The California State Bar has opened an investigation into a prominent Los Angeles law firm that represents thousands of sexual abuse victims in a record $4 billion settlement, according to court documents made public Wednesday.
The investigation into Downtown LA Law Group, which is also the subject of a criminal investigation into allegations that plaintiffs received money to sue, was detailed in a court motion filed Jan. 20 by Los Angeles County attorneys. The county this spring accepted the historic payment to settle thousands of sexual abuse claims within youth centers and foster homes.
The county's latest court filing asks Superior Court Judge Lawrence Riff for permission to turn over to the State Bar confidential case documents related to sexual 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 investigation into the company.
The county included a number of Times research as evidence, citing reports that found nine clients represented by the firm who said recruiters paid them to sue the county. Four said they were told to make up their abuse claims. The firm has denied any wrongdoing and said it “categorically does not participate in nor has it ever tolerated the exchange of money to retain clients.”
DTLA did not directly address an investigation into whether it planned to oppose the request.
“We cannot comment on matters pending before the court,” the firm said. “While we cooperate with the Bar, we are also taking all necessary steps to protect the legitimate privacy rights of plaintiffs who are victims of sexual assault.”
The motion requests a hearing on Feb. 26 to present arguments on allowing the State Bar to review DTLA's filings.
“He Los Angeles Times “The articles raise serious allegations of fraudulent and illegal 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 the materials necessary to conduct a thorough investigation of these allegations, particularly when the allegations concern potentially systemic fraudulent practices by licensed attorneys.”
The State Bar served a subpoena to the county on Nov. 4, requesting thousands of documents related to the approximately 2,700 sexual abuse victims represented by DTLA, according to a statement from Alex Binder, an attorney for the State Bar's investigative arm. The firm represents almost a quarter of the total victims of the agreement.
The bar association requested three sets of documents: complaints, detailed descriptions of the abuse and certificates from mental health professionals, which is a requirement for older victims under state law.
The county dismissed the lawsuits but said the other documents were covered by a protective order.
“The county is in an untenable position,” the motion said. “He possesses confidential materials that the State Bar requests to investigate serious allegations of possible attorney misconduct, but cannot produce them.”
First the state legislators and a group of lawyers called bar to investigate in October, after The Times published its first investigation into possible fraud in the county deal.
The State Bar declined to comment on whether it would investigate the claims at that time, but said generally that California law prohibits attorneys from making payments, or forcing others to make payments, to solicit clients.
According to the motion, the bar is investigating allegations raised by The Times that DTLA “may have engaged in fraudulent and illegal practices” on behalf of sexual abuse clients, “including possible misuse of outside recruiters, deceptive presentations, and conduct that may constitute moral turpitude.”
“If true, these allegations could undermine the legitimacy of thousands of claims and distort settlements intended to compensate survivors of child sexual abuse,” the motion said.
Payments to sexual abuse victims in the settlement are expected to range from $150,000 to $3 million. Payments were initially anticipated to begin in January, but were delayed in part due to renewed scrutiny of DTLA's caseload. The county appointed a judge Conduct an additional level of vetting of the company's cases, which must be completed before any money is released.
In a letter sent to customers last week, DTLA said it was told at a recent court hearing that the delays were due, in part, to “a greater than expected false claim potential” among more than 10,000 claimants. The letter reminded customers that false claims could be flagged for “possible criminal prosecution” and said they could withdraw their claim at any time.
The State Bar investigation comes as the Los Angeles County district attorney's office continues its own investigation into the firm as part of a broader investigation into fraud within the sexual abuse litigation.
Lawyer Dist. Nathan Hochman announced in November, following the Times' report that it had launched an investigation into allegations that the plaintiffs had fabricated stories of abuse. One of the people who told the Times they had been paid to make up false claims said a senior investigator at the office had left a business card with a family member in December.
The district attorney's office said Wednesday that the investigation was ongoing but declined to comment further.
