Girardi Gained Their Trust, But Left Them With Regret

In an airy conference room overlooking downtown San Francisco, celebrity trial lawyer Thomas V. Girardi looked into Kathy Ruigomez's sleepless eyes and told her everything was going to be all right.

Nobody had said that to Ruigomez in the month since a natural gas pipeline explosion incinerated her home and left her 19-year-old son, Joe Ruigomez, burned and comatose. The September 2010 blast killed eight people, including Joe's girlfriend, sending flames high into the sky above their San Bruno, California, neighborhood.

Now, in an interview a decade later, Kathy Ruigomez wondered if Girardi knew he was lying when he spoke those words.

Kathy Ruigomez and Joe Ruigomez at Joe's high school graduation the year before the explosion. (Courtesy Kathy Ruigomez)


Girardi had seemed different from other lawyers, whose shills hounded Ruigomez in the hospital cafeteria and jockeyed like salesmen to take up her family's valuable claims against the utility company responsible for the blast, Pacific Gas and Electric.

Girardi wore an impeccable suit and a disarming smile that was so contagious, it drew a smile out of Ruigomez for the first time since the explosion. She knew the Los Angeles plaintiffs attorney had beaten PG&E before; she had seen "Erin Brockovich," the blockbuster film that immortalized the $333 million settlement he'd wrung out of the company in 1996.

Let me take care of all of the legal stuff, Girardi told her. You just focus on healing. Ruigomez signed a retainer agreement days later.

As Girardi had promised, things quickly began looking up. He brought in top medical specialists to help Joe, who awakened from his coma.

Girardi visited the young man regularly to stand by his bedside and encourage him. The attorney began to feel like part of the family. For years after the family reached an eight-figure settlement against PG&E, Girardi kept watch over many of the settlement funds and stayed in touch with Joe, who revered him.

Ruigomez didn't think anything of Girardi's frequent visits with her son. But that changed when the family finally asked Girardi to turn over the money.

"It's kind of disturbing that he wanted to see [Joe] face to face when he was basically stealing his money," Ruigomez said. "It's kind of a little, you know — very unsettling."

Ruigomez is among numerous former clients who have discovered that Girardi, their celebrated advocate, took much of the money he won for them and spent it.

Thomas Girardi photographed in Los Angeles in 2016. (Photo by Jim Steinfeldt/Michael Ochs Archives/Getty Images)


For years, Girardi built a reputation as a wildly successful fighter for the underdog, plastering the walls of his Wilshire Boulevard office with awards and articles celebrating his billion-dollar settlements, and flaunting his absurd wealth alongside his wife on "The Real Housewives of Beverly Hills."

But when the cameras were off, the champion of the downtrodden became their predator, according to a string of lawsuits. Elderly cancer patients, poisoned families and blue-collar workers, earthquake survivors, widows and orphans have all accused him of taking untold millions from them.

Last month, an attorney for his law firm, Girardi Keese, admitted Girardi had misappropriated $2 million from a settlement fund for survivors of plane crash victims, leading to intense scrutiny of his finances and prompting creditors to drag him and his firm into bankruptcy.

But a Law360 review of thousands of pages of court documents and dozens of interviews with attorneys, former clients and others in his orbit show Girardi has faced similar accusations going back decades, even before "Erin Brockovich" made him a star.

All the while, he exploited his fearsome reputation, influence, and structural failings in the legal system to keep his clients in the dark and silence his accusers.

An Accounting

Accusations that Girardi was misappropriating client funds have been something of an open secret in the California legal community for years. The media reported on some of the lawsuits, most of which were unsuccessful.

Few, however, were eager to believe that the popular and politically connected dean of the plaintiffs bar could be as terrible as a handful of thrown-out lawsuits and fringe detractors said he was, several Los Angeles attorneys told Law360.

Girardi told acquaintances to ignore the haters. His massive success, he claimed, had simply put a target on his back.

One of Girardi's former tax bookkeepers in the 1990s recently told Law360 that Girardi spent money without care, but made enough to never run out.

It took until the end of 2020, but he did.

Girardi Keese, which once counted 38 lawyers, had dwindled to just a few. Girardi was forced to admit in a September deposition that he was dead broke. His reality TV-star wife, Erika Jayne, filed for divorce weeks later.

And finally, as Girardi Keese became unable to pay its employees, his co-counsel at Edelson PC sued him.

Edelson had teamed up with Girardi to extract a string of settlements from Boeing on behalf of widows and orphans who lost their loved ones in a widely publicized 2018 plane crash. Girardi settled the cases in July, but Edelson couldn't get any straight answers about when to expect its share of the attorney fees. It soon learned Girardi Keese had not fully paid their mutual clients, either.

A federal judge in Chicago, far from Girardi's home turf, held him in contempt and referred the case to prosecutors.

Now, Girardi's attorneys and his brother claim he's losing touch with reality. Whatever he and his firm have left is heading toward liquidation in bankruptcy.

"The firm will not be reopening," said Elissa Miller of SulmeyerKupetz, the interim trustee for Girardi Keese.

The true extent of how much money is missing from Girardi's cases may never be known. Girardi often settled cases privately and kept the total value of the deals secret — even from clients, according to court documents.

Miller said Girardi Keese's all-paper accounting system could take years to fully untangle.

Court cases and public records have offered occasional glimpses of the firm's finances: a chaotic churn of court winnings, loans, massive expenses and quixotic investments.

All the while, there were signs Girardi may have improperly used funds held in clients' trust accounts as his own, a glaring breach of professional guidelines that can lead to disbarment and even criminal charges.

In August 1996, Girardi wrote himself a $9 million check from a Girardi Keese client trust account. In September 1996, he wrote two checks from the same account to buy over $340,000 in stock in a Las Vegas casino chain. Neither transaction appeared on the law firm's books, according to Alfred Warsavsky, a forensic accountant who reviewed Girardi Keese's finances during divorce proceedings in 2002.

The firm's client trust accounting records, he wrote, "have been inadequate at best and abysmal at worst."

It would not be the last time questions were raised about Girardi Keese's trust accounts.

Neil Wertlieb is a veteran attorney who has chaired the ethics committee of the California State Bar and the California Lawyers Association and served as an expert witness in litigation involving attorney ethics and standard of care. He reviewed public court documents obtained by Law360 that showed or described withdrawals from Girardi Keese trust accounts.

He said he was particularly troubled by documents in a federal lawsuit filed by former clients Girardi represented in litigation over hormone-replacement therapy. Wertlieb said that if the documents are accurate, they suggest the firm not only violated multiple trust account rules, but that in 2013 Girardi had paid the plaintiffs in that case at least $4.3 million from settlement funds from other cases.

"And that suggests, in effect, a Ponzi scheme, where he's using money from basically subsequent cases to fund his and his firm's obligations on prior cases," Wertlieb said.

Girardi himself commemorated another problematic event in a 2018 letter to litigation lender Law Finance Group.

Girardi wrote that he "totally, negligently violated the agreement" to pay the lender out of the settlement funds from a specific case.

"I truly did not appreciate the fact that I should have been distributing money to pay it off out of one case," he wrote. "From the bottom of my heart, it was innocent."

Decades of Complaints

In the Mojave Desert, between the sprawl of Los Angeles and the neon glare of Las Vegas, lies Hinkley, California.

Here, amid the dry scrub brush and decaying bungalows of this hardscrabble town, Girardi catapulted from a high-powered local litigator into one of the most feared plaintiffs attorneys in the nation.

For years, cancers, tumors and other diseases had afflicted Hinkley's residents. They suspected those maladies were caused by chemicals released into the local water supply by a nearby PG&E plant.

A trio of firms including Girardi Keese led the legal fight against PG&E, resulting in a $333 million settlement reached in 1996. Hinkley's struggle and victory in court were dramatized in the film "Erin Brockovich."

Just two years after that settlement, Girardi scored another eye-popping victory, when a jury awarded $785 million to Lockheed workers who'd been exposed to chemicals on the job.

But by the time "Erin Brockovich" appeared in theaters in 2000, his former Hinkley clients were livid, telling reporters who had descended on their town that the attorneys kept them in the dark about how the funds were distributed. Many aired suspicions they had not received all of the money they were owed.

It didn't matter, though. Girardi's reputation soared thanks to the monster Lockheed settlement and "Erin Brockovich."

When an outside lawyer raised questions about whether all of the residents of Hinkley received the money they were due, Girardi and the other lawyers on the case sued him twice in state court for defamation, only to later drop the claims.

And when Lockheed clients sued, he quietly settled at least one of their lawsuits. There were calls for the California State Bar to investigate, but that went nowhere, according to a 2000 report in Salon.

Still, the complaints kept coming.

In 2012, another group of former clients alleged Girardi misappropriated $22 million from a $100 million settlement he won from insurers in 1997 to cover damage from the 1994 Northridge earthquake, one of the costliest natural disasters in U.S. history.

State courts threw out those claims, saying the clients had waited too long to file suit.

Complaints about the Lockheed settlements persisted for years, as well.

One former Lockheed client, Paul Kranich, accused Girardi of stealing $8.5 million from a batch of settlements, even claiming Girardi used $3.5 million of that sum to settle a previous Lockheed settlement-skimming suit in 2001. Kranich's suit, filed in 2016, was also thrown out for being filed too late.

In 2014, nearly 30 elderly women who had developed cancer after taking the hormone-replacement drug Prempro claimed Girardi took $12.5 million of their $17 million settlement. After a contentious battle in federal court, that case settled for an undisclosed sum two years later.

Court records show Girardi has been sued dozens of times for fraud, malpractice or breach of contract since 1995. Several of those cases were eventually settled, however, and available details are sparse.

Graham LippSmith, a former Girardi Keese attorney who spent 13 years at the firm before leaving in 2015, told Law360 that for years he bought into Girardi's assurances that those types of suits were just the work of unscrupulous attorneys and greedy ex-clients.

"You come out of a place like that thinking it's normal to be sued" all the time, LippSmith said. "It's not."

Looking back, he said he shudders to imagine the impact on Girardi's former clients if even some of the allegations are true.

Several cases against Girardi are still active.

Among them is a lawsuit filed by residents of the Los Angeles suburb of Carson. They say Girardi never paid them their full shares of a $120 million settlement reached in 2016 over claims their Carousel housing tract was built atop a toxic waste dump, sickening its residents.

Asked about the suit against Girardi, former client Barbara Post's voice hardened.

"This tract hates Tom Girardi," she said.

Post, the former president of the Carousel Homeowners Association, played an instrumental role in getting the original lawsuit against Shell Oil Co. and Dole Food Co. off the ground. Her daughter became close with several Girardi Keese attorneys before she died of cancer.

Even though Post has been paid by Girardi Keese, she said it was not worth the psychic toll of suing Shell and Dole, followed by years of gaslighting from the law firm's attorneys, and then another lawsuit against Girardi to get her neighbors what they were owed.

"I wish we'd never filed the lawsuit at all," Post said. "It's one of the worst things that's ever happened to me."

In the Dark

Large corporations often prefer paying private judges to decide cases in arbitration because it is faster than public court and keeps the proceedings confidential, avoiding a public airing of sensitive or unflattering information. The practice has recently come under fire for its role in concealing the conduct of bad actors, such as repeat sexual abusers.

Girardi often opted to settle cases in arbitration, too — especially in front of private judges he knew. Once his cases were settled, he would often hire familiar private judges to distribute funds, according to court records reviewed by Law360. This is not uncommon in mass tort settlements, which, unlike class action deals, are not overseen by the court.

To settle the Ruigomez family's case against PG&E, Girardi and the utility agreed to arbitrate the claims before retired California Supreme Court Justice Edward Panelli. They ended up reaching an eight-figure deal in January 2013.

Ruigomez said a few months later, in April, Girardi told her he was worried. The lawyer claimed Panelli had told him heartbreaking stories about lottery winners who went broke after being lured into bad investments. Panelli, Girardi told her, wanted him to help manage the funds so this wouldn't happen to her son, Joe.

Girardi recommended that Ruigomez let him invest a large portion of the money in a high-interest account. The family agreed.

For years, the money stayed with Girardi, and the Ruigomez family tried to reassemble their lives as best they could. Kathy Ruigomez repeatedly asked for an accounting of the funds and Girardi never said no, but also never provided one, she said.

In 2019, the family finally started demanding the money in full from Girardi. Girardi stopped returning their calls. The warmth drained from their relationship.

Ruigomez's lifelong friend, Kimberly Archie, had supported her through the entire ordeal and went on to consult for Girardi Keese as a liability expert and case manager. Archie used her skills and connections at the firm to help Ruigomez figure out what was going on. Together, they discovered troubling signs, including lawsuits from lenders alleging Girardi was defaulting on millions of dollars in loans.

The Ruigomez family hired Abir Cohen Treyzon Salo LLP — which now employs several former Girardi Keese attorneys — and sued Girardi Keese in June 2019.

In January 2020, Girardi agreed to pay the family $12 million in mediation with JAMS arbitrator Howard Miller, a former Girardi Keese partner. He paid $1 million that month but missed a deadline to pay the rest, prompting a state court judge to enter an $11 million public judgment against Girardi in April 2020. The sum included attorney fees.

Months later, after he failed to pay any more, the Ruigomez family learned the money was gone.

Their experience offers a glimpse into the ways Girardi warded off accusations that came his way.

In the Prempro case, for instance, Girardi hired Panelli through the arbitration company JAMS to distribute settlement funds to Girardi Keese's elderly clients.

A longtime lawyer for the firm, James O'Callahan, sent letters to the clients claiming Panelli had delayed their full payment.

"Although I wish the check was for the higher amount, I am happy that Justice Panelli has approved this interim payment," O'Callahan wrote in one such letter.

In a 2015 deposition, Panelli denied ever having made such orders. He did not return calls and emails left by Law360. O'Callahan died in 2019.

Girardi was also politically connected and had enormous pull with judges across California. In 2005, he was the first trial lawyer to receive a seat on the panel that sets policy for California state courts. And in 2019, Gov. Gavin Newsom appointed Girardi to an advisory committee that vets and recommends candidates for state judgeships.

"His Christmas parties were attended by half the state bench," said one attorney who has known Girardi for years and requested anonymity to speak candidly. "He had California wired."

Sometimes, those connections got him into trouble.

A year after the 1996 "Erin Brockovich" settlement, for instance, Girardi and Walter Lack of Engstrom Lipscomb & Lack PC took several active and retired judges on a deeply discounted Mediterranean cruise, according to contemporaneous articles in the Los Angeles Times. The attendees included a handful of the judges who had served as arbitrators on the PG&E case, and a short-lived public outcry ensued.

When lawsuits did come, Girardi often successfully had them thrown out of court. Sometimes, Girardi's efforts to find a friendly venue were outright brazen.

Last year, he urged a California judge to use her "discretion" to transfer the Carson case to a for-hire judge who had attended the cruise, even though the clients weren't subject to an arbitration agreement. That request was denied.

When Girardi couldn't get a lawsuit against him thrown out of court or placed in arbitration with a familiar private judge, he would stall and delay discovery. Girardi Keese often racked up sanctions as it flouted discovery deadlines in cases.

A lawsuit brought by Girardi's Prempro clients was the exception to this routine of avoidance and delay.

With a contempt motion pending that laid out in detail his alleged mishandling of client trust account funds — pointing to bank records showing he sent them "at least $4.3 million ... misappropriated from the proceeds of other settlements" — Girardi settled the case in 2016, ending the matter.

The State Bar of California has never taken action against Girardi's license, although it is well aware of several of the serious allegations against him and appointed a special prosecutor in 2010 to investigate the Ninth Circuit's scathing findings in a ruling that year that he and longtime friend Walter Lack had repeatedly lied to courts in trying to enforce a $500 million foreign judgment.

The bar declined to comment to Law360 about anything related to Girardi.

Meanwhile, Girardi's repeated sanctions for refusing to turn over financial documents in various lawsuits against him never resulted in investigations. Under California law, discovery sanctions are exempt from being automatically reported to the state bar.

'His Favorite Clients'

A defeated Girardi sat for a videoconference deposition with the Ruigomez family's lawyers in September 2020. He had missed a $2 million payment on the $11 million judgment, and they grilled him on his ability to pay.

"I'm — at one point, I had about $80 million or $50 million in cash," Girardi said, according to the deposition transcript. "That's all gone. I also had a stock portfolio of about $50 million, and that's all gone."

Girardi Keese, once a seemingly bottomless well of cash, was insolvent and surrounded by people saying it owes them money — lenders, other ex-clients, bodyguards, co-counsel, legal service providers, and more. A criminal defense attorney working for Girardi and his firm testified in December that the firm had only $15,000 in its coffers and couldn't make payroll.

Now, the Ruigomez family — like residents in Carson, the crash victims' families, and others who came to Girardi in hopes he would make justice of their injury and loss — are at the mercy of a complicated bankruptcy process expected to stretch on for years.

Kathy Ruigomez said she feels betrayed by everyone who was supposed to be watching out for her. The California Public Utilities Commission failed to protect her family from PG&E. The state bar left Girardi with an unblemished record and a Trial Lawyers Hall of Fame award.

"The watchdogs for each of these groups are not watchdogs," she said. "They are basically partners."

She thinks often about Girardi. How he earned her trust and friendship. How he seemed to care, bringing comfort and direction to their lives at a terrible time; how he had really done a fantastic job litigating her case against PG&E.

But most of all, Ruigomez wonders when he decided to take their money and leave her family devastated all over again.

"He did say we were his favorite clients, and I can see why," she said. "We just sort of sat to the side and let him just use all our money until it was gone. Like, yeah, I'm sure we were your favorite."

Contact reporter Brandon Lowrey at brandon.lowrey@law360.com. Contact reporter Ryan Boysen at ryan.boysen@law360.com.

--Editing by Pamela Wilkinson and Marygrace Murphy.


For a reprint of this article, please contact reprints@law360.com.

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