Close Scrutiny Of Legal Costs Has Upland City Attorney Nervous

Upland city attorney Bill Curley and his law firm have survived, at least temporarily, the first round of a critical review of the quality and cost of the legal services being provided to the city.

Bill Curley

Since June of 2003, Richards Watson & Gershon, the Los Angeles-based law firm that employs Curley and also serves as legal counsel to 29 cities in California, has received $7.8 million in legal fees from the city of Upland. In recent years, the firm’s billing of Upland has increased, with the city paying the firm $5.7 million since January 2009.
In addition to being paid for routine legal advice the city requires with regard to day-to-day operations, the firm is also making a considerable amount of money for its representation of Upland in several lawsuits. Most, though not all, of those suits are ones that were filed against the city by various entities. In a few notable exceptions, the cases consist of litigation initiated by the city. The most expensive case the city is currently involved in is that of San Bernardino County Flood Control District vs. Upland, Caltrans and the county’s transportation agency, known as SANBAG.  The city has expended more than $4 million in defending that case, which relates to Upland’s approval of the Colonies at San Antonio residential and Colonies Crossroads commercial developments and the $102 million settlement cost the county sustained when the developer, the Colonies Partners, sued the county over flood control issues after the county built the 20th Street storm drain at Upland’s behest in conjunction with Caltrans’ extension of the 210 Freeway across property owned by the Colonies Partners. More than four years ago, the county offered to settle the case with Upland for $2 million. The Upland City Council, upon the advice of Richards, Watson & Gershon, declined  that offer.
The city has also paid Richards Watson & Gershon over $575,000 to defend it in a case brought against it by Robert Mills and Scott Schaller, the owners of the Chronic Cantina, over the city’s April 2009 effort to revoke that restaurant’s operating permits. The city was guided by Curley in its decision to yank those permits. It has since been publicly disclosed that former mayor John Pomierski was extorting the Chronic Cantina’s ownership and was receiving laundered fees in return for assurances by his business associates that the mayor could ensure that the nightspot would have clearance to operate. A federal grand jury indicted Pomierski on conspiracy, extortion and bribery charges a year ago today, March 2, 2011. Pomierski maintains his innocence and his lawyer has demanded that the city cover his legal costs in defending himself in the lawsuit brought by Mills and Schaller.
The city has expended just over $420,000 in an effort to prevent G3 Holistics, a marijuana clinic which opened in 2009, from operating in Upland. The city succeeded in temporarily closing down the G3 Collective in August 2010 after the city filed an injunction in West Valley Superior Court in Rancho Cucamonga, but that injunction was stayed by G3 owner Aaron Sandusky’s appeal of the city’s blanket prohibition of medical marijuana dispensaries. On November 9, 2011 the Fourth District Court of Appeals in Riverside ruled that Upland’s banning of clinics did not contradict Proposition 215, the 1996 law that approved medical marijuana in the state, but Sandusky appealed that ruling to the state Supreme Court. Ultimately, however, the city’s legal efforts against the clinic, which have so far failed to shutter the operation, may prove to have been  superfluous as the federal government, in the form of the Drug Enforcement Administration and the U.S. Attorney’s Office, have taken steps against such operations throughout the state, including a November raid of the G3 clinic in Upland. Drug Enforcement Agency officers told Sandusky in January that he is in violation of federal law.
In 2011, Richards Watson & Gershon posted monthly bills to Upland ranging from a low of $117,403 to a high of $213,794.
With legal bills of roughly $2 million per year, and the presentation of information to suggest that the city had sustained legal costs in both the County Flood Control District and G3 Holistics cases that were unnecessary, pressure has mounted on the council to rein in the legal work being done by Richards Watson & Gershon.  At the urging of city councilwoman Debbie Stone, the city council met in closed session for an hour-and-a-half on February 27, during which the soundness and expense of the legal services provided to the city were issues.
After the council emerged from that executive session, councilman Brendan Brandt, a member of the city’s legal affairs committee, addressed the public.
“We met in a extended closed session to talk about the city attorney and sealing litigation issues,” Brandt said. “We want to assure the citizens of Upland we are as a council closely scrutinizing and making sure taxpayer money is being used in a very efficient and responsible manner. There has been a lot of discussion about the amount of money paid for attorney services, most notably with regard to the San Bernardino County Flood Control District vs. the city, SANBAG and Caltrans. There is a lot of talk about the money the city is spending to defend itself. I have to put it in context a little bit.  The latest figures I have were reported by the Press Enterprise, which got the information through a public records request. The county of San Bernardino and SANBAG have spent $30 million in legal fees in the county of San Bernardino and county flood control district vs. the city, SANBAG and Caltrans.  At the same point Upland has spent  $4 million. We are being faced with a serious lawsuit in which the demand is $160 million. We have had to spend $4 million to defend ourselves. We cannot crawl under a rock or ignore this or default and we must defend ourselves in this lawsuit. I would like to report the legal subcommittee is going to further whittle down and sharpen and ensure we are getting the best bang in terms of our action and all five of us are keeping an eye not only on the litigation itself but the billings, and we will make sure we are spending our money wisely.”
With regard to the offer by the county to settle the county flood control/Colonies case for $2 million, which is less than half the cost of the legal services provided by Richards Watson and Gershon for representing the city in the litigation, Brandt said, “That was made almost five years ago.  We were not a party to that settlement agreement.  We had at least one public speaker who said if we had settled for that amount it would have been a gift of public funds. Potentially doing that would not have absolved our liability or ended the litigation with SANBAG and Caltrans. We would still be in this fight and involved in having to defend ourselves against Caltrans and SANBAG.”
Councilman Gino Filippi suggested the city has allowed Richards Watson & Gershon too much autonomy in handling decisions with regard to legal matters facing the city.
“In my opinion, there has been a serious lack of oversight by the former mayor and members of the council over the past several years,” Filippi said. “Although I was not on the city council at the time that the city had discussion with the San Bernardino County Flood Control District, and could have resolved the case with the county for approximately $2 million, I am obviously concerned that the city received direction from its legal professionals that such a settlement was inappropriate or unwarranted.  So, instead, and without having a cost/benefit analysis, the city spent approaching $5 million dollars in legal fees when the city could have resolved this matter for $2 million.
“Even if there was perception years ago, as charged by some critics, that settling for $2 million was unwarranted or even a gift of public funds, such an action years ago has resulted in the city spending an additional $3 million dollars with no end in sight on the legal fees,” Filippi continued. “This is just one reason why I fear Upland is on a course of insolvency.”
Filippi said Curley and Richards Watson & Gershon had not kept the counsel informed about important issues related to the litigation that would have allowed the council to make more informed decisions.
“Until stated in Monday’s city council meeting that the county was demanding $160 million, I had not been made aware by our legal counsel that such a huge amount is being demanded,” Filippi told the Sentinel. “Even if the city of Upland were to be found minimally responsible, such a result would be financially catastrophic.  It appears to me at this time that the most prudent thing would be to explore any and all settlement opportunities.”
Curley declined to comment on the outcome of the city council’s closed door evaluation of him and his law firm, referencing Brandt’s statement with regard to the matter.

Leave a Reply