Guilty plea of former LA city attorney official raises new questions about litigation scheme

The Department of Justice's announcement that a former high-ranking member of the Los Angeles city attorney's office had agreed to plead guilty to aiding and abetting extortion raised new questions about a scheme in which the city hand-picked plaintiffs' lawyers to sue itself, attorneys said Tuesday.

Thomas H. Peters, who was chief of the Civil Litigation Branch of the city attorney's office from 2014 to 2019, agreed to plead guilty to one count of aiding and abetting extortion, a crime that carries a maximum sentence of 20 years in federal prison, the U.S. attorney announced Monday.

However, there were at least two mystery characters mentioned in the U.S. attorney's announcement that Peters had agreed to admit urging payment of $800,000 to an extortionist who threatened to release information about the litigation scheme.

The extortionist, referred to by the U.S. attorney as "Person A," allegedly threatened to reveal damning information about the city attorney's office and its alleged involvement in a litigation scheme to file a lawsuit against itself, if she was not paid.

The other character or characters mentioned in Peter's information and plea agreement is a "city attorney's office official," senior to Peters.

"During the spring of 2015, defendant PETERS was informed by a City Attorney's Office official senior to defendant PETERS that the ... complaint was a friendly lawsuit intended as a vehicle for the city to settle globally and at minimal cost all claims related to the [Los Angeles Department if Water and Power] billing debacle, that [New York attorney Paul] Paradis had referred the case to Ohio Attorney for that purpose, and that City Attorney Official had directed and authorized this strategy before the complaint was filed," Peters' charging information reads.

While he did not venture to guess who "Person A" is, Santa Monica attorney Jamie Court of Consumer Watchdog, who has followed the scandal closely since questions about the litigation were raised in 2019, said there were only a few officials senior to Peters.

"​​This news release accompanying the indictment says that it goes all the way to the top, above Peters," Court said.

The lawsuit at the center of several investigations was filed in 2015 by Los Angeles water customer Antwon Jones, who along with thousands of others, said he was overbilled by the largest utility in the nation in 2013. Configured and implemented by PricewaterhouseCoopers, the system allegedly overbilled more than a million ratepayers. Antwon Jones v. City of Los Angeles, BC577267 (L.A. Sup. Ct., April 1, 2015).

The Jones class and the city reached a $67 million settlement in record time in 2015, and without conducting any discovery. After it became public that the lawyer the city hired to sue PwC secretly drafted a separate lawsuit in which Jones sued the city, the FBI raided the city attorney's office, the utility office and the offices of at least two private attorneys working for the city.

The federal investigations found city-hired attorney Paul O. Paradis of the New York law firm Paradis Law Group drafted and handed off the Jones complaint to hand-picked opposing counsel, Ohio lawyer Jack Landskroner. Paradis was aided by co-counsel Beverly Hills attorney Paul Kiesel, who is cooperating with the DOJ's investigation, according to the department.

Landskroner, who died in June, and other class counsel in the Jones lawsuit, received $19 million in attorney fees in 2015 without doing much, if any, work on the case, according to the DOJ. Paradis then received a $2 million kickback from Landskroner, according to a guilty plea Paradis agreed to.

City Attorney Mike Feuer, who has denied involvement in the scheme or the attempted cover-up, responded Monday to Peters agreeing to plead guilty, saying he was "furious" to hear what Peters had allegedly done. Feuer's office did not respond to an email Tuesday asking if he was concerned about whether another official at his office could have been involved.

"I am furious and disappointed beyond words that someone I hired and placed faith in would commit this breach of trust -- of the public, of my office and of me personally," Feuer said in an email Monday.

Along with Peters and Paradis, DOJ prosecutors have secured plea agreements from David H. Wright, the utility's former general manager, and David F. Alexander, a former senior official at the utility. Kiesel is cooperating with the DOJ investigation, according to the department.

"Person A," is a former employee of Kiesel's, according to the DOJ.

San Diego attorney Timothy G. Blood of Blood Hurst & O'Reardon LLP, who represented plaintiffs in an overbilling lawsuit that was consolidated into the Jones action, and who had raised suspicions about the action back in 2015, also said he expects more officials will likely be named in connection to the scheme.

Blood said he was also concerned about whether the State Bar would look into the matter.

"While we continue to learn new facts as more people plead guilty, the basic facts have been known for a long time," he said in an email Tuesday. "If the State Bar's excuse is that it is waiting for prosecutors to complete their investigation, then it seems the State Bar is failing to fulfill its obligation to take prompt action to protect the public from lawyer misconduct."