An attorney who represented plaintiffs in a class-action lawsuit allegedly colluded with opposing counsel working on behalf of city of Los Angeles officials during the fallout from a Los Angeles Department of Water & Power billing system failure.
The State Bar of California issued a notice of disciplinary charges against attorney Michael Jacob Libman on March 6. The State Bar accuses the Tarzana attorney of violations of the Business and Professions Code and professional conduct rules, as well as moral turpitude, deceit and collusion, conflict of interest and misrepresenting his past case experience.
The action against Libman grew out of the city’s decision more than a decade ago to launch a new consumer information system that included a replacement of the DWP’s system for billing ratepayers for electricity and water use, according to the State Bar’s filing. The system, called Customer Care & Billing (CC&B), was developed and overseen by Pricewaterhouse Cooper (PwC).
“The launch of the new CC&B system was a disaster,” the State Bar’s notice states. “The CC&B system overcharged some ratepayers, failed to bill other ratepayers, sent delayed bills, improperly estimated bills, failed to provide ratepayers with appropriate refunds or credits and failed to ensure that reported problems were investigated.”
In turn, the DWP lost hundreds of millions of dollars and faced four class-action lawsuits filed on behalf of ratepayers. The Los Angeles City Attorney’s Office hired two lawyers – New York-licensed Paul Paradis and California attorney Paul Kiesel – to file a lawsuit against PwC over the billing mess, according to the State Bar, but the pair eventually became part of an apparent plot to co-opt the other class actions with a new class action, Antwon Jones v. City of Los Angeles.
Libman was hired as a local counsel to represent Jones and file the lawsuit, and city officials negotiated to dismiss the other four class actions in favor of the Jones lawsuit, leaving the latter as the sole vehicle to address DWP customers’ complaints, according to the State Bar.
“(Libman) colluded with Paradis and Kiesel, attorneys who (the) respondent knew represented the city and DWP, to structure, position and settle Jones v. City in a way that would serve the interests of the city and DWP, while failing to disclose and concealing this collusion from Jones, the court overseeing and approving the settlement in Jones v. City and others,” the State Bar’s notice says.
The city’s litigation against PwC was eventually dismissed.
Libman’s attorney, Megan Zavieh, said her client is looking forward to a public trial. A statement by Libman emailed to the Southern California Record indicates he expects full vindication.
“I am disappointed that the State Bar filed charges against me in this politicized LADWP case driven by vindictive, corrupt and connected lawyers bent on railroading me because I have been exposing their corruption for the past few years,” Libman said. “If I will get a fair trial that allows me to present all the evidence, I will be fully vindicated, and the true scale of the layers of corruption further exposed. I look forward to the public trial, and I invite members of the media, bench and bar to come watch.”
In 2017, the Los Angeles Superior Court approved a $67 million settlement to settle the Jones v. City of Los Angeles class action. The State Bar alleges that the deal included $19 million in plaintiffs’ attorney fees, including kickbacks to some and a payment of $1.65 million to Libman.
The State Bar’s notice indicates that Libman could face suspension, disbarment or possibly a monetary sanction of $50,000 per disciplinary order. He is also accused of failing to obey previous court orders related to the investigation of the case.
The U.S. Attorney’s Office for the Central District of California reports that Paradis agreed to plead guilty to a bribery charge for receiving an illegal $2.2 million payment and other actions related to lawsuit collusion.