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  Legal Business  -   POSTED: 2007/05/29 13:17

A few of the cases grabbed big headlines: a $12.5 million settlement for four brothers whose adoptive parents starved them for years and a $7.5 million award in the death of a 7-year-old Newark boy that led to an overhaul of the state's child welfare system. Despite typically mundane subject matter -- "slip-and-fall" injury suits, job harassment, automobile accidents or failure to pay taxes -- the settlements and judgments in cases handled by the Division of Law add up to a sizable bottom line for taxpayers.

The division, which acts as the state government's law firm on most matters, handled 935 civil cases involving the state as either plaintiff or defendant that were settled or adjudicated last year, according to records obtained by The Star-Ledger through the Open Public Records Act.

The division staff of attorneys -- down to 530 after 110 positions were eliminated because of budget cuts -- won the state about $161.2 million, a 60 percent increase compared with the amount recovered in 2005, when the division secured $98.9 million.

Its losses nearly tripled, to $69.5 million, compared with 2005. That year, according to the records, the state paid out $26.2 million on tort claims, employment claims, NJ Transit lawsuits and tax litigation.

"I'm certainly pleased that the Division of Law under the leadership of the attorney general is doing a better job on civil claims," said Sen. John Adler (D-Camden), chairman of the Senate Judiciary Committee.

"As for the payouts ... what it really calls into question is whether or not the division is doing a good enough job advising all of the departments and agencies on what is proper conduct," he said. "The best way to not have payouts is to not cause harm."

Division of Law Director Robert J. Gilson said he believes the attorneys have done a good job, despite the layoffs that began last April, handling the legal work generated by the 16 state departments and more than 400 state agencies. Gilson took over the division in November after serving as a partner in the law firm of Riker, Danzig, Scherer, Hyland and Perretti.

"We feel we are addressing the needs of the state," Gilson said, noting the division has 28 different sections to litigate about 40,000 active cases and to provide legal advice. "We are down in numbers (of attorneys) but we don't feel that has reflected on the quality and quantity of the work being done," he said.

Gilson's chief of staff, Peter Traum, pointed to two securities cases last year, in which attorneys put in "an awful lot of work," that paid off to the tune of $119 million.

The first involved a $69 million judgment obtained by the Bureau of Securities against the founder of Wellesley Services LLC for defrauding hundreds of investors over an eight-year period. The second involved a $50 million settlement negotiated with AOL Time Warner by the Division of Investments Pension Security Fraud Recoveries.

Still, Traum was quick to point out a year-to-year snapshot of outcomes in civil litigation can be misleading because cases take years of work to complete.

"It's not that simple," Traum said. "In many cases, that's just how they fell."

In 2006, for instance the state settled 11 cases by agreeing to pay at least $1 million, compared with only four million-plus settlements in 2005, the records show. Those 11 cases cost the state $46.2 million while the four settlements in 2005 tallied $5.7 million.

The largest settlement last year was $12.5 million, which went to three children and a young man who were starved for years by their adoptive parents after being placed in the home by the Division of Youth and Family Services. The abuse was uncovered in 2003, but it took three more years to conclude the civil suit.

Other notable cases included:

A $7.5 million settlement for the estate of 7-year-old Faheem Williams, who was found dead in January 2003 in the basement of a Newark home, and his two siblings after the DYFS overlooked complaints of abuse. The case prompted sweeping changes in the state's child welfare system.

A $6.3 million jury verdict for a child who was diagnosed with Shaken Baby Syndrome after being placed in a foster home in 1999 by the DYFS.

A $4 million settlement for Edward Arena, who was injured July 4, 2004, when an NJ Transit bus rear-ended his vehicle on the New Jersey Turnpike. An economics expert valued his lost wages at $3.5 million.

At the same time, Traum said, just looking at the payouts fails to account for an attorney's ability to whittle down the settlement in a sure loser.

"Sometimes even when there is a payout, we may view it as a win because we brought the claim down substantially," he said. Two lawsuits brought by the American Trucking Association are a good example, he said.

The association sued when the Department of Environmental Protection instituted fees more than a decade ago on truckers who transport hazardous waste. It filed a second lawsuit when the DEP demanded a registration fee to pay for police background checks on hazardous and solid waste businesses.

The state settled the cases last year for $8.25 million, but Traum said it was a win as "the state's exposure was $25 million."

Newark Star Ledger, NJ

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