Judge fines L.A. $2.5 million for ‘serious abuse’ in handling of evidence in DWP case
A Superior Court judge on Tuesday ordered the city of Los Angeles to pay a $2.5-million fine, ruling in favor of a consulting firm that accused City Atty. Mike Feuer’s office of concealing evidence in a high-profile lawsuit involving the Department of Water and Power.
At a downtown L.A. hearing, Judge Elihu M. Berle said there had been “serious abuse of discovery by the city and its counsel” in the DWP case — actions that merited “considerable sanctions.”
California law allows courts to impose sanctions over discovery misconduct by attorneys. In this case, PricewaterhouseCoopers alleged that the city’s attorneys concealed key documents, and produced unprepared witnesses and false deposition testimony.
PricewaterhouseCoopers attorney Daniel J. Thomasch said at Tuesday’s hearing that city attorneys intentionally dragged out the case by refusing to turn over evidence. The delays resulted in a monetary cost to PricewaterhouseCoopers, Thomasch said.
“The city thought it could just wear down PWC and the court,” Thomasch said.
Rob Wilcox, a spokesman for Feuer, said the city attorney’s office is evaluating its options. “We strongly disagree with the court’s ruling,” Wilcox said.
Jamie Court, president of advocacy group Consumer Watchdog, said the fine should disqualify Feuer, a mayoral candidate, from running for City Hall’s top job.
“Taxpayers are going to have to pay for the malfeasance of the city attorney and his office,” Court said.
Consulting firm PricewaterhouseCoopers is seeking at least $8 million, alleging the city tried to conceal evidence during legal proceedings.
The city in 2015 sued PricewaterhouseCoopers, blaming the consulting firm for a new DWP billing system that overcharged a wide swath of customers. In turn, DWP customers filed a class-action lawsuit against the city.
While PricewaterhouseCoopers was defending itself in the lawsuit brought by the city, its lawyers uncovered evidence in the DWP class-action case. The firm alleged in court documents that the city took part in a fraudulent scheme to control the outcome of the class-action lawsuit.
Representatives for Feuer’s office have denied the city was involved in or aware of the alleged scheme and have blamed two outside attorneys it hired. Those attorneys have denied wrongdoing, with one saying his work was done at the direction of the city attorney’s office.
The FBI raided the city attorney’s office and the DWP in July 2019, seeking information related to the billing litigation. Representatives of the U.S. Attorney’s Office said in a July court filing that the investigation is ongoing.
The city dropped its lawsuit against PricewaterhouseCoopers in September 2019. In June 2020, the consulting firm’s attorneys filed a motion for sanctions. PricewaterhouseCoopers attorneys said they would seek at least $8 million for what it alleged was the city’s “obstructionist discovery tactics.”
PricewaterhouseCoopers alleged that “the city went far beyond the boundaries of legitimate adversarial conduct, consciously and persistently abusing the discovery process to hide its wrongdoing,” according to the motion.
PricewaterhouseCoopers attorney Thomasch said Tuesday’s ruling “vindicates the rule of law by holding the city and its lawyers accountable for their egregious abuses.”
Thomasch said the city’s discovery abuse was the result of its attempt to hide from the court and DWP customers its participation in the filing and settling of the “sham” consumer class-action lawsuit.
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