Daily Journal - Los Angeles

Unlikely Bedfellows Face Off

Republican Activist Takes on GOP Candidate's Lawyer

By Lawrence Kootnlkoff

Daily Journal Staff Writer

It's a tale of unlikely bedfellows:  a Republican activist facing off against GOP gubernatorial candidate Bill Simon, who is represented by a registered Democrat.

Anthony Duffy, an active Orange County Republican, no sooner won a breathtaking $78 million civil judgment against William E. Simon & Sons than he was back in court against Democrat Brad Brian, who managed to get the jury verdict reversed.

Duffy probably has been in more comfortable courtrooms.

But the Newport Beach sole practitioner, who backed former Los Angeles Mayor Richard Riordan against Simon in the March GOP primary, insists the politics of the situation don't bother him.

"I and other lawyers in my position feel we are bound by the highest rules of ethics, and one of those is that we represent our clients properly," said Duffy, who represented plaintiff Paul Edward Hindelang.

On Sept. 12, Los Angeles Superior Court Judge James C. Chalfant threw out the highly publicized $78-million jury verdict against Simon's family company over a failed business venture.

A jury ordered the firm to pay the multimillion-dollar damages for fraud and other misconduct in late July.

But, after hearing from Brian, Chalfant found that Hindelang himself had defrauded Simon by failing to reveal his past conviction for drug trafficking, and the judge ordered him to pay $125,000 in damages.

Duffy says he will appeal Chalfant's decision.

The legal fight has done more than pit two of this town's biggest litigators against each other.  It has caused Simon's political handlers fits and left Democratic Gov. Gray Davis rubbing his hands in glee.

"A jury of 12 people still found Mr. Simon fraudulent," Davis said.  "No judge's decision is going to change that fact."

And while a conservative Republican is the lawyer who nailed Simon for the big verdict, it was a registered Democrat who got him off; Munger Tolles & Olson's Brad Brian.

Brian is a veteran white-collar criminal defense lawyer specializing in complex, corporate civil litigation.  A 1977 Harvard graduate and former managing editor of the Harvard Law Review, Brian earned his stripes as a corporate trial lawyer in 1994, successfully defending former Columbia Savings & Loan Chairman Tom Spiegel in a junk-bond scandal.

Brian also has represented a who's who of corporate America, including General Electric, Allstate Insurance, Litton Systems and Boeing.

Brian took over at the post-trial stage.  The trial itself was handled by Bill Lancaster of Seyfarth Shaw and sole practitioner Stephanie Krafchak.

Yale graduate Duffy is a member of the New Majority, a group of wealthy Orange County executives and professionals trying to prod the Republican Party back into the moderate center, away from the hard-right faction that supported Simon over Riordan.

New Majority founders include George Argyros, now ambassador to Spain, Irvine Co. Chairman Donald Bren, Emulex Corp. Chief Executive Officer Paul Folino, Broadcom co-founder Henry Samueli and Apria Healthcare President Lawrence Higby.

Mark Chapin Johnson, another founder, was finance chairman of Riordan's failed Republican primary campaign.

"I joined because I agreed with the idea of making the Republican Party more mainstream and appealing to middle-of-the-road voters," said Duffy, who recently left Lee, Goddard & Duffy to set up his own firm.  "I believe in the big-tent concept."

The 110 members of the New Majority, who pony up $10,000 in annual dues, gave $100,000 to Riordan, while individual members kicked in another $400,000 from their own pockets.

Duffy is more active in politics than Brian, a college baseball all-star whose bad back has forced him to confine his athletic endeavors to the golf course. 

"I can't run anymore," laughs Brian, also a board member and past president of the Legal Aid Foundation of Los Angeles.

Meanwhile, Davis' handlers have had a feeding frenzy over Simon's continuing troubles. 

Somber television ads question Simon's leadership abilities in the face of his business and legal difficulties.

Davis surrogates jump in front of any camera, microphone or notepad they see to hammer their message home.

Republican politicos point out that Duffy was representing Hindelang since before Simon began his run for the governor's mansion.

"This lawsuit was originally a federal case launched by Simon," Duffy pointed out.

"If I, after representing Mr. Hindelang for two and a half years, say to him, 'You're going to have to get another lawyer because the guy we're going against is running for our party,' I would be guilty of breaching rules of conduct," he said.

But the attention--whatever the case's final outcome--comes at a bad time for Simon's beleaguered campaign.

Scandals surrounding Enron, WorldCom, Martha Stewart, Tyco International and other honchos have focused voters' minds on corporate scalawags and malfeasance.

"I think the public is rightly concerned about corporate responsibility," Duffy says.

Both Duffy and Brian say they can separate politics from the work of representing their clients.

"It is not our desire to have an impact on the gubernatorial campaign," Duffy said.  "Our goal is to have our client's rights vindicated."

"I don't think this case is about politics:  It is about a business deal that went south," said Brian.  "By and large, the courts have stayed out of politics and should stay out." 

Still, in a system in which attorneys often run for office and politicians hold final say over judicial appointments, the worlds of law and politics regularly intersect.

Clients are more likely to choose attorneys they agree with politically, simply because they feel more comfortable with them, according to law professor Erwin Chemerinsky of USC. 

However, "that is not always the case," Chemerinsky added.

"Sometimes, a Democrat wants to be represented by a Republican or vice-versa, to send the message that their case is not about politics," he says.

With the verdict behind Simon for the moment, at least, he is trying to rebound and take the offensive against Davis.

The one-time prosecutor has an endorsement from his former boss, U.S. attorney and later New York Mayor Rudolph Giuliani. 

But not even Clarence Darrow, Johnnie Cochran and Alan Dershowitz working together may be able to save the Simon campaign from itself.

A poll released Aug. 29 by the Public Policy Institute of California showed Simon with the support of 30 percent of voters, while Davis garnered 41 percent.

Meanwhile yet another Simon lawsuit began Wednesday in Washington, D.C.

Westfed Holdings is suing the U.S. government, which the company and its investors blame for the 1993 collapse of its savings and loan, Marina del Rey-based Western Federal, said Simon lawyer John Morrissey of Bingham McCutchen.

Though Simon is not a party in this suit, his family firm, which lost $40 million in the savings and loan failure, held a stake in Westfed and stand to gain if the suit prevails.

The bailout of Western Federal and Loan cost taxpayers $122 million.