Protecting the system: How the plaintiffs' bar can be the solution to the DTLA scandal

There is a problem, and the collective plaintiffs' bar needs to become the solution.

The allegations against DTLA Law Group regarding the LA County Sexual Abuse claims are a five-alarm fire. The Los Angeles Times reports that recruiters were allegedly paying people outside county benefits offices to sign retainers and file false sexual abuse claims. According to the same reports, two individuals thought they were being hired as movie extras for $100 each, only to be handed scripts about abuse that never happened. Others have admitted fabricating claims for cash. While we do not know the validity or the breadth of any alleged fraud scheme, we must take immediate action because we must protect the civil justice system.

These allegations threaten real victims who suffered horrific abuse in Los Angeles County facilities. As one survivor told the Los Angeles Times: "For someone to capitalize on something that they never endured or never experienced, I think it's a travesty." It should not be lost on the public, the legal community and the plaintiffs' bar that this is the result of the mass advertisers and attorneys who gather massive "inventories." Nor should it be lost on all of us that a solution is out there.

We need to be responsible for separating the legitimate cases from the suspicious or outright phony claims.

Los Angeles County supervisors have called for investigations. Last week, the county announced it will subject all DTLA cases to additional screening before making payments. That's understandable -- they're staring down nearly $5 billion in settlements and discovering that a significant portion of claims may be fabricated.

But here's the fundamental problem: the county is the defendant. Asking the party being sued to determine which claims are legitimate creates an obvious conflict of interest. Would we trust a pharmaceutical company to vet injury claims against it? According to the Los Angeles Times, under the original settlement terms, the county could offer just $50,000 to resolve fraudulent claims -- creating a perverse incentive to label as many claims as possible as "fraudulent." Frankly, if a claim is fraudulent, the county should pay nothing -- it should not be lost on any of us that this is taxpayer money, and it dilutes the amount available to victims with real claims. Paying fraudulent claims only acts as an incentive for unscrupulous lawyers to sign up and submit fraudulent claims.

Similarly, law firms holding thousands of cases face their own impossible conflict. When you're sitting on 2,000 or 3,500 cases in a settlement with a fixed pool of money, every dollar matters. The more cases you eliminate as fraudulent, the more money potentially flows to remaining cases -- and the higher your contingency fees. There is no doubt the vast majority of the larger firms are well respected, honorable and ethical. They would likely disqualify themselves from vetting their own cases based on the appearance of impropriety and their professional obligations.

That's why reputable plaintiffs' firms with no serious financial stake in the outcome and with the requisite experience must step forward now. This isn't radical. It's been done before.

In the Los Angeles Department of Water and Power billing scandal, serious questions emerged about a corrupt "reverse auction" arrangement. The settlement was reached days after filing, with no discovery, and tens of millions went to attorneys who had done virtually no work. Federal charges against the lawyers (and subsequent plea deals) followed. Here, the Consumer Attorneys of California has called for State Bar investigations. That's a good start. But investigations take years, and the settlement is moving forward now. It took years for the State Bar to investigate the LADWP scandal.

In the LADWP scandal, the court appointed independent counsel to audit the entire mess -- a process we were proud to lead. We have worked on that case since 2019 and with at least 6,000 attorney hours. The settlement was checked, corrected as needed and monitored. We were responsible for ensuring that LADWP paid $39 million in refunds and credits as required under the terms of the settlement agreement that was approved in 2017. It was tedious, thankless work, but necessary to restore integrity.

The DTLA situation demands the same approach on a much larger scale. Hundreds of legitimate cases are now moving forward, and they risk being tainted if the entire settlement process loses credibility.

Here's what needs to happen:

First, identify a small group of reputable plaintiffs' firms with established track records, nominal involvement in the settlement but significant experience with sexual abuse and mass action cases, and no financial interest in the outcome. Selection should be overseen by the court or a neutral administrator to ensure transparency and public trust.

Second, divide the DTLA inventory among these firms for independent review. Each case should be evaluated on its merits: Does the claimant's story hold up? Is there corroborating evidence? Were they actually in county custody? Working with the County's lawyers and team is necessary.

Third, create a transparent process with clear standards. Legitimate cases move forward. Fraudulent cases get dropped. Gray area cases require additional investigation. The lawyers assigned cases have their own ethical obligations to these clients -- an obligation the County's well-meaning lawyers would never have.

Fourth, reviewing firms should be compensated at reasonable rates -- but only after the work is complete and approved and paid from the fees the DTLA group otherwise would recover. Frankly, the DTLA lawyers should welcome this approach.

Fifth, the reviewing firms should periodically report to the county, the clients, the court and the public their findings. This was done periodically over the past six years in the LADWP case.

Will it take time? Absolutely. But the alternative is worse. Checking and stopping this scandal now with specific and ethical accountability from within the profession, lets our critics know that the rank-and-file members of the plaintiffs' bar can not only be trusted, but can be trusted with protecting the public.

The overwhelming majority of plaintiffs' attorneys don't operate this way. Most are hardworking professionals who scrutinize cases carefully, represent real people, and fight for justice rather than volume. Without them, the courthouse doors would be closed to millions of working-class people who could never afford to pay a lawyer by the hour.

Real victims are justifiably terrified that fraud allegations will torpedo their chance at justice -- wondering if they'll still be believed. That question should haunt every member of the plaintiffs' bar. If we don't answer it with action -- with real, independent vetting conducted by experienced and unbiased lawyers -- we're telling victims that our profession cares more about protecting our own than delivering justice.

We can't wait for regulators. We can't rely on the defendant. This is our profession. Our responsibility. Our credibility.