Two decades ago, the film “Erin Brockovich” helped to make Thomas Girardi a kind of popular hero.
As a first-rate lawyer who pursued personal injury cases against large corporations, he was on the legal team when Ms. Brockovich went after Pacific Gas & Electric in 1993. Ultimately, the California dealership was forced to pay hundreds of millions of dollars to people who said they contracted cancer and other diseases by drinking contaminated groundwater.
The film helped introduce the world to the “toxic crime” litigation – cases arising from exposure to chemicals and pollutants. And Mr. Girardi, who received thanks in the credits for the film and served as a consultant on the film, reaped the rewards for clients and himself: he won billions of dollars for clients of the pharmaceutical company Merck and married a singer who has a spot on “The Real Housewives of Beverly Hills”.
But now Girardi is starring in his own legal drama – one that William F. Savino, a lawyer for one of the companies that are now suing him, called it an “almost Shakespearean tragedy”.
Lawsuits taking place simultaneously in state and federal courts in Los Angeles and Chicago have left Girardi’s personal and professional life in shambles as he faces charges of misconduct, including that he has embezzled money that should go to the families of the victims of Lion of 2018 Air crash that led to the grounding of the Boeing 737 Max.
Girardi’s lawyers, 81, suggested in court that he is no longer mentally competent – an idea that another lawyer for Lion Air families said was just an attempt to avoid responsibility for a Ponzi scheme that ultimately failed.
Girardi owes tens of millions of dollars to finance firms and hedge funds that have lent money to his small Los Angeles law firm, Girardi Keese, according to the court records. He and the company went bankrupt in December, and most of his assets were frozen. Last week, a federal judge ordered the appointment of an interim trustee “to immediately take possession of the books and records” to determine how much money he has and owes others.
At the same time, a federal judge in Chicago is holding hearings on charges of fraud against Girardi over a deal with Boeing over the Lion Air accident. Lawyers at another firm representing the victims’ families say Girardi may have gone astray minus $ 2 million in cash from the deal paid by Boeing, which acknowledged that a software problem contributed to the crash that killed 189 people.
And then there is personal conflict. Girardi’s 21-year-old wife – Erika Jayne, singer and star of the reality show “The Real Housewives of Beverly Hills”, filed for divorce in November when mounting debts and allegations of financial wrongdoing began to rise.
It is an impressive drop for Girardi, who in 2014 was included in the Trial Lawyers Hall of Fame. The group noted that he secured more than 30 favorable jury verdicts for clients and praised him for his role in more than 100 deals, including the PG&E case and the $ 4.85 billion deal resulting from complications associated with the painkiller Vioxx from Merck.
Now Girardi’s legal practice is effectively closed, leading to other upheavals. His company represented around 8,000 customers in the so-called Porter Ranch environmental litigation – a far-reaching lawsuit involving 36,000 people who lived close to a major gas leak in 2015. Lawsuits estimate that the litigation could lead to US value agreements. $ 1 billion just for Mr. Girardi Customers, who now need a new representation.
Girardi’s company was the main lawyer in the Lion Air litigation, and Boeing paid it an undisclosed amount that should be distributed to the victims’ families. But at least $ 2 million of that money has not been distributed, said Jay Edelson, a lawyer who represented other clients in the litigation. Girardi’s lawyers suggested to the Chicago court that neither he nor his law firm was in a position to pay the disputed money.
And at a hearing last month, Evan Jenness, a criminal defense lawyer hired by Mr. Girardi, told Judge Thomas M. Durkin that she wanted to get a “mental assessment” of Mr. Girardi because “he is unable to advise me effectively on how to defend it. “
Mrs. Jenness did not respond to a request for comment. The lawyer representing Girardi’s firm, Michael Monico, said in an e-mail that he had no new information to provide.
Edelson said the suggestion that Girardi’s competence might be in question was a ploy to evade responsibility and accused Girardi and his company of “running a Ponzi scheme” for many years. In a recent lawsuit, Edelson’s firm said Girardi had a history of postponing payments until money arrived from other jury deals and verdicts.
Edelson said his company suspected something was wrong over the summer because some of the victims’ families had not been paid by Girardi’s company, although Boeing had already made a deal with the families in early 2020.
“We received many apologies, but we didn’t know that the money was being taken,” said Edelson. “We knew the money didn’t go to customers in the fall.”
In early December, Edelson filed a lawsuit alerting Judge Durkin to problems with payments. In a lawsuit filed on Jan. 5 by Edelson’s company, he included a transcript of a voice message left by Girardi around Thanksgiving.
“Don’t be mean to me, be nice to me,” said Girardi in the message, according to the document. “I’m doing well. By the way, it was because of me that we did it. I’ll be in touch, don’t worry about everything. We are friends. Things will work out well.”
As the bankruptcy proceeds, it is unclear whether the families of the victims of the Lion Air accident or Girardi’s creditors will be paid first. But that may be the least of Girardi’s concerns.
In many states, embezzlement of a client’s money can be grounds for forfeiture and even criminal prosecution. At a hearing last month, Judge Durkin called Girardi’s conduct “unfair”, said he would refer the case to federal prosecutors. Later that day, the United States attorney’s office in Chicago filed a motion with the judge to remove the seal of confidential documents accordingly for authorities to review.
Shanin Specter, a Philadelphia defense attorney who served as Girardi’s co-attorney in the Vioxx litigation, said Girardi had a well-deserved reputation as one of the nation’s leading trial lawyers. But the allegations that he strayed from the client’s money, if true, are inexcusable, Specter said.
“Taking your client’s funds is the professional equivalent of touching an electrified rail,” said Specter. “It is professional suicide”.