Cost of Holden Defense Rises to $1.3 Million

City Councilman Nate Holden emerged victorious last fall from both sexual harassment lawsuits filed against him, but the taxpayers of Los Angeles stand to lose about $1.3 million in the high-profile cases.

Legal bills by Holden’s private attorneys that were obtained by The Times under the California Public Records Act show that the costs have ballooned about 30% higher than anticipated. The Century City firm that was brought on just weeks before the first case went to trial asked for nearly $800,000 for about four months’ work.

“It makes me want to puke,” one City Council member said when told of the tab. A second council member uttered an obscenity. “That’s disgusting,” said a third, Councilman Joel Wachs.

“It’s just a great employment thing for lawyers--’Oh boy, I’ve got the city as a client so I’ll just keep charging.’ The problem here is that the city doesn’t watch carefully; it has nothing to do with Holden,” said Wachs, who is a non-practicing attorney. “Everyone around here is very good at spending other people’s money, but if they had to pay for it out of their own pockets they’d be a lot more careful.”

Because of council members’ concerns over the high fees, the city administrative office has hired a Pasadena law firm to audit the bills. The audit is expected to cost about 1% of the bills reviewed, according to Dan McGowan of the administrative office. He said he expects to recover about 5% of the total, or $65,000, through the audit.

The bills cover the lawsuits filed by former receptionist Marlee M. Beyda, who unsuccessfully charged that Holden had masturbated by rubbing against her during several after-hours visits to his Marina del Rey apartment, and by Carla Cavalier, a longtime Holden deputy who charged that there was a sexually hostile environment in the councilman’s office, including lewd comments and inappropriate touching. A judge ruled against Beyda on Nov. 27 after a six-week trial, and another jurist dismissed the Cavalier case before the trial began.

The $1.3 million total does not include the time spent by four members of the city attorney’s office who worked on the city’s defense in the cases. Those lawyers earn $99,000 to $112,000 a year.

In an interview Tuesday, Holden at first responded with a shocked “What?” when told about the total bill for his defense, then said he believes the taxpayers’ money will be well spent in the long run.

“I think it’s worth it to the city. It’s certainly worth it to me,” he said. “They could have thrown in the towel, and it would have cost them a heck of a lot more. Not just for these cases but for other cases in the future, the city would have been the deep pocket. The bottom line is really undefined in terms of the benefits to the city.”

Skip Miller, the lead attorney in the second firm that represented Holden and several other city employees named as defendants in the lawsuit, said he and his partners saved the city about $185,000 by working at cut rates. Miller said he normally charges $350 an hour, but billed the city $250 an hour.

“We’re giving the city . . . a healthy reduction,” he said. “We pulled out all the stops. We did what we had to do to prepare it and to try it.”

According to the bills, Miller worked 799 hours on the two cases from Aug. 31 to Dec. 31. Other lawyers racked up more than 2,000 hours during that time.

That includes about 58 hours--or $10,000--worth of legal work on the Beyda case after the trial ended. The stack of bills also includes $12,700 for photocopies, $11,000 for messenger services, $6,300 for phone calls and postage, and $3,000 for parking.

Plus $3,139.66 for after-hours air-conditioning.

“We don’t have after-hours air-conditioning. We use fans, because it costs $45 an hour,” said Shelly Mandell, one of Beyda’s lawyers.

Asked about the air-conditioning charge, Miller said: “We only bill for that when it’s absolutely necessary to work after hours because of the pressure and the emergency of the trial. The building shuts the air off [at 6 p.m.]. The windows are sealed. We obviously have to be able to breathe fresh air.”

But Wachs and council members Laura Chick and Ruth Galanter all said Tuesday that the Holden experience just shows that the city needs a better mechanism to monitor private legal bills.

“It makes me lose my optimism that we can get our priorities in this city straight and get a handle on things,” Chick said. At a time when the city faces a $50-million budget deficit, Chick noted that she has recently been rejected when asking for $500,000 to improve street cleaning and $300,000 for trailers to house police detectives, and that female officers in the West Valley Division had to change clothes in 108-degree heat last summer because the city lacked funds to fix the air-conditioning.

State law requires public agencies to pay for the defense of their employees for any litigation connected to their work, including sexual harassment. The city attorney’s office advised the council when the claims against Holden were filed four years ago that not providing a defense would open the city to litigation by the councilman.

To avoid the politically sticky situation of deciding whether to pay for the defense of one of its members, the City Council ceded the matter to the city attorney’s office, which has allowed the contract to swell from its original maximum of $25,000 without any council action.

Now, some legislators regret that decision.

“There’s something totally askew on this,” Wachs said of the $500,000 billed by Holden’s previous law firm, Casterline & Agajanian, which did not take either case to trial. “I cannot imagine what Agajanian could have done for that.”