $2.2 billion from insurance companies in the World Trade Center insurance case.
Other career highlights—Senior member of staff of the House Judiciary Committee. White House counsel (1993-94).
Read about the other "Lions":
Joe Jamail: Keeping it simple
James Neal: Hating losing more than loving winning
Fred Bartlit: John Wayne in a pinstripe suit
Bobby Lee Cook: Kickin' asses that needed kickin'
James Brosnahan: Defending clients, not movements
Richard "Racehorse" Haynes: The man they call when they're in Texas-size trouble
Photo courtesy of Bernie Nussbaum.
Case Watergate impeachment hearings.
Location Rayburn House Office Building.
Who Rep. M. Caldwell Butler, R-Va., consults with Bernie Nussbaum (standing, center), senior counsel of the House Judiciary Committee. Sitting is Evan A. Davis; standing is Hillary Rodham, before her marriage to Bill Clinton.
What Nussbaum supervised a crew of talented young lawyers during the House Watergate investigation. Butler served four terms as a Virginia congressman before returning to Roanoke after deciding not to run for re-election in 1982. Davis became a partner at Cleary Gottlieb Steen & Hamilton and later served as key legal adviser to New York Gov. Mario Cuomo. Hillary Clinton is now the U.S. secretary of state.
Note In July 1974, the House Judiciary Committee voted three separate articles of impeachment against President Richard Nixon. Nixon resigned on Aug. 9, 1974. Against Nussbaum’s advice, Rodham left Washington to marry Clinton in October 1975.
Mark Curriden, an occasional contributor to the ABA Journal, is a freelance writer based in Dallas.