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Civil Litigation

May 30, 2019

City’s request to temporarily seal depositions in ratepayer case opposed

The city of Los Angeles is accused by lawsuit opponents of seeking to have key depositions sealed from public view in order to buck negative publicity about a Department Water and Power ratepayer settlement that has been mired in fraud allegations.

Los Angeles City Attorney Michael N. Feuer

The city of Los Angeles is accused of seeking to have key depositions temporarily sealed to curb negative publicity about a Department Water and Power ratepayer settlement mired in fraud allegations.

The city settled the ratepayer case regarding incorrect bills for $67 million while simultaneously pursuing claims against the company that sold the billing software, Pricewaterhouse Coopers LLC. Los Angeles v. Pricewaterhouse Coopers LLP, BC574690 (L.A. Super Ct., filed March 6, 2015).

But allegations of a collusive settlement between the office of Los Angeles City Attorney Michael N. Feur and counsel for the ratepayer class has thrown both cases into flux, resulting in resignations of three of the city's counsel, questions from the bench about kickbacks, and attorneys pleading the Fifth Amendment against self-incrimination.

On June 3 Judge Elihu M. Berle will hear a motion in superior court on whether to seal transcripts of the latest depositions of Deputy City Attorney James P. Clark, former head of the city attorney's civil division Thomas Peters, and lead class plaintiff Antwon Jones.

"Throughout this litigation, the city has consistently sought to publicize its allegations while concealing contradictory evidence," Pricewaterhouse Coopers defense attorney Daniel J. Thomasch of Gibson, Dunn & Crutcher LLP wrote in the company's brief.

Gibson Dunn pointed to an April 26 filing by the city attorney's office stating it recently became privy to a batch of emails by outside counsel Paul O. Paradis and Paul R. Kiesel that revealed a "reprehensible breach of ethics." The emails appeared to show outside counsel preparing and sending a draft copy of the class complaint to opposing counsel.

Los Angeles County Superior Court Judge Elihu M. Berle

The city, in saying special counsel went rogue, said no city employee sent or received the emails.

"But now that Mr. Clark and Mr. Peters have been implicated in the collusive class action litigation that the city orchestrated in parallel with its litigation against PWC, the city seeks to seal their documents and testimony," wrote Thomasch.

Rob Wilcox, a spokesman for the city attorney's office, said the city wanted the depositions sealed in order to not influence Kiesel's second round of deposition testimony, which took place this week.

"Pursuant to the agreement of multiple parties, including PWC, Mr. Peters' deposition is to remain sealed until after Mr. Kiesel's deposition is completed. The city also requests that Mr. Clark's deposition transcripts be treated similarly," Wilcox wrote in an email, adding that after Kiesel is deposed the city would support unsealing the transcripts.

Feuer, who initiated an ethics investigation and vowed to take action against any misconduct, said he was never apprised of concurrent representation, nor did any staff know about the possibility. Jones v. City of Los Angeles, BC577267 (L.A. Super. Ct., filed April 1, 2015).

Kiesel previously told the Daily Journal the city attorney's office was "well aware and wanted this lawsuit brought against it so the city could insure a return to ratepayers of 100 percent of what was overpaid."

Thomasch's motion alleged, however, "The city seeks to conceal the body of evidence that would lead any reasonable reader, inexorably, to the conclusion that [Kiesel's] behind-the-scenes conduct in furthering the Jones action was 'at the express direction of the city attorney's office and its lawyers.'"

Gibson Dunn said there is no overriding interest in sealing the documents because they do not contain trade secrets, financial, medical or any other relevant information.

"That right to public access, while not absolute, is at its apex here, where the materials sought to be hidden from the public reveal the conduct of public employees acting in the name of their office, and where such conduct is relevant to an asserted fraud -- on the court, on litigants adverse to the city, and on the public," Thomasch wrote.

The judge might also, at the hearing next week, select a special master to audit the settlement. Proposed candidates includes forensic accountants and retired judges.


Justin Kloczko

Daily Journal Staff Writer

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