The California State Bar has opened an investigation into a prominent Los Angeles law firm that represents thousands of sex abuse victims in a record $4 billion settlement, according to court filings made public Wednesday.
The investigation into Downtown LA Law Group, which is also the subject of a criminal probe into allegations plaintiffs were paid to sue, was detailed in a Jan. 20 court motion filed by attorneys for L.A. County. The county agreed this spring to the historic payout to settle thousands of claims of sex abuse inside juvenile halls and foster homes.
The latest court filing by the county asks Superior Court Judge Lawrence Riff for permission to give the State Bar confidential case documents related to sex abuse clients represented by Downtown LA Law Group, or DTLA. The county said the State Bar had subpoenaed the documents as part of its ongoing probe into the firm.
The county included a series of Times investigations as exhibits, citing reporting that found nine clients represented by the firm who said they were paid by recruiters to sue the county. Four said they were told to make up their claims of abuse. The firm has denied all wrongdoing and said it “categorically does not engage in, nor has it ever condoned, the exchange of money for client retention.”
DTLA did not directly address an inquiry into whether they planned to fight the request.
“We are unable to comment on matters pending before the court,” the firm said. “While we are cooperating with the Bar, we are also taking whatever steps necessary to protect the legitimate privacy rights of the plaintiffs who are victims of sexual assault.”
The motion asks for a Feb. 26 hearing for arguments on allowing the State Bar to review DTLA’s filings.
“The LA Times articles raise serious allegations of fraudulent and unlawful practices by attorneys that pose a risk of harm to the public,” the county’s motion said. “The State Bar cannot fulfill its duty to protect the public if it is not able to obtain all necessary materials to conduct a thorough investigation of these allegations, particularly where the allegations concern potentially systemic fraudulent practices by licensed attorneys.”
The State Bar served a subpoena on the county Nov. 4, requesting thousands of documents related to the roughly 2,700 sex abuse victims represented by DTLA, according to a declaration from Alex Binder, an attorney with the investigative arm of the State Bar. The firm represents nearly a quarter of the total victims in the settlement.
The bar asked for three batches of documents — lawsuits, detailed descriptions of the abuse and certificates from mental health professionals, which is a requirement for older victims under state law.
The county turned over the lawsuits, but said the other documents were covered by a protective order.
“The County is placed in an untenable position,” the motion stated. “It possesses confidential materials that are sought by the State Bar in order to investigate serious allegations of potential attorney misconduct, but cannot produce them.”
State lawmakers and an attorney trade group first called on the bar to investigate in October, after The Times published its first investigation on potential fraud in the county’s settlement.
The State Bar declined to comment on whether they would investigate the claims at the time, but noted, generally speaking, that California law prohibits attorneys from making payments, or causing others to make payments, to solicit clients.
According to the motion, the bar is looking into allegations surfaced by The Times that DTLA “may have engaged in fraudulent and unlawful practices” representing sex abuse clients, “including potential misuse of third-party recruiters, misleading filings, and conduct that may constitute moral turpitude.”
“If true, these allegations could undermine the legitimacy of thousands of claims and distort settlement intended to compensate survivors of childhood sexual abuse,” the motion said.
Payments to sex abuse victims in the settlement are expected to range from $150,000 to $3 million. The payments were initially anticipated to start in January, but have been delayed in part due to new scrutiny of DTLA’s caseload. The county appointed a judge to conduct an extra level vetting of the firm’s cases, which must be completed before any money goes out the door.
In a letter sent to clients last week, DTLA said they were told in a recent court hearing that delays were due, in part, to “a higher-than-expected false claim potential” across the more than 10,000 plaintiffs. The letter reminded clients that false claims could be flagged for “potential criminal prosecution” and said they could withdraw their lawsuit at any time.
The State Bar investigation comes as the L.A. County district attorney’s office continues its own probe into the firm as part of a larger investigation into fraud within the sex abuse litigation.
Dist. Atty. Nathan Hochman announced in November, following The Times’ reporting, that he had launched an investigation into claims that plaintiffs made up stories of abuse. One of the people who told The Times they’d been paid to make up false claims said a senior investigator with the office had left a business card with a family member in December.
The District Attorney’s office said Wednesday the investigation was ongoing, but declined to comment further.
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