Photo by Eli Meir Kaplan
Steven Toll didn’t know much about class actions when he was applying to law firms 35 years ago and got an interview with Cohen Milstein. But he was intrigued by the practice and also had an interest in the financial sector from his time at the Wharton School, so he decided to give it a shot. More than 30 years later, the 1975 Georgetown Law graduate remains hooked by what intrigued him at the outset – the idea of protecting “the little guy” against corporate fraud. In 2013, he was co-lead counsel in the case against Countrywide over mortgage-backed securities, which settled for $500 million, part of a long track record of massive class-action settlements in Toll’s career. Based in the firm’s Washington, D.C., headquarters, Toll is also firm managing partner.
In recent years, Toll also has been involved with Lolly’s Locks, which his family founded in 2012 after Toll’s wife, Lolly, lost her battle with cancer. During that struggle, Lolly and the family realized how important high-quality wigs can be throughout treatment, and also that they are too expensive for many patients. Lolly’s Locks provides wigs to women who cannot afford them.
Lawdragon: The Countrywide settlement seems representative of your career – a hard-fought case, lasting years, resulting in a notable settlement. What do you see as a key factor in your track record here? You need to be aggressive, but as most of these end in settlement, there must need to be a positive working relationship with the other side.
Steven Toll: The key factor in our firm achieving the landmark settlement in the Countrywide Mortgage-Backed Securities case, and my other securities fraud cases, stems from our persistence to continue to aggressively litigate cases from start to finish, leaving no stones unturned, and adapting to adverse rulings we might receive during the course of a case. For instance, in the Countrywide case, the court issued a number of adverse rulings that dramatically cut back on the scope of the case. Nevertheless, we continued to push forward to litigate the claims, realizing that someday we may need to appeal certain of the judge’s rulings. We litigated the case and prepared it so that we could go to trial on the remaining claims, or at least be in a position where defendants might consider resolving the claims.
The nature of the relationship between us and defense counsel in the Countrywide MBS case was professional, yet both sides fought very aggressively on all legal and factual issues. Defense counsel maintained that the case had no merit and the problems at Countrywide resulted from the economic crisis that occurred in this country. While the parties ultimately agreed to a mediation, we vigorously differed as to the value of the case, with both sides aggressively advocating their positions. Yet, because of a certain level of trust and respect that existed – despite the vast disagreement on legal and factual issues – we were ultimately able to reach an agreement to settle the case for $500 million, although there were times that it did not appear we would reach an agreement.
LD: Any other key factors, more generally, beyond the Countrywide settlement?
ST: The key in these types of situations, as has been the hallmark as to how this firm operates, is to litigate aggressively, but also in a professional and not underhanded or deceptive manner. Most all defense counsel we deal with seem to share that philosophy, which has led to what I find to be mostly positive working relationships with our opposing counsel, despite the vast disagreements. So, while we can agree to disagree, as long as both sides come about it in an evenhanded and forthright manner, it tends to work. That does help when you eventually get into a mediation process, so that you have a level of trust and confidence that you’re dealing with someone at arm’s length, even if in fact you may disagree so much that you can never resolve a case. But, at least you know you go in with the possibility that you may be able to overcome your differences on the views of the case as long as you deal with each other in an open and honest way.
LD: How did you start getting interested in stock fraud cases? Was this what you were thinking of doing with your career when you were at Georgetown?
ST: I never imagined while at Georgetown law school, that I would end up being a plaintiffs’ securities class-action lawyer. After I graduated Georgetown, I had no specific thought in mind as to what I might do and took a job at the Federal Home Loan Bank Board (FHLBB), representing the government in cases brought against savings and loan executives. I worked first in the enforcement division of the FHLBB, bringing actions against S&L executives who were violating the agency’s rules and regulations. I then moved into the FHLBB litigation division, representing the government in cases defending the rules and regulations of the FHLBB.
After a number of years, I found complex litigation to be my principal interest, especially in the financial area, given that I had a background in accounting from the Wharton School at the University of Pennsylvania. I wanted to go into private practice and work on complex litigation matters, although I had no specific thought in mind as to what type of firm or what areas of practice I might prefer. Almost by happenstance, after writing letters to probably 100 law firms in D.C., I got an interview with Cohen Milstein who told me they did plaintiffs’ class action litigation, mostly in the area of securities and antitrust.
I really knew nothing about class actions or what they were. In addition, I had not enjoyed the antitrust course I had taken in law school. Despite that, I ultimately was intrigued enough by the class action field and what the firm was doing in protecting people against corporate misconduct. Because of my interest in the financial area, working on securities fraud cases ended up being a natural fit.
LD: At some point, you must have realized you were hooked, that this was something you’d want to be doing for a while, in addition to handling some other types of plaintiff-side cases. What has kept you at it for three decades?
ST: After spending a few years at Cohen Milstein doing both antitrust and securities cases, it was clear to me that plaintiffs’ securities fraud litigation really interested me and was something I could see doing for a long time. Each case is different, every fraud is different, the law is ever changing, and the challenge exists in each case to try to prove defendants’ misconduct. I’ve also occasionally gotten involved in other types of cases, such as an employment discrimination case, a consumer case, and a products liability case. Trying to protect the “little guy” against misconduct by large corporate America is really what keeps me at this for all these years.
My approach is not that every corporation is evil. In fact, it is a very small segment of corporate America that tends to violate the law in these areas. However, it is the interest and excitement in protecting people against corporate abuse, and holding corporations accountable for their misdeeds that is a passion of mine.
LD: Is there a case – whether high profile or not – that sticks out in your memory for being especially unusual, or difficult to reach a good resolution for your clients, or just filled with unpredictable twists and turns?
ST: There are a number cases throughout my career that stand out for their unusual nature or history, but one that probably stands out the most is the securities fraud case against a company called Globalstar. What made it especially difficult was the inability to resolve the case with the defendants, mostly because of the intransigence of the insurance companies involved. There were different layers of insurance, and while some of the carriers seemed to want to resolve the case, the primary carrier would not pay its entire policy, so we were unable to tap the second, third and fourth layers of insurance coverage to settle the case. Despite multiple mediation sessions, we were unable to break through this logjam. There was no other alternative but to go ahead and try the case, even though it had great risk. We felt the case, while difficult, could be won, and after winning the summary judgment motion, we refused to accept what we considered to be a low-ball offer by the defendants to settle the case.
We finally reached a point near the end of the trial where I told the principal defense counsel that unless they settled the case now, each day our demand would go up by $5 million until the jury rendered its verdict. Two days later, defense counsel called me and said he would meet our latest settlement demand, which had gone up by $10 million over the last two days. The case ended with what we felt was a very good settlement. We ultimately spoke with the jury and learned that it would have been quite a challenge for us to win had the case not settled.
LD: In the era after the Private Securities Litigation Reform Act (PSLRA), and what are viewed as pro-corporation Supreme Court decisions since then, what has been key for Cohen Milstein continuing to thrive in this type of practice?
ST: The key for Cohen Milstein, in what I view as a very difficult litigation environment, and a Supreme Court which is not friendly to class actions or plaintiffs, has been adaptability, creativity and ingenuity. We have diversified more than any other plaintiffs’ class action firm in the country. Some plaintiffs’ firms have most of their entire firm focused on securities-fraud litigation, while that only makes up about one-third of our practice. We have thriving practices, in the areas of antitrust, ERISA, public client, consumer, civil rights, qui tam, human rights, and more recently have expanded to do managed-care abuse, products liability and catastrophic injury cases. Having talented lawyers, who are also great people, is also a key. We have doubled in size over the last five years, from about 40 to 80 lawyers, and the quality and character of the lawyers we have hired is tremendous.
LD: If we can switch gears for a bit, can you tell me a little about Lolly’s Locks, in terms of the mission and how the charity came about?
ST: Lolly’s Locks was formed in loving memory of my late wife, Lolly, who lost her 15-month battle with cancer in March 2012. While she was sick, Lolly endured more than 20 chemotherapy treatments and eventually lost her hair. Lolly never let her cancer or the effects of chemotherapy keep her from living and enjoying her life. She went out and bought two high-quality wigs that made her look and feel as close to herself as possible, and went on making beautiful memories with all the people that she loved.
When Lolly first went to purchase her wigs, she was stunned to learn that high-quality wigs can cost thousands of dollars. She was even more surprised to find out that insurance typically covers very little, if any, of this cost.
Lolly, a constant optimist, never forgot to count her blessings, even after she got sick. She often reflected on how lucky she was to have her wigs, which she credited with allowing her to fully participate in the activities she loved without having to feel self-conscious, and making it possible for her to have a sense of normalcy at a time which was anything but. Despite the gravity of her diagnosis, Lolly was sure that she was going to get better, and once she did, she planned to use her time and resources to help less fortunate women battling cancer have access to high-quality wigs.
In 2012, our family founded Lolly’s Locks to carry out Lolly’s goal, and the mission of connecting high-quality wigs with cancer patients who could not otherwise afford them.
LD: Many people might not realize that good wigs can be expensive and often not covered by insurance, leaving them inaccessible. How many patients has the charity been able to assist so far?
ST: Indeed, wigs that are both undetectable and comfortable can cost thousands of dollars. Such wigs can make a huge difference in the quality of life for many female cancer patients. For many women, having a great wig can mean the difference between sitting out life during treatment, versus remaining involved at work and in all of the things that they love. But the fight against cancer is obviously very expensive and, despite how much of a positive impact they can make on a woman battling cancer, wigs often get relegated to the status of luxury, out of reach for many cancer patients.
Again and again, we have had recipients report that having the ability to look like themselves throughout treatment and to be able to continue to feel beautiful when they get dressed to go somewhere has made a real difference in their sense of wellness.
As previously stated, it came as a total shock to Lolly – who was well-insured – that her insurance would only cover a small fraction of the cost of her wig. When we started Lolly’s Locks, we did research to confirm that Lolly’s situation was not unique, and that insurance typically pays very little, if anything, toward a wig for a woman undergoing cancer treatment.
One very frustrating thing that we have seen again and again with our recipients are insurance policies that claim a willingness to cover most or all of a wig but that go on to place impossible caveats on the insured’s ability to receive coverage. For instance, we have had several recipients with insurance policies worded to make them believe that they would be reimbursed for any wig they wanted, only to find out that their insurance would only cover wigs procured from approved providers, none of which actually existed within hundreds of miles.
As of this writing, Lolly’s Locks has provided wigs to just shy of 100 women in 31 states!
LD: What is the ultimate goal for Lolly’s Locks, and what do you think is needed to get there?
ST: We could not have found a better way to celebrate Lolly’s life than through Lolly’s Locks, and we could not be more proud to play this wonderful role in so many women’s journeys as they stand up and fight against a cancer diagnosis. There is really nothing like our organization out there, and the response from cancer patients and health-care providers alike has been overwhelming.
In 2013, the American Cancer Society reported 805,500 new cases of cancer in women. That number is expected to rise to 810,220 in 2014. Each year, some reasonable percentage of newly diagnosed women cancer patients will lose their hair from the side effects of chemotherapy and most will not be able to afford a high-quality wig. When you consider these numbers along with the fact that our mission is so unique, it should come as no surprise that we have experienced a steady growth in applications since the inception of the charity.
As much as my family and I are ecstatic and proud of the success of the past year-and-a-half, we see a great need for what we do in the cancer space, and we hope to get to a place where we can help thousands of cancer patients annually. In order to accomplish this goal, we need to continue to raise awareness so that we are a well-known resource to cancer patients throughout the country. To then help all the women who contact us, we have a great need for more funds in order to be able to continue granting wigs to every worthy applicant.