Mar. 20, 2019
Judge asks about criminal investigation in LA billing matter
The superior court judge presiding over the department of water and power billing fiasco asked point blank Tuesday if the litigation has spawned any criminal investigations.
LOS ANGELES -- The superior court judge presiding over cases tied to the Los Angeles Department of Water and Power billing fiasco asked point blank Tuesday if the litigation has spawned any criminal investigations.
Judge Elihu M. Berle questioned counsel during a hearing in which the city of Los Angeles is trying to recoup losses from software billing company Pricewaterhouse Coopers LLP, seller of a program that spat out incorrect bills. The two related cases, one a class action against the city and the other a city claim against the company, have resulted in collusion allegations, the awarding of no-bid contracts, and one attorney who pleaded Fifth Amendment protection against self-incrimination 200 times. Antwon Jones v. City of Los Angeles, BC577267 (L.A. Super. Ct., filed April 1, 2015). Los Angeles v. Pricewaterhouse Coopers LLP, BC574690 (L.A. Super Ct., filed March 6, 2015).
"Are you aware of any threatened criminal prosecutions?" Berle asked Pricewaterhouse Coopers defense attorney Daniel J. Thomasch of Gibson, Dunn & Crutcher LLP, who is demanding depositions and other discovery to defend the city's lawsuit.
Thomasch said he wasn't aware of any such probes but added, "The matter may have drawn the attention of people looking into that."
Neither the offices of the California attorney general or U.S. attorney' in Los Angeles would confirm or deny an investigation into the matter.
The dual cases are now shrouded in fraud allegations six years after city ratepayers initially reported receiving incorrect bills, some as high as $50,000. One customer, Antwon Jones, was lead plaintiff in the underlying $67 million class action settlement against the city.
But in a plot twist Jones' new attorney, Jeffrey B. Isaacs, has told the court his client was represented by New York consumer attorney Paul O. Paradis and Paul R. Kiesel of Beverly Hills, who without his knowledge were working concurrently for the city against his interests.
Thomasch also informed Berle Tuesday that Chief Deputy City Attorney James P. Clark, once a Gibson Dunn partner, submitted an errata sheet with more than 50 changes to his sworn deposition.
"Statements that are completely changed from what they were," Thomasch said.
In his deposition, Clark said he knew at the end of March 2015 the Jones class action was going to be filed against the city. His proposed errata now says, "I didn't."
In another portion of the deposition there was this exchange:
"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.
Clark changed that to "I don't know why Mr. Paradis recommended him to Mr. Jones."
Landskroner is Ohio attorney Jack Landskroner, who is accused by Thomasch, and other plaintiffs' attorneys, of colluding with Paradis and Kiesel.
Thomasch said he plans to depose Clark about those changes.
Jones, through his attorney Isaacs, an Isaacs Friedberg partner and former chief assistant Los Angeles city attorney prior to Michael N. Feuer's administration, said Paradis introduced Landskroner to Jones over email. Then Landskroner filed the class action and engaged in settlement talks with the city the next day.
In what is alleged by attorneys on both sides as well as consumer advocates, the city's attorney's office installed its own opposing counsel to quickly execute a sue-and-settle case then leverage it against Pricewaterhouse Coopers. Landskroner, who was paid more than $10 million for settling the case without any discovery, pleaded the Fifth Amendment more than 200 times during his deposition, declining to answer any questions about his relationship to city counsel and if any of his fees were kicked back to Paradis or anyone else. He is seeking to withdraw from the case.
Both Paradis and Kiesel, who stood to receive nearly 20 percent of any city recovery against the company, withdrew from representing the city, and Feuer announced a misconduct investigation following reports by the Daily Journal. In addition, no-bid contracts awarded to a business controlled by Paradis to fix the billing problems were canceled but not before $20 million on the contract was paid.
Thomasch told Berle Paradis and Kiesel were not rogue actors in the matter but instead worked in concert with officials at the highest levels of the city attorney's office.
"We believe they were meeting constantly with city attorney office members," said Thomasch, adding that deposing Feuer is still on the table.
Kiesel has denied any adverse, joint representation. According to his deposition, Kiesel said it was known in the city attorney's office that Paradis represented Jones while working for the city, but nobody brought this issue up to Jones.
Clark said he had no specific memory of advising Feuer about the Jones case, but he probably did because he briefed him twice a week, according to his deposition.
Tom Peters, head of the city attorney's civil division and a former partner at Kiesel Law LLP, is accused of knowing about the alleged collusion.
Browne George Ross LLP attorney Eric M. George, who now represents the city in the billing cases, told Berle the settlement fully refunded ratepayers and was approved by the mediator in the case, retired U.S. District Judge Dickran Tevrizian.
George also told Berle depositions by Thomasch should not proceed without the appointment of a special master to look into the matter. Berle allowed discovery to proceed for the sake of expediting the case.