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Two decades ago, the film “Erin Brockovich” helped make Thomas Girardi a folk hero.
Already an accomplished trial attorney who pursued personal injury cases against large corporations, he was part of the legal team when Ms. Brockovich tackled Pacific Gas & Electric in 1993. Ultimately, the service Californian public has been forced to pay people hundreds of millions of dollars. who said they got cancer and other ailments from drinking contaminated groundwater.
The film helped introduce the world to “toxic tort” litigation – cases resulting from exposure to chemicals and pollutants. And Mr. Girardi, who was fired for the credits of the film and served as an advisor on the film, reaped the rewards for his clients and himself: he went on to make billions of dollars for the clients of the company. Pharmaceuticals Merck and married a singer who has a spot on “The Real Housewives of Beverly Hills”.
But now Mr Girardi is playing in his own legal drama – one that William F. Savino, a lawyer for one of the firms now suing him, has called “an almost Shakespearean tragedy.”
Simultaneous lawsuits in state and federal courts in Los Angeles and Chicago have left Mr. Girardi’s personal and professional life in tatters as he faces charges of misconduct, including hijacking money that was supposed to go to the families of the 2018 Lion victims. Air crash, which led to the grounding of the Boeing 737 Max.
Lawyers for Mr Girardi, 81, suggested to the court that he was no longer mentally competent – an idea that another lawyer for the Lion Air families said was just an attempt to avoid liability of a Ponzi scheme that ultimately collapsed.
Mr. Girardi owes tens of millions of dollars to finance companies and hedge funds that loaned money to his small Los Angeles law firm, Girardi Keese, according to court documents. He and the company went bankrupt in December and most of its assets were frozen. Last week, a federal judge ordered the appointment of an interim trustee “to take immediate possession of the books and records” to determine how much money he has and owes others.
Meanwhile, a federal judge in Chicago is holding hearings on fraud charges against Mr. Girardi over a settlement with Boeing over the Lion Air crash. Lawyers at another firm representing families of victims say Mr Girardi may have embezzled at least $ 2 million in settlement money paid by Boeing, which acknowledged that a software glitch contributed to the crash which killed 189 people.
And then there are personal conflicts. Mr Girardi’s wife of 21 years – Erika Jayne, singer and star of the reality TV show ‘The Real Housewives of Beverly Hills’, filed for divorce in November amid mounting debts and allegations financial mischief began to mount.
It’s a staggering drop for Mr. Girardi, who in 2014 was inducted into the Trial Lawyers Hall of Fame. The group noted that it had obtained more than 30 favorable jury verdicts for clients and praised it for its role in more than 100 settlements, including the PG&E case and the resulting $ 4.85 billion settlement. complications associated with Merck’s pain medication, Vioxx.
Now, Mr. Girardi’s legal practice is effectively shut down, throwing further lawsuits into turmoil. His company represented approximately 8,000 clients in the so-called Porter Ranch environmental litigation – a high-profile lawsuit involving 36,000 people who lived near a major gas leak in 2015. Documents filed by the court believe the litigation could lead to settlements worth $ 1 billion just for Mr. Girardi’s clients, who now need new representation.
Mr Girardi’s firm was lead counsel in the Lion Air litigation, and Boeing paid him an undisclosed sum that was supposed to go to the families of the victims. But at least $ 2 million of that money was not distributed, said Jay Edelson, a lawyer who represented other clients in the litigation. Lawyers for Mr Girardi suggested to the Chicago court that neither he nor his law firm were able to pay the disputed money.
And at a hearing last month, Evan Jenness, a criminal defense attorney hired by Mr. Girardi, told Judge Thomas M. Durkin that she wanted a “mental assessment” from Mr. Girardi because “he is unable to advise me effectively on how to defend it.
Ms. Jenness did not respond to a request for comment. The lawyer representing Mr Girardi’s firm, Michael Monico, said in an email that he had no new information to provide.
Mr Edelson said the suggestion that Mr Girardi’s competence might be at issue was a trick to evade responsibility and accused Mr Girardi and his company of “running a Ponzi scheme” for many years. In a recent court filing, Mr Edelson’s company said Mr Girardi had a history of deferring payments until money came from other settlements and jury verdicts.
Mr Edelson said his business had started to be wary that something was wrong over the summer as some of the victims’ families had not been paid by Mr Girardi’s business, even though Boeing had largely settled in with families by early 2020.
“We continued to get many apologies, but we had no specific knowledge that the money had been taken,” Edelson said. “We knew the money wasn’t going to customers in the fall.”
In early December, Mr Edelson filed court documents alerting Judge Durkin to problems with payments. In a file filed Jan. 5 by Mr. Edelson’s company, he included a transcript of a voicemail message left by Mr. Girardi around Thanksgiving.
“Don’t be mean to me, be nice to me,” Mr Girardi said in the post, according to the file. “I’m fine. It’s because of me that we got this, by the way. I’ll be in touch, don’t worry about everything. We’re friends. Things are going to be okay.”
As the bankruptcy case progresses, it is not clear whether the families of the Lion Air crash victims or Mr Girardi’s creditors will be paid first. But that is perhaps the least of Mr. Girardi’s concerns.
In many states, the embezzlement of customer money can be grounds for expungement and even criminal prosecution. At a hearing last month, Judge Durkin called Mr. Girardi’s conduct “unacceptable,” said he would refer the case to federal prosecutors. Later that day, the US attorney’s office in Chicago filed a motion with the judge to unseal the confidential settlement documents for law enforcement review.
Shanin Specter, a Philadelphia trial attorney who was co-counsel with Mr. Girardi in the Vioxx litigation, said Mr. Girardi had a well-deserved reputation as one of the top trial attorneys from the country. But the allegations that he has embezzled customers’ money, if true, are inexcusable, Mr Specter said.
“Taking your client’s funds is the professional equivalent of hitting an electrified rail,” Specter said. “It’s professional suicide.”
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