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California Bar Needs Housecleaning, Reform: Retiring Top Justice

Nov. 30, 2022, 11:05 PM

California Bar reform is on the to-do list for the next state supreme court chief justice along with bringing in mediators for oversight, retiring Chief Justice Tani Cantil-Sakauye said Wednesday.

Cantil-Sakauye, in her last meet the media meeting before retiring in January, said much needs to be done to correct the deficiencies revealed by the Thomas Girardi affair in which hundreds of millions of dollars in claims were filed against the bankruptcy estates of Girardi Keese and the now-disbarred Girardi.

“The bar needs to do in-house cleaning and investigation of the Girardi lawsuits and bring all of that to bear. And we’ll take the lessons learned from the years and hundreds of Girardi complaints and find a way to have an effective audit that really permits them to go forward with credibility, and also in the Girardi orbit, other people who might have been involved,” Cantil-Sakauye said.

“It’s hard to imagine that any one person, one entity is responsible for so much but there needs a deep dive,” the jurist said.

The state bar, prompted by a Los Angeles Times lawsuit, said it opened a total of 205 disciplinary matters on Girardi over four decades, and that 120 of them involved alleged client trust account violations. At least 69 of those complaints were submitted on or after Dec. 18, 2020, when a petition was filed to force his Girardi Keese firm into bankruptcy.

The supreme court disbarred Girardi in June and ordered $2.3 million in restitution to clients whose money was stolen.

“The bar has so much more potential. So, if I had a list the first would be raised dues. Raise dues for practicing attorneys, find a way to invest in the disciplinary system immedidately. Also look to ways to maintain records of past conduct and prior conduct, even conduct that isn’t necessarily actionable, but creates a history, a record of conduct for particular frequent fliers of state bar complaints,” she said.

Higher Fees

California lawyers are overseen by the state supreme court, which handles admission and discipline, and the California Legislature, which uses its power under the Business & Professions Code to push for bar reform. The dual-parent system frequently leads to conflicts with one branch trying to exert changes over the bar, a state agency long criticized for failing to protect the public.

The annual fee bill, in which the California Legislature approves licenses fees for practicing lawyers, likewise vexes the outgoing chief justice who calls for higher fees to fund bar improvements.

“The bar is fully funded by lawyers’ fees and dues. There’s not a single penny of state and general fund,” yet every year lawmakers deal with a funding bill for the agency that oversees more than a quarter million lawyers, she said.

“Why every year do you examine the bar in this way, when it’s not a penny of general fund? They are a corporation answerable to a board of trustees and a supreme court, and they need to raise their dues in order to buy a competent computer system, hire more investigators, revamp their disciplinary system,” she said.

Mediator Oversight Needed

The bar additionally needs to regulate, oversee, and discipline mediators. “Mediators are lawyers, but there’s no particular unit that I’m aware of in the state bar that focuses on mediator complaints in the same way attorney complaints are handled in the same way they can also get buried,” Cantil-Sakauye said.

With such a rise of mediation and arbitration, “there ought to be focus on mediation and mediators’ training qualifications and the complaint process specifically for that,” she said.

A decade ago, 10 million filings were annually made in California. That number has dropped to 3.5 million, and it’s not pandemic related, Cantil-Sakauye said. “So what I worry about rule of law. Where are the cases going,” she asked. “I know where they’re going. They’re either going to mediation, arbitration, or they’re not getting filed because of the justice gap” where it’s still too expensive to hire a lawyer.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Maya Earls at mearls@bloomberglaw.com; Rob Tricchinelli at rtricchinelli@bloomberglaw.com