Venue Change Is OKd in PR Billing Case

A Superior Court judge decided Wednesday that a lawsuit by the city of Los Angeles alleging overbilling by Fleishman-Hillard should be moved out of the county, after lawyers for the public relations firm argued that negative publicity and the firm’s status as an “outsider” would make it difficult to get a fair trial.

Attorneys for Fleishman-Hillard and Douglas R. Dowie, the former general manager of the firm’s Los Angeles office, asked that the case be transferred to Ventura County.

Judge Mary Thornton House said she would choose where to send it after she heard from attorneys for the city.

In granting the change of venue, House cited the extensive news coverage in Los Angeles of allegations by the city that Fleishman-Hillard had billed the city for $4.2 million in questionable costs over the last five years.

“Most likely, the public in Los Angeles has little or no knowledge of the defendant other than that presented in the press concerning the recent dispute,” House wrote in her order.

As a result, she wrote, city residents may see Fleishman “only as an outsider public relations firm who dealt with public officials in order to obtain lucrative contracts which enabled defendant to overcharge the plaintiff for its services.”

The judge agreed with Fleishman attorney Sheldon Eisenberg that the company’s actions could be seen as affecting all Los Angeles residents because they are customers of the Department of Water and Power, which hired the firm for public relations services.

“All Fleishman wants, your honor, is a level playing field in this case,” Eisenberg told the judge. “We want a jury that is not made up of ratepayers in the city of Los Angeles.”

Alleging that Fleishman officials had told the city they would like the trial to be delayed until next year, city officials accused the firm of playing games with its change-of-venue motion.

“We are sure a jury in any county can see overbilling and fraud,” said Assistant City Atty. Susan Lopez-Giss. “Fleishman is using legal gamesmanship to delay paying back the ratepayers of Los Angeles.”

In a letter to the city controller Wednesday, Eisenberg renewed the firm’s offer to enter mediation to resolve the financial dispute, but also indicated that the company was prepared to go to trial if the city balked.

The city attorney sued Fleishman-Hillard in July, alleging that it submitted false invoices. The lawsuit was filed a few days after The Times reported that seven former employees said they were encouraged or directed to inflate bills.

Lopez-Giss argued in court against the move, saying that Fleishman-Hillard and Dowie should stand trial in Los Angeles because they did business in Los Angeles and have widespread ties to the community.

The judge decided, however, that Fleishman-Hillard met the criteria for being an outsider, noting that its headquarters is in St. Louis, that it has offices all over the world and that it brings in only 1.4% of its total revenue from its work in Los Angeles.