Federal judge orders LA to produce contracts with outside counsel in homeless case

Wondering aloud in court whether the City of Los Angeles' outside counsel is unduly profiting from delayed proceedings in the aftermath of a settlement over homeless beds, U.S. District Judge David O. Carter demanded Wednesday to see all the records of their contracts.

Such an order for attorney-client contracts is unusual. In other federal and state cases, judges have demanded production of such contracts, but not for the reason Carter gave.

"Hasn't this simply incentivized and curtailed any opportunity here to reach an accommodation between the parties and curtail these extraordinary costs?" Carter asked the Gibson, Dunn & Crutcher LLP attorneys, who represent the city.

Carter said he wanted the material produced, or he would order it.

This was after firm partner Bradley J. Hamburger said each attorney working on the case is billing up to $1,295 an hour regardless of rank or experience.

"The numbers ... are not flat rates that we get no matter what we do," Hamburger told the judge. "They are essentially a cap, a budget. We hope that we do not have to spend that number of fees --"

"Where would I verify that?" Carter interjected. "It may be appropriate that I order all of your fee arrangements produced with the city. It would be available under the Freedom of Information Act, and there's no reason that the press should have to chase those. Are you going to do that voluntarily or should I make an order?"

"We'd have to ask the city attorney," Hamburger replied.

"Call her, I'll wait," Carter responded. "Go ahead. You are the city attorney. This has been relegated to you by the city attorney. I want to know if Gibson Dunn is making these decisions or the city attorney."

After a brief recess, Gibson Dunn attorney Kahn A. Scolnick said the city's counsel approved the production of their contracts.

In September, the city council approved nearly $5 million for the firm's continued work - up from its original $900,000 contract, according to a memo from City Attorney Hydee Feldstein Soto.

Carter's statements were made during a hearing that he had instructed Mayor Karen Bass and City Council President Marqueece Harris-Dawson to attend. Neither they nor the city attorney were in court.

Carter on Friday ordered the city officials to explain why they should not be held in contempt after he heard that a special master and a data monitor reported Los Angeles is not providing data on its plans and spending for shelter beds it agreed to in the settlement. The special master's report, also filed on Friday, found that the city's response to a status request "arrived a full week after the special master's inquiry and failed to provide the verified data, milestone documentation, or validation necessary for oversight."

Gibson Dunn asked for a pause in the proceedings while the city appeals Carter's appointment of the monitors over the city's objections and without approval of the elected city council.

"Section 7.2 of the parties' settlement agreement states that any monitor shall be 'mutually agreed upon' - which means, as the Court itself repeatedly acknowledged at the hearing on monitor selection, that the Court cannot unilaterally appoint someone over either party's objection," stated the city's ex parte stay request filed by Gibson Dunn partner Theane D. Evangelis.

She said in a statement last month that the judge's "overreach ... otherwise threatens to saddle the city with enormous costs and subject city officials to the dictates of an unelected third party."

At Wednesday's hearing, Carter noted that the city filed a supplementary quarterly report on Tuesday following his contempt threat.

"It causes me concern that you're simply reacting to pressure being applied," Carter told counsel for the city.

Scolnick responded that the city filed the report as soon as updated information became available, denying that the timing had anything to do with the contempt threat.

Carter also grilled the city's attorneys over an email brought to his attention by Special Master Michele Martinez during the lunch recess.

The email, sent by a member of the city attorney's office, requested that the city be notified of the subject matter of any communication between the special master and Carter.

Carter took issue with what he saw as the city's attempt to limit the work of the special master, repeatedly assuring the parties that Martinez "will report fraud."

Hamburger denied that the city was attempting to limit the special master, arguing it was simply requesting additional details about the work. He subsequently withdrew the request.

Carter further noted that Martinez has not been paid for the last 83 days of her work as special master.

"This has gone on long enough," Carter said. "You're not delaying payments any longer. You're not waiting 83 days. You're not going to try any intimidation or anything concerning my special officer. You will pay her immediately. Now I'm going to sit here. Go cut the check."

After another recess, Carter said he had learned that a check had been cut and issued to Martinez.

Carter then took the contempt order, motions to stay and motions for sanctions under submission, setting a follow-up hearing for next Wednesday.

"I feel comfortable saying there is a human cost to this delay," he said. "The goal is always to help people, and it's unfortunate that the strategy seems to be delay, delay, delay. It's what killed people. The city could have helped."

Carter has maintained control of the case even after the settlement was reached between the city and the Alliance for Human Rights in 2023. He said this was necessary to ensure the $1.24 billion agreement was carried out. Hearings since then have centered on the plaintiffs' and monitors' claims that the city is not on track to meet its obligations by the 2027 deadline or has not provided proof that it is. Alliance for Human Rights et al. v. City of Los Angeles et al., 2:20-cv-02291 (C.D. Cal., filed March 10, 2020).

An attorney representing the LA Alliance - Umhofer Mitchell & King LLP partner Matthew D. Umhofer - said in a phone interview last month that he viewed the city's appeal and stay requests as a stalling tactic that reflects a broader unwillingness to follow through on its time-sensitive homelessness commitments.

"One of the key pieces to this is that the city agreed to nearly 10,000 total encampment reductions, and it is now clear that it has not come anywhere near that and will not be able to meet that commitment," he said.

In Carter's monitor order, the judge cited a section of the settlement that purportedly allows him to resolve disputes "regarding the interpretation, performance or enforcement of this agreement" if the parties fail to do so "within a reasonable time."