As a service to the community, The Leslie Brodie Report publishes below an objection recently submitted to the court in the matter of BENJAMIN FOGEL vs. FARMERS GROUP, INC. CASE NO BC300142
Dear Judge Highberger:
This will serve to inform this Court about ethical violations and fraud on this Court stemming from collusion between the law offices of Girardi & Keese and Skadden Arps, to equitably object in the interest of justice to the proposed settlement in this matter, to seek a decree from this Court that all sums allocated as attorneys’ fees be shifted to the general fund allocated to compensate the class, and to seek any other relief this Court deems proper (collectively “Objection”).
The Objection is based on the fact that while the matter of Fogel vs. Farmers Group was pending before this Court, the law offices of Skadden Arps and Girardi & Keese entered into a wholly separate agreement by which Skadden Arps agreed to represent Girardi & Keese in the matter of In Re Girardi (Case No.08-80090), which was pending before the Ninth Circuit. Neither the Ninth Circuit nor this Court (or for that matter, the class of plaintiffs which Girardi allegedly represents) were ever informed of the concurrent representation. In fact, as will be shown, Skadden Arps, and its clients Girardi & Keese and Thomas Girardi, both actively and by omission took action to conceal the matter.
FACTUAL BACKGROUND
In August 2003, plaintiff-Fogel filed a class action lawsuit against Farmers Group, Inc. in Los Angeles County Superior Court, case number BC300142. Walter Lack (of Engstrom, Lipscomb & Lack) and Thomas Girardi and Graham LippSmith (of Girardi & Keese) represent plaintiff-Fogel and the class. Skadden Arps and partner Raoul Kennedy represent the defendants, collectively referred to as Farmers Group, Inc.
Separately, on August 25, 2005, the Ninth Circuit issued an order to show cause why Girardi & Keese, Engstrom Lipscomb & Lack, Thomas Girardi, and Walter Lack should not be suspended, disbarred, or otherwise sanctioned as a result of the massive fraud which took place in litigation pursued by them against Dole Food Company. This gave rise to the new matter involving the potential disbarment and sanction of counsel, referred to as In re Girardi, Ninth Circuit case number 08-80090.
Very shortly thereafter, and despite their respective roles as counsel for plaintiffs and defendants in Fogel v. Farmers, Girardi & Keese and Skadden Arps entered into a wholly separate agreement by which Skadden Arps and partner Thomas Nolan would represent Girardi & Keese and Thomas Girardi before the Ninth Circuit in the matter of In Re Girardi.
Subsequently, on July 13, 2010, the Ninth Circuit issued a decision heavily sanctioning both Walter Lack and Thomas Girardi (and their respective firms) almost $500,000. The Ninth Circuit reprimanded Mr. Girardi and suspended Mr. Lack for practicing before the court for a period of 6 months. The court adjudicated that the grave misconduct by Walter Lack and Thomas Girardi included “the persistent use of known falsehoods,” and that the “false representations” were made “knowingly, intentionally, and recklessly” during years of litigation.
On July 14, 2010, the day after the Ninth Circuit issued the published decision, Skadden Arps and Thomas Nolan (on their behalf as well as on behalf of its clients, Girardi & Keese and Thomas Girardi) moved to redact their names from the decision. The court rejected the request, noting that redaction was not merited.
Skadden Arps and its clients were in a rush to remove their names from the Ninth Circuit’s published decision in hopes of further hiding from the public and members of the Fogel v. Farmers class the existence of its relationship with Girardi & Keese.
As discussed above, Thomas Girardi hired Skadden Arps to represent him in the matter of In Re Girardi after Girardi undertook representation of the plaintiffs in Fogel v. Farmers. The fact of the matter is that Mr. Girardi had a choice, and could have selected a different lawyer and a different law firm to represent him other than Skadden Arps and Thomas Nolan. He did not do so. Instead, by his actions, Girardi chose to breach the duties of loyalty, zealousness, and candor he owed to his clients, as well as the duty of candor he owes this Court.
Alternatively, assuming a claim be made that Girardi & Keese and Thomas Girardi were entitled to select counsel of their choosing in the matter of In Re Girardi, they were still under a duty to inform this Court as well as the class of plaintiff of the concurrent representation. They did not. Instead, by omission, they defrauded both this Court and the plaintiff-class. The omission was intentional because counsel did not want to run the risk of disqualification.
By the same token, Skadden Arps (like defendant Farmers) had a duty to inform this Court of the concurrent representation. Skadden Arps, wishing to collect fees from its clients Thomas Girardi and Girardi & Keese, as well as fees from its client Farmers Group, Inc., chose to remain silent. One can safely also entertain the thought that Skadden Arps (and, by extension, Farmers) took advantage of the matter to coerce Girardi & Keese to acquiesce to a less than desirable settlement in the Fogel matter than otherwise would have been reached.
The ethical responsibilities of both Skadden Arps and Girardi & Keese were governed by Rule 3-310 of the California Rules of Professional Conduct. By any measure, both firms failed to live up to these responsibilities. Rule 3-310(C)(1) requires an attorney to obtain informed written consent before accepting representation of more than one client in a matter in which the interests of the clients potentially conflict. No showing can be made that Girardi & Keese and Skadden Arps ever obtained the WRITTEN consent of their respective clients. By denying their clients the opportunity to consent/object, both firms violated their ethical obligations.
While the Skadden firm may argue that Skadden partner Thomas Nolan had absolutely no involvement in the Fogel matter, this Court should reject such a proposition.
As this Court is aware, defending Farmers Group, Inc. is Skadden Arps’s Raoul Kennedy, who is subordinate Thomas Nolan, co-chair of Skadden’s West Coast Litigation practice. In addition, Nolan and Kennedy are close friends and throughout this entire period also, jointly, defended MGA in its litigation against Mattel. Note that in the Mattel vs. MGA case, both Kennedy and Nolan were counsel of record. Incidentally, it was Thomas Girardi who referred MGA and Issac Larian to Skadden Arps after a dispute erupted between MGA and its former counsel (O’Melveny), leading Issac Larian to knock on Girardi’s door.
As such, any argument that Kennedy and Nolan maintained an ethical wall should and would fail. In any event, California law does not fully recognize the concept of ethical walls. In fact, California law presumes imputed knowledge to all members of a firm. Any determination of the existence of an ethical wall requires an individual determination on case-by-case basis. Here, this Court was never informed of the simultaneous and adverse representations, and was not allow to properly exercise its judgment.
Simply stated, these lawyers clearly placed their desire for fees above their loyalty to their clients, and deceived the Court in the process.
At this late stage of the game, and after years of litigation by which this Court and the class of plaintiffs were deceived by their less-than-forthcoming counsel, this Court should be extremely skeptical of any claim that Raoul Kennedy and Thomas Nolan maintained an ethical wall. Any wall constructed was a privacy wall for the purpose of hiding the truth from this Court and the class of plaintiffs. Note that two of the lawyers involved were already found by the Ninth Circuit to make use of “the persistent use of known falsehoods,” and that the “false representations” were made “knowingly, intentionally, and recklessly” during years of litigation.
Both Skadden Arps and Girardi & Keese (and their respective lawyers) engaged in the above-described misconduct for financial gain. Specifically, Skadden Arps wished to receive the fees from Girardi in the matter of In Re Girardi. Conversely, Girardi & Keese and Thomas Girardi were hoping to obtain a quick cash settlement from Farmers Group, Inc., to the detriment of their clients. In addition, Skadden sought to obtain benefits for its long-time client, Farmers Insurance Group, at the expense of the class of plaintiffs, while causing injury to these plaintiffs, the Court, and the fair administration of justice
ATTORNEY’S FEES
Both federal and California courts have held that, when the ethical violation in question is a conflict of interest between the attorney and the client, the appropriate fee for the attorney in question is zero. Despite the admittedly harsh consequences, courts routinely and liberaly employ this remedy. See generally Fair v. Bakhtiari (2011) 195 Cal.App.4th 1135. As such, and due to the serious nature of the violations described above, it is respctfully requested that no attorney fees be awarded to counsel in this case. Instead, any amount which was origianly designated for that purpuse should be shifted to the pool of money designed to companastate the class.
INTEREST OF UNDERSIGNED
This Court should be aware that the undersigned is not a member of the plaintff-class in this matter, and never owned any policy issued by Farmers or any of its subsidieries.
In January of 2011, undersigned filed an ethics complaint against Howard Rice’s Jerome Falk, who acted as a special prosecutor on behalf of the State Bar of California, for his decision to “exonarate” Thomas Girardi and Walter Lack for the grave misconduct the two committed before front of the Ninth Circuit. The basis of the complaint was that Jerome Falk should have declared a conflict due to his ongoing relationship with Skadden Arps’s Thomas Nolan. Not surprsingly, Jerome Falk was also part of the legal team that represented MGA in the litigation between MGA and Mattel.
While researching this matter, the undersigned learned that Skadden had moved the Ninth Circuit to remove its name from the decison in the matter of In Re Girardi.
In March 2011, the undersigned advanced a wholly separate ethics complaint concering the conflicts of interest in the case of Fogel vs. Farmers Group, Inc. based on the facts described above. Named in the complaint were Thomas Girardi, Graham LippSmith, Rauol Kennedy, and Thomas Nolan. Because Mr. Girardi has numerous contacts and close acquaintances within the State Bar (i.e. Executive Director Joe Dunn, who Girardi assisted in launching an online newspaper, for example), and because of other factors and externalities, there appears to be a very small likelihood that the State Bar will take any action in response to this complaint.
As such, it is up to this Court to ensure that 12.5 million consumers recieve fair and honest dispensation of justice. The undersigned also asks the Court to recognize that, without the actions taken by the undersigned, the Court would have remained ignorant of the above-described facts. As such, it will also be up to this Court to determine the manner in which to treat this objection (which was styled as an “equitable objection” given potential issues with standing) and the related informal request to intervene in the interest of justice.
Thank you for your consideration. Please do not hesitate to contact me if the Court needs any further information or clarification of the above-described facts.
►http://lesliebrodie.blog.co.uk/2011/08/17/objection-to-class-action-settlement-in-fogel-v-farmers-group-a
