Jury rules against Geragos, judge slams desk over 'arbitrary' claim

A Los Angeles County jury on Thursday ordered prominent attorney Mark Geragos to pay $100,000 to plaintiff Gary Franklin in a high-profile lawsuit alleging Geragos participated in a 2018 scheme to extort Nike.

Franklin, who ran a Los Angeles-based youth basketball program, claimed Geragos and now-disbarred attorney Michael Avenatti derailed a $1.5 million settlement offer by demanding their own payout from Nike. Geragos denied any wrongdoing, asserting he never had an attorney-client relationship with Franklin and was never charged in the related federal criminal case.

The verdict, reached in just a few hours, followed a heated trial during which Los Angeles County Superior Court Judge Steve Cochran chastised Franklin's counsel for procedural missteps and rejected claims that court-imposed time limits were "arbitrary."

The jury awarded Franklin noneconomic damages but declined to award him any economic damages.

"It's about as close as you can get to vindication," Geragos said following the announcement of the verdict.

"We're unhappy with the noneconomics because it was clear that all the other claims were all derivative from the legal malpractice," Geragos' attorney, Sean E. Macias of Macias Counsel Inc. in Glendale, said of the verdict. "But we heard from the jurors afterwards. They felt sorry for Mr. Franklin, and I don't think that was correct."

Macias further pointed to a numbering issue with the verdict form that he said, "caused a lot of issues."

But Franklin's attorney, Trent B. Copeland of Ellis George LLP, said the award was "not a small amount."

"The jury did find that Mr. Geragos engaged in misconduct, he aided and abetted Mr. Avenatti, he assisted in wrongful conduct, he owed Mr. Franklin a fiduciary duty and he created the standard of care. No lawyer should rejoice when a jury makes those findings, and the fact that it was a $100,000 verdict is still a verdict against Mr. Geragos," Copeland said after the verdict.

Earlier in the day, and outside the presence of the jury, Cochran chastised Copeland for mistakenly displaying a document related to a purported settlement after Cochran had ruled that it be excluded from evidence.

"You can't try the case on innuendo. That's what that was," Cochran said. "You float it without proving it - classic innuendo."

Cochran also took Copeland to task for describing the court's time limits on testimony as "arbitrary" in a motion, language that prompted the judge to slam his desk and demand to know who wrote the motion.

"During this trial there has been nothing arbitrary in here. Do you read me? Nothing arbitrary," Cochran told Copeland, noting that he had allowed the plaintiff's side an extra hour for their case.

The case centers on Geragos' alleged involvement in a 2018 extortion scheme with now-disbarred Avenatti, who was later sentenced to 2.5 years in prison for his role. Federal prosecutors did not indict Geragos as a co-conspirator, which the judge in Avenatti's case cited as a reason for leniency in his sentence.      

Franklin hired Avenatti after Nike chose not to renew a $72,000 annual sponsorship contract for Franklin's Los Angeles-based youth basketball program, California Supreme. He claimed that Avenatti secretly brought Geragos into the matter, saying Geragos had a "fantastic" relationship with Nike's legal team. According to the complaint, within a week, the two attorneys were in Geragos' New York office, allegedly threatening to expose damaging information about Nike unless the company paid tens of millions of dollars.     

The lawsuit further claims Geragos and Avenatti derailed a $1.5 million settlement offer from Nike without Franklin's knowledge or consent. Franklin v. Geragos, 20STCV37797 (L.A. Super. Ct., filed Oct. 10, 2020).    

In a cross-complaint, Geragos asserted that he never had an attorney-client relationship with Franklin, emphasizing that the two never met or communicated.   

Geragos also maintained that Nike's decision not to renew Franklin's contract had nothing to do with him or Avenatti in a joint statement of the case filed ahead of trial. 

In a declaration ahead of Wednesday's proceedings, Copeland reiterated claims that Geragos and Avenatti had directly helped scuttle the $1.5 million settlement offer by demanding their own separate payment from Nike without Franklin's knowledge.

"Impairing Franklin's claim, defendant stated that 'it was a strange question' to even suggest that Franklin would be paid without separately paying defendant and Avenatti," a declaration filed by Copeland on Tuesday stated.

Franklin's damages from the scheme, Copeland said, "include, but are not limited to, the impairment of his claim against Nike, loss of claims due to statute of limitations, and the impermissible use of his confidential information."

At Wednesday's proceedings, however, Macias argued that Franklin had not adequately detailed during his testimony what harm was caused to him by the case and the termination of his relationship with Nike beyond the potential loss of sponsorship deals.

"I said, 'did you lose any business opportunities as a result?' And that's his answer. ... He mentioned Muscle Milk and Skull Headphones. No money, no damages, no claims," Macias said.

Macias further noted that Franklin had testified that a smaller settlement he received in the case had covered all his damages.

"He said yeah, he was paid $160,000 and he fully released Nike and all of their attorneys," Macias said.

Macias then stated that Copeland was an associate of Franklin's at the time of the lawsuit, though Copeland had declined to take the case.

"Here's the question that I think we all need to have an understanding of: Why not sue Trent Copeland?" Macias said. "Trent Copeland says, 'I'm there, in the beginning, middle and end.'"

Copeland objected to these statements, prompting Cochran to remind the jury that statements by counsel are arguments, not evidence.

According to Macias, Geragos' involvement came down to: "I put two guys together. I sat in the room. I drank a Diet Coke. I was silent, and I got sued. Thanks."

"All my checks cash," Macias said of the evidence he presented. "That's my reputation. I'm Sean Macias, and that's what I stand by, every day and twice on Sunday."