Ethics Complaint filed with California State Bar against Skadden Arps and Girardi Keese for Alleged Misconduct in Class Action Suit Against Farmers Insurance


An ethics complaint alleging multiple acts of misconduct has been filed with the State Bar of California against attorneys from the firms of Skadden, Arps, Slate, Meagher & Flom LLP and Girardi & Keese.

An ethics complaint alleging multiple acts of misconduct has been filed with the State Bar of California against attorneys from the firms of Skadden, Arps, Slate, Meagher & Flom LLP and Girardi & Keese.

Knowledgeable sources, speaking on condition of anonymity, maintain the complaint alleges that ethical breaches took place as a result of Skadden Arps' representation of Girardi & Keese in the matter of In Re Girardi because, at the same time, Girardi & Keese and Skadden Arps were on opposing sides in the case of Fogel v. Farmers Group, Inc.

According to the sources, the parties named in the complaint are Raoul Kennedy, Thomas Nolan, and Richard Zurmoski of Skadden Arps as well as Graham LippSmith and Thomas Girardi of Girardi & Keese.

The complaint alleges that in August 2003, Walter Lack (of Engstrom, Lipscomb & Lack) and Thomas Girardi and Graham LippSmith (of Girardi & Keese) filed a class action suit on behalf of plaintiffs Benjamin Fogel against Farmers Group, Inc. in Los Angeles County Superior Court. The suit -- which is still pending and is anticipated to settle in September 2011 -- was defended by attorneys from Skadden Arps (Raoul Kennedy and Richard Zurmoski).

Despite their respective roles as plaintiffs’ counsel and defendants’ counsel in Fogel v. Farmers, Girardi & Keese and Skadden Arps entered into an 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 following the Ninth Circuit's issuance of 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.

On July 13, 2010, the Ninth Circuit issued an order suspending Walter Lack for a period of six months and reprimanding Girardi; the order also imposed almost $500,000 in monetary sanctions against the two attorneys.

On July 14 2010, in an attempt to conceal their attorney-client relationship, Skadden Arps and Thomas Nolan filed a motion with the Ninth Circuit asking for their names to be redacted from the published opinion.

According to sources, including TLR's legal correspondent -- known as State Bar Insider ("SBI") -- the arrangement described above is disfavored and unethical; moreover, for such a reltionship to be authorized, Thomas Girardi was required to notify each member of the class he represents about his status as a client of Skadden Arps, and seek a waiver and obtain approval from his clients.

According to SBI, "on its face and based of my reading of "Freivogel on Conflicts," it appears that Tom Girardi violated his duty of loyalty and zealousness as well as the duty of candor to his clients -- the class that he allegedly represents."

Moreover, according to sources, Skadden Arps has also violated multiple ethical rules and statutes by agreeing to undertake the representation of Girardi & Keese and Thomas Girardi.

A separate source stated: "Assume for the sake of argument that Skadden Arps feels a motion for sanction is warranted against Mr. Girardi in Fogel v. Farmers. Taking such action would require Skadden to be directly adverse to its client (Thomas Girardi) in the matter of In Re Girardi."

Moreover, according to SBI, he never heard of a practice by which counsel is asking a court to redact her or his name from a published opinion. "They obviously were attempting to conceal the relationship, and now I am fairly certain as to why it was done," SBI concluded.

Knowledgeable sources maintain that the ethics complaint seeks the removal of Thomas Girardi's name from the roll of members of the State Bar of California, and asks that multiple years of actual suspension be imposed on Graham LippSmith, Raoul Kennedy, Thomas Nolan, and Richard Zuromski.


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