New counsel enters LA utility billing case, following scandal

An Ohio attorney pleaded the Fifth Amendment against self-incrimination more than 200 times while deposed over his relationship with opposing counsel regarding a 2015 settlement with the city of Los Angeles that has given rise to allegations of dual representation and attorney kickbacks.

That attorney, Jack Landskroner of Landskroner Grieco Merriman LLC, is accused by counsel for Pricewaterhouse Coopers LLC of colluding with private attorneys for the city of Los Angeles by quickly settling a ratepayer class action he brought against the city, then paying them a portion of his $15 million fee.

Those outside attorneys, New York's Paul O. Paradis of Paradis Law Group PLLC and Paul R. Kiesel of Kiesel Law LLP in Beverly Hills, were hired to represent the city's interests in litigation over incorrect bills by the Los Angeles Department of Water & Power using a Pricewaterhouse billing software system.

Paradis and Kiesel withdrew from the litigation after allegations surfaced that they were in an attorney-client relationship with lead class plaintiff Antwon Jones and brought in Landskroner as a favorable opponent to file a lawsuit they drafted. The city hoped to then leverage that case in its lawsuit against, Pricewaterhouse, the company's attorneys at Gibson, Dunn & Crutcher LLP have argued.

Paradis and Kiesel have been replaced by Eric M. George and Maribeth Annaguey of Browne George Ross LLP, according to a joint status report filed Friday by the city and the company ahead of hearings in both cases this week. Gibson Dunn said it intends to depose Annaguey because she represented the city when she worked for Liner LLP in connection with the Jones case.

George could not be reached late Friday for comment on his entrance into the case.

The report said Landskroner serially pleaded the Fifth Amendment on March 5 in response to questions about the related cases and potential payments to opposing counsel.

"Mr. Landskroner also objected on Fifth Amendment grounds to PWC's inquiries about his relationship with former special counsel Paul Paradis and Paul Kiesel and attorneys from the Los Angeles city attorney's office," wrote Pricewaterhouse Coopers attorney Daniel J. Thomasch, a Gibson Dunn partner from New York.

Kiesel, who has contended he did not jointly represent Jones and the city, answered questions at his deposition. Kiesel said he knew Jones retained Paradis while representing the city, which was "widely" known within the city attorney's office, according to Gibson Dunn's report to the court.

"But neither Mr. Kiesel, nor to his knowledge any attorney within the city attorney's office, advised Mr. Paradis to inform Mr. Jones of that fact," wrote Gibson Dunn.

The company's report of the deposition went on: "Mr. Kiesel admitted that he worked to assist Mr. Paradis on behalf of Mr. Jones but the city informed both special counsel that it did not want them to serve as counsel to a ratepayer in any action brought by a ratepayer over billing issues at the LADWP."

Kiesel didn't recall when the city gave him that direction, but testified it was after Jan. 24, 2015, the date on which the draft Jones v. Pricewaterhouse Coopers complaint showing Kiesel and Paradis as Jones' attorney circulated in the city attorney's office, according to Gibson Dunn.

Thomas Peters, head of the city attorney's civil litigation branch and a former partner at Kiesel Law, testified last year the draft Jones complaint was "never intended to be filed" and that he directed Paradis to make it as a "thought experiment," stated Gibson Dunn.

"The complaint, which is fully drafted and appears ready for filing, bears no resemblance to a thought experiment," wrote Gibson Dunn.

Kiesel has pointed to a deposition of Jones in which Jones said he hired only Paradis to sue the city and that he did not believe Kiesel represented him, according to the deposition.

The issues of overlapping representation were not previously disclosed to the court. The Jones case first landed on Judge Elihu Berle's desk about four years ago. Jones v. City of Los Angeles, BC577267 (L.A. Super. Ct., filed April 1, 2015). Los Angeles v. Pricewaterhouse Coopers LLP, BC574690 (L.A. Super Ct., filed March 6, 2015).

In addition, a dispute is taking shape over whether an auditor ordered by the court to look into payments will also use any work product from the city's own investigation into misconduct. City Attorney Michael N. Feuer, who said his office was never apprised of possible concurrent representation, has hired Ellen A. Pansky of Pansky Markle to look into potential misconduct.

"The master/auditor can utilize this work product as part of his or her own work, thereby saving time and expense, and avoiding any unnecessary distraction from the prosecution and the defense of the above-captioned litigation matter," the city wrote.

Pricewaterhouse Coopers told the court it does not want the auditor to use the work product of the city's investigator. "That is important, but it is only part of the story--the fraud on the court is appropriately pursued by counsel through the discovery process," Thomasch wrote in the filing.

A status conference in the Jones case is set for Monday, while the Pricewaterhouse Coopers matter will be heard Tuesday.