Victims For Sale

On April 22, 2011, a Missouri resident named Linda Burke received a phone call from a woman who identified herself as “Sarah.” Burke didn’t know Sarah, but that didn’t stop the caller from asking some exceptionally personal questions. Had anyone in the Burke household died after taking a diabetes drug called Avandia? Sarah “refused to tell me who she worked for, [her] address, or phone number, and hung up,” Burke said later, according to state court records. At the time, Avandia’s manufacturer, GlaxoSmithKline (GSK), was besieged by lawsuits linking Avandia to an increased risk of heart attack. Burke and scores of other Missouri residents wanted no part of the Avandia litigation, court records show. “Getting an avalanche of calls,” a consumer named Walter Lechtreck complained to the state’s attorney general. “They’re soliciting about a lawsuit against this pharmaceutical company about Avandia. I’m getting this almost daily. Twice already today.”

After investigating, Missouri Attorney General Chris Koster discovered that a company called Internet Technology Partnerships was behind the solicitations. ITP has ties to a network of websites including MedRecallNews, ServicesToLawyers, and Pearl-Shucker.com, among others. These companies do law firm marketing and identify clients for mass-injury lawsuits against pharmaceutical manufacturers. They’re all operated by Jesse Levine of Norristown, Pa.

Levine is not an attorney. His line of work is known as lead generation: Lawyers pay him for the names of alleged victims. He has rivals with names such as All Your Leads Needs, Tort Law Group, Your Lead Caller, Guaranteed Performance, and MassTortROI (return on investment). They provide the pipeline that connects claimants to lawyers—or vice versa. The sites are the hidden plumbers of the mass-tort industry, a web of plaintiffs’ attorneys, paid expert witnesses, and accountants who annually pursue billions of dollars’ worth of lawsuits against companies that make drugs, chemicals, cars, and other products.

Levine prefers a different metaphor for what he does. The “pearls” produced by his trademarked Pearl-Shucker Lead Qualification System are medical patients whose woes bring large settlements. The system “was developed over the last 10 years and began with a white paper I published in 2002, introducing this landmark process for legal marketing and data mining,” Levine explains on one of his websites. “Since then, we’ve built a system for developing thousands of qualified case leads and have become the ‘in-house’ marketing department for law firms of all sizes around the country.”

In theory, these little-known businesses channel legitimate injury victims to upstanding lawyers. State bar rules prohibit lawyers from sharing their client fees with nonlawyers, but generally it’s not illegal to purchase names of potential clients, according to Stephen Gillers, a professor at New York University School of Law specializing in professional ethics.

The business of procuring clients for personal injury lawyers isn’t new. The pejorative term “ambulance chaser” describes not only an attorney who hands out business cards at accident scenes or emergency rooms but also a nonattorney recruiter. In some places, ambulance chasers are referred to as “case runners.” Traditionally, these shadowy characters have operated on a small scale, taking $50 or $100 for a promising referral. Earlier this year the Texas Court of Criminal Appeals affirmed the conviction of a legendary Corpus Christi case runner named Mauricio Celis. Prosecutors alleged Celis collected millions of dollars from plaintiffs’ lawyers from 2004 through 2007. While Celis had close ties with South Texas tort firms, it turned out his own claim to being an attorney was false and led to a criminal sentence of 10 years’ probation.

Plaintiffs’ attorneys value access to large batches of potential clients because the ability to mount hundreds or even thousands of claims provides leverage in settlement negotiations with a corporate defendant.

For several years, Glaxo felt the pressure of mass litigation concerning Avandia. In 2012 the company agreed to pay $3 billion to settle federal and state government claims that it illegally marketed the diabetes drug and others.

More From Bloomberg Businessweek: