A Hall of Fame Lawyer, a ‘Real Housewife’ and a Stunning Fall

20 years in the past, the film “Erin Brockovich” helped make Thomas Girardi one thing of a folks hero.

Already an completed trial lawyer who pursued private damage instances in opposition to giant firms, he was a part of the authorized group when Ms. Brockovich went after Pacific Fuel & Electrical in 1993. Finally, the California utility was compelled to pay a whole lot of thousands and thousands of {dollars} to individuals who mentioned they acquired most cancers and different illnesses from ingesting contaminated groundwater.

The film helped introduce the world to “poisonous tort” litigation — instances arising from publicity to chemical compounds and pollution. And Mr. Girardi, who was thanked within the film’s credit and served as an adviser on the movie, reaped the rewards for shoppers and himself: He went on to win billions of {dollars} for purchasers of the pharmaceutical firm Merck, and married a singer who has a spot on the “Actual Housewives of Beverly Hills.”

However now Mr. Girardi is starring in his personal authorized drama — one which William F. Savino, a lawyer for one of many companies that’s now suing him, referred to as an “nearly Shakespearean tragedy.”

Lawsuits taking part in out concurrently in state and federal courts in Los Angeles and Chicago have left Mr. Girardi’s private {and professional} life in tatters as he faces accusations of misconduct, together with that he misappropriated cash that was presupposed to go to households of victims of the Lion Air crash in 2018 that led to the grounding of Boeing’s 737 Max.

Legal professionals for Mr. Girardi, 81, have advised in courtroom that he’s not mentally competent — an concept that one other lawyer for Lion Air households mentioned was merely an try to keep away from accountability for a Ponzi scheme that lastly fell aside.

Mr. Girardi owes tens of thousands and thousands of {dollars} to finance companies and hedge funds that lent cash to his small Los Angeles legislation agency, Girardi Keese, in accordance with courtroom filings. He and the agency have been pushed out of business in December, and most of his property have been frozen. Final week, a federal decide ordered the appointment of an interim trustee “to instantly take possession of the books and information” to find out how a lot cash he has and owes to others.

On the similar time, a federal decide in Chicago is holding hearings into fraud accusations in opposition to Mr. Girardi over a settlement with Boeing over the Lion Air crash. Legal professionals with one other agency that characterize victims’ households say Mr. Girardi might have misappropriated a minimum of $2 million in settlement cash paid out by Boeing, which had acknowledged {that a} software program difficulty had contributed to the crash that killed 189 folks.

After which there may be the private strife. Mr. Girardi’s spouse of 21 years — Erika Jayne, a singer and star of the fact TV present “Actual Housewives of Beverly Hills,” filed for divorce in November simply because the mounting money owed and allegations of monetary misdeeds started to mount.

It’s a beautiful fall for Mr. Girardi, who in 2014 was inducted into the Trial Lawyer Hall of Fame. The group famous that he had secured greater than 30 favorable jury verdicts for shoppers and praised him for his function in additional than 100 settlements, together with the PG&E case and the $4.85 billion settlement arising from issues related to Merck’s ache remedy Vioxx.

Now Mr. Girardi’s authorized follow is successfully shuttered, throwing different lawsuits into upheaval. His agency had been representing about 8,000 shoppers within the so-called Porter Ranch environmental litigation — a far-reaching lawsuit involving 36,000 individuals who lived close to a serious gasoline leak in 2015. Court docket filings estimate the litigation may result in settlements value $1 billion only for Mr. Girardi’s shoppers, who now want new illustration.

Mr. Girardi’s agency was the lead counsel within the Lion Air litigation, and Boeing paid it an undisclosed sum that was presupposed to be distributed to the households of victims. However a minimum of $2 million of that cash wasn’t distributed, mentioned Jay Edelson, an lawyer who had represented different shoppers within the litigation. Legal professionals for Mr. Girardi have advised to the Chicago courtroom that neither he nor his legislation agency have been ready to pay the disputed cash.

And at a listening to final month, Evan Jenness, a felony protection lawyer employed by Mr. Girardi, informed Decide Thomas M. Durkin that she needed to get a “psychological analysis” of Mr. Girardi as a result of “he’s unable to successfully advise me on how you can defend him.”

Ms. Jenness didn’t reply to a request for remark. The lawyer representing Mr. Girardi’s agency, Michael Monico, mentioned in an e mail that he had no new info to supply.

Mr. Edelson mentioned the suggestion that Mr. Girardi’s competency could be at difficulty was a ruse to evade legal responsibility and accused Mr. Girardi and his agency of “operating a Ponzi scheme” for a few years. In a current courtroom submitting, Mr. Edelson’s agency mentioned Mr. Girardi has a historical past of suspending funds till cash is available in from different settlements and jury verdicts.

Mr. Edelson mentioned his agency turned suspicious that one thing was amiss over the summer season as a result of a number of the victims’ households had not been paid by Mr. Girardi’s agency although Boeing had largely settled with the households in early 2020.

“We stored getting plenty of excuses however didn’t have any agency information the cash was taken,” Mr. Edelson mentioned. “We knew the cash didn’t go to the shoppers within the fall.”

In early December, Mr. Edelson filed courtroom papers alerting Decide Durkin to the issues with the funds. In a Jan. 5 courtroom submitting by Mr. Edelson’s agency, he included a transcript of a voice message left by Mr. Girardi round Thanksgiving.

“Don’t be imply to me, be good to me,” Mr. Girardi mentioned within the message, in accordance with the submitting. “I’m doing good. It was due to me that we acquired this by the best way. I’ll be in contact, don’t fear about every part. We’re associates. Issues are going to work out good.”

Because the chapter case proceeds, it’s not clear whether or not the households of the victims of the Lion Air crash or Mr. Girardi’s collectors can be paid first. However which may be the least of Mr. Girardi’s issues.

In lots of states, misappropriation of consumer cash will be grounds for disbarment and even felony prosecution. At a listening to final month, Decide Durkin referred to as Mr. Girardi’s conduct “unconscionable” mentioned he would refer the matter to federal prosecutors. Later that day, the U.S. lawyer’s workplace in Chicago filed a movement with the decide to unseal confidential settlement paperwork for legislation enforcement to evaluate.

Shanin Specter, a trial lawyer in Philadelphia who has served as a co-counsel with Mr. Girardi on the Vioxx litigation, mentioned Mr. Girardi had a well-earned status as one of many nation’s prime trial legal professionals. However the allegations that he misappropriated consumer cash, if true, have been inexcusable.

“Taking your consumer’s funds is the skilled equal of touching an electrified rail,” Mr. Specter mentioned. “It’s skilled suicide.”

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