A consumer advocacy group is criticizing the city of Los Angeles for paying outside private counsel more than $1.8 million to defend a water mis-billing lawsuit and then taking a cut as plaintiff counsel in another related case.
Consumer Watchdog, advocating on behalf of taxpayers, requested the disclosure of contingency fees regarding two lawsuits in which the city hired private counsel to defend and prosecute its cases, including Paul Kiesel of Kiesel Law and Paul Paradis of the Paradis Law Group PLLC.
The advocacy group objected to the attorneys defending the city in the ratepayer mis-billing class action against the Department of Water & Power and also representing the city in its case against the company that installed the faulty billing software. Pricewaterhouse Coopers LLP. City of Los Angeles v. Pricewaterhouse Coopers LLP, BC574690 (L.A. Super Ct., filed March 6, 2015).
Last fall, the $67 million class action settlement with the city was preliminarily approved by Los Angeles Superior Court Judge Elihu Berle. Paradis was paid about $1.8 million for his role in defending the city. The city said there is no contingency fee agreement with Kiesel. Jones v. City of Los Angeles, BC577267 (L.A. Super. Ct., filed April 1, 2015).
Under the California Public Records Act, Consumer Watchdog requested terms of the agreement to find out "whether or not ratepayer action was compromised so that the city could have a better case against Pricewaterhouse Coopers," said Jamie Court, president of Consumer Watchdog.
The city initially rejected the disclosure request, calling it privileged information, but said the denial was made in error after being asked by the Daily Journal. Under the agreement, Kiesel and Paradis will split 19.99 percent of any recovery related to the city's case against Pricewaterhouse Coopers.
Court applauded the disclosure but said Paradis should be disqualified. He called for an ethics complaint to be filed related to the Paradis payment. "It's completely unethical to be on both sides of this," he said.
Aside from the payments to Paradis and $800,000 to disbursement monitor Paul Bender of Arlington, Virginia regarding the class action, it is unknown how much of the estimated $19 million in attorney fees is being divvied up in that case, said Court. "There was no discovery done in the ratepayer case. We are concerned ratepayer interests got sold out so DWP didn't have to disclose damaging revelations about its own failed bureaucracy," said Court.