A Civil Action (59 page)

1

Schlichtmann and his partners sat around the conference room table. They kept the doors to the room closed and the Venetian blinds on the windows lowered. For three days they took no phone calls, returned no messages, and answered none of the registered letters that arrived every morning from creditors. They had sandwiches and trays of cold cuts brought in for lunch. The air-conditioning unit in the window chattered away, but still it grew warm in the room. The seven men shed their suit coats and rolled up their shirtsleeves. Nesson, the only member of the team missing, was on vacation with his family.

They took stock of their situation. They could go forward and begin the medical phase of trial, but the judge would probably dismiss three of the leukemia death cases because of the date the jury had given. And the jury was clearly divided. “That turns the next phase of trial into a real gamble, a roll of the dice,” Schlichtmann told his partners. On top of that, their financial position was precarious in the extreme. Gordon had just cashed in the firm’s retirement plan. He thought he could get
them through another three months, until October. Beyond that, Gordon foresaw only disaster.

Their only sane option, as Schlichtmann had realized after his sleepless night in New York, was to try to settle with W. R. Grace now, before the judge began dismissing leukemia claims. But to negotiate a settlement, they had to be prepared to go ahead with the trial. Grace had to believe they were willing to go ahead, and for Grace to believe that, they had to make themselves believe it, too. “You can’t settle without a commitment to going on,” said Phillips.

“It’ll mean putting me in a rowboat and setting me adrift for six months,” said Schlichtmann. “With some suits,” he added.

Grace, they reasoned, had an incentive to settle. In September Keating would face the same jury that had already handed his client one loss. This time the testimony would be about dead children, not groundwater movement. “Grace did lose,” said Gordon. “The fuckers
did
lose!”

They spent the first day of their strategy session convincing themselves they really could go on with the trial. On the morning of the second day Schlichtmann left the conference room and went over to the offices of Foley, Hoag & Eliot to see Keating. He returned half an hour later and reported that Keating had arranged for Grace’s executive vice president and general counsel, a man named Albert Eustis, to fly up to Boston on Friday morning for a settlement conference.

Gordon recognized Eustis’s name. At the closing arguments, he’d seen several men in dark suits—Grace executives, he surmised—sitting in the gallery behind Keating’s counsel table. He’d gone over to introduce himself. He’d gotten a chilly reception, but Eustis had stood out. Eustis had the sort of commanding presence that drew one’s eye. He was in his mid-sixties, still trim as an athlete, with a head of thick silvery hair.

Schlichtmann recalled seeing this man, too. “Was that Eustis?” he asked Gordon. “The really handsome guy?”

Gordon searched the computer database for more information on Eustis. He found a sketchy biography: Born in Mahoney City, Pennsylvania, November 1921. Educated at Columbia and Harvard Law. Married 1959. Joined W. R. Grace 1961. Executive Vice-President and General Counsel 1982. Member of Harvard Club and American Yacht Club.

The rest of that day and all the next, Schlichtmann and his partners worked on a settlement demand. After much debate, they decided that the case was still worth twenty-five million dollars, nearly the same figure they had agreed upon a year ago, before Nesson had joined the team. They would begin the negotiation by asking for more, around thirty-five million. They devised a complicated proposal—part cash, part annuities and deferred payments—of the sort they had presented on the eve of trial, when they demanded a hundred and seventy-five million and Facher walked out. Facher wasn’t around now, and this time they didn’t expect anyone to walk out. “Grace wouldn’t be sending a heavyweight like Eustis if they thought they could buy settlement cheap,” observed Schlichtmann.

Only Conway remained pessimistic. “You went over to see Keating the day after the verdict. I think his first thought was that we’re hemorrhaging.”

Schlichtmann brushed this aside. “If they thought that, they’d send in the lawyers, the bloodsuckers. They’re not doing that. You look into a man’s eyes and you see something. Keating was not licking his chops.”

By evening, the walls of the conference room were adorned with charts and the table was covered with legal pads and crumpled wads of paper, with empty soda cans, coffee cups and half-eaten sandwiches. It seemed as if everything had been resolved. They would ask for thirty-five million and settle for twenty-five million.

Then Conway stood up. “I want another chart,” he declared. “I want to know at what point we walk away from the table and go to trial. I want to know what our squeal point is.”

Conway looked more rumpled than ever, his shirttails half out of his pants, his hair flying in all directions. He looked, as Schlichtmann had once described him, like a refugee. And indeed, he was in danger of becoming homeless—the deed to his house was still in Uncle Pete’s files.

“We don’t want to do this, Kevin,” warned Gordon.

But Conway was adamant, and Gordon relented. “Besides, everyone’s already thought about the squeal point,” Gordon admitted. “I know I have.”

“Let’s have it,” Conway said grimly, sitting back down.

They went around the table, beginning with Kiley, who said, “Fifteen million.” Phillips agreed with that amount, and so did Gordon.
Schlichtmann was next. He hesitated a long while. Finally he said, “Twenty-five million.”

Phillips drew back. “Twenty-five million! Don’t give us that bullshit. That’s not your bottom line.”

“It’s not bullshit,” Schlichtmann said calmly. “Our bottom line cannot be less than our honest valuation of the case.”

And then it was Conway’s turn. “Ten million,” he said.

Schlichtmann leapt up from his chair. “That’s crazy!” he shouted, his hands balled into fists. He stood over Conway. “Those are panic numbers! That’s what you’re doing, goddamn it, you’re panicking!”

Conway leaned forward in his chair, his head bowed, his elbows on the table.

Schlichtmann was bending over him, his face crimson, spittle coming from his lips. “You’re saying we fucked up on Beatrice because we got greedy! I’ll know we fucked up on Beatrice if this is the number we take from Grace. It’s fucking insane! It’s grabbing what you can grab and running!”

Kiley had also jumped to his feet. He stepped up to Schlichtmann. “It doesn’t mean we’d actually take that number, Jan. It’s just the
least
amount.”

Schlichtmann turned and walked away from the table, breathing hard.

Conway raised his head and took a deep breath. “I feel like we’re really hanging by our skins now,” he said, his voice quavering. “This was a case we never wanted. It looked like suicide, but we could never shake it. I think going to a verdict in the second phase with this jury would be reckless.” He paused, and then said sadly, “I don’t have that kind of pride.”

Schlichtmann nodded grimly. “Then we
did
make a mistake not settling with Beatrice before trial.”

“No we didn’t,” Phillips said.

“No, Jan,” said Conway. “I haven’t lost a second’s sleep on Beatrice. But things have changed. Now we’re just trying to stay alive. Ten million dollars is an awful lot of money. My first consideration is keeping the firm together, even before my family, because my family depends on that.”

They never did agree on their squeal point. The subject had revealed their deepest fears, fears they could not bring themselves to
confront. The conversation trailed off to other matters. Gordon had reserved a suite of rooms at the Lafayette Hotel for the negotiation tomorrow. “It’s got old-world elegance,” Gordon said, quoting from a brochure. “A crystal chandelier in the dining room, sterling-silver water pitchers. We can also start a new charge account there. That’s an additional benefit.”

The settlement meeting at the Lafayette Hotel got off to a poor start. Schlichtmann and Conway, Gordon and Phillips, the four negotiators, arrived early and waited for Eustis and his retinue. When Eustis finally showed up, twenty minutes late, he was brusque to the point of open hostility. He refused to engage in small talk or any exchange of pleasantries. He listened impatiently as Schlichtmann began with his analysis of the verdict and where it left the respective parties. “I don’t have much time,” Eustis said, looking at his watch. “I’m a nuts-and-bolts man. I need to know what your figure is.”

Phillips delivered the settlement demand, starting with the $2.5 million for the endowed chair in environmental health.

And Eustis’s manner suddenly changed. “I like that, I really do,” he said. “You realize how little research there is in that field? Yes, we need something like that.”

Phillips laid out the other elements of the proposal and Eustis wrote them all down, nodding occasionally and asking questions about taxes and annuities, which Gordon answered.

“Your proposal is constructive,” Eustis said. “The numbers are high, but we have to start somewhere.” This was a matter, continued Eustis, that he needed to discuss with Grace’s board of directors and with the chairman himself, J. Peter Grace. As it happened, Eustis noted, the board was meeting next Thursday.

And then Eustis made a remark that amazed and delighted Schlichtmann. “We need a vacation from these legal bills,” Eustis said, looking over at Keating. “It’s a lot of waste and it’s not the way we like to do business.”

Schlichtmann glanced at Keating and saw his eyes widened slightly. The remark clearly stung Keating, who spoke for the first and last time during that meeting. “I don’t mind you being concerned,” Keating said to Eustis with a small, deprecating laugh, “but let’s not call it waste.”

Eustis said that he wanted to keep the lines of communication open. Schlichtmann offered to come down to New York next Friday, after the board meeting.

“That’s fine,” said Eustis immediately. “I don’t think there’s any need for neutral ground.”

“We’re agreed, then?” said Schlichtmann. “Next Friday morning at ten o’clock?”

Eustis didn’t stay for lunch, but Schlichtmann found no cause for concern in that. On the way out the door, he paused and told Schlichtmann that he was fond of good wines. What wine were they having with lunch?

Gordon had ordered up an excellent chardonnay. They drank it themselves and ate the lunch they had planned for Eustis, sitting around the half-empty table. Schlichtmann kept marveling at Eustis’s remark about Grace’s legal bills. “Why would he say that?” Schlichtmann wondered. “Did you see Keating’s reaction?”

Phillips pronounced himself generally pleased. “I think he expected to hear eighty or ninety million dollars. When he heard our numbers, everything changed. He became much more friendly.”

Even Conway seemed to breathe easier. “It was like Jekyll and Hyde, once he heard the numbers,” Conway said.

Schlichtmann leaned back in his chair. He had a sense of foreboding that he couldn’t shake, although the brief meeting had given him no cause to feel that way. He decided that it must simply be the bitter aftertaste of the Beatrice defeat. He made a conscious effort to change his mood.

“Well,” he said, snapping his fingers, “it looks like our figure was perfect. We were right, absolutely right.”

“Don’t be so cocky,” said Phillips.

2

Schlichtmann and his partners flew down to New York on Thursday, August 7, for their negotiation with Eustis. The foreboding Schlichtmann had felt since the meeting with Eustis still plagued him, and his mood seemed contagious. In this jittery, uneasy state, he and Conway and the others saw portents everywhere, starting with Schlichtmann’s
horoscope in the
Boston Herald:
“Whether your problems be of a personal or career nature, you must refuse point blank to settle for less than you know to be just and honorable.”

They made a joke of that, but the matter of the limousine did not amuse them. They boarded it at La Guardia Airport. The day was fiercely hot and as humid as the tropics. The limousine broke down two blocks from the Helmsley Palace, a cloud of white smoke billowing up from the hood. They got out and walked the rest of the way to the hotel, carrying their bags in the sweltering heat. A bad omen, said Schlichtmann, and no one disagreed.

Schlichtmann and Conway shared a two-bedroom suite on the forty-fourth floor of the Helmsley, complete with a kitchen, three bathrooms, and three television sets. A wall of windows opened on a panoramic view of the city’s skyscrapers and Central Park, and in the distance the Hudson River. The suite cost eight hundred fifty dollars a night, paid for by Gordon with a new credit card. The opulence was wasted on Conway, who would have been just as happy at the Holiday Inn. But Conway understood the strange calculus of a negotiation. “You send signals with everything you do. Do we come to New York cowed, with our tail between our legs? This is for us, for our inner strength, and for Jan.”

But the Helmsley did not seem to do much for their inner strength. Schlichtmann stood at the windows of the suite, gazing down on the twin spires of St. Patrick’s Cathedral. “My life insurance,” he said suddenly. “Have we still got it?”

“Yeah,” said Gordon, but his voice was doubtful. “There’s a small problem with the thirty- or sixty-day billings.”

Schlichtmann looked at Gordon in consternation. “Gordon, if you let my life insurance lapse, I’ll die for sure.”

“Are you worth more dead than alive?” wondered Gordon.

Phillips sat in gloomy silence apart from the others, his head wreathed in a cloud of cigarette smoke. “If tomorrow is a bad day, we’ll shoot you and call it even.” Phillips didn’t smile at his own joke.

Schlichtmann grimaced. “You won’t have to shoot me. I’ll do it myself.”

Seven months ago, before the start of trial, Schlichtmann had ordered three new suits from Dmitri, his New York haberdasher. Now, in New York with nothing to do for the rest of the afternoon, he
decided he’d like to wear one of the new suits to the negotiation tomorrow. Perhaps it would bring him luck. He tried to talk Gordon into accompanying him down to Dmitri’s.