by Joyce E. Cutler
Bloomberg News
Nov. 2, 2022, 11:47 AM; Updated: Nov. 2, 2022, 4:34 PM
https://news.bloomberglaw.com/us-law-we ... theft-case
NOTICE: THIS WORK MAY BE PROTECTED BY COPYRIGHT
YOU ARE REQUIRED TO READ THE COPYRIGHT NOTICE AT THIS LINK BEFORE YOU READ THE FOLLOWING WORK, THAT IS AVAILABLE SOLELY FOR PRIVATE STUDY, SCHOLARSHIP OR RESEARCH PURSUANT TO 17 U.S.C. SECTION 107 AND 108. IN THE EVENT THAT THE LIBRARY DETERMINES THAT UNLAWFUL COPYING OF THIS WORK HAS OCCURRED, THE LIBRARY HAS THE RIGHT TO BLOCK THE I.P. ADDRESS AT WHICH THE UNLAWFUL COPYING APPEARED TO HAVE OCCURRED. THANK YOU FOR RESPECTING THE RIGHTS OF COPYRIGHT OWNERS.
** Edelson’s suit, insurance repayment, bar probes aim for justice
** Separate RICO case continues in San Francisco federal court
Former Girardi Keese attorneys David Lira and Keith Griffin will not be held in contempt for their involvement in the Lion Air crash litigation during which millions of dollars due to victims was stolen, a Chicago federal judge said, adding that Edelson PC, prosecutors, and the state bars will “bring bad actors to account.”
Judge Thomas M. Durkin, US District Court for the Northern District of Illinois on Wednesday denied in a contempt motion filed by Chicago-based Edelson—Girardi Keese’s local counsel in the class-action litigation in the 2018 crash of a Boeing Co. 737 Max 8 airliner that killed 189 passengers and crew.
The court held a three-day hearing in December on the motion as it pertained to Lira and Griffin one year after issuing an order finding since-disbarred plaintiffs lawyer Thomas Girardi and his firm in contempt and entering a judgment against them in the amount of the outstanding payments.
“Girardi took advantage of vulnerable people at their most vulnerable moments, and he used the prestige of his profession, the reputation of American courts, and the imprimatur of this Court to do it,” Durkin said. “It is nearly impossible to mend such a breach of trust.”
“The best we can do is demonstrate that the legal system Girardi besmirched has the ability to rectify its errors and bring bad actors to account. With the hearings and settlements initiated by the Edelson firm, a step has been taken in that direction,” Durkin said.
Durkin already found Girardi in contempt for taking clients’ money. Girardi has since been disbarred in California. The man and the firm are in involuntary bankruptcy. The Edelson firm earlier this year brokered a settlement with its insurance carrier resulting in the clients being paid in full.
“Evaluation of counsel’s conduct is now left to more proper authorities, whether they be a state bar, criminal prosecutors, or one of the several ongoing civil proceedings addressing the relationship between these parties specifically or Girardi’s actions more generally,” the judge said.
Attorneys’ Response
While the court didn’t grant all the relief the Edelson firm sought, “we are gratified that the Court found that we proved that Girardi was ‘operating a Ponzi scheme with client money,’” Jay Edelson said in an email.
“We look forward to continuing to do our part, through our civil cases and public advocacy, to usher in some badly needed reform,” Edelson said. “We do hope that, at some point, the California bar stops being a shield protecting those who participated in Tom’s criminal scheme and instead does the job it was established to do.”.
Edelson separately sued the firm, Girardi, 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.
“Tom Girardi’s conduct and treatment of the Lion Air clients is inexcusable. He should be held accountable for his actions as the sole owner and principal of Girardi Keese,” Ryan Saba, with Rosen Saba LLP representing Griffin, said in an email. “Mr. Griffin is grateful that the victims of the Lion Air crash have been made whole and is sympathetic for the ordeal imposed upon them.”
Michael D. Monico, with Monico & Spevack representing Girardi, didn’t immediately respond to an email seeking comment.
Durkin said Wednesday that it wasn’t credible Griffin and Lira, who is Girardi’s son-in-law, “were so completely unaware of the prior disputes over client payments that they had no suspicions of Girardi’s conduct and motives.”
“In short, it is difficult to believe Griffin and Lira were unaware that Girardi was running a Ponzi scheme with client money, which in fact he was,” the court said.
Edith R. Matthai, with Robie & Matthai representing Lira, said “we are not making comments on the court proceedings involving David.”
The case is In re Lion Air Flight JT 610 Crash, N.D. Ill., No. 1:18-cv-07686, opinion 11/2/22.
(Updates to add Matthai remark in 16th paragraph. A previous update corrected the headline and story top to show the ruling specified two attorneys, and not the firm or its principal who had already been held in contempt)
To contact the reporter on this story: Joyce E. Cutler in San Francisco at [email protected]
To contact the editors responsible for this story: Rob Tricchinelli at [email protected]; Maya Earls at [email protected]; Andrew Harris at [email protected]
