Under fire, Feuer defends his office’s handling of DWP billing litigation

Los Angeles City Atty. Mike Feuer, who is running for mayor, railed this week against a 595-page report that found that attorneys in his office took part in a scheme to settle litigation that arose from a faulty billing system used by the Department of Water and Power.

In a public relations blow to the city attorney’s office, the report accuses five former and current city attorneys of various ethical transgressions in violation of the state’s Rules of Professional Conduct.

State Bar of California spokesperson Teresa Ruano told The Times on Saturday that the agency would review the report, compiled by a court-appointed special master.

The report concluded that attorneys for the city colluded with opposing counsel to settle a high-profile class-action lawsuit, defrauding the court. Opposing counsel ultimately collected $19 million in attorneys fees, an amount investigators called “excessive, unjustified and a misappropriation of taxpayer funds.”

Two former top attorneys in Feuer’s office, James Clark and Thomas Peters, were the “shot callers” for the “sham” lawsuit against the city, investigators wrote.

Peters, Feuer’s onetime chief assistant city attorney, resigned in 2019 after a Times inquiry into outside income he received, and Clark, chief deputy city attorney, stepped down last year.

Feuer, in an interview, said he’d seen no evidence to show that Peters and Clark “failed to act with integrity.”

Feuer criticized the report as one-sided and said investigators didn’t interview the city attorneys named in it.

“It is incomplete, it contains a lot of conjecture, and many, many errors, and omissions that are material to the outcome,” Feuer said. “It’s riddled with untrue statements, it omits key facts, and it reaches conclusions that have no factual support.”

Adam Fox, attorney for Clark, criticized the report and questioned why investigators didn’t interview his client. “It wasn’t fair,” Fox said. Peters’ attorney didn’t respond to a request for comment.

Several outside attorneys hired by the city are also named in the report. There’s no evidence Feuer himself knew about the scheme, investigators concluded.

Superior Court Judge Elihu M. Berle sought the investigation after a consulting firm alleged that attorneys working for the city participated in a scheme to control a class-action lawsuit brought by DWP customers overcharged by the utility.

Thousands of customers received inflated bills after the DWP launched a new billing system in 2013, prompting a flurry of lawsuits against the city. Separately, the city sued PricewaterhouseCoopers, which implemented the billing software. PricewaterhouseCoopers uncovered information about the class-action lawsuit while defending itself in the case brought by the city.

Berle appointed Edward Robbins, a former federal prosecutor, as “special master,” tasking him with determining whether attorneys committed fraud on the court, engaged in unethical behavior and collusion and more.

Investigators studied a massive trove of documents, including emails, depositions of city attorneys and others taken in the DWP billing litigation, and contracts. The report took a year and a half to complete and cost about $3.4 million, which was billed to the city.

Robbins declined to respond to Feuer’s comments.

Laurie Levenson, a former federal prosecutor and law professor at Loyola Law School, called the alleged violations found by investigators “very serious.”

Attorneys can face disciplinary action for violating the state’s Rules of Professional Conduct.

The report will “jump-start any investigation by the state bar,” said Levenson, adding that the findings could also be referred to the state attorney general’s office.

Levenson said not all special masters conduct interviews. A review by the state bar would probably include more testimony and interviews, she said.

Separate from the court-ordered investigation, the U.S. attorney’s office continues to scrutinize the city’s handling of issues stemming from the botched DWP billing system. FBI agents in 2019 raided the DWP’s headquarters and city attorney’s office.

Some political candidates this week seized on Robbins’ report. Marina A. Torres, who is running for city attorney in 2022 — Feuer faces term limits next year— released a statement calling on Feuer to fire the city attorneys named in the report.

“The actions by those city attorneys shake the very confidence and trust that the public places in our public servants,” said Torres, an assistant U.S. attorney for the Central District of California.

Feuer’s office has long denied the city was involved in or aware of the alleged scheme and blamed two outside attorneys it hired to work on the DWP litigation. Those attorneys have denied wrongdoing, with one saying his work was done at the direction of the city attorney’s office.

Robbins’ report challenges the city’s assertion that those two attorneys went “rogue,” stating that the evidence “supports a finding that the city directed and assisted in the city suing itself with a sham lawsuit.”

Three other city attorneys named in the report — Eskel Solomon, Deborah Dorny and Richard Tom — all work in the DWP’s office. The report stated they knew of the plan but “did not protect their client, the city; rather they let the scheme unfold before their eyes and worked on the case thereafter.”

Solomon, in an email, said that “incorrect conclusions” were reached about himself and the two other staff attorneys at the DWP, and that the trio didn’t act improperly.

“Because neither I nor any attorney at the LADWP legal office was contacted [by Robbins], the report is without context or understanding, like random Cliffs Notes that purport to analyze the true meaning of a complicated book,” Solomon said. “I wish the special master had spoken with me.”

Dorny also called Robbins’ conclusion about her “wrong.” “I have spent my career advising my clients honorably and am confident that, in due time, the truth will prevail,” Dorny said.

Tom’s attorney referred The Times to the city attorney’s office, which said in a statement earlier this week that its staff attorneys “acted properly.”

An outside attorney representing the city in lawsuits related to the DWP billing debacle was replaced this week as counsel of record on those cases, a court document shows.

The attorney, Maribeth Annaguey, was named in Robbins’ report as violating ethical rules. She didn’t respond to a request for comment.

Attorneys at her firm, Browne George Ross, didn’t respond to several requests for comment about her removal from the cases.

Feuer spokesman Rob Wilcox said the city attorney’s office disagrees with the report’s conclusions about Annaguey.