Questionable Texas law firm pockets millions from Lac-Mégantic compensation fund
Garcia Law Group is associated with a non-lawyer case runner, Radio-Canada's Enquête finds
On July 6, 2013 a runaway train laden with oil cars derailed and incinerated the city centre of Lac-Mégantic, Que. It was one of the biggest rail disasters in Canada's history and led to changes in rail regulation.
Of the 47 people killed, 40 would be represented by a group of law firms that included the Garcia Law Group. It is an outfit associated with Willie Garcia, 54, a Texan critics say is one of the most notorious ambulance chasers in Texas.
Approximately $114 million has been paid to the families of victims. This money came from an indemnization fund. The federal government, over 30 companies that were sued, as well as Montreal Maine & Atlantic Railway, Ltd. the company — now in bankruptcy protection — that owned the train, all contributed to that indemnization fund.
- Watch The Case Runner onthe fifth estate Friday at 9 p.m.
According to estimates done by Radio-Canada's Enquête, the Garcia Law Group pocketed between $10 million and $15 million from that fund, despite the fact that they did very little legal work.
In fact, another Texas lawyer says Willie Garcia's signature on the contract may even make it void.
Undue pressure on victims' families?
In the days and weeks after the crash — when many bodies were still being identified — lawyers from the U.S. turned up in town, offering to help families fight for compensation.
Ambulance chasing, also known as case running, has deep roots in the border towns of South Texas, and Garcia is considered one of the best.
The practice can involve unscrupulous agents who pressure clients, often when they are at their most vulnerable, to sue companies or individuals. Those agents then sell those cases to law firms for a fee. The problem is so rampant that the state has made it a criminal offence that can lead to significant jail time.
The Garcia Law Group sits in a nondescript strip mall between a car parts shop and a beauty spa in Hidalgo County, Texas, close to the Mexican border.
But Garcia's lifestyle has been vastly different than what this modest facade suggests. At one time, he owned a Bentley, a Jaguar, a sprawling ranch and a mansion, as well as a Picasso and a Dali print.
Court documents made public during lengthy divorce proceedings in the mid-2000s provide insight into how Garcia amassed that fortune. He, his employees or his contacts travelled extensively after major accidents to recruit victims willing to sue major U.S. corporations.
How Garcia got into business
Garcia got into this business after tragedy struck small-town Texas in 1989. A school bus was knocked into a quarry by a truck, and 21 students drowned. Lawyers and case runners showed up in hospitals, funeral homes, and morgues, trying to solicit business from the families of the victims.
This led to three lawyers being indicted. Garcia escaped charges by testifying against them, leaving him to drum up business around the world.
"I was also told that the big, some of the big airline crashes in Europe, that they had had people there within 24 hours. They are very proud of that, on being on site very quickly," says Michelle Whitmore, a U.S.-based settlement planner who works with accident victims.
"To me, these people are dealing with grief and anguish like it was meat in a counter," says Bill Edwards, a lawyer who has been practising in Texas for over 50 years.
"It's a butcher shop. … They don't care about these people."
Hans Mercier, a Quebec lawyer, was hired by Chicago's Meyers & Flowers to represent a group that included the Garcia Law Group and the Texas-based Webster Law Firm.
Mercier says it was the Garcia firm that signed up the first case filed in U.S. courts. He told Radio-Canada that he was unaware of Willie Garcia's past and was unsure whether "he came [to Lac-Mégantic] or not."
But the five-month Enquête investigation revealed that Willie Garcia not only visited Lac-Mégantic, he was involved in information sessions for the families organized by the U.S. lawyers at a local motel, Le Quiet, which Mercier attended. Willie Garcia reserved the room.
Ginette Cameron lost her daughter Geneviève at the Musi-Café, a bar near the explosion that had the largest concentration of victims. She says she was approached by Willie Garcia during one of those information sessions.
"Someone came to me and said, 'Do you want this to happen to another mother like you?' He repeated this to me a few times."
Cameron says, "They kept pushing for us to join the fight right away. And I just felt it made no sense. Why the urgency? For some cash?"
She says, "People here were already in a lot of pain. We will probably never recover. But to do that to vulnerable people like us — that's unbelievable."
Pascal Lafontaine lost his wife Karine, his brother and sister-in-law in the tragedy. For him, the decision to sign with lawyers and pursue litigation came too quickly. "My family was torn up … we were not ready to make such an important decision."
He says, "That money was for the children. That money was for them to overcome the pain. And to realize that there are people who come and grab money out of that pot without remorse — do they not have a conscience?"
Bill Edwards, the Texas lawyer, says, "It plays on the frailties of victims." He says such an approach asks people "to make life-altering decisions when they're really not emotionally capable of doing that."
Mercier, the Quebec lawyer for the group, says the victims signed freely.
"There was no undue pressure. There was a sales pitch, which is normal in any profession. But we are lawyers. Our job is not to sell anything. We have to show why our services are useful and the advantages of pursuing these lawsuits."
Mercier also believes that his group`s legal pressure in the US led to the size of the $114 million legal fund and that good legal work was done on behalf of the plaintiffs. "Do you really think that the defendants would have paid these amounts had they not felt threatened by our U.S. legal action."
The Garcia Law Group website says its "attorneys, paralegals, and support staff all demonstrate the tenacity to fight for your best interest — even against the largest industries."
But the firm was registered in Texas only after the Lac-Mégantic disaster. What's more, the only registered lawyer for the firm is Mary Garcia, Willie's daughter.
The Garcias may have made a mistake, though. It was Willie's signature that was on the retainer agreement which the victims families signed that gave the Garcia Law Group and the other firms the right to represent them.
"He can't sign a legal contract, under our rules," says Edwards. That Texas law could "make the contract void," he says.