Bar To Review Special Master’s Report On LA Water Bill Attorneys

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By Blaise Scemama, THE DAILY JOURNAL 

July 16, 2021

The report released this week named prominent attorneys it said had “violated the ethical rules against dishonesty, deceit, and collusion and violated their ethical duties to … the court in violation of Rules of Professional Conduct.”

In its first major test since admitting “mistakes” in regulating disgraced attorney Thomas V. Girardi, the State Bar said it would review a special master’s report released this week that found several prominent attorneys in Los Angeles committed ethical violations.

According to a 595-page report released Tuesday, attorneys from the Los Angeles city attorney’s office colluded with private lawyers to sue their own client, the city, in a sham water billing class action that quickly settled for $70 million without discovery and with bloated attorney fees in 2015.

The attorneys “violated the ethical rules against dis honesty , deceit, and collusion and violated their ethical duties to … the court in violation of Rules of Professional Conduct,” the report said.

State Bar Communications Manager Teresa Ruano said in an email Wednesday that she “cannot confirm or deny whether we have received complaints about a particular attorney or whether we are investigating an attorney for potential misconduct.

That said, we are aware of the special master’s report and will review its findings,” she wrote.

California lawmakers called for an audit of the State Bar Tuesday after it admitted mistakes in handling decades of allegations that Girardi stole millions of dollars in client funds. A proposed bill, Senate Bill 211, would direct the state auditor to conduct an audit into the Bar’s discipline system.

The bill, with amendments proposed by Sen. Tom Umberg, D-Santa Ana, would also provide that “the audit include consideration of possible options for the State Bar to more proactively protect the public, including, to the extent possible, the appropriateness of an independent discipline monitor to more closely review the State Bar’s discipline process, an independent ombudsperson to assist the public, and other options to protect the public.”

The Assembly Judiciary Committee unanimously approved the amendments 11-0 Tuesday before forwarding it to the Assembly Appropriations Committee. It also requires that the audit be submitted no later than April 15. 2022 to the chief justice and the Assembly and Senate Judiciary Committees.

Pasadena attorney Erin Joyce, who defends lawyers in State Bar investigations and disciplinary actions, said the bar and the Office of Chief Trial Counsel looked the other way in the face of dozens of client complaints against Girardi but have routinely gone after small time attorneys.”

“They call it the ‘low hanging fruit,'” she said.

However, now under intense scrutiny resulting from its public mishandling of Girardi, “the State Bar may be forced to take action on the special master’s report,” she said. “That will be a very new direction for [Office of Chief Trial Counsel], which almost always lets the hard targets walk.”

Some of the most prominent attorneys named by the special master included Paul Kiesel, former Chief Deputy City Attorney James P. Clark, former Assistant City Attorney Thomas H. Peters and Maribeth Annaguey of Browne George Ross O’Brien Annaguey and Ellis LLP.

Jamie Court of Consumer Watchdog said that if the bar does not discipline the attorneys named in the report, the agency might be restructured or leadership could be removed.

“This is more than a litmus test or a test for the State Bar, this could be its final test, or it might be restructured,” Court said. “There’s a lot of talk in Sacramento about it being restructured, because its not working. If the State Bar can’t see [it’s way] to bring a case to take the law licenses of attorneys who clearly violated the rules of professional conduct while representing a public entity and misusing tens of millions of dollars in taxpayer funds, when are they ever going to take anyone’s law license?”

While at least two lawsuits filed since 2019 claim City Attorney Mike Feuer knew or at least was involved in the collusion to sue his own client, the city, the special master’s report found no evidence he knew the water billing class action was “the product of collusion.”

However, in the report, the special master said his ability to reach a firm conclusion about the extent of Feuer’s knowledge or participation in the class action “was hampered by the lack of evidence, which arguably was a direct result of the fact that Mr. Clark was tasked by Mr. Feuer with overseeing the class actions,” and who “destroyed and/or kept no notes of his briefings of Mr. Feuer.”

Feuer voluntarily sat for a deposition about a month after the FBI searched the city attorney’s office in 2019 for evidence of bribery, kickbacks and extortion related to the $70 million settlement ensnared in fraud. Feuer said he delegated responsibilities to Clark and Peters. He responded “I don not recall” more than 60 times when answering questions about the water billing litigation.

“The State Bar has to open an investigation not only into Kiesel, Peters and Clark, but also into Mike Feuer for his failure to supervise these attorneys,” Court said. “They have to find out what he knew and when he knew it, by putting Mike Feuer under oath, because he had a duty to closely supervise these attorneys.”

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