Ex-Employee’s Suit Accuses Law Firm of Improprieties

The former financial accounting manager for Latham & Watkins, one of California’s largest law firms, sued the firm Wednesday, alleging that she was forced out after she complained to her superiors about numerous financial improprieties.

In her Los Angeles Superior Court suit, Ceola Katee Huyghue of Chino contended that she was not allowed to refund to clients millions of dollars that the firm derived in double payments or overpayments.

Huyghue, 37, also alleged that Latham held on to money left over from client retainers and diverted it to the firm’s partners rather than returning it to the clients.

Reacting to the suit, Latham’s managing partner, Robert Dell, said the firm had nothing done wrong and would vigorously contest the allegations in court.

Huyghue, 37, further alleged that her complaints to superiors, in particular Michael Eichenseer, Latham’s financial controller, cautioning them that the firm was in violation of State Bar of California rules, were rebuffed.

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Dell said the firm’s internal investigation of Huyghue’s charges found no wrongdoing by Eichenseer, who is a named defendant in the suit. Dell said Eichenseer remains an employee in good standing.

The suit alleges that Huyghue’s attempts to alert superiors to the alleged improprieties, starting in 1993, had an adverse impact on her career at the 820-lawyer firm. Latham officials did not honor promises to promote her and she stopped receiving written performance evaluations after earlier getting glowing written reviews, according to the suit.

Finally, on Sept. 25, Huyghue left the firm after her situation became untenable, the suit stated.

Dell said Latham conducted its internal investigation after having been presented with a draft of the allegations from Huyghue’s lawyers, William and Michael Johnson of Long Beach, within the past month.

“Upon receipt of it, we conducted our own very thorough investigation internally,” Dell said in a telephone interview from San Francisco. The firm’s investigation found no wrongdoing, said Dell and Robert A. Long, who runs Latham’s Los Angeles office.

“We found there is absolutely no substance to any” of Huyghue’s charges, Long said.

In the four-count civil suit, Huyghue, who is African American, charged Latham with discriminating against her on the basis of race and gender, unlawful retaliation for reporting unlawful acts, “constructive termination in violation of public policy,” and intentional infliction of emotional distress.

Huyghue said she made repeated complaints first to Eichenseer and then to his superiors about the alleged improprieties. She alleged that her complaints were “brushed off” and that calculations used in determining bonuses and raises of female members of her department were changed if they received higher ratings than the men.

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At one point, Huyghue said she asked if she could get a transfer within the firm. She said that request was rebuffed and that she became increasingly troubled about the situation.

“I’ve had to see a psychotherapist. . . . My husband and I have sought marriage counseling to deal with my depression,” Huyghue said in a telephone interview.

Long said he was told that Huyghue had left on a stress leave in September and it was the impression of firm officials that she planned to return until recently. “At no time while she was employed here did she ever raise any such claims,” Long said of Huyghue’s charges about financial improprieties.

Long said that the firm has a diverse work force and that for someone “to make an allegation of discrimination is preposterous.”

Los Angeles-based Latham is a huge law firm with branch offices in Costa Mesa, San Diego, San Francisco, New York, Newark, Chicago, Washington, London, Moscow, Hong Kong and Tokyo. The firm has long had a prominent role in Los Angeles, with its lawyers serving as influential City Hall lobbyists, as well as being the attorneys for 1984 Olympic chief Peter Ueberroth and later playing a key role with Ueberroth at Rebuild L.A. in the aftermath of the 1992 riots.

The firm has a number of blue-chip clients, including large Wall Street investment banks such as Bear Stearns & Co., Nissan North America, Chase Manhattan Bank, Minnesota Mining and Manufacturing, NBC, Ford Motor Co., Walt Disney Co., Wells Fargo and Safeway, among others.

Last year, the firm had profits of $770,000 per partner, according to American Lawyer magazine.