Since the official accounting of the money is secret, there’s no way to ascertain how much money was distributed to Hinkley residents short of a survey of all 650 clients in the case. Their suspicions aroused by the secrecy, many Hinkley residents want to know where the money went. (While Girardi would not comment for this article, he has been quoted in the Los Angeles Times contending that at least 50 Hinkley residents have written him to say that they didn’t want the disbursement made public — presumably because their awards were larger.)
Family members who’d experienced the same level, intensity and duration of chromium exposure received wildly different awards. The Gonzales family, for example, had lived close to the PG&E plant for 14 years; the father, who had a foot of his lower colon removed, received $100,000; his daughter Lydia, who has suffered skin problems, received $200,000; another daughter, Anita, who led one of the first groups of plaintiffs and who also lost some of her colon, received about $2 million; his son Daniel, who has suffered skin and other problems, received nothing. “His story wasn’t dramatic enough,” said his son Ron.
Residents were first told in the July 2, 1996, letter that their awards would be based on their medical records. Some residents say their medical records were never solicited. “But no one ever looked at my medical records,” said Smith. “I’m sure of that because my doctors told me so after I asked.” Other plaintiffs echoed the same complaint.
Otherwise, there was no mention of the criteria, formula or method by which the money would be divided. It was up to the arbitrators, Lack told his clients in a July 24, 1996, letter. “We are confident that by Aug. 15, 1996, the Judges will be in a position to announce all awards,” the letter said. “We have the utmost confidence that their awards will be fair to all parties concerned.”
Roberta Walker, who had started the case and was depicted in the movie as Donna Jensen, didn’t get the $5 million that her movie counterpart received. “It’s a big fabrication,” said Walker. “People look at $333 million and think, ‘Wow! You got that much money?’ But no.”
Nola Wetterman, who has suffered miscarriages and back problems, received many millions of dollars, sources say. Wetterman herself says it’s about $1 million.
Another older ill resident was awarded about $25,000. “He blew up at one of the attorneys, who didn’t like his attitude,” said Tommy Wetterman, Nola’s son. “He got a real bad deal.”
Pretty soon, fairly or not, some residents say they saw a pattern in the distribution method. “If you were buddies with Ed and Erin, you got a lot of money,” said Smith. “Otherwise, forget it.”
Residents also were confused about the high fees charged to the town’s 100 children. According to the California Code of Civil Procedure, the California Probate Code and case law, attorneys may take only 25 percent of the settlement money given to minors. The arbitrators allowed the attorneys to take 33-and-a-third percent.
“We were livid when we found that out,” said Smith.
Apparently, the plaintiffs’ attorneys and JAMS’s Trotter had decided that any minor who turned 18 during 1996 would be treated as an adult, according to a number of townspeople. That meant that at least three Hinkley teens whose 18th birthdays fell in calendar year 1996 were charged at the higher 40 percent rate.
When the money did come, some residents tried to complain about what they felt were unfair amounts, but they were put off. “We didn’t even get to talk to Erin and she’s the one who got us mixed up in this thing,” said Smith. Some wanted to contest the awards, but were discouraged. “We were told if we appealed the settlement, we’d get less money,” said Ron Gonzales. “It was essentially a threat.”
One plaintiff, Muriel Marcum, tried to explain to her attorneys that her medical condition merited more money. But Lack wrote back, saying he was “disgusted by such a statement, which betrays your utter lack of knowledge … The symptoms you have suffered … could be related to any number of causative events.”
Those bold enough to actually contest their awards had to pay extra. “The Judges will be charging you by the hour for handling these appeals and the charges will be deducted from your recovery,” Lack told his clients in the July 24, 1996, letter. The judges heard some of the appeals in Lack’s office, a two-hour drive from Hinkley. “If you miss your appointment, you will be charged anyway,” the letter informed clients.
One resident who did appeal was Gonzales. He was given an award of $100,000, but appealed on the grounds that he deserved more. “Ten minutes later, one of the judges offered me $250,000.” The appeal cost him $21,000 in arbitration fees.
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In the summer of 1997 — while some of the residents of Hinkley were still fuming over what they regarded as paltry checks — Girardi and Lack, flush from their winnings and wanting to “give something back” to the California legal community, organized a weeklong Mediterranean cruise for 90 people, including 11 public and private judges. The three PG&E arbitrators were among those invited.
One judge called it “absolutely incredible.” A luxury yacht floated on azure waters; tuxedoed butlers balanced silver trays of free champagne; young bikini-clad ladies frolicked on the sun-splashed deck, according to retired Judge Schoettler, who was a guest. As another bare-chested judge remarked at the time: “This gives decadence a bad name.”
The cruise was organized under the banner of Girardi and Lack’s Foundation for the Enrichment of the Law. Girardi told the Los Angeles Times that the cruise included “an extensive professional program.” The cost was about $3,000 per person, about half the normal rate; Girardi told the Times he and Lack had received a discount for chartering the entire Cunard cruise ship. After some confusion, all of the judges on the trip paid their way, save two unrelated to the PG&E case who were invited to lecture.
The public judges claimed the cruise had been an educational seminar, allowable under both state and federal judicial rules. But Schoettler said no one he knew attended a lecture. The fact that the three PG&E judges accepted the discounted cruise from the attorneys whom they had just enriched is one reason Chief Justice George instigated a study into the business of arbitration.
The study, completed in September 1999, recommended that arbitrators disclose their relationships with parties before them, and refrain from accepting gifts from those who come before them.
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Meanwhile, the PG&E plaintiffs grew increasingly disenchanted with the case. Roberta Walker regrets that she ever agreed to arbitration. “I wanted it to go to court. I wanted a jury to decide it.” She believes that if that had happened, PG&E’s executives might have gone to jail “for murder, for lying, for destroying the lives of thousands of people,” she said. She added that she doesn’t begrudge her attorneys their fees, but wishes that the settlement had provided her and her family free medical coverage for life.
But some of her neighbors had grown disgusted with their lawyers. “I feel like I was treated like a country hick that didn’t understand plain English,” said Tindell. “We are the ones who made those guys zillionaires.” Some residents began to take their cases to at least four other attorneys for help.
One of those was Michael Dolan, who runs a one-man practice in Bakersfield. He talked to 81 of the plaintiffs and found they received, on average, $152,000. That too fueled speculation among the town’s residents about who had gotten the money. But before Dolan took any action, Girardi, Lack and Masry went on the offensive. On June 22, 1998, the three filed a suit against Dolan. They claimed Dolan slandered them when he told Hinkley plaintiffs they had a right to sue Girardi, Lack and Masry for malpractice over the too-high minors fee, among other issues. The attorneys also charged that Dolan had interfered with their business relationship with the clients.
The suit landed on the front page of the Los Angeles Daily Journal, a legal paper, two days later. In his defense, Girardi claimed that the minors’ higher fee had been approved by arbitrator Trotter, and therefore was permissible. But under California law, a Superior Court judge had to approve the higher fees charged to the minors.
According to the PG&E settlement signed by lawyers on both sides, the settlement would not be final until a Superior Court judge approved certain aspects of the case. Dolan and others say that has not yet happened. In an interview, arbitrator Goertzen said that he assumed a Superior Court judge approved everything, since it was required.
The slander case against Dolan didn’t last long. Two weeks later, on July 7, 1998, the three attorneys quietly dropped the suit. But talk in Hinkley about the case continued. This prompted Masry to sue Dolan again in August 1998. When Dolan moved to depose Masry as part of the open court proceedings, Masry again dropped the suit, in March 1999.
The following month, Girardi, Masry and Lack refunded some money to the minors who had turned 18 in 1998. On April 26, 1999, the three wrote letters informing the teens that “computer errors” had generated incorrect awards. They added, “It is unclear under the law as to whether your fee should have charged as an adult or as a minor.” The attorneys enclosed checks amounting to the difference between 33-and-one-third percent and 40 percent, which totaled a few hundred thousand dollars, said Dolan.
The attorneys also steered some clients with large awards toward certain financial planners, one of whom was Ed Masry’s son, Louis. In May 1996, a few months before PG&E settled, Louis Masry started his own company, Sunrise Financial Services, now located in the same building as his dad’s law firm. “I had met some of the people while my father represented them, but most of my clients came from referrals,” he said in an interview. Louis Masry now represents about 100 people from Hinkley.
Girardi, Lack and Masry appeared on television shows and in newspaper stories, discussing their victory against PG&E. Yet, the attorneys repeatedly warned their clients not to talk to the press or even share information among themselves. “We again strongly urge you not to discuss your awards with anyone other than immediate family members,” the three wrote on July 24, 1996. They also said in the same letter that PG&E had the right to sue the residents if they violated the confidentiality of the agreement; a PG&E attorney was later quoted in the Los Angeles Times saying that was “ridiculous.”
Around the same time, Brockovich was arranging to sell her “true story” to Hollywood for about $100,000, according to Brockovich. With the aid of Girardi and Lack, “Universal [the movie studio] actually got ahold of the trial transcripts under a court order,” Brockovich said during an interview.
“What’s Universal got to do with this case?” asks Hinkley resident Smith. “And how come we never got a copy?”
When the studio released “Erin Brockovich” last month, Lack and Masry started fielding calls from potential clients around the country who had seen their names roll by in the film’s credits, under a “Special Thanks” heading. The three attorneys are now mounting similar cases against PG&E on behalf of townspeople in other Southwestern backwater towns.
All of which raises questions about this type of justice. “Obviously, there is something broken with our system,” said Robin Lossing of Citizens Against Lawsuit Abuse. Once the attorneys take out their enormous fee, there’s not much left for the plaintiffs, she said. “This is a lawyer-run lottery system. Who really pays for this? Consumers do.”
Indeed, one could argue that California taxpayers are already paying for it. A few months after PG&E settled the Hinkley case, in October 1996, the California Legislature gave the utility $500 million to improve the “safety and reliability” of its distribution system. And if Masry, Lack and Girardi get their way, PG&E may pay them even more money in future cases — without any way for the public to understand how or why.