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Water Replenishment District Problems Generate Huge Legal Fees

Posted Wednesday May 13, 2015 at 6:45 a.m.

By Brian Hews

A Hews Media Group-Community News investigation has revealed that the Water Replenishment District, based out of Lakewood, California, has spent nearly $10 million since 2012 on legal fees, with one of the biggest recipients, Latham &  Watkins of Los Angeles, billing almost $2 million in less than three months in late 2014.

Sources are telling HMG-CN that two law firms, Harris & Associates and Latham & Watkins, are both currently in dispute negotiations related to legal fees with WRD. Harris & Associates, who held a fundraiser for current WRD President Sergio Calderon during his election campaign, resigned in 2014.

The sources place the amount in dispute with Latham & Watkins at $1.4 million.

Online documents suggest that disputes exist, with no checks paid to Harris & Associates since April 2014 and no checks paid to Latham & Watkins in 2015.

In that time, WRD has racked up over $1.7 million in legal fees, just over $191,000 per month, not counting Latham & Watkins $1.9 million at the end of 2014.

The staggering total amount is well over $260,000 per month, paid using funds from WRD ratepayers; and WRD recently raised their rates by 5.6%.

Sources are also telling HMG-CN that current WRD Director Albert Robles was instrumental in bringing Latham & Watkins into WRD at the end of the Proposition 218 fiasco, much the same way Robles, as a Carson City Councilman, brought the high-powered law firm into the Carson Football Stadium negotiations.

Cerritos, Downey, and Signal Hill sued the WRD in 2010, saying it violated Proposition 218 procedural requirements in setting its rate for pumping groundwater. Bellflower joined the case in 2011 after a Los Angeles Superior Court agreed with the cities and ruled the district violated the procedural requirements.

WRD recently agreed to pay $9.1 million to settle the Proposition 218 lawsuit brought by the four cities.

The lawyers WRD hired is a blue chip listing of Los Angeles firms routinely charging upwards of $785 an hour for their services.

The list includes Albright, Lee & Schmit; Alston & Bird; Harris & Associates; Latham & Watkins; Leal-Trejo; Sheppard, Mullin, Richter &  Hampton; Tafoya &  Garcia; and Anthony Willoughby.

Leal-Trejo, Harris & Associates, and Alston & Bird benefitted the most during the three-year billing period.

Over $3 million was paid to Leal-Trejo, $2 million to Harris & Associates, and $1.3 million to Alston & Bird.

In one month, Alston and Bird racked up $152,000 in fees while Harris and Associates billed over $180,000.

Months before Harris and Associates resigned, the law firm billed WRD over $700,000 in an eight month span.

Anthony Willoughby was paid in what was listed in WRD’s check register as a “lump sum” totaling $89,000 in 2012.

The Latham & Watkins amount of $1.9 million was paid in October, November and December of 2014.

A Cerritos official, one of four cities involved in the Proposition 218 lawsuit, told HMG-CN, “we were doing fine with other law firms, then WRD brought in the ‘big gorilla’ Latham & Watkins. Latham brought in ‘experts’ and high paid attorneys to fight against us that generated huge fees, and the ironic thing is that those fees will be paid by WRD ratepayers.”

An article by the Los Angeles Times indicated that Latham & Watkins, which helped coordinate Vernon’s battle against disincorporation, was paid nearly $7 million in by Vernon in 2011.

‘The law firm is running the city,’ one Vernon councilman said at the time.

John Van de Kamp, the former state attorney general who was Vernon’s ethics advisor, said he also believed the firm’s rates at the time were too high.

The article went on, “neither Latham & Watkins nor [Vernon] city administrators would provide detailed legal billings or answer other questions about the services for which the firm was charging.”

Calls and emails into Latham and Watkins about the WRD fees were not returned.