California Bar Releases Decades of Girardi Discipline Docs (1)

The State Bar of California on Thursday released 40 years of disciplinary records for the now-disbarred attorney Thomas Girardi, admitting that its handling of those matters revealed “serious failures” in its system of discipline.

The agency 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, according to the bar’s announcement.

Charged by the State Bar with 14 counts of violating ethics rules and California law for stealing millions of dollars from his clients, Girardi in June was disbarred by the state’s top court, ordered to pay some of those clients more than $2 million and assessed $5 million in sanctions and costs. The man and his firm were forced into bankruptcy.

“There is no excuse being offered here; Girardi caused irreparable harm to hundreds of his clients, and the State Bar could have done more to protect the public,” Ruben Duran, Chair of the Board of Trustees of the State Bar, said in an open letter explaining the disclosures on Girardi. “We can never allow something like this to happen again.”

The report is the latest admission that the agency that oversees more than 250,000 California lawyers failed to protect the public. It follows the California Supreme Court last week approving release of the records after the Los Angeles Times sued the bar for their disclosure.

The newspaper argued that without the information about how the agency handled, or mishandled, years of complaints about the nationally known plaintiffs’ lawyer, “the public cannot hold the Bar accountable, and will be stymied in any attempt to evaluate the ‘reforms’ that the Bar publicly has touted in the wake of the Girardi scandal.

‘Simply Breathtaking’

Three of the 205 disciplinary matters led to the disbarment, according to the organization, whose membership is compulsory for California licensed lawyers, while 64 were closed afterward due to his disbarment. “Thirteen other matters were previously resolved through non-public measures at the investigation, prefiling, or post filing stages,” the regulator said.

“Nonpublic measures may include non-public private reprovals, agreements in lieu of discipline, admonitions, warning letters, or directional letters,” it said in a footnote to Thursday’s announcement. Sixty of the remaining 125 were closed at intake, 61 were closed after investigation and four at what it called the “prefiling stage.”

“It’s a staggering announcement. It’s bad to miss one clue or to miss two clues. To open 138 disciplinary matters and never get to ground is simply breathtaking,” Nora Freeman Engstrom, a Stanford Law professor specializing in legal ethics, said in an email. Freeman Engstrom noted that three of the 205 matters resulted in Girardi’s disbarment and 64 others were dismissed due to his disbarment.

“A little late to be closing this barn door, but better late than never,” Robert Hillman, a University of California—Davis professor of legal ethics. “It is amazing that the Bar had little or nothing in place to detect patterns of complaints. Putting systems in place to detect patterns is long overdue and may be one of the few good things to come out of the Girardi mess.

“The Bar’s tone is one of shame, which is entirely appropriate,” Hillman said in an email.

A Chicago federal judge in December 2020 found Girardi in contempt for stealing money recovered for the families of victims of the 2018 crash of Indonesia’s Lion Air Flight JT 610, in litigation against Boeing Co.

Edelson PC, local counsel for Girardi in the Lion Air case, in July sued the firm, Girardi, his then-wife, Real Housewives star Erika Girardi, attorneys David Lira, and Keith Griffin and others alleging they engaged in a Ponzi scheme that stole more than $100 million from clients, co-counsel, and others.

Shielding the Firm

“What we know now—for the first time—is that the Bar was receiving a constant drumbeat of complaints that Tom and his firm were stealing money for nearly 40 years. The Bar spent that time, not protecting the public as it was established to do, but shielding the Girardi Keese firm,” Jay Edelson said in an email.

“We still would not have known about the extent of these complaints had the LA Times not sued for the information. Most significantly, and this cannot be understated, the Bar is still protecting the wrongdoers,” the Chicago attorney said. “Tom was not working alone. The Bar uniquely knows the extent to which other currently practicing attorneys participated in his scheme. Yet, consistent with their behavior for decades, they still are not alerting the public, let alone taking any action.”

The bar, Edelson said, is “nothing short of an embarrassment and any claims that they have learned their lesson are simply not credible.”

The State Bar board of trustees chairman, Duran, said in the letter that the agency wants “the public to know that we take our statutory mission to protect the public seriously. As articulated in our new strategic plan, our public protection mission is the guiding light for all that we do. Moreover, meaningful change begins with a culture that values transparency and accountability, principles the Board of Trustees and State Bar leadership hold central in our decision-making.”

The California Legislature, which oversees lawyers under the California Business & Professions Code, has for years criticized and forced audits on the bar to push the agency to honor its role to protect the public.