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Civil Litigation,

Apr. 3, 2019

Disagreement arises over mediators for LA water bill settlement probe

A handful of mediators, forensic accountants and tax attorneys are among those being recommended to look into the Los Angeles Department of Water & Power ratepayer settlement that has been tainted with fraud allegations.

Los Angeles County Judge Elihu M. Berle

A handful of mediators, forensic accountants and tax attorneys are among those being recommended to look into the Los Angeles Department of Water & Power ratepayer settlement tainted with fraud allegations.

Parties involved in the underlying settlement and the city's related pending lawsuit against software billing company Pricewaterhouse Coopers LLC are split on whom Judge Elihu M. Berle should select to look into the financial paper trail of the Antwon Jones settlement, which is shrouded in allegations of dual representation and attorney fee kickbacks.

Berle is in the process of appointing a special master to look into payments made in connection with the Jones settlement in the ratepayer class action against the city, specifically regarding two outside attorneys: plaintiffs' counsel Jack Landskroner of Ohio and Paul Paradis of New York. While representing the city's interests Paradis is accused of installing Landskroner as opposing counsel as part of a sue-and-settle case. Landskroner pleaded the Fifth Amendment against self-incrimination when asked if any of his fees were paid to Paradis.

The special master's role will not be narrowed to just finances, Berle stated. "There is no intention of limiting the work of the special master to a specific subject," Berle said during a hearing last month.

The findings of the special master are not binding until made so by the court.

The city is recommending retired superior court judges Ann Kough, Louis M. Meisinger or Daniel Weinstein to serve as auditors.

Kough, now a JAMS mediator, previously served as a Los Angeles Superior Court complex civil judge. Meisinger is a neutral with Signature Resolution who previously served as Disney's general counsel. Weinstein has mediated cases with JAMS for more than 20 years, and before that served as a state court judge in San Francisco.

"Due to the complexity of the legal issues, the city proposes that the special master and/or auditor be a retired judge with experience presiding over complex factual and legal matters," wrote Eric M. George and Maribeth Annaguey of Browne George Ross LLP, outside counsel for the city of Los Angeles, in a brief filed last week.

The city, which has already hired Ellen A. Pansky of Pansky Markle to look into ethical misconduct, said it wants the special master to use Pansky's work product as a way to save time and money.

Pricewaterhouse Coopers, meanwhile, is recommending tax litigators Edward M. Robbins Jr. and Sandra R. Brown of Hochman Salkin Toscher Perez PC to jointly serve as special master. Both were federal prosecutors and have experience conducting financial investigations, according to Pricewaterhouse Coopers.

"Mr. Robbins and Ms. Brown have each conducted numerous grand jury investigations and civil administrative investigations involving a wide range of complex financial transactions and the attempted concealment thereof, and have experience using financial experts and analysts and discovery tools to carry out these investigations," wrote the company's defense attorney, Daniel J. Thomasch of Gibson, Dunn & Crutcher LLP, in court filings.

Specifically, Thomasch wants to look into the $19 million Jones attorney fee application, which was unopposed, and into the timeline of fees paid to Landskroner, who received $15 million in a case with no discovery.

Landskroner submitted billable hours predating his entrance into the litigation by four months, and Michael Libman, an Encino lawyer who was brought in as local counsel, submitted billable hours before the lead plaintiff received the incorrect bill that served as the basis of the lawsuit, said Thomasch.

A total of $30 million in no-bid contracts awarded to a company controlled by Paradis, Aventador Utility Solutions, should be examined, Thomasch said.

Ties to Bender Consulting, which was hired as an "independent monitor" to oversee remediation of the settlement, should also be looked into, wrote Thomasch. He said he believes the company, whose expense cap went from $750,000 to $3.5 million, had a previous relationship with Landskroner related to similar billing issues involving the Cleveland water department.

Attorneys representing other plaintiffs involved in the Jones litigation are opposing the recommendation, made by yet another plaintiff, of David J. Pasternak of Pasternak, Pasternak & Alsbrook to be a special master, on the grounds of his relationship with involved parties. Pasternak is a former State Bar president.

"However, we understand that Mr. Pasternak has decades-long relationships with City Attorney Mike Feuer, Paul Kiesel and the city's newest lawyer, Eric George (who is not a person of interest, but represents the interests of several)," wrote Timothy Blood of Blood, Hurst & O'Reardon LLP.

Blood is nominating forensic accountant Samuel Willoughby of Aon Cyber, while Jones is suggesting ADR Services Inc. neutral Rita "Sunny" Miller, who was a Los Angeles County judge for 18 years.

A hearing is set for April 8.


Justin Kloczko

Daily Journal Staff Writer

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