Top lawyer in L.A. city attorney’s office quits amid questions about outside income

A top lawyer in Los Angeles City Atty. Mike Feuer’s office who was helping oversee litigation regarding the 2013 Department of Water and Power billing debacle has resigned, the office said.

Chief Assistant City Atty. Thomas Peters stepped down Friday after The Times questioned Feuer’s office about outside income that Peters reported.

In city disclosure forms reviewed by The Times, Peters reported in 2017 that he received more than $100,000 in referral income from the law office of Anthony M. DeMarco. He also reported receiving two separate payments of between $10,000 and $100,000 from two law firms — Anthony M. DeMarco and Panish, Shea and Boyle — for referral fees in 2018. The city attorney’s office handled several lawsuits filed against the city by Panish, Shea and Boyle in recent years.

Referral fees are common in the legal world. Attorneys receive the fees for passing on a case to another attorney. Depending on how long a case is in court, the referring lawyer may be paid years after making the referral.

The city attorney’s office said Feuer was not aware of Peters’ referral fees.

“When [The Times] raised these issues ... I brought them to Mr. Feuer’s attention who had not been previously apprised of them,” spokesman Rob Wilcox said in a statement to The Times. “Mr. Peters has resigned. This is now a personnel matter and I cannot discuss it further.”

Peters didn’t respond to an email and could not be reached by phone.

It appears the referral fees are not connected to the city’s lawsuit over the DWP billing issues.

Peters’ departure marks another tumultuous episode for Feuer’s office, which is engaged in a high-profile legal fight stemming from the DWP billing fiasco, in which hundreds of thousands of customers were overcharged.

Peters, chief of the civil litigation branch in Feuer’s office, was an attorney on the city’s ongoing lawsuit against consulting firm PricewaterhouseCoopers, which the city blames for causing the billing errors. PricewaterhouseCoopers alleges Feuer’s office took part in a collusive scheme to quickly settle a lawsuit brought by ratepayers against the city over the billing errors, which Feuer’s office denies.

A former plaintiffs’ trial attorney, Peters joined Feuer’s office in 2014 and handled the bulk of the claims or lawsuits filed against or brought by the city, according to the city attorney’s office’s website. He earned a city salary of $258,460, according to the city’s personnel department.

An attorney for Panish, Shea and Boyle declined to comment about the fees paid to Peters, citing a possible conflict of client-attorney privilege.

Panish, Shea and Boyle has sued the city on behalf of plaintiffs several times in recent years. In some cases, Peters’ name appeared on court documents defending the city in those lawsuits and on city documents related to the cases.

The Times couldn’t determine what role, if any, he played in those lawsuits.

DeMarco told The Times that the fees he paid Peters are from cases dating back several years, before Peters started working for the city attorney’s office. He also said his firm hasn’t had any recent cases involving the city.

Wilcox said the city attorney’s office has no internal policy related specifically to the acceptance of referral fees.

Lawyers at City Hall often recuse themselves from cases if they have a conflict of interest or if there is the appearance of one. Several years ago, Feuer removed himself from a lawsuit involving the city’s collection of hotel taxes because he once worked for a law firm that represented a defendant in the case.

The city attorney also walled himself off from a DWP public records lawsuit, which was filed to prevent the names and addresses of people who benefited from a turf removal rebate program from being released to the San Diego-Union Tribune, a sister publication of the Los Angeles Times. Feuer obtained a rebate through the program, his office said at the time.

Peters is the third attorney to depart the city’s case against PricewaterhouseCoopers. Earlier this month, Paul Paradis, an outside attorney hired by Feuer’s office, left the case and lost his city contracts amid revelations that he represented the plaintiff who later filed a class-action lawsuit against the city over the billing errors. Paul Kiesel, another outside attorney hired by the city, also left.

Feuer’s office has launched an ethics investigation into issues surrounding the settlement of that case and two no-bid contracts Paradis received from the DWP totaling $36 million.

The DWP’s billing meltdown occurred in 2013 as the agency launched a replacement for its antiquated billing system. Antwon Jones, a Van Nuys resident who received a $1,374 electric bill from the utility, was the lead plaintiff in a class-action lawsuit against the city.

A settlement with Jones was announced a few months later. Around the time Jones filed his lawsuit, the city sued PricewaterhouseCoopers, accusing the consulting firm of misrepresenting its ability to implement the billing system.

PricewaterhouseCoopers lawyers now allege that city attorneys took part in a scheme that allowed the city to hand pick the plaintiff and his lawyer and clear the way for a settlement that was reached without a full public airing of the issues.

At the hearing this month, a judge asked Jones’ attorney, Jack Landskroner, if any referral fees had been paid to Paradis. Landskroner deferred to his lawyer, Mark Drooks, who cited his client’s 5th Amendment protections against self-incrimination and declined to answer the judge’s question.

At the heart of the conflict of interest allegation is a complaint drafted in January 2015 in Jones vs. PricewaterhouseCoopers identifying Paradis and Kiesel as Jones’ attorneys. (Kiesel denies he was ever retained as Jones’ attorney.)

Peters testified in a deposition in September that, while he was weighing the city’s legal options in the billing fiasco, he instructed Paradis to draft the complaint. Peters acknowledged that the draft was circulated among DWP officials and city attorneys, but said “it was never intended to be filed” in court.

“I directed it be created … as a thought experiment,” Peters testified.

Times staff writer Kim Christensen contributed to this report.

dakota.smith@latimes.com

Twitter: @dakotacdsmith