When is extortion legal?

When it's done in the court system - usually - but not always.

John Stossel writes that "Payoffs and bribery aren't the real problem. Extortions is."

In his column in WSJ.com, Small Victories for Tort Reform, he writes:

Foes of lawsuit abuse have been writing gleefully about the fall of Dickie Scruggs, Bill Lerach and Melvyn Weiss. All three lawyers are likely to spend time in jail for plotting to bribe a judge (Scruggs) or paying kickbacks (Lerach and Weiss).

Good riddance.

Locking them up will stop them from further damaging America – at least for a few years. But it's a small victory for reformers.

New members of the parasite circus will just step forward to take their place. And what these aggressive class-action and securities lawyers do legally is more damaging to America than the crimes that Scruggs, Lerach and Weiss committed. They broke laws to cheat other lawyers out of some loot, but at least that barely hurt the public.

Emphasis mine.