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Laco Ca Annual Litigation Cost Report Feb 2013

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LO S A NG E LES , C ALIFORNIA 9 001 2- 27 13

(213) 974-1762



February 20, 2013

County Counsel

(213) 626-7446

(213) 633-0901

The Honorable Board of Supervisors
County of Los Angeles
383 Kenneth Hahn Hall of Administration
500 West Temple Street
Los Angeles, California 90012


County Counsel Annual Litigation Cost Report Fiscal Year 2011-2012

Dear Supervisors:
On January 24,2013, under separate cover, the Annual Litigation Report
for Fiscal Year 2011-2012 ("FY 2011-12"), was submitted to your Board. The
Annual Litigation Report provided a comprehensive, confidential discussion
regarding litigation expenditures for FY 2011-12.
The enclosed County Counsel Annual Litigation Cost Report ("Cost
Report") provides a brief summary of the FY 2011-12 Annual Litigation Report.
The Cost Report is a public document and will be posted on the County Counsel
If you have any questions regarding this report, please contact me at
(213) 974-1762.
Very truly yours,
County Counsel

Litigation Cost Manager





The Annual Litigation Expenses for Fiscal Year 2011-2012
("FY 2011-12") were $115.2 million. This was a seven percent increase over the
$107.4 million spent last fiscal year. The increase was, in large part, the result of an
$8 million cost award paid by the County to its insurance carrier in an action brought
by the County against the carrier for property damage caused by the 1994 Northridge
earthquake. Although down slightly as compared to last year, the 819 new cases
filed against the County this year was the second consecutive year in which the
number of new cases exceeded the 800 mark. The County obtained 179 dismissals
this year without any County liability. It tried 42 cases - winning 24. The County
was also successful in 22 of its 30 appeals, and recovered nearly $1 million through
its litigation efforts in FY 2011-12.

Payment of Judgments and Settlements

Of the $115.2 million paid in litigation expenses this year,
$59.9 million was paid to satisfy 19 judgments and to settle 255 lawsuits. The
amount paid in judgments and settlements this year rose seven percent, and was up
$3.4 million over last year. Although a single $8 million payment caused a
significant increase in judgments this year, settlements were actually down
$1.8 million as compared to one year ago.

In FY 2011-12, the County paid $17.9 million injudgments. This was
$5.2 million, or 40 percent, more than the $12.7 million paid last fiscal year. The
increase in judgments this year resulted primarily from the payment ofa single, longstanding judgment, Aetna.

Aetna, the largest judgment paid this year, was an action brought by
the County to recover insurance proceeds for the repair of County buildings after the
1994 Northridge earthquake. At the 2004 trial, the County was found to have
sustained damages to several County buildings totaling $13 .7 million. However, the
loss was less than the aggregate $20 million policy deductible. As a result, the COUlt
ruled that the insurance catTier was the "prevailing party" and ordered the County to
pay Aetna's litigation costs of nearly $6 million. In 2011, the ruling was upheld on
appeal and, due to post-judgment interest, the County was required to pay Aetna

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nearly $8 million this year. The Aetna judgment accounted for 45 percent of the
$17.9 million in judgments paid by the County this fiscal year.
In addition to Aetna, the County also paid $3.5 million this year on
Bouman, another long-standing judgment. The Bouman judgment was entered
against the County nearly 25 years ago in a class action gender discrimination
lawsuit involving the Sheriff s Department. After the Ninth Circuit Court of Appeals
upheld the judgment, the County entered into a 1993 Consent Decree which required
the Sheriff s Department to develop and implement policies, examinations, processes
and goals designed to facilitate the hiring and promotion of female deputies. The
Bouman judgment and resulting Consent Decree also required the County to pay the
class counsel's attorney fees and other costs of monitoring these efforts. During the
life of the case, the County paid $72.4 million on Bouman, including $3.5 million
this year. However, the payment this year was the County's final payment.
Effective June 2012, the Court approved ajoint report indicating the completion of
the County's obligations under Bouman and the matter has been fully and finally
Three other judgments, each exceeding $1 million, also contributed to
the $17.9 million paid by the County in judgments this year. These judgments were
paid to homeowners who claimed that their house sustained damages from a sewer
leak (Gliksman - $1.2 million), a County pharmacist who claimed that she was not
properly accommodated when assigned to a graveyard shift (Chang - $1.1 million),
and an intoxicated pedestrian who was struck by a Sheriff s vehicle while jaywalking
across Sunset Boulevard in West Hollywood (Rosenberger - $1 million).

In FY 2011-12, the County paid $42 million in settlements. This was
$1.8 million less than was paid in settlements last fiscal year. Six settlements
combined for more than $21 million and accounted for one-half of the amount spent
on settlements this year. These settlements included two case categories: Dangerous
Condition (roadway and trip-and-fall) and Medical Malpractice. The Dangerous
Condition cases were Roderick ($6.15 million - a studio worker was rendered a
quadriplegic when he drove his vehicle off the Angeles Crest Highway and down a
150-foot embankment) and Nelson ($3.6 million - an elderly man was paralyzed
when he tripped and fell over an exposed support bar at a bus shelter). The four
Medical Malpractice settlements included three actions involving labor & delivery
issues and one settlement involving a brain hemorrhage. The tlTIee labor & delivery
cases were Montoya ($3.5 million - a mother suffered neurological and brain injuries
after the delivery of her baby at Harbor-UCLA Medical Center), Works ($3 million a mother prematurely delivered twins at LAC+USC Medical Center- one twin died
and the other suffered significant neurological injuries), and Marin ($2.8 million - a
newborn was deprived of oxygen during birth at Harbor-UCLA Medical Center and

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suffered brain damage). The final Medical Malpractice settlement was Vasquez
($2.3 million - a patient suffered a subdural hematoma after his temporary release
from Rancho Los Amigos National Rehabilitation Center).



In FY 2011-12, the County obtained 179 dismissals without paying
plaintiffs or their attorneys any money. Contract Counsel and County Counsel
secured these dismissals by either persuading plaintiffs or their attorneys to
voluntarily dismiss their actions or by obtaining court orders through a variety of
motions (such as motions to dismiss, demurrers, and motions for summary
judgments) directing that the cases be dismissed. The County expended $1.4 million
in attorney fees and costs in obtaining these 179 dismissals, down from the
$3.9 million spent last year to obtain 157 dismissals.


Attorney Fees and Costs

In addition to Judgments & Settlements, the $115.2 million paid in
litigation expenses this year also included Attorney Fees & Costs in the amount of
$55.3 million. Of this amount, $40.9 million was paid to Contract Counsel and
$14.4 million was billed by County Counsel to other County departments for
litigation services. The amount billed by County Counsel included the attorney fees
& costs for handling cases in-house, as well as for managing or overseeing cases
assigned to Contract Counsel. Attorney Fees & Costs for both Contract Counsel and
County Counsel increased this year as compared to Fiscal Year 2010-2011
("FY 2010-11 ").
Contract Counsel

Contract Counsel fees & costs were up $3.5 million as compared to
last year. This increase principally occurred in excessive force, foster care, and auto
liability cases. A primary cause of this increase was the continued influx of new
cases during the proceeding two fiscal years, as well as a significant rise in the
number of such cases proceeding to trial this year. Finally, the increase in Contract
Counsel fees & costs was also the result of a one-time acceleration in the payment of
invoices in the second half of this year brought about by the implementation of a new
electronic billing system. The efficiencies of the new system, including the prompt
payment of invoices, effectively advanced the payment of some attorney fees &
costs, which otherwise would have been paid next fiscal year, into this year.
County Counsel

County Counsel fees & costs were also up $900,000, as compared to
last year. The primary reason for this increase was a credit that was applied in the

HOA.949268. 1


previous fiscal year. In FY 2010-11, County Counsel recovered $862,000 in fees &
costs in connection with an action brought by the County to compel a homeowner's
association to comply with requirements to create hiking and equestrian trails
adjacent to its property. County Counsel prevailed and was awarded $862,000 in
attorney fees & costs. This recovery was applied as a credit and used to offset the
expenditure of fees & costs by County Counsel attorneys during the previous fiscal
year. Absent this one-time credit, County Counsel fees & costs this year would have
been nearly the same as last year.


Contract Cities Expenses and Waterworks Exnenses

Of the $115.2 million in annual litigation exp((nses this fiscal year,
$7.5 million was not paid by the County General Fund. Instead, these expenses were
paid by the Contract Cities Trust Fund and the Waterworks District. These payments
were the result of alleged misconduct of Sheriff's deputies contractually assigned to
various cities throughout the County, liabilities resulting from work performed for
cities by the Department of Public Works, and public water rights litigation.


New Cases

For the second consecutive fiscal year, the number of new cases
exceeded the 800 mark. In FY 2011-12, there were 819 new cases, down slightly
from the 849 new cases filed against the County last fiscal year. Consistent with this
modest decline, several departments experienced decreases in new cases as compared
to last year, including the Sheriffs Department, the Probation Department, the
Treasurer-Tax Collector, the Public Defender's Office and the Department of
Beaches and Harbors. The Departments of Public Social Services and Child Support
Services each experienced a 50 percent reduction in new cases this year. Although
the overall number of new cases declined this year, several departments saw
increases over last year in the number of new actions filed against them. These
departments included Public Works, Health Services, the District Attorney's Office,
the Auditor-Controller, Children and Family Services, the Assessor's Office, Animal
Care and Control, and the Board of Supervisors. The Departments of Mental Health
and Community and Senior Services saw significant increases this year as compared
to one year ago - each increased to 22 new cases from six and four, respectively.


Trials, Writs, and Appeals

The number of cases tried by the County rose for the second
consecutive year ·- from 22 in Fiscal Year 2009-201 0 to 35 in FY 2010-11, and again
to 42 this fiscal year. This was the most cases tried during any of the last six fiscal
years. The County was successful in 57 percent of these cases, winning 24, losing
14, and trying four cases in which jurors were unable to reach a verdict. The County
prevailed in 13 of 19 Law Enforcement trials . The two most significant losses were

HOA.949268. 1


Dirks ($6 million - excessive force used during an arrest following a routine traffic
stop) and Castro ($2.6 million - prisoner beaten by a fellow prisoner at West
Hollywood Sheriffs Station). The County won six of eight Auto Liability cases and
three of six Employment cases. The most significant Employment loss was Hager
($4.5 million - wrongful termination for disobeying orders and investigating the
alleged homicide of another deputy).
The number of cases tried this fiscal year did not include trials and
hearings involving writs of mandamus and prohibition. In FY 2011-12, six such
writs proceeded to trial or final hearing. The County prevailed in four, including
actions enjoining the City of Los Angeles from constructing a sewer line in an
unincorporated area of the County and controlling dangerous dogs.
The County received favorable decisions in 22 of 30 appeals. The
County won two of the five appeals it initiated, and 20 of the 25 appeals filed by
adverse parties. In one successful appeal, the County obtained a reversal of a
$250,000 award of attorney fees & costs in a Law Enforcement case (Shoyoye), and,
in another, it secured the reversal of a $606,000 judgment in an Employment action
(Rogers). Two appellate losses were particularly significant - Aetna and California
Department of Health Care Services. Aetna was a failed attempt to recover
insurance proceeds for damages caused by the 1994 Northridge earthquake and a
resulting $8 million cost bill. Health Care Services was an unsuccessful action
brought by the County to recover $5.25 million in expenses for providing services to
Medi-Cal patients.
VIII. Recoveries

The County recovered $992,803 through its litigation efforts in
FY 2011-12. These efforts included eminent domain and condemnation actions. The
most significant of these recoveries was the result of an action filed by the California
Depmtment of Transportation against the Los Angeles County Flood Control District
to acquire land to widen the 405 freeway. The County recovered $771,000 as the
result of this action.