[JURIST] The kickback fraud case against leading class action law firm Milberg Weiss Bershad & Schulman [firm website] has hit unexpected delays as five judges from the US District Court for the Central District of California [official website], which covers Los Angeles, have recused themselves from the case. The five recusals have been attributed to owning stock in a company sued by Milberg Weiss in the past, having approved attorneys fees in a suit brought by Milberg Weiss, and for having been supported by a former Milberg partner when appointed to the federal bench. Federal statute 28 USC 455 [text] requires federal judges to recuse themselves from any case where their impartiality may be reasonably questioned. The arraignments of two defendants who have agreed to plead guilty [Reuters report] have been postponed until Judge John F. Walter is ready to proceed.

The firm faces a 20-count indictment [PDF text; JURIST report] on charges that the firm and name partners David J. Bershad and Steven G. Schulman [statements] paid up to $11.3 million since 1984 to individuals to serve as lead plaintiffs in class-action and shareholder derivative lawsuits. Milberg Weiss allegedly concealed the payments as cash or transferred the payments through other law firms. One lawyer pleaded guilty to funneling money [JURIST report] to a lead plaintiff last month. The Los Angeles Times has more.