Los Angeles Fined $2.5 Million Over Discovery Misconduct In Lawsuit

On Tuesday, Los Angeles County Superior Court Judge Elihu M. Berle ordered the city of Los Angeles to pay a fine amounting to $2.5 million for “serious abuse of discovery by the city and its counsel” during a court case last year.

The PricewaterhouseCoopers DWP case

In 2019, Los Angeles had sued consulting firm PricewaterhouseCoopers over a poorly planned new billing system for the city’s Department of Water and Power (DWP), which led to many customers receiving higher than normal bills. During the case, PricewaterhouseCoopers began accusing the city, specifically city attorney Mike Feuer, of concealing evidence that would likely be in the consulting firms favor.

While LA dropped the lawsuit in September of last year after many witnesses refused to testify following a concurrent FBI investigation, PricewaterhouseCoopers maintained that the city had withheld evidence, brought in questionable witnesses, lied in depositions, and made the case go on for longer than usual costing the firm more money.

While both Feuer, who is planning a mayoral run in 2022, and the city of Los Angeles put the blame on outside attorneys, those same attorneys said that Feuer’s office had given direction for their work.

In June, PricewaterhouseCoopers finally sued, filing a motion for sanctions and asking for $8 million due to the damages by the city.

“The city used the same tactics that many use against smaller clients that they think don’t have enough money,” explained Los Angeles-based legal adviser Marco Chavez. “A lot of times bigger companies add in more court date, or give lots of stays or extensions to continue discovery, and a lot of other things to drag a case out. They either hope to win automatically in cases where they sue, or they hope that the lawsuit is dropped in cases where they are being sued themselves.”

“I can’t say if the city really was concealing evidence or anything like that, but if they wanted the case to go away and not have to risk losing, they would try to outspend. LA did exactly that and tried to pay its way out of a hole, but they forgot that PricewaterhouseCoopers is one of the Big 4 accounting firms and has billions and billions in revenues. They could pay to stay. And they did, which made all the difference when LA dropped that suit last year.”

Los Angeles to pay $2.5 million

Tuesday’s Judge Berle issued a $2.5 million fine to the city. Judge Berle said in the ruling that there was “serious abuse of discovery by the city and its counsel” and that “considerable actions” needed to be given as punishment.”

“The city thought it could just wear down PWC and the court,” PricewaterhouseCoopers lawyer Daniel J. Thomasch said on Tuesday. “This vindicates the rule of law by holding the city and its lawyers accountable for their egregious abuses.”

While PricewaterhouseCoopers maintains that Los Angeles had abused discovery and withheld evidence, the city maintained innocence on Wednesday.

“We strongly disagree with the court’s ruling,” said a spokesman for Feuer’s office. “We’re evaluating our options.”

The PricewaterhouseCoopers suit now joins the recent NRA case against the city, which had LA pay the NRA $150,000 over first amendment violations, as major court loses for the city in the last week. Altogether, Los Angeles has lost $2.65 in court decisions this month so far.