COUNTY COUNSEL ANNUAL
LITIGATION COST REPORT – FISCAL YEAR 2015-2016
I.

Overview

In Fiscal Year ("FY") 2015-2016, the County of Los Angeles paid
$131.8 million in litigation expenses, up 11 percent from $119 million paid in
FY 2014-2015 ("2014-15"). The increase was, in large part, the result of a
$12.8 million boost in judgments and settlements as compared to FY 2014-15. The
$131.8 million paid this year includes $71.3 million in judgments and settlements
and $60.5 million in attorneys' fees and costs ("fees and costs"). Importantly, the
County was reimbursed $22.2 million by the Contract Cities Liability Trust Fund and
Special Districts which reduced the County's FY 2015-16 litigation expenses
($131.8 million) to $109.6 million, only one percent more than the $108.4 million
paid by the County last year after reimbursement. Finally, this year saw a decline in
new lawsuits against the County, an increase in the number of cases dismissed
without any County liability, and the highest amount of County recoveries
($4.7 million) in the last seven years.
II.

Judgments and Settlements

Of the $131.8 million paid in litigation expenses this year,
$71.3 million was devoted to satisfying 17 judgments and settling 251 cases. The
$71.3 million spent on judgments and settlements in FY 2015-2016 ("2015-16")
represented a 19 percent increase as compared to the $59.9 million expended on
judgments and settlements in FY 2014-15.
Judgments
In FY 2015-16, the County paid $11.8 million in judgments. Of the
17 judgments paid in FY 2015-16, three exceeded $1 million: one Breach of
Contract claim, one Law Enforcement case, and one Auto Liability matter.
In the Breach of Contract case, a judge found in favor of the
contractor in a dispute regarding the renovation and seismic retrofitting of the
La Plaza de Cultura y Artes Foundation project (Accent Builders - $5.8 million).
The judgment included an award of $2 million in fees and costs. In one of the Law
Enforcement matters, a jury concluded that Sheriff's Deputies wrongfully shot and
killed the decedent (Montalvo - $1.43 million paid by the County). Another jury
concluded that a Sheriff's Deputy was partially responsible for the death of a motorist
who was struck and killed when he exited his vehicle and wandered the freeway after
a traffic collision (Hernandez - $1.4 million).

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Settlements
The County paid $59.4 million in settlements this year, $15.2 million
more than it paid in FY 2014-15. Of the 251 settlements paid this year, 18 exceeded
$1 million and accounted for 60 percent of the $59.4 million in settlement payments
this year.
Twelve of these million dollar settlements stemmed from the
Sheriff's Department. These cases include one sexual assault by Deputy case
(Lindsay F. - $6.15 million) and seven Deputy-involved shootings which ranged
in amounts from (Ostegren - $5 million) to (Beierschmitt - $1.4 million). Five
settlements involved the Department of Health Services, including a matter in which
a patient received an excessive dose of Morphine via a computerized patientcontrolled analgesic pump (Ruiz - $6.1 million). The Fire Department settled a case
wherein it was alleged that paramedics who attended to a toddler after she slipped in
the bathtub at home missed signs of possible brain injury (Gutierrez - $2.4 million).
III.

Fees and Costs

In addition to $71.3 million paid in judgments and settlements, the
$131.8 million paid in litigation expenditures this year also included fees and costs
amounting to $60.5 million, or two percent more than the $59 million paid last year.
Of the $60.5 million paid in fees and costs in FY 2015-16, $47.3 million was paid to
Contract Counsel, and $13.2 million was billed by County Counsel to various
County departments for litigation services. County Counsel billings include the fees
and costs for overseeing litigated cases assigned to Contract Counsel, as well as for
handling cases solely in-house. "Fees" generally refer to the hourly rate paid to
counsel, and "costs" include a variety of expenses related to, among other items,
court reporters, experts, and copying.
Contract Counsel
At $47.3 million, Contract Counsel fees and costs were up less than
one percent over the $46.8 million paid last year in FY 2014-15.
Contract Counsel fees increased by $1.8 million, or four percent, over
the $38.6 million paid last year, but Contract Counsel costs dropped 16 percent, from
$8.2 million last year to $6.8 million this year. The increase in Contract Counsel
fees was largely attributable to more resource allocation devoted to the Southern
California Gas litigation. Several Departments realized reductions in Contract
Counsel costs, including the Sheriff's Department in the area of Law Enforcement,
the Department of Health Services in the Auto Liability and Employment areas, and
the Chief Executive Office in the General Liability area.

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County Counsel
County Counsel fees were down slightly and costs increased in
FY 2015-16. At a net $13.2 million this year, County Counsel fees and costs
increased by $1 million over the $12.2 million spent in FY 2014-15.
County Counsel fees, including those related to oversight of Contract
Counsel, remained relatively flat at $10.9 million, declining $63,000 as compared to
last year. Although several County Departments experienced gains in County
Counsel fees this year, including the Assessor's Office, the Fire Department, and the
Department of Public Works, such gains were offset by a comparable decrease in
County Counsel fees realized by the Sheriff's Department in the area of Law
Enforcement. While fees remained relatively stable as compared to last year, County
Counsel costs doubled from $1.2 million last year to $2.4 million in FY 2015-16, as
a result of the Los Angeles Superior Court Consolidation Plan, which eliminated all
court reporter positions for civil trial courts and required court reporters to be paid by
the litigants. This practice impacted costs this fiscal year.
IV.

Department Litigation Expenditures

In FY 2015-16, ten County departments spent $118,978,543, or
90 percent, of the County's $131.8 million in litigation expenditures. These expenses
were comprised of judgments and settlements, as well as fees and costs, in a variety
of areas, including Law Enforcement, General Liability, Employment, Medical
Malpractice, and Auto Liability. In FY 2015-16, the expenditures for the top ten
departments ranged from a high of $62,580,291 paid by the Sheriff's Department to a
low of $2,248,735 spent by the District Attorney's Office. The litigation
expenditures of the top ten departments for FY 2015-16 are as follows:
ANNUAL LITIGATION EXPENSES –
TOP TEN DEPARTMENTS
FY 2015-16
Sheriff

$62,580,291

Health Services

$20,368,843

Public Works

$7,647,937

Chief Executive Office

$6,781,335

Fire

$5,141,691

Children and Family Services

$4,781,681

Probation

$3,275,806

Public Health

$3,233,610

Parks and Recreation

$2,918,614

District Attorney

$2,248,735

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V.

Contract Cities and Special Districts

Of the $131.8 million reported in Annual Litigation Expenses
in FY 2015-16, the Contract Cities Liability Trust Fund and Special Districts
reimbursed the County approximately $22.2 million. The County paid the remaining
$109.6 million.
A.

Contract Cities

In FY 2015-16, the Contract Cities Liability Trust Fund paid
$18.8 million of the $131.8 million in Annual Litigation Expenses.
This
$18.8 million payment, which included judgments, settlements, fees and costs, was
primarily the result of liabilities arising from the alleged misconduct of Sheriff's
Deputies contractually assigned to various cities throughout the County. A small
portion of the $18.8 million reimbursed to the County related to the Department of
Public Works' General Liability cases and totaled $63,400.
In FY 2015-16, the Contract Cities Liability Trust Fund's insurance
carriers paid $19.4 million for six Sheriff's Department Law Enforcement cases,
including one sexual assault by Deputy case and five Deputy-involved shooting
cases, in which the payment exceeded the Trust Fund's Self-Insured Retention.
These insurance payments are not included in the $131.8 million paid by the County.
B.

Special Districts: Water and Flood Control
1.

Water Districts

Water Districts reimbursed the County for $1.6 million of the
$131.8 million in litigation expenses this year, including expenses related to
Groundwater Adjudication, Auto Liability, and General Liability cases. The largest
reimbursement involved Groundwater Adjudication. In 2004, the Los Angeles
County Water District No 40 (Antelope Valley) filed a lawsuit, which was
subsequently joined by District No. 35 (Santa Clarita Valley), seeking a judicial
determination of the rights of public water suppliers and landowners to capture
groundwater from the Antelope Ground Water Basin ("Basin"). The County's
lawsuit was in response to two actions brought against the Water Districts by two of
the Basin's largest agricultural companies. Approximately $1.3 million of the
$1.6 million reimbursed to the County this year by the Water Districts was
attributable to this adjudication of groundwater rights in the Antelope Valley. These
fees and costs were ultimately paid from the revenue stream of the Water Works
District - not from the County General Fund.
2.

Flood Control Districts

The Flood Control Districts reimbursed the County for $1.2 million of
the $131.8 million in litigation expenses in FY 2015-16. These expenses involved
Environmental, General Liability, and Auto Liability cases. The most costly of these
was a federal Clean Water Act case. In 2008, the Natural Resources Defense
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Council and the Santa Monica Baykeeper brought a lawsuit pursuant to the federal
Clean Water Act, alleging that the County and the Flood Control District violated the
Los Angeles County municipal storm water permit by allowing pollutants to exceed
water quality standards in Los Angeles Rivers, watersheds, and beaches. A number
of appeals to the Ninth Circuit have resulted from this complex and protracted
litigation. The Department of Public Works paid $227,500 in fees and costs on
behalf of the Flood Control District in FY 2015-16. The Flood Control District
reimbursed the Department of Public Works for the Clean Water Act case, as well as
for a variety of other matters, for a total of $1.2 million.
3.

Open Space District

Since 2012, the Department of Parks and Recreation has been
involved in a series of related lawsuits involving challenges to a proposed oil drilling
project in the City of Whittier. The Open Space District contributed $600,000 to the
defense of these consolidated actions in FY 2015-16.
VI.

City of Azusa

The judgments and settlements paid in Fiscal Year 2015-16 do not
include payments made this year to 13 plaintiff cities in the City of Azusa, et al. v.
County of Los Angeles ("Azusa") action. The plaintiff cities claimed that the
Auditor-Controller improperly calculated the amount of Property Tax Administrative
Fees ("PTAF") collected from those cities beginning in Fiscal Year 2006-2007
("2006-07"), based upon the 2012 California Supreme Court ruling in City of
Alhambra v. County of Los Angeles ("Alhambra"). Between FY 2006-07 and
FY 2012-2013 ("2012-13"), the County collected $233.2 million in PTAF from all of
the cities, a portion of which must be returned as a result of the Alhambra ruling. In
FY 2015-16, the County paid $5 million to 13 cities led by the City of Azusa. Since
these payments constituted a partial refund of the $233.2 million previously collected
by the County, this amount is not included as a judgment or settlement in the
FY 2015-16 litigation expenses.
VII.

Dismissals

In FY 2015-16, the County disposed of 234 cases without payment of
settlements, judgments or attorneys' fees to opposing parties and without any County
liability. Of these 234 dismissals, 127, or 54 percent, resulted from voluntary actions
by Plaintiffs and/or their attorneys (on nearly every occasion prompted by
a dispositive motion or other action by the County). Ninety-seven of the
234 dismissals, or 41 percent, were involuntary to the extent that they were
effectuated by successful County motions, including demurrers, motions to dismiss,
summary judgments, and discovery motions resulting in terminating sanctions. Six
of the 234 dismissals occurred as a consequence of the opposing parties' failure to
timely prosecute the actions, and four dismissals resulted from the failure of plaintiff
to appear at trial.

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VIII. New Cases
The number of new cases involving the County fell below the
800 mark for the third consecutive fiscal year and realized a slight drop of three
percent from 773 in FY 2014-15 to 749 in FY 2015-16. The Sheriff's Department
led the way with 202 new cases, followed by 163 new cases that were considered
Non-Jurisdictional (plaintiffs failed to identify a responsible department), 71 for the
Department of Health Services, and 64 new matters for the Department of Public
Works. All other Departments fielded fewer than 40 new cases in FY 2015-16. The
749 new cases this year fall within 13 various categories, or case types: Auto
Liability (119), Breach of Contract (8), Condemnation Defense (25), Dangerous
Condition (185), Elections (2), Employment (76), Environmental (7), Foster Care
(25), General Liability (70), Law Enforcement (156), Medical Malpractice (41), Real
Property (32), and Tax (3).
IX.

Trials, Writs, and Appeals
A.

Trials

The County tried 34 cases in FY 2015-16, nine more cases than the
County tried last year and two more than it tried in FY 2013-2014 ("2013-14"). The
County prevailed in 53 percent, or 18 trials, this year, compared to 16 victories, or
64 percent, last year. There was one mistrial this year compared to no mistrials in
FY 2014-15 and four in FY 2013-14. The County prevailed in three employment
cases, seven excessive force cases, five general liability cases, one false arrest claim,
one failure to protect claim, and one auto liability case. Of the 15 losses, an auto
liability case from the Public Defender's Office, Newland, was the most expensive.
In Newland, the Plaintiff, a pedestrian, was struck by a car that had collided with a
Deputy Public Defender. The bifurcated trial resulted in an adverse jury verdict of
nearly $14 million that has been appealed by the County. At issue before the Court
of Appeal will be an exception to the Going and Coming Rule, which provides that
an employee is not acting within the course and scope of his employment when he is
commuting to and from work.
B.

Writs

Just like last year, the County was an interested party in eight writs of
mandamus and/or prohibition. The County was not the moving party in any writ
proceedings this year. One writ stemmed from challenges to the dissolution of
California Redevelopment Agencies and the resulting reallocation of funds at the
direction of the California Department of Finance to the County Auditor-Controller.
This proceeding either had no demonstrable impact or their effects were de minimis.
Adverse parties prevailed against the County in three writs this year and were
unsuccessful in two. Two other matters resulted in split decisions.

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C.

Appeals

The County won 81 percent of the 31 appeals to which it was a party
this year. The County prevailed in two of the six appeals that it initiated and in all of
the 23 appeals commenced by adverse parties. The County received 25 rulings in its
favor and four adverse rulings. There were two split decisions.
The most noteworthy appeal arose out of festivities in Valencia on the
Fourth of July 2010. During a fireworks display at the Valencia Mall, a car making a
left turn veered out of control, landing on the sidewalk, colliding into pedestrians,
and killing the plaintiffs' family member. Plaintiffs alleged that the County Fire and
Sheriff's Department failed to control vehicular traffic and to place safety barriers to
protect pedestrians on the sidewalk. After the plaintiffs unsuccessfully opposed the
County's motion for summary judgment, the Court of Appeal affirmed, finding that
the County did not own the subject property and did not cause any dangerous
condition that may have existed.
X.

Recoveries

The County recovered $4,719,666 through its litigation efforts on
21 cases in FY 2015-16. As a result of a complaint against the Hacienda La Puente
Unified School District for its failure to pay monies owed under a contract that
required the school district to provide adult educational services to County inmates,
the County collected $3,350,000. Similarly, the County recovered $550,000 arising
out of a contract in which the contractor failed to deliver on its commitment to
remediate boilers at three County facilities. In addition, the County was awarded
$500,000 when it prevailed at a bench trial that focused on concession agreements at
Whittier Narrow Equestrian Center. Another $124,135 flowed from eminent domain
proceedings involving the State of California's condemnation of property utilized to
widen the I-5 Freeway. The remaining $195,531 stemmed from various other
contract claims, governmental class action lawsuits, and collection of discovery
sanctions from adverse parties.

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