Chaos Theory

How Kurt Melchior, who escaped Nazi Germany at 13, metamorphosed into a business litigator

Published in 2014 Northern California Super Lawyers — August 2014

Q: I understand you weren’t born in this country.

A: I was a refugee. I’m Jewish, although I’m not an observing Jew. My family lived in Germany. One of my relatives once did some research and determined we’d been there 500 years at least. And then the Nazis came in.

When [my dad] was in college in Germany, he had a fraternity brother, and the fraternity brother was gay. Years later, the fraternity brother was a dentist in a small town. He was also Jewish, and was in a gay relationship. One day, my dad got a call from this dentist’s office saying that the police had come and taken him away. My dad tried to find out what happened and eventually went to the place where they were detaining him. The man in charge there said, “He violated the racial laws”—meaning that his gay partner was not Jewish, if you can believe that.

So my dad said to the jailer, “What are we supposed to do?” and the jailer said, “Look, I’ll tell you the truth. Your friend is the best dentist in this little town, and the number two dentist is a big Nazi. He’s the guy behind this. [Your friend has] got to leave town.” The dentist had a distant relative in Texas, and my dad wrote and told him the story. The [relative] said, “I don’t know this dentist, but if that’s the problem, I’m prepared to help.”

My dad got the dentist released from prison to go to America, and when the dentist got here, he kept pushing my dad and saying, “You live in a country where there’s no free press and you don’t know what’s going on, but you’re in grave danger and you’ve got to leave.” Eventually my parents decided to take him up on it. They had to sell all of their assets for 10 cents on the dollar. We took a ship from Rotterdam, Holland, to New York in August 1938.

 

Q: How old were you?

A: Thirteen. Kristallnacht was just three months later, and we would have all been killed. Isn’t that quite a story?

 

Q: That is an amazing story. And where did your family settle?

A: Chicago. They didn’t want to be in New York because everybody—all the refugees—were in New York. And in the 1920s, my dad had been a food broker. He was a [German-based] broker for one of the slaughterhouses in Chicago. He handled the shipments of lard for them. Lard was very precious in Europe in the 1920s. So my dad had worked for [the Chicago firm] on a commission basis. He thought—thinking like a European—“Well, I worked for them, and now they’ll do something for me.”

He went to the slaughtering company—one of the big companies, I won’t mention its name—and had a meeting with one of the executives. He said, “I did this for you 15 years ago,” and the man said, “Well, you got paid for it, didn’t you?” My dad felt shocked that that was the American way. [So] my dad first went to work in a factory. He had been a food broker in Germany and eventually he went to work as a salesman for a cheese manufacturer.

 

Q: What was it like for you, moving to a new country?

A: I had taken some English in school. But the real change in my life came after I graduated from high school. I got a job running an elevator. I didn’t have any money or know any better; I went to city college.

One day, a professor took me aside and said, “What are you doing here?” I said, “I’m going to college.” The professor said, “No, no, no. This is not college. You’ve got to go to the University of Chicago.” I said, “I can’t afford it.” He said, “Beg, borrow or steal, but get out of here and learn something.”

So I went home—we were very German and very obedient—and I said [what] the professor had told me. I had a little bit of money, my dad had a little money, so we kind of put it together. I went to the University of Chicago, and it was just totally different. There were fantastically learned people who were teaching us science, humanities, social science and how the world really worked.

 

Q: Have you ever gone back to Germany?

A: The first time I went back to Germany was in 1956, when I was working in the Justice Department. We had a case that was tried in the U.S. Court of Claims in Germany. The court took the plaintiff’s testimony in Germany … because they said he was old and frail and couldn’t travel. This was a suit by a Swiss inventor about whether royalties from his invention were capital gain or ordinary income. We tried it in Baden-Baden, and I felt very uncomfortable about the Germans and thought that they were being civil and not saying “Heil Hitler” only because we were Americans.

 

Q: Have you ever gone back to your hometown?

A: I went back to Essen in 1994 and—very interesting—one of the major buildings in Essen that survived the war, wasn’t bombed, was the main synagogue where I went as a child. The Germans, particularly before World War I, would build public-building walls 6 feet thick. It was that kind of a building, so during the war, the Germans used it as a horse stable. Of course, there were no Jews in Essen after the war, so they converted it into a museum and place of remembrance for the Jewish community.

 

Q: When did you become interested in law?

A: I was drafted in World War II and was in the Army. When I came back from the Army, I went back to the University of Chicago and I got a master’s degree in international relations. One day, the professor of international affairs comes up to me and he says, “Well, you’re about to get your degree, and what are you going to do then?” I was really surprised because at Chicago, professors don’t really talk to the students.

I said, “I think I want to become a foreign correspondent.” He said, “Well, that’s a great idea, but I think you should take a year of law school,” which seemed very strange to me. He said, “Oh, I don’t mean to sell your soul for a living like the people over there,” pointing over his shoulder at the law school. He said, “But they understand social structure better than we political scientists do.”

So I applied to law school and I got in, and it turned out I liked it very much. I was going to go for a year, but I liked it, so I stayed three years. And here I am.

 

Q: Did your interests always lie in the business arena?

A: Oh, no, no, no. Actually, at that time, I looked on law as kind of an abstraction—you know, here’s a case and here’s what happens to it. I interviewed a little on Wall Street and didn’t like it and went to work for the government. Most of my time I spent in the Justice Department. I tried a lot of cases all over the country, but eventually [left.] There were a number of bright young lawyers—my contemporaries and my friends—in the division of the Justice Department where I worked, and they all left. Many got tired of going through the routine.

I’ll give you just a typical story. I had written a letter to a U.S. attorney someplace in the Midwest, and about a week after I put the letter in the outbox, I got a call from the assistant chief. He said, “Kurt, I got your letter, and we can’t send that letter.” I said, “What’s the matter with it?” He said, “Well, you’re using this word, and I don’t think that’s a proper English word.” I’ll tell you what the word was, I remember it. Something had “metamorphosed.” I went up to his office and showed it to him in the dictionary, and he said, “Well, we can’t send the letter anyway.” I said, “Why not?” and he said, “We’re signing the chief’s name and the chief doesn’t use that word.”

 

Q: Frustrating. So what did you do after that?

A: While I was in the Army, one of the things the Army did was send me to language school in Berkeley. So I came to know California and I thought, “If I’m going to go into private practice, which seems to be the only thing left for me to do, I’ll go to San Francisco because I really liked it.”  A friend of mine said his father had a lawyer friend in San Francisco who needed a lawyer to work for him. He was a good guy, but he didn’t pay me very much, and when I asked for a raise, he let me go. I had just been married and we had just come back from a belated honeymoon trip to Europe.

 

Q: When was this?

A: 1960. I talked to a fellow I knew. He said, “I’ve got room in my office if you want to come work for me,” and I thought, “My gosh, that’s such a big law firm—10 lawyers.” [Laughs] But I liked the guy and he was very smart, so I went to work for him and I found out pretty much immediately that I had made a mistake until then in [thinking] that I didn’t want to work for a sizable law firm. The problems were more interesting, more challenging. I stayed with that law firm for 29 years. At that time, it was called Severson, Zang, Werson, Berke & Larson.

 

Q: Eventually you moved on.

A: I didn’t want to stop practicing when I got to retirement age, and through an acquaintance, I was introduced to a man named Bill Gughner, the managing partner of Nossaman. I had a drink with Bill Gughner, who was from Los Angeles, to see whether that might be a fit, and the drink turned into dinner, and I drove him down to the airport to catch the last plane to Los Angeles. I decided to join Nossaman and I’ve been here ever since, 25 years now.

 

Q: When you started with Nossaman in 1989 you were …

A: 64. I’m now 89, and I’m not getting the business that I should be getting, but when I get it, I can do it as well as ever, I think.

 

Q: You’ve no doubt seen many changes in the field of law.

A: When I worked for the single practitioner in the late 1950s, he knew the lawyers in town. He said, “Watch out for lawyer so-and-so, he doesn’t tell the truth,” and, “Watch out for lawyer so-and-so, people don’t want to talk to him.” Nowadays, there are so many lawyers that it’s really very rare that you happen to deal with somebody who you already know. It’s very impersonal. I think that this is an inevitable trend in society. If you look at, say, groceries, you used to be able to talk to the grocer and say, “I like this or this kind of bagel or rolls.” “Well, we don’t have those anymore, but try this one.”

 

Q: What keeps you coming to the office every day?

A: People have problems that need a solution, and the law provides solutions—not necessarily the best solutions, but solutions. It’s put together in order to allow society to function and people to get along, to adjust to each other. Even if they have a big lawsuit and lose it, they may get very ugly about it, but eventually, people get over it and life goes on.

What I think I’m really good at is dealing with chaos. Dealing with a complicated, messy situation and trying to rationalize it.

 

Q: Tell me about your book, Off the Record: Sidebars from a Trial Lawyer’s Life.

A: I used to like to tell war stories. I’d like to preserve them, so I had this in mind for a long time. I thought that most people—young lawyers, law students or the general public—just don’t have any clue what the life of a lawyer is like. I think one of the real skills of a trial lawyer is to be able to think on your feet. I wanted to make that point.

 

Q: Could you give us an example of one of the stories?

A: I was trying a case, and much of it depended on an expert. I was trying the case in Sacramento. One of my partners was preparing the expert. My partner said, “She’s ready, and we’ll be up in Sacramento after court tomorrow, and then you can put her on the following day.”

This was a very large and complicated case, and the expert was very good. My partners brought her up and I noticed some tension. I said to her, “Is there something that bothers you?” and she said yes. I went into a side room and closed the door, and she started crying. Now, this is a very mature woman, probably in her 50s. She knew how critical her testimony was. She was very tense because she was concerned that it might not go over with jury and the case would be in trouble. There’s no book that tells you what to do. She was falling apart—and I needed her in the morning.

I got an idea. I said, “Look, I appreciate that, and you’re absolutely right. But,” I said, “I’m in the same position. I have to talk to that jury six hours a day, and I could make a wrong move or make a slip and cost my client the case. Somehow or other, I get through this, and if I can do it, you can, too.”

It worked, and, boy, she really killed the testimony the next day. She was terrific.

 

Q: How about a case that really stands out in your mind?

A: Probably the most challenging case I ever had was a 6,000-person class action. Just before you get to Truckee, there’s a mountain on the left-hand side, and my client had developed a 6,000-lot second-home subdivision on that mountain. The subdivision ran into some trouble; the client solved all those problems. [But] someone filed a class action claiming that the client had defrauded the buyers.

They had a very prominent lawyer who led the charge for the plaintiffs, and we tried that before a jury for 5 ½ months. The judge, with whom I had been on a first-name basis before he became a judge, had been president of the plaintiff’s bar at one time. The jury was out for nine days, and on the eighth day, a juror dropped dead.

 

Q: Did you have an alternate?

A: Yeah, we still had two alternates. That’s a good story, too. So we got one alternate. After an hour or two, [the jury] sent in a question and the question read something like, “If somebody wants to award damages, do they have to have a reason?" Of course, a big argument broke out between the plaintiff’s lawyers and us, and the judge finally gave the standard jury charge about the basis for damages. In another hour or so, they came back with a 9-to-3 defense verdict. That case was probably worth at least $100 million. … We tried the entire economics of that mountainside.

 

Q: Is that the outcome you expected when you heard that question?

A: I was sweating it every day, every minute. Much later, we decided that we would give a dinner for the jurors after the jurors were discharged. The nine who had voted for us came; the other three didn’t. The foreman told me what that question was about. He said, “You just had bad luck. You got Mary instead of Helen” or “Helen instead of Mary.” I said, “What do you mean?” He said, “If it would have been the other [alternate], it would have taken five minutes.” I said, “You talked to her?” and he said, “Of course. We ‘lived together’ [in the jury box] for six months.”

 

Q: What do you see as the role of law?

A: I think that there has been a constant evolution of the law: It’s two steps forward and one step back, sometimes one step forward and two steps back. It’s not always very receptive to new ideas. Law has created a great deal of social change, desirable social change.

 

Q: What do you think about the trend toward fewer trials?

A: Thirty years ago, I think I went to court once a week for something, and now I go once every three months or less. Part is I’m older and getting different kinds of work to do, but I think it’s [true] for younger people too. It was always true that most cases settled. Out of 100 disputes, only 10 get to the point where people really want to follow them up, and out of 100 disputes that are followed up, 90 to 95 percent settle. But I think, by and large, mediation is a good thing. I think that people live more happily if they resolve their problems and go home with half a loaf—or lose only a half of loaf—and get on with it.

 

This interview was edited and condensed.

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