Los Angeles City Attorney Michael N. Feuer might have been told about an apparent reverse auction of a class action settlement in which special counsel for the city for a time also represented the plaintiff, according to a sworn deposition transcript obtained by the Daily Journal.
The sworn disclosure was made by Chief Deputy City Attorney James P. Clark, Feuer's No. 2 at the city attorney's office.
On Wednesday attorneys Paul R. Kiesel and Paul O. Paradis withdrew as special counsel to the city in litigation involving incorrect water bills produced by a Pricewaterhouse Coopers LLC system following a report by the Daily Journal disclosing documents accusing Paradis and Kiesel, who were hired as private special counsel to defend the city from litigation tied to city water misbilling, of simultaneously representing lead plaintiff Antwon Jones.
The Daily Journal has also obtained a draft complaint against Pricewaterhouse Coopers with Antwon Jones' name on it as the plaintiff and Kiesel and Paradis listed as his counsel. The document is dated January 2015.
The city said it hired Paradis and Kiesel on Dec. 18, 2014, 10 days after Jones said he retained Paradis.
"I was unaware of this complaint," Kiesel said in a phone interview Thursday. "I never authorized my firm's name on the complaint and never to this day have seen a full copy of this complaint. I can only imagine Mr. Paradis expected to request my involvement but he never did and we wound up representing the city of Los Angeles against Pricewaterhouse Coopers," said Kiesel.
The city attorney's office has not responded to repeated phone calls and emails this week requesting comment for this story.
According to the deposition transcript, Clark, under questioning by Pricewaterhouse Coopers attorney Daniel J. Thomasch of Gibson, Dunn & Crutcher LLP, said Feuer likely knew about the existence of the draft complaint showing his outside counsel also represented the plaintiff.
"Did you apprise him of that fact?" Thomasch asked.
"I'm sure I did. We met twice a week. I advise him of what's going on. I have no specific recollection of advising him," testified Clark.
The deposition also indicates Clark knew Paradis had previously been counsel to Jones when the complaint against the city was filed.
"And on that day you knew that Mr. Paradis had previously been Mr. Jones' counsel; correct?" Thomasch asked.
"Correct," testified Clark.
"Why was Mr. Paradis not ethically walled off of having anything to do with the Jones case once the Jones case was filed?" asked Thomasch.
"Well, because I think that we do not believe there was simultaneous representation; therefore, there was not adversity and not conflict," testified Clark.
The Jones settlement was criticized for being resolved without discovery but with $19 million in attorney fees.
Paradis and Kiesel are accused by Pricewaterhouse Coopers of installing their own opposing counsel, an Ohio attorney named Jack Landskroner, who filed the complaint five days after being retained. A settlement offer was made the next day, according to court documents.
Landskroner was paid $15 million. Kiesel and Paradis, who was paid $1.8 million by the city, stood to gain nearly 20 percent of attorney fees recovered in the city's pending case against Pricewaterhouse Coopers, according to the settlement. The ensuing developments have jeopardized the city's chances of recovering from the billing company.
Kiesel has denied any joint representation, pointing to a deposition of Jones in which Jones said he did not know or hire Kiesel. Jones and his attorney, Jeffery Isaacs, have contended that Jones hired Paradis not knowing Paradis would also be hired by the city.
"No one brought Mr. Landskroner into the case because he was viewed as someone who would be the most zealous advocate available for Mr. Jones to pursue claims. Correct?" Thomasch asked.
"That's ... that's right," said Clark.
"Did anyone in the city attorney's office consider whether it was ethical for Mr. Paradis to not inform Mr. Jones of the nature of his conflict yet be the person who recommended counsel to Mr. Jones?" asked Thomasch?
"No," said Clark.
Dissatisfaction with the handling of the Jones class action was brought to the attention of Clark and Feuer at least three and a half years ago, documents also indicate.
San Diego attorney Timothy G. Blood, who filed the first lawsuits over the water misbilling, wrote to Feuer in June 2015 expressing concern about being shut out of settlement negotiations with the city.
"First, you confirmed that the city and [Department of Water and Power] have engaged in secret settlement discussion to resolve the pending litigation against the city and the DWP arising from the DWP's admitted overbilling of its customers -- conduct that is ongoing," wrote Blood.
Participating lawyers, not just the public, were shut out of negotiations, Blood contended.
"In fact, to the exclusion of all others, the city chose to negotiate with the lawyers who copied the work of the other lawyers, have the least amount of relevant experience in class action litigation, have done the least amount of work in this case and filed their copy-cat complaint a full five months after the first lawsuit was filed and apparently without complying with the Tort Claims Act," Blood wrote.
Blood was referring to Ohio attorney Landskroner, accused of being brought in at the eleventh hour as the city's chosen opposing counsel, and settling the case with no discovery while taking home $15 million in fees. Landskroner has since pleaded, through his attorney, for Fifth Amendment protection against self-incrimination when asked multiple times by Los Angeles County Superior Court Judge Elihu M. Berle if any of the fees were paid to Paradis or anyone else.
Isaacs, Jones' attorney, said Jones entered into an attorney-client relationship with Paradis on Dec. 8, 2014. A week later Paradis and Kiesel were hired by the city, the city said. Isaacs said Paradis on March 26, 2015 introduced Jones to Landskroner, who began representing him.
To this day Paradis and Kiesel have not notified Jones they are no longer his counsel, Isaacs has said.
Kiesel's attorney said that relationship ended when Landskroner came in as counsel.
At the same time Paradis was representing the city's interests in the misbilling litigation a company he controlled received $36 million spread over three no-bid contracts to fix the billing fiasco. That company, Aventador Utility Solutions, which lists an oceanside Santa Monica condominium as its place of business, was only in existence for three months before it began contract work related to the Jones settlement.
"We seek Mr. Paradis' deposition, Ms. [Gina M.] Tufaro's deposition, and Mr. Kiesel's deposition. They were all in on it," Pricewaterhouse Coopers defense attorney Thomasch said in court this week. "Everybody knew what was going on except Mr. Jones, the court, and [Pricewaterhouse Coopers] and the public, of course."