Judge Dismisses WVWD False Claims Suit, Subject To Amendment & Refiling

A year after a qui tam lawsuit was quietly filed under seal alleging the top echelon of management, two of its elected officials, the general counsel, contract attorneys and consultants at the West Valley District conspired to enrich themselves through the provision of bribes and kickbacks, the Los Angeles County Superior Court Judge hearing the matter says his analysis of what has been presented to the court thus far does not make for a convincing case nor supply the details to back up the plaintiffs’ claims. He has given them a limited window during which they must marshal that evidence, such that as of today they have two weeks to establish sufficient evidence exists to substantiate their allegations or the case will be permanently dismissed.
West Valley Board Member Clifford Young joined with the district’s former chief financial officer, Naisha Davis, and then-assistant board secretary Patricia Romero in launching the relatively rare qui tam action last year.
A writ of qui tam is a private individual’s petition or a petition by a set of individuals, who is or are claiming to be of assistance in a possible criminal prosecution, for a court order against those the petitioner or petitioners alleges or allege have engaged in prohibited and illegal acts.
For a governmental district with the relatively limited charter of providing water to some 82,000 customers, households or businesses in Bloomington, Colton, Fontana and Rialto, as well as unincorporated areas in San Bernardino County and Jurupa Valley in Riverside County, the West Valley Water District has been a hotbed of contention, controversy and political rivalry in recent years, a situation that escalated when Butch Araiza, who had been the district’s general manager for three decades, retired in 2015. From that time forward, Dr. Clifford Young had ventured forth to fill the vacuum at the district Araiza’s departure had created. Young, one of the county’s leading African-American Republicans, served an abbreviated stint as a member of the San Bernardino Board of Supervisors in 2004. He rekindled his political career in 2013 by being elected to the West Valley Water District Board. He has had mixed results in seeking to capture sway over the district. Despite his Republican affiliation and demographics in the largely blue-collar district that overwhelmingly favor the Democratic Party in terms of voter registration numbers, Dr. Young was able to capture what appeared to be iron-clad control of the district when he succeeded, in 2017, in achieving reelection and getting two fellow Republicans elected to the board, Dr. Mike Taylor, Young’s neighbor and the former chief of police in the City of Baldwin Park, and Kyle Crowther, an officer with the Fontana School District Police Department, the former to a four-year term and the latter to a two-year term to fill out the last two years of former Board Member Alan Dyer’s term following Dyer’s 2017 resignation. Dr. Young, Dr. Taylor and Crowther combined with a fourth Republican, Greg Young [no blood relation to Dr. Clifford Young], to form a 4-to-1 ruling coalition of Republicans on the board, with the only Democrat at that time being longtime board member Don Olinger.
One of the first moves by the newly established board immediately upon Taylor and Crowther being sworn into office in December 2017 was to hire Robert Tafoya, the city attorney with Baldwin Park and with whom Dr. Taylor had a previous strong working relationship, to serve as the West Valley Water District’s general counsel. Soon thereafter, the board moved to effectuate a major makeover at the senior level of the district’s staff, placing District General Manager Matthew Litchfield and Assistant General Manager Greg Gage on administrative leave, outright terminating Chief Financial Officer Marie Ricci and terminating or suspending Human Resources Manager Karen Logue and Board Secretary Shanae Smith. In short order, Litchfield, Smith and Logue were, like Ricci, no longer employed with the district. Gage was reinstated after a brief interim. Former Loma Linda Mayor Bob Christman, who had once served as the district’s chief financial officer and was previously employed at California State University San Bernardino where Dr. Young was a professor and administrator, was tapped to serve as the district’s interim general manager. While Christman was in place, the district in March 2018 hired Baldwin Park City Councilman Ricardo Pacheco as its “assistant general manager of external affairs.”
Also in March 2018, the board rejected claims filed against the district by Litchfield, Smith, Logue and Ricci alleging harassment and wrongful termination. Subsequently, Logue and Litchfield filed unjustifiable termination suits against the district.
The district employed a veritable who’s who of Southern California law firms over the ensuing timeframe in dealing with not only litigation and procedural actions relating to access to water availability that involved numerous other regional water purveyors, but claims and litigation the district became embroiled in with former employees. In addition to its general counsel, Tafoya & Garcia, the district at one time or another throughout 2018 was represented by the Kaufman Law Firm; Varner & Brandt; Larson O’Brien;  Ziprick & Cramer; Albright, Yee & Schmidt; and Gresham, Savage, Nolan & Tilden.
In June 2018, with Olinger and Crowther absent, the board hired Clarence Mansell, a journeyman water operations manager who had previously worked for the Los Angeles County Sanitation District as a wastewater treatment plant operator as well in water-related positions with the cities of Los Angeles, Corona and Rialto in their respective water divisions, to serve as interim general manager to replace Christman.
In August 2018, Gage, having found employment elsewhere, departed from the district.
In October 2018, the board reorganized, appointing Michael Taylor board president and making Crowther vice president. Unrecognized by the general public at that time was that the reorganization represented a radical shift in the dynamics controlling the district, as Taylor and Crowther had formed an alliance with the Democrat Olinger to form a new ruling alliance, deposing Dr. Clifford Young as president and shunting Greg Young to the side.
For much of the public, there were issues roiling below the surface that went completely unremarked. The elevation of Mansell from interim general manager to full-fledged general manager rankled Young and Young, but was not apparent to outsiders. At the January 17, 2019 meeting of the board, the first overt hint of dissension among the board members was reflected on an item relating to a contract to renovate the customer service foyer at district headquarters. Both Cliff Young and Greg Young wanted to reject the awarding of a $567,000 contract to Caltec Corporation, which had been the low bidder on the project. Ultimately, both Young and Young, who asserted the pricing on the work was too high, were unable to convince their colleagues to hold off on the action, as they were defeated in a 3-to-2 vote.
The following month, at the February 7, 2019 board meeting when the panel split 3-to-2 with Young and Young dissenting to approve the district’s December 2018 purchase order report, it had grown clear that there was a rift on the board. There followed a 3-to-2 split over a $43,395.64 payment to the Tafoya and Garcia law firm for services rendered in October 2018, again with Young and Young at odds with their colleagues. That was followed by a 3-to-1 vote, with Greg Young in opposition and Dr. Young abstaining, to ratify a $32,679.10 payment to Tafoya & Garcia for services rendered in November 2018.
Thereafter, both Youngs and Dr. Taylor locked horns on an item calling for the district to send a formal request to the state controller’s office to conduct a full financial audit of all of the West Valley Water District’s fiscal dealings over the previous two years, including all contracts and contractors used by legal counsel. Taylor suggested that instead of having the state auditor go over the district’s books, the district have the district’s previous auditing firm carry out the examination. When Greg Young insisted on the board voting on the original motion to seek the state audit, that motion failed 2-to-3. Taylor then motioned to have the district’s contract auditor carry out the audit to cover the period from the end of the last audit completed to the then-current date. That passed 3-to-0, with Young and Young abstaining.
On February 19, 2019, Clifford Young, West Valley Water District Chief Financial Officer Naisha Davis and West Valley Water District Assistant Board Secretary Patricia Romero as plaintiffs, represented by attorneys Rachel Fiset and Erin Coleman of the law firm Zweibach, Fiset & Coleman, had filed, under seal, a lawsuit in Los Angeles Superior Court, referred to as a qui tam action, which alleged West Valley Water District General Counsel Robert Tafoya and his law firm, Tafoya & Garcia; West Valley Water District Special Counsel Clifton Albright and his law firm, Albright, Yee & Schmit; West Valley Water District Special Counsel Martin Kaufman and his law firm; and West Valley Water District consultant Robert Katherman, as defendants, had violated the California False Claims Act. In the suit, Michael Taylor, Assistant West Valley General Manager Ricardo Pacheco, West Valley Water District Board Vice President Kyle Crowther and West Valley Water District General Manager Clarence Mansell were identified as co-conspirators.
A writ of qui tam is a petition for a court order against those the petitioner or petitioners alleges or allege have engaged in prohibited acts. The petitioner in a qui tam action can receive all or part of any penalty imposed on those adjudged guilty. The name qui tam is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning “[he] who sues in this matter for the king as well as for himself.” In the  simplest terms, a qui tam suit is one seeking to advance the public interest against an individual or individuals alleged to be violating the public trust.
The qui tam suit filed by Young, Davis and Romero embodied a paradox presenting an uncommon dilemma and conundrum for the district and its board members in that the suit named the district as a plaintiff despite the consideration that the district board never voted to file the suit and, in fact, three of the board’s members at the time – Taylor, Crowther and Olinger – were adamantly opposed to the prosecution of the suit, disagreed with the upshot of the suit, and had not empowered the law firm Zweibach, Fiset & Coleman, nor Rachel Fiset nor Erin Coleman to act on the district’s behalf. In the time since Olinger has left the district board and been replaced by Channing Hawkins, the majority opposition to the qui tam action has not changed. Indeed, Hawkins, with the consent of Taylor and Crowther, has had the district retain the services of Rodney Sean Diggs, an attorney at the law firm Ivie, McNeill & Wyatt and one of Hawkins’ fellow graduates of Howard University School of Law, to augment Maribel Medina and the law firm of Leal Trejo in representing the district in contesting the qui tam action.
The qui tam lawsuit alleges that Taylor, who was chief of the Baldwin Park Police Department from 2013 to 2016, had been terminated by the Baldwin Park City Council but was subsequently re-hired to a one-year contract to again serve as Baldwin Park police chief on December 1, 2017, some 25 days after being elected to the water board and six days before he was sworn in. Taylor’s contract to resume his duties as police chief was drafted by Tafoya, who was also Baldwin Park’s city attorney, according to the lawsuit. Upon being sworn in as a water board member and assuming his duties in that capacity on December 7, 2018, according to the suit, Taylor effectuated hiring Tafoya as the West Valley Water District’s general counsel on a contract with no end date. In the ensuing 18 months, according to the lawsuit, Tafoya’s firm billed the West Valley Water District approximately $395,000.
Further, according to the suit, less than four months later, after Taylor assumed his position on the West Valley Water Board dais, Pacheco, a Baldwin Park City Councilman who had voted for Taylor’s reinstatement as police chief, was hired by the West Valley Water District as the “assistant general manager of external affairs.” He was later moved without board approval to the newly created position of “assistant general manager,” earning a salary of $192,000 per year, the suit alleges. Since his hiring, Pacheco and the California Education Coalition political action committee he controls have donated a total of $8,000 to Taylor’s campaign and $1,000 to West Valley Water District Board Vice President Kyle Crowther’s campaign, according to the lawsuit.
According to the suit, in 2018, Taylor spearheaded the effort to hire his associate, Mansell, as the West Valley Water District’s interim general manager and subsequently as the permanent general manager, at an annual salary of $225,000. The lawsuit alleges Mansell was hired by a 3-to-2 board vote without a recruitment effort.
The lawsuit alleges that in 2017 and 2018, Tafoya provided Taylor with travel and accommodations in Mexico and Las Vegas, paid for Taylor, Crowther and Cliff Young to travel to Arizona, twice paid for Crowther’s airfare to Florida and made contributions to Crowther’s and Taylor’s campaign war chests or otherwise assisted them in their campaigns. Tafoya further militated or lobbied on behalf of Albright, Yee & Schmit, the Kaufman Law firm and Robert Katherman in getting the two former entities legal work for the water district and a consulting contract for the latter while those firms and/or their principals were providing gifts, travel accommodations, entertainment and political contributions to members of the water board, in particular Taylor and Crowther, the suit alleges.  According to the suit, Taylor, Tafoya, Pacheco, Crowther, Mansell, West Valley Water District Human Resources and Risk Manager Deborah Martinez and other law firms and consultants connected to Taylor and Tafoya  “have engaged in illegal kickbacks and bribes to ensure contracts with the district and subsequent approval of invoices for payment.”
Maribel S. Medina, representing the West Valley Water District as a real party in interest in the lawsuit, on July 9, 2019 filed a motion to dismiss the complaint, accompanied by a memorandum of points and authorities, a declaration and exhibits.
In general, Medina’s overarching suggestion was that Dr. Clifford Young, who was subject to complaints by Litchfield, Gonzalez, Ricci, Logue, Smith and ultimately Mansell of improperly seeking to extend his authority beyond the limitations of his statutory power as a single vote on the water district’s five-member board of directors by making direct orders to staff, had grown discomfited by his inability to quash the internal district investigations those complaints triggered. The investigations into those accusations were carried out, in large measure, by the Kaufman Law Firm. In this way, the suit implies the qui tam action is a reprisal by Young and those he is affiliated with against Mansell and the district’s political leadership – i.e., the board – for allowing Litchfield’s, Gonzalez’s, Ricci’s, Logue’s and Smith’s accusations to persist without being controverted by official district action.
According to Medina, the suit, filed under the auspices of the California False Claims Act, fails to meet the legal requirements of such an action and exists rather as a politically-angled hit piece that lodges spurious allegations of corruption against the members of the board who, over the roughly one year period after the 2017 election, had evolved toward resisting Dr. Clifford Young’s improper overreach in dominating and micromanaging the district utilizing his status by asserting authority outside his legitimate role and capacity as an elected member of the board. The qui tam lawsuit neither establishes that the defendants and their named co-conspirators acted in collusion or in secret, according to Medina, nor does it delineate any information or true or false accusations that were not publicly known previously. “The allegations in the complaint consist of sensationalized facts taken directly from negative news media articles,” the motion to dismiss states. “The purpose of the California False Claims Act is to expose undetected fraud, in order to guard the public. By [the] relators’ own admission, this case has nothing to do with fraud, let alone any interest in protecting the district’s financial interest. [T]he Relators declare repeatedly in their various motions that this lawsuit was brought ‘to expose corruption at the district,’ and ‘expose a scheme of kickbacks and bribes.’ Consequently, as a California False Claims Act claim, the complaint is facially and fatally flawed.”
As used by Medina, “relator” is a term meaning plaintiff in a California False Claims Act case, as someone who has related a set of facts upon which the lawsuit is based.
“The fact is, this lawsuit has nothing to do with exposing fraud,” according to Medina. “It is the proverbial wolf dressed in sheep clothing. This lawsuit was brought in an attempt to interfere with ongoing investigations of harassment, bullying and misappropriation of public monies by relator Dr. Young, who has been represented by relators’ legal counsel Rachel Fiset in the ongoing investigations. This lawsuit is frivolous, vexatious and brought solely for the purpose of harassment.”
According to Medina, the allegations that money paid to the Kaufman Law Firm was misdirected are provably untrue. She said that members of the water district staff had accused Young of “grossly abusing his power and misappropriating public funds for his own personal benefit.” In January 2018, the Kaufman Law Firm was retained by the district to investigate allegations against Young that he “harassed, bullied and abused former General Manager Matthew Litchfield,” according to Medina. “Mr. Litchfield further alleged that relator Dr. Young gave him a list of people to hire and terminate under threat of retaliation. On or about the latter part of 2018, the district again retained the Kaufman Law Firm to investigate various complaints made by district employees against relator Dr. Young by alleged co-conspirators current General Manager Clarence C. Mansell and Deborah Martinez.”
Medina also took issue with the suit having been filed under seal, with the sole notice to the district consisting of it having been served upon Olinger, who at that time was in his late 80s and who was instructed to keep the matter under wraps, resulting in those sued not being informed of the suit and therefore not in a position to refute its accusations. “Although, statutorily the district must have been provided a copy of the complaint and material evidence 15 days after the Attorney General receives it, the district was not,” according to Medina. “The district became aware of the qui tam lawsuit only after the seal was lifted, when the named defendants were served with the complaint.”
The suit by Young, Davis and Romero inaccurately portrays the provision of gifts and political donations as being secretly conducted, according to Medina. “Relators also assert that the political contributions made by the named defendants to the members of the board of directors is evidence of this scheme of kickbacks and bribes,” according to Medina’s motion. Making reference to campaign disclosure statements filed by Taylor and Crowther that were cited as exhibits in the qui tam suit, Medina noted that disclosure of the donations were made and that Dr. Young was himself a political contributor to Taylor’s campaign.
“Not only is this not fraud, but the California Supreme Court has held, “[p]olitical contribution involves exercise of fundamental freedom protected by the First Amendment of the United States Constitution and Article 1 of the California Constitution,” according to Medina.
According to Medina, the billings made by Tafoya and his firm, Albright, Yee & Schmit, the Kaufman Law Firm and Robert Katherman to the district were legitimate invoices for services that were actually rendered. In this way, the central premise of the legal action Young, Davis and Romero have filed is invalid, Medina insists, as no false claim was ever made by Tafoya, nor by Albright, Yee & Schmit, nor by the Kaufman Law Firm; nor by Robert Katherman.
According to Medina, the plaintiffs do not have the facts to back up the accusations the case is based upon, but rather intend to use the case as the basis to seek the facts they allege. The case is based not on documentation but assertion, Medina maintains. “[T]he relators fail to identify a single false claim. Instead, by [the] relators’ own admission, ‘Qui tam plaintiffs filed this action in order to shed light on the board’s corruption and misappropriation of public funds.’”
The plaintiffs were obliged to plead the case with specificity, according to Medina, meaning they had to lay out exactly what false claims the defendants had made. They were unable to do so, Medina said, because no false or fraudulent billing had taken place. “Relators do not even come close to meeting the ‘who, what, when, where and how,’” according to Medina. “In the 77 paragraphs of the complaint, relators do not identify a single false claim for reimbursement, let alone specify who did what. In fact, Relators do not even distinguish between the role of the named defendants or the named co-conspirators, which alone is a fatal flaw.”
Medina further asserted that elements of the suit had been submitted by Romero to California’s Fair Political Practices Commission, which upon looking at the accusations had decided not to proceed with any action against the defendants.
In her pleading, Medina argued that “under such circumstances,” the qui tam action should be dismissed.
Los Angeles Superior Court Judge David S. Cunningham III, in a ruling entered February 10, dismissed the claim as filed, indicating the case was long on accusation and short on proof. He said Young, Davis, Romero, Fiset and Coleman had proven neither that the lawyers and consultants had not provided work or services for which they were paid nor that they were overpaid, and that the plaintiffs had not shown that the costs of the services rendered were inflated. The allegations in the case did not lay out specific amounts for each false claim nor the dates they were made, Cunningham said. Mere allegations that something was stolen did not establish fraud, the judge said. Cunningham did, however, give the plaintiffs 30 days to amend the suit.
This week, Fiset told the Sentinel, “We think we have made the case for false claims and have built it around the fact that kickbacks and bribes arose from the relationship between the defendants and mainly board member Taylor but also board member Crowther, to some extent. We understand the judge has questions about those details. We will add that to the complaint and will file it again.”
Fiset said that misrepresentations were made with regard to the payments to the defendants and that “a claim based on fraud is a false claim. Bribes being provided constitutes fraud.”
Asked why Taylor and Crowther were not named in the suit, Fiset said that as individuals who did not submit invoices to the district, “They cannot be named, but they are co-conspirators. They are not named as defendants, but that doesn’t mean they didn’t commit the acts we are alleging. We are suing the violators who took the money from the district.”
Fiset said the payments to the defendants were “approved under false circumstances. I believe if the majority of the board had known the contracts were based upon fraudulent invoices and claims being presented to the district by the defendants while bribes were being offered and received, they would not have voted in favor of those contracts and the contracts would not have been approved. It is the ratepayers who are losing from the corruption.”
Fiset admitted the plaintiffs were in a bind because the information to prove the allegations is in large measure in the possession of the district, which is withholding the release of documentation.
“We have asked for details relating to those contracts as well as information with regard to gifts, donations and like inducements provided to board members Taylor and Crowther by Robert Tafoya, his law firm or its agents,” Fiset said. “We have made those requests under the Public Records Act. They have refused to answer. It has been months. They will not provide the information they are required to under the law. There are other cases pending against the district. Other law firms have made requests. They have not answered those requests. The district absolutely does not want this information made public.”
The clock is ticking against her and the plaintiffs, Fiset acknowledged. “I believe we have until March 13,” she said. “We are working on all manner of acquiring that information. The district is stonewalling on providing us that information. They are doing that so details relating to corruption and fraud do not come out. They are doing their best to keep the public from knowing what they are doing. We are doing our best to get to that information. There is a push and pull. We are working as feverishly as we can without them abiding by their obligation to openly provide information about their operations.”
Fiset noted that the plaintiffs are at a double disadvantage in that whenever an issue relating to the suit has come before the district’s board of directors, Clifford Young has not participated in how the district has responded, while Taylor and Crowther have continued to vote in accordance with their own best interest, which she said is contrary to the public interest.
“With regard to all issues pertaining to the suit, Dr. Young as a plaintiff has recused himself in the vote while Taylor and Crowther, as named co-conspirators in the suit, have not. We are experiencing difficulty because they are voting. This is a conflict of interest violation.”
She said that is compounded by the consideration that Tafoya, who is a named defendant, is yet serving in the capacity of the district’s legal advisor, such that the board is getting its legal advice from him. That advice is tainted by his conflict, and the advice he is providing is calculated to protect his own personal interest and that of his firm as opposed to the interest of the district’s residents and ratepayers, Fiset said. “Robert Tafoya is advising them in this case,” she said. “He should not be involved in telling them what should be done in this case or telling them how to vote. This entire case grew out of conflicts of interest. That is why we filed the qui tam action. That is why Leal Trejo filed the motion to dismiss the case. They are working hard to stop the case and stop the flow of information. Dr. Young has not been voting on issues relating to the case. [Current Board President] Channing Hawkins has said that he recognizes that this is a big problem for the district and that perhaps he will work toward doing what is right and facilitating some sort of information flow, but I have yet to see the information. There is a ton of corruption in the district. That is clear as day.”
Fiset dismissed accusations that she and Coleman are taking a shotgun approach to the matter and are being inexact in their legal pleadings.
“Our lawsuit is somewhat narrow under the False Claims Act,” she said. “What the judge is looking for is very specific. I think we’ve met our burden. There is so much corruption. We have to narrow our corruption field to show specific issues. We have investigators at our disposal. We have whistleblowers, and they know quite a bit. We are open to whatever they have been saying. They have an understanding of what is happening, the pillaging that is going on. But there are people who know things and are afraid to speak. We need to find a more neutral ear. Someone is needed to expose what the district is doing through documentation. There is general fraud and we are looking at it more objectively.”
Tafoya told the Sentinel the lawsuit is angled toward destroying his name as well as his reputation and that of his law firm.
Medina told the Sentinel, “The False Claims Act has the laudable goal of protecting taxpayer dollars. Judge Cunningham thoroughly analyzed the facts and the law in this case, a lawsuit filed nearly a year ago, and concluded that the lawsuit failed to identify a single false claim. In granting the West Valley Water District’s motion to dismiss, the court agreed with the district that continuing to litigate a qui tam action that has no merit is a waste of limited government resources.”
-Mark Gutglueck

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