In the legal dispute between MGA (Bratz Dolls) and Mattel (Barbie Dolls), it is estimated that MGA’s legal cost to date are close to $200 million. According to Mattel, Bratz Dolls were designed by a former Mattel employee (Carter Bryant) before he jumped ship to MGA. Mattel sought $2 billion in damages, and according to Bob Eckert, Mattel’s CEO, pursues the case “as a matter of principle.”
Representing El Segundo, California-based Mattel was John Quinn of Quinn Emanuel Urquhart & Sullivan.
Defendant Carter Bryant was represented by Keker & Van Nest’s John Keker. Los Angeles-based MGA and founder/CEO Isaac Larian were initially represented by O’Melveny & Myers. However, a dispute erupted when O’Melveny insisted that partner Daniel Petrocelli serve as lead counsel in the case.
Mr. Larian was not thrilled about Petrocelli and fired O’Melveny altogether. O’Melveny immediately demanded payment of $10 million it claims MGA and Mr. Larian owe the firm in unpaid and outstanding legal fees.
With a looming trial date, no counsel, and a threat from O’Melveny that if he does not pay he will be sued, Mr. Larian went knocking on the door of Thomas Girardi of Girardi & Keese.
MGA TEAM — COUNSELS WHO REPRESENTED DEFENDANT MGA (“BRATZ DOLLS”.) FROM LEFT: SKADDEN ARPS’ RAOUL KENNEDY AND THOMAS NOLAN ; HOWARD RICE’S JEROME FALK AND DOUGLAS WINTHROP; KEKER & VAN NEST’S JOHN KEKER AND MGA’S IN-HOUSE COUNSEL, MR. CRAIG HOLDEN.
Specifically, Larian asked Girardi to look into the fees it had paid to O’Melveny. According to media reports, Girardi stated, “When O’Melveny couldn’t get Petrocelli in the lead chair it wanted off the case. We are taking a look at the massively large fees that happened with the O’Melveny representation. On first blush, it seems like an awful lot of money for what has been accomplished. I think the client has strong reason to have great concern.”
At approximately the same time, Girardi’s friend — Thomas Nolan of Skadden Arps — was chosen to serve as counsel for MGA and Mr. Larian instead of O’Melveny. At that time, also representing MGA was its own in-house counsel, Mr. Craig Holden.
Thomas Nolan, who served as Girardi’s defense counsel (along with Diane Karpman) in the Ninth Circuit disciplinary matter of In Re Girardi stemming from an attempt by Walter Lack and Thomas Girardi to defraud the Ninth Circuit , is a well-known and respected attorney. According to Mr. Girardi, Thomas Nolan “is like “Wayne Gretsky” – he doesn’t look any bigger, tougher or faster, but the next thing you know he’s scored four goals. And he’s always a gentleman.”
Following a verdict against MGA, preparations were made for the second stage of the trial to set damages, which were estimated to be approximately $500 million. At the conclusion of that stage, the jury awarded $100 million to Mattel. In addition, Judge Stephen Larson issued a draconian injunction against MGA, ipso facto dissolving it.
Following the trial, Wayne Gretsky of Skadden Arps quickly arranged for Howard Rice’s Jerome Falk and Douglas Winthrop to join the legal team and file an immediate emergency motion with the Ninth Circuit Court of Appeals which subsequently reversed the entire judgment.
WAYNE GRETSKY-THOMAS GIRARDI -JOHN KEKER-JOE COTCHETT PROXIES REVEALED
At the conclusion of the appeal in a civil case prosecuted by the firms of Girardi & Keese and Engstrom Lipscomb & Lack against Dole Food Company, Chief Judge Alex Kozinski issued an order to show cause why Thomas Girardi and Walter Lack should not be disbarred, suspended, or sanctioned for the attempt to defraud this Court for the purpose of unjustly collecting a $500 million judgment.
Representing Thomas Girardi in those disciplinary proceedings before ther Ninth Circuit were Wayne Gretsky of Skadden Arps and ethics expert Diane Karpman.
Oral arguments ensued, during which one of the judges on the panel stated that the “elephant” in the room is the manner in which the matter would be developed by the State Bar of California.
Subsequently, the Court found both Girardi and Lack culpable, and imposed close to $500,000.00 in monetary sanctions, reprimanded Girardi, and suspended Lack. Some of the findings included that Lack and Girardi have resorted to employing “the persistent use of known falsehoods” and that “false representations” were made “knowingly, intentionally, and recklessly” during years of litigation.
The State Bar of California assigned the matter to an outside special prosecutor (Jerome Falk of Howard Rice) since Howard Miller of Girardi & Keese served as President of the State Bar, and had hired the Chief Trial counsel of the State Bar at the time, Mr. James Towery.
After conducting an interview with Walter Lack, Jerome Falk chose to not file any charges against Lack or Girardi based on his position that any false statements submitted were not “intentional.” This determination was contrary to findings made by the Ninth Circuit.
Within days of the issuance of Mr. Falk’s decision, YR advanced an ethics complaint against James Towery, Jerome Falk, Howard Miller, and Douglas Winthrop, contending that it had been improper for Mr. Towery to select Jerome Falk (of Howard Rice) to serve as special prosecutor because, among other reasons, Howard Miller (of Girardi & Keese) had appointed Howard Rice’s managing partner (Douglas Winthrop) as president of the California Bar Foundation, a foundation owned, controlled, and maintained by the State Bar of California, as well as because of the close business relationship between Howard Rice’s Jerome Falk and Wayne Gretsky of Skadden Arps.
Subsequently, and fortuitously, YR also discovered that Lack and Girardi were actually clients of Jerome Falk and Howard Rice. YR had inquired with Mr. Hawley of the State Bar of California whether this fact was known to the Special Master investigating the complaint. The State Bar of California remained mum.
Subsequently, Jerome Falk wrote to YR:
I received your November 13 email concerning my participation in the State Bar’s investigation of Walter J. Lack, Thomas V. Girardi and other attorneys. It is filled with disparaging characterizations, all of which seem to stem from your allegations that I or my firm have represented Mr. Lack and Mr. Girardi.
Your allegations are false.
I have never represented either person, or their firms. Neither has Douglas Winthrop. Nor has my firm ever represented Mr. Lack or Mr. Girardi.
From 2006-2008, my firm represented several law firms, including Engstrom, Lipscomb & Lack and Girardi & Keese, in a litigation matter. The public records of that litigation show that neither Mr. Winthrop nor I had nothing to do with that representation; in fact, I was unaware of it. The public records also show that my firm represented the law firms, but did not represent Mr. Girardi or Mr. Lack. The attorney responsible for that representation had left Howard Rice and taken the files with him before I was asked to serve as Special Deputy Trial Counsel in the State Bar matter.
You are on notice that your allegations are false. The falsity of those allegations can be determined from the public records of the litigation in question.
Jerome B. Falk, Jr.
Complainant YR wrote back:
Dear Mr. Falk:
In your letter dated December 7, 2011, you attempt again to defraud and mislead in your attempt to avoid responsibility for your repugnant and deceitful actions taken in connection with your actions as a special prosecutor on behalf of the State Bar of California against two of your and your firm’s clients — Girardi & Keese and Engstrom Lipscomb & Lack (and by operation of law, Thomas Girardi and Walter Lack), as part of a scheme to exploit your authority for financial gain.
By analogy, rather than acknowledging that you were caught with your hand in the cookie jar, you seek to bamboozle the unwary by stating that it wasn’t actually your hand in the cookie jar but, rather, only your fingers, and in any event it wasn’t a jar but, rather, a plastic container which you contend doesn’t qualify as a jar. Therefore, you devote an entire paragraph proclaiming, “Your allegations are false.” You conclude by placing me on “notice” that my allegations are “false.”
The contents of your communication are unethical in the extreme, as well as entirely frivolous factually, legally, and by operation of law, to wit:
You claim, “In fact, I wasn’t aware of it” (referring to the fact that you and your firm had represented Girardi & Keese and ELL). While you acknowledge your firm (Howard Rice) did represent Girardi & Keese and ELL from 2006 to 2008 , you assert that you were not aware of this representation. Simply put, your assertion is false; it is simply implausible that for two entire years you were unaware that your firm represented such celebrity/famous/notorious attorneys such as Thomas Girardi, Walter Lack, and Pierce O’Donnell.
This is particularly true since you are a member of Howard Rice’s “attorney liability” group, which consists of between 7-9 attorneys (including your colleagues Sean SeLegue, Pamela Phillips, and Steve Mayer), and the subject matter of the litigation was a suit advanced against Girardi & Keese, ELL, and O’Donnell for legal malpractice in connection with alleged attorney misconduct in the litigation involving El Paso Natural Gas/Sempra Energy, a series of cases which received significant publicity.
I am also hard-pressed to believe that you were unaware of the estimated $250,000 retainer Girardi & Keese and ELL paid to your firm (money which paid your and your colleagues’ salaries), and that no one ever discussed this matter with you for purposes of addressing legal strategy or legal issues in person or during meetings.
Most importantly, in your letter to Robert Baker you acknowledge that you had interviewed Walter Lack. Again, you ask me to believe that Walter Lack did not mention the fact that Howard Rice represented him and his firm only one year prior to your meeting.
The fact that Walter Lack did not speak up during the interview with you is just too convenient, and is further circumstantial evidence that you and he both knew of the prior representation, and chose to nevertheless further continue with the conspiracy to obstruct justice for financial gain, to the detriment of the public and the proper administration of justice. Complete story, please continue HERE.
Proxies at the State Bar of California Board of Governors are the president of State Bar of California Jon Streeter of Keker & Van Nest, Alec Chang of Skadden Arps, Nancy Fineman of Cotchett Pitre & McCarthy, Craig Holden, and executive director of the State Bar of California — Voice of OC’s Joe Dunn, below: