April
2022

A report on where
things
stand



Former Presiding Judge Buckley Retires...Girardi’s Misconduct Said to Have Inspired Audit Report on State Bar...Garnett Confirmed as District Court Judge, Remains on Ballot As Superior Court Candidate...Federal Judge Thomas to Go on Senior Status



Judges, Lawyers Under Scrutiny


Michael J. Avenatti
Attorney/Convict

Michael J. Avenatti

The Ninth U.S. Circuit Court of Appeals has before it California lawyer Michael Avenatti’s contention that subjecting him to a second trial on 10 counts of wire fraud in connection with allegedly siphoning nearly $10 million in client funds would constitute double jeopardy.

The first trial in the U.S. District Court of the Central District of California came to a halt on Aug. 24 when Senior Judge James Selna declared a mistrial because prosecutors withheld potentially exculpatory financial data gleaned from Avenatti’s law firm’s servers. On Oct. 4, Selna rejected Avenatti’s motion to dismiss based on double jeopardy, finding that the motion lacked merit, under case law, because the Brady error was not the result of misconduct and prosecutors had not “goaded” Avenatti into seeking a mistrial.

The lawyer, acting in pro per, filed an interlocutory appeal, and the Ninth Circuit denied a motion to dismiss it.

State Bar disciplinary charges were filed July 29, 2019. Avenatti was placed on interim suspension on June 4, 2020 based on his Feb. 14 conviction in the U.S. District Court for the Southern District of New York on attempted extortion and wire fraud counts.

The case, tried before a jury in Judge Paul G. Gardephe’s courtroom, stemmed from Avenatti’s effort to exact a sum of about $25 million from Nike by threatening to blacken its reputation in litigation if it did not comply. On July 8, 2021, Avenatti was sentenced to two-and-a-half years in prison by Gardephe.

Avenatti is slated to be sentenced on May 24 in the U.S. District Court for the Southern District of New York in another case. He was convicted on Feb. 4 of wire fraud and aggravated identity theft in connecting with cheating former client Stormy Daniels out of nearly $300,000.

The money Avenatti pilfered was an advance to Daniels in connection with her book, “Full Disclosure,” in which she tells of her affair with then-President Donald Trump. Avenatti forged her signature on a letter to her literary agent, directing that payments be sent to a bank account he controlled. Avenatti represented himself in the proceeding.

The lawyer handled a number of high-profile cases, including representation of Daniels—whose actual name is Stephanie Clifford—in her actions against Trump in an effort to skirt a 2016 nondisclosure agreement she signed in connection with a $130,000 pay-off to her for agreeing not to talk publicly of their 2006 affair. He also handled her action against the then-president for defamation.

Thomas V. Girardi
Former Practicing Lawyer

Thomas V. Girardi

The California Supreme Court has before it the Jan. 10 recommendation by the State Bar Court that former premier personal injury attorney Thomas V. Girardi be disbarred.

The State Bar announced on Jan. 24 that it will intensify its efforts to determine whether disciplinary action against Girardi was averted, through the years, by virtue of Girardi’s influence and the connections he had within the organization. The downtown Los Angeles law firm of Halpern May Ybarra Gelberg LLP was hired to conduct a probe. A state auditor’s report, issued April 14, declares that the State Bar is doing a shoddy job of dealing with attorneys who time and again breach ethical standards, with repeated complaints against the violators resulting in no action. Girardi was not named in the report, but the Los Angeles Times, in a news story on the report, said:

“The audit of the State Bar was ordered last year by the Legislature in the wake of a Los Angeles Times investigation that documented how the now-disgraced attorney Tom Girardi cultivated close relationships with the agency and kept an unblemished law license despite over 100 lawsuits against him or his firm—with many alleging misappropriation of client money.”

It noted:
“That Girardi's serial misconduct went unchecked for decades has forced a reckoning among the legal establishment.”

Girardi, 82, is a conservatee, is on involuntary inactive status, is in bankruptcy, is being divorced by his trophy wife, actress/singer Erika Jayne, and has moved from his Pasadena mansion—which was seized by a bank—into an assisted living facility. His reputation is irredeemable based on litigation in which it is claimed that he and his firm stole millions of dollars in clients’ settlement funds.

An initial peek by the State Bar into its inaction in the face of complaints against Girardi led the regulatory agency to admit in July, 2021, that an internal review “revealed mistakes made in some investigations over the many decades of Mr. Girardi’s career going back some 40 years and spanning the tenure of many Chief Trial Counsels.” The bland admission of “mistakes” was widely seen as inadequate absent elaboration.

 A statement by State Bar Board of Trustees Chair Ruben Duran, who heads Best & Krieger LLP’s Ontario office, suggests that the State Bar is now set to dig more deeply than before. He said:

“Mark our words: we will go wherever the evidence leads us.”

Duran also commented:

“The State Bar Board leadership and staff take very seriously the immense harm done by Thomas Girardi to innocent victims. We have been proactively doing everything in our power to learn from the past and do better in the future to prevent harms like this from recurring.

“This necessarily includes assessing whether intentional wrongdoing by anyone associated with the State Bar may have influenced how complaints against Girardi were handled.”

While Duran expressed a resolve to determine what occurred when complaints about Girardi were received, he did not provide hope that much of what is learned will be shared with the public. To the contrary, he said:

“Details of the investigation, including details of past closed complaints and investigations, must remain confidential to comply with the law and to give this investigation the greatest chance of success.”

The probe will doubtlessly include questioning of Tom Layton who, while an investigator for the State Bar, acted as an aide to Girardi, frequently accompanying the high-profile lawyer at social events; attorney Walter Lack and former State Bar President Howard Miller, who worked with Girardi on a case that resulted in an ethics probe by the Ninth U.S. Circuit Court of Appeals (with a determination that Girardi and Lack had committed misconduct); and former State Bar Court prosecutor Dale G. Nowicki who had a clandestine professional relationship for more than a year with Girardi’s son-in-law, attorney David Lira.

Layton

The Los Angeles Times, in a July 13 article by Harriet Ryan and Matt Hamilton, reported:

“As an investigator for the State Bar of California, Tom Layton was responsible for policing the legal profession for rogue attorneys.

“But while collecting a salary as a watchdog for the public, Layton spent work hours advancing the interests and political connections of a lawyer with a long record of misconduct complaints: the now-disgraced trial attorney Tom Girardi, emails obtained by the Los Angeles Times show.

“During years when clients accused the attorney of stealing from them, Layton, the most high-profile investigator at the agency, was arranging dinner dates for Girardi with civic elites, such as then-Los Angeles Police Chief Charlie Beck and billionaire developer Ed Roski, and otherwise acting as his personal assistant, political operative and, at times, chauffeur, according to the emails.”

Lack, Miller

Girardi’s firm, Girardi | Keese, in tandem with Lack’s firm, Engstrom, Lipscomb Lack, attempted to levy execution in the United States on a $489 million Nicaraguan default judgment against Dole Food Company. That company had not been named as the defendant but court documents were altered to make it appear that it had been. The firms’ bid in the U.S. District Court for the Central District of California failed.

On July 6, 2005, Miller, of Girardi’s firm, a week before he was to orally argue the appeal before the Ninth Circuit, determined that the judgment was invalid and that the appeal should be dismissed. It was dismissed five days later.

However, the Ninth Circuit on Aug. 25, 2005, issued an order to show cause to Girardi, Lack, Miller, two Lack associates, and the two firms to show cause “why it or he should not be required to reimburse the appellees for fees and expenses incurred in defending this appeal, and why it or he should not be suspended, disbarred, or otherwise sanctioned.” The alleged conduct was described as “filing a frivolous appeal, falsely stating that the writ of execution issued by the Nicaraguan court named Dole Food Company, Inc. as a judgment debtor, falsely stating that the writ corrected mistakes in the judgment, and falsely stating that the notary affidavit constituted an accurate translation of the writ.”

The OSC was discharged on March 28, 2006, as to Miller.

Senior Judge Wallace A. Tashima was appointed as a special master. In an Oct. 7, 2009 report (incorporating corrections to an earlier report), he declared:

“In a high stakes gamble to enforce a foreign Judgment of nearly a half billion dollars, Respondents initiated and directed years of litigation against Defendants. Respondents efforts went beyond the use of ‘questionable tactics’—they crossed the line to include the persistent use of known falsehoods….Respondents made these false representations knowingly, intentionally, and recklessly. Their actions vexatiously multiplied the proceedings at great expense to Defendants and required the Ninth Circuit to deal with a frivolous appeal.”

Tashima called for sanctions totaling $390,000, which were not contested.

A three-judge panel—comprised of Judges William A. Fletcher, Marsha S. Berzon, and N. Randy Smith—on July 13, 2010, said:

“As early as January 2003, respondents Lack and Girardi were aware that the Nicaraguan Judgment named the wrong defendant and that the discrepancy could doom any enforcement action in American courts.”

 The panel added that the “careful and detailed decision” by then-District Court Judge Nora Manella (now presiding justice of Div. Four of this district’s Court of Appeal) “should have given them pause in pursuing an appeal, as it laid bare the fundamental and fatal flaws in their enforcement action.”

The judges noted that Girardi had a “practice of authorizing the Lack firm to sign his name on briefs that turned out to contain falsehoods,” and concluded that his “proven conduct is at most reckless.” They declared:

“THOMAS V. GIRARDI is formally reprimanded.”

Lack and his associate Paul A. Traina—whom the panel said “cannot, like Girardi, rely on a claim of ignorance”—were suspended from practice before the Ninth Circuit for six months.

Yet, the State Bar imposed no discipline on Girardi, Lack or Traina.

In light of Miller being State Bar president, a special prosecutor, Jerome Falk, was named. He found that no misrepresentations had been “intentional.” It later emerged that Falk had ties to Girardi and Lack; their law firms had been clients of his law firm.

Nowicki

It has also emerged that Nowicki, while a State Bar prosecutor, reported to a supervisor in the office who was overseeing the disciplinary proceedings against Girardi. At that time, Nowicki was moonlighting, practicing law with Lira, whose wife, Jacqueline Lira, is Girardi’s daughter. When it came to light, the State Bar said it did not know of Nowicki’s moonlighting as a lawyer, noting that it was not reported to it, in violation of a policy. Nowicki resigned from his State Bar post on Oct. 4. He is now practicing law with an office in La Mirada.

Lira left Girardi | Keese—which is now shut down—on June 13, 2020, after a heated confrontation with Girardi over his cheating of clients. He’s presently with Engstrom, Lipscomb & Lack, the firm of which Walter Lack is managing partner.

Girardi, while he was still practicing law, often teamed with Lack in representing clients in court. Girardi provided theatrics and Lack understood the legal aspects.

With the current focus on the State Bar’s disciplinary system, the question is presented whether other high-profile attorneys who were subjects of publicly aired allegations of misconduct—such as the late Neil Papiano and former Los Angeles County Bar Association President Paul Kiesel—escaped State Bar actions based on their prominence and clout.

 The Jan. 10 State Bar Court recommendation that Girardi be disbarred came as no surprise given that the ex-practitioner did not file opposition. Chief among the findings was that Girardi “committed an act of moral turpitude…by intentionally misappropriating $1,985,615.15” that belonged to the minor children of air crash victims.

Girardi and his firm represented four sets of plaintiffs—families, including minors—in multidistrict litigation in In Re: Lion Air Flight JT 610 Crash, assigned to the U.S. District Court for the Northern District of Illinois. The case stemmed from a plane crash on Oct. 29, 2018, causing the death of all 189 persons who were aboard. A settlement was reached. In violation of court orders to electronically disburse settlement funds that were in his client trust account (“CTA”), Girardi held onto $2 million of the funds. According to the State Bar complaint:
“On or about September 3, 2020, the balance in respondent’s CTA was $239,396.25. On or about December 4, 2020, before respondent had disbursed any portion of the $2,000,000.00 from respondent’s CTA to, or on behalf of the minor plaintiffs, the balance in respondent’s CTA was $14,384.85.”

On Dec. 14, 2020, U.S. District Court Judge Thomas Durkin of the Northern District of Illinois found Girardi in contempt for violating his orders, directed entry of a $2 million judgment against him, and ordered that his assets be frozen.

The judge said of the plaintiffs:

“These are widows and orphans. Half a million dollars for any one of these families is a significant amount of money. Life changing, given the tragedy they went through.”
A Dec. 2, 2020 class action alleges that Girardi and Jayne embezzled the money to fund their “outrageous lifestyles…in the glitz-and-glam world of Hollywood and Beverly Hills.”

It is also alleged by the State Bar that Girardi “willfully and intentionally misappropriated at least $269,759.70” of a $504,400 settlement of a client’s suit for the wrongful death of her husband.

Girardi was relegated to involuntary inactive status by the State Bar on March 9, 2021 Disciplinary charges were filed against him on March 30, 2021, alleging 14 counts involving the large-scale cheating of clients.

His ability to pay damages is in doubt. Girardi now professes a lack of assets, saying in court papers:

“At one point I had about $80 million or $50 million in cash. That’s all gone. I don’t have any money.”

The trustee in the bankruptcy of Girardi’s dissolved law firm, is seeking $25 million from Jayne, asserting she knew that funds for gifts and “glam” services lavished on her were derived from settlements stolen from her husband’s clients.

The New York Post reported yesterday:

“Ain’t love grand?

“Tom Girardi and ‘Real Housewives of Beverly Hills’ star Erika Jayne’s longtime marital home has gone into foreclosure—with another abysmal price cut after nearly a year on the market without any offers, The Post can report.

“Initially listed for $13 million last May, the Pasadena, Calif., estate now sits on the market for just $7.98 million.”


Judiciary: Vacancies, Appointments




Ninth U.S. Circuit Court of Appeals

Three members of the Ninth Circuit, who were appointed by Democratic presidents, have announced they will assume senior status upon the confirmation of a successor named by Democratic President Joe Biden. They are former Chief Judge Sidney Thomas, 68, and Judge M. Margaret McKeown, 70, both appointed by President Bill Clinton, and Judge Andrew Hurwitz, 74, an appointee of President Barack Obama.

 

With the confirmation on Wednesday by the U.S. Senate of Los Angeles Superior Court Judge Sherilyn Peace Garnett as a judge of the District Court, there are now five vacancies. Garnett replaces Judge Manuel Real who assumed senior status on Nov. 4, 2018, after 52 years on the bench (and died June 26, 2019).

Judge John A. Kronstadt, 70, retired April 1. An appointee of then-President Barack Obama, he assumed office in 2011.

He is the husband of Court of Appeal Justice Helen Bendix of this district’s Div. One. No successor has been named.

Judge James V. Selna took senior status on March 4, 2020, and Riverside Superior Court Judge Sunshine Suzanne Sykes, a citizen of the Navajo Nation, has been nominated to take his place.

Two doomed nominations are those of Los Angeles Superior Court Judge Hernan D. Vera, chosen Sept. 20 for the seat previously occupied by Judge Margaret Morrow who went on senior status Oct. 29, 2015, and U.S. Magistrate Judge Kenly Kiya Kato of the Central District of California, picked on Dec. 15 to assume the office of Judge Virginia Phillips, a former chief judge, who retired on Feb. 14, on her 65th birthday. The Senate Judiciary Committee did not report favorably on the nominations.

Judge Beverly Reid O’Connell died on Oct. 8, 2017, at the age of 52. No successor has been named.



There are no vacancies

Second District

Gov. Gavin Newsom has named Court of Appeal Justice Maria E. Stratton, 69, of this district’s Div. Eight as presiding judge of that division. If confirmed by the Commission on Judicial Appointments—comprised of Chief Justice Tani Cantil-Sakauye, Attorney General Rob Bonta and Court of Appeal Senior Presiding Justice Arthur Gilbert of this district’s Div. Six—she will replace Tricia Bigalow, who retired.

There are three vacancies. Justices Laurie Zelon of Div. Seven and Halim Dhanidina of Div. Three retired and Justice Jeffrey Johnson of Div. One was removed by the Commission on Judicial Performance based on a pattern of improper sexual advances and other misconduct.

Court of Appeal Justice Frank J. Menetrez of the Fourth District’s Div. Two has applied for a transfer to this district. Others under consideration for appointment here include former Los Angeles County Bar Association President Rex Heinke, 71.

Los Angeles Superior Court Judge Upinder S. Kalra is serving as a pro tem justice through May 31.

 

Seats in other districts are filled.


Los Angeles County

Former Los Angeles Superior Court Presiding Judge Daniel J. Buckley’s last day on the bench was April 15, with his official retirement, after using up earned vacation days, being Monday. Judge Holly Kendig will stop working a week from today with an official retirement date of June 16.

Judges who were up for reelection this year and chose not to run to succeed themselves, thus creating open seats in the June 7 primary, are John P. Doyle, who retired March 10; Stephen M. Moloney, who departed the court Tuesday with an official retirement date of June 3; and Judges Randall F. Pacheco and Bruce Marrs who have not specified retirement dates.

Judge Gloria White-Brown has said she will retire this year, but nonetheless declared her candidacy for reelection and, despite initial appearances of possible challenges, will be reelected without opposition.

There are nine contests on the June 7 ballot, including one in which the name of Sherilyn Peace Garnett will appear on the ballot, notwithstanding her confirmation as a U.S. District Court judge. Should she win, her replacement will be named by Gov. Gavin Newsom.



 

 

 


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