Pellicano Case May Be Costly for Cities

The cities of Los Angeles and Beverly Hills could face enormous civil payouts in the fallout from the wiretapping prosecution of disgraced private investigator Anthony Pellicano. Some legal experts are likening it to the Rampart scandal, which led to $70 million in settlements.

Former Beverly Hills Police Officer Craig Stevens has pleaded guilty to illegally accessing law enforcement databases, and former LAPD Officer Mark Arneson has been charged with tapping into confidential databases for information on dozens of people and conspiring with Pellicano to wiretap people.

Although the case has targeted only two officers -- compared with the dozens implicated in the Rampart scandal -- the roster of more than 80 victims includes actors, journalists, entertainment industry executives, a real estate mogul and the former wife of a billionaire corporate buyout specialist.

Rampart officers were accused of civil rights violations against gang members and convicted felons, including frame-ups, injuries and false imprisonments.

The Pellicano investigation involves invasion-of-privacy allegations, but attorneys said the legal exposure also could be vast.

“The damages could be in the millions of dollars and not only against the city for the police misconduct, but against any law firms and clients of Pellicano,” said attorney Neville Johnson, who specializes in privacy cases for Los Angeles-based Johnson & Rishwain. “It is as if ‘L.A. Confidential’ has come to life in the new millennium.”

Arneson has also been implicated for his part in Pellicano’s “criminal enterprise,” which allegedly included wiretaps, bribery and identity theft to boost the Hollywood private eye’s standing -- and business -- with wealthy clients.

Federal authorities have emphasized that their investigation is not over.

Los Angeles City Councilman and former federal prosecutor Jack Weiss called the alleged actions of the officers an “extraordinary breach of trust and abuse of power,” the potential implications of which “are just starting to dawn on city officials.”

“No one knows what will happen,” Weiss said. “But if the federal case grows in the way lawyers around town expect it to grow, the consequences could be very severe for the city.”

Jonathan Diamond, a spokesman for City Atty. Rocky Delgadillo, would not comment on the potential financial effect of any civil claims.

He said just one lawsuit has been filed. Last year, former Los Angeles Times reporter Anita Busch sued Los Angeles, Arneson and others, alleging that Arneson supplied Pellicano and his associates with confidential information about her, which they used to threaten her.

A spokeswoman for the Los Angeles County district attorney, Sandi Gibbons, said it was unclear how many criminal cases involving Arneson, a 29-year veteran of the Los Angeles Police Department, could be affected.

The district attorney’s office is notifying defendants and their attorneys of the pending case against Arneson in federal court, she said. Prosecutors have already reviewed cases involving Stevens, notifying the defense in one case and dismissing another involving a traffic misdemeanor “in the interest of justice,” Gibbons said.

Lt. Mitch McCann, spokesman for the Beverly Hills Police Department, said his department doesn’t believe the city will suffer any liability, because the FBI information that his department has reviewed showed that Stevens played only a small role in Pellicano’s alleged crimes.

So far, the guilty plea from Stevens hasn’t affected any criminal cases, McCann said. “At this point, we don’t believe that this would be a Rampart-like case for us.”

Attorney Harland Braun, who represented one of the main officers in the Rampart case, said there would not be any fallout on other criminal cases.

“The allegation is they did something with Pellicano to help defendants -- not prosecutors,” Braun said. “Unless they did something illegal to help a prosecutor, I don’t see how it’s going to affect any convictions in any cases.”

But that doesn’t include the potential cost of civil litigation.

Loyola Law School professor Laurie Levenson said that any information obtained through illegal wiretapping would probably get thrown out of court, possibly leading to a wave of overturned civil cases.

“The law does say illegally obtained wiretap evidence is not admissible,” Levenson said. “Those other civil cases would get new trials.”

Still, some legal observers said it’s too soon to tell.

“What cuts against liability is that what these police officers were doing” was not “within the scope of their employment,” said Gregory Keating, a USC Law School professor.

The cities might face liability if city-owned computers were used to get the private information and if the information was accessible because of the officers’ positions with the cities, Keating said.

The issue, Keating said, then becomes whether the cities “knew or should have known what the officers were doing was wrong” and then failed to stop them.