Legal News

From Behind Bars, Joe Nacchio Sues His Lawyer for Malpractice

By Dionne Searcey

From behind the bars of the federal prison in Minersville, Pa., Joseph Nacchio has a message for his lawyers: you spent too much on underwear.

Nacchio, the former Qwest CEO serving a 70-month prison sentence for insider trading, has sued the attorneys who lost his case: New Jersey lawyer Herbert Stern and his firm, Stern & Kilcullen LLC.

According to this Bloomberg story, the firm billed Nacchio more than $25 million to defend his criminal and civil cases (he also faced SEC charges). Some of their costs, Nacchio's filing said, included attorney underwear, staff breakfasts and hotel-room movies during the six-week trial in Denver. Click here for a copy of the complaint, filed in New Jersey superior court.

Nacchio’s suit accuses Stern and his firm of professional negligence for, among other things, having an expert witness barred "by virtue of their blatant failure to comply with basic litigation procedures."

Nacchio was convicted of illegally selling $52 million of his Qwest stock. During the trial, he was barred from calling his key witness, a securities expert, to help show that Nacchio's stock trades weren't tied to inside information.

Stern, who still goes by “Judge Stern” even though he stepped down from the federal bench in 1987, wrote the book "Trying Cases to Win" but is probably most well known for presiding over the Berlin case of an aircraft hijacking and writing “Judgment in Berlin,” which was made into a movie starring Martin Sheen as Stern. He was retained by Nacchio for $5 million, the suit said.

Stern did not immediately return a call for comment.

"The billing for both the criminal and civil work that he did was grossly excessive," said Bruce Nagel of Roseland, New Jersey, Mr. Nacchio's attorney who filed the suit.

According to the suit:

“A dissenting opinion in the Tenth Circuit Court of Appeals affirmance of Nacchio’s conviction referred to Stern’s ‘slip up’ and concluded that based on the majority decision affirming the conviction, ‘the defense counsel behaved inexplicably, which is to say they performed below the level expected of competent counsel.’”

Nacchio's legal saga has been a long one. Since the guilty verdict was handed down he's had his verdict tossed out and then upheld, he's been sentenced and resentenced and endured a saga on Con Air fit for a hardened criminal. The Supreme Court rejected his appeal in 2009.

Full post as published by Law Blog - WSJ.com on March 23, 2011 (boomark / email).