Mar. 14, 2019
Los Angeles cuts off contract but private attorney has collected $21.9 million already
A total of $30 million in no-bid contracts secured by a private attorney accused of misconduct while litigating dual Los Angeles Department of Water & Power cases for the city have been canceled, but not before the attorney's company was paid $21.9 million.
A total of $30 million in no-bid contracts secured by a private attorney accused of misconduct while litigating dual Los Angeles Department of Water & Power cases for the city have been canceled but not before the attorney's company was paid $21.9 million.
That company, Aventador Utility Solutions, was awarded contracts to remediate errors in connection with a 2016 class settlement over water and power billing mistakes. Its principal owner is Paul O. Paradis of New York, who in his capacity as special counsel for the city, has been accused of acting as a dual-agent by also representing lead plaintiff Antwon Jones.
Jones testified in a sworn deposition that he first retained Paradis with the intention of suing the city but did not know Paradis was also representing the city at the time. Antwon Jones v. City of Los Angeles, BC577267 (L.A. Super. Ct., filed April 1, 2015).
The department of water and power said Wednesday it ended the contracts after these issues arose.
"Given these recent allegations, in order to eliminate any potential conflict or the appearance of a conflict of interest, today the Board of Water & Power Commissioners directed the department to terminate its contract with Aventador Utility Solutions," the department said in a statement.
It's unclear if the department will seek to recoup the money.
Aside from the $21.9 million already paid to Aventador, the company previously received a $6 million contract related to the Jones settlement. Aventador, which appears to be named after a high-end $400,000 Lamborghini and lists an oceanside Santa Monica penthouse as its place of business, became a company less than three months before being approved for the work. Paradis was also paid $1.8 million by the city related to the Jones settlement.
Both opposing and fellow counsel in the cases argued Paradis, and Paul Kiesel of Kiesel Law LLP in Beverly Hills, reverse auctioned, or settled the weakest case, by bringing in a favorable opponent and padding the settlement with high attorney fees in exchange for the city's control in the Jones settlement. The city hoped to leverage that case in its lawsuit against the company that sold the billing software to the city, Pricewaterhouse Coopers LLC, attorneys argued in court. Both Kiesel and Paradis were to be paid 20 percent of any settlement or damages recovered in that case.
Both Kiesel and Paradis withdrew from representing the city, and the office of City Attorney Michael N. Feuer said it was undergoing an ethics investigation after inquiries from the Daily Journal.
Kiesel denied being in an attorney-client relationship concurrently with the city and Jones.
The class of 1.6 million water bill customers received $67 million as part of the settlement.
"It was a good settlement for LADWP customers as they were made whole," the department said in a statement.
The department pointed to comments made by the mediator in the case, retired U.S. District Judge Dickran Tevrizian: "[T]he proposed settlement provides an excellent recovery for members of the settlement class. With respect to monetary recovery, all settlement class members will receive a credit or refund for 100 percent of any amounts that they were overcharged by LADWP."
But the settlement could be reopened and the city's pursuit of recouping damages from the billing software company is uncertain following the recent allegations of dual representation.
Jack Landskroner, an Ohio attorney whom Pricewaterhouse Coopers accuses of being installed as opposing counsel by the city, pleaded the Fifth Amendment against self-incrimination last week when Los Angeles County Superior Court Judge Elihu M. Berle probed him about any fees being paid to Paradis or anyone else. Berle also froze payments from the city to Landskroner.
According to Jones, Paradis introduced Landskroner to him over email six days before the class action was filed against the city. According to his deposition by Pricewaterhouse Coopers attorneys from Gibson Dunn & Crutcher LLP, Jones was under the impression Landskroner was being added to his legal team, not replacing it. Further, Landskroner provided to the court dates for billable hours that pre-dated his time representing Jones. Gibson, Dunn partner Daniel J. Thomasch has alleged it was in fact the city that drafted the complaint before turning it over to Landskroner on the eve of its filing on April 1, 2015.
The settlement was reached 87 days later with no discovery. Landskroner's firm was paid $15 million out of $19 million in attorney fees.
Feuer has denied knowing about the issues raised and said he is strongly committed to an ethics investigation although stopped short of referring it to an outside body. His chief deputy, James P. Clark, said in a deposition he likely told Feuer about the arrangements.
Consumer Watchdog, which is not involved in the litigation, asked Wednesday that Attorney General Xavier Becerra look into the matter.
"We now ask that you take over the investigation of the city attorney's misconduct in the matter of Jones v. DWP and report back to the public about your findings. The city attorney cannot be trusted to investigate his own agency," wrote Consumer Watchdog President Jamie Court.
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