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09
Nov 2009
City's legal costs: $137M over past 2 years

STUDY: Total is nearly twice that of last period; Trutanich changes tactics.

The city of Los Angeles shelled out $137 million over the past two years for legal costs - nearly two times more than the previous two-year period and enough to hire nearly 1,300 police officers and cover most of the public works budget, according to a report released Monday. The study by California Citizens Against Lawsuit Abuse also found the amount of money Los Angeles County spent on lawsuit verdicts, settlements and outside counsel rose from $138 million to $190 million in the same period.

"It's amazing that while endless programs are being cut and jobs are being lost, the city and county of Los Angeles are spending hundreds of millions of dollars on lawsuits," said Maryann Marino, regional director of the organization's Southern California branch.

A recent national study cited in the report found that every man, woman and child in the United States pays $835 a year in a "lawsuit tax" - higher prices for goods and services due to litigation costs.

The report found eight of the state's largest cities and nine of its largest counties spent $504 million to deal with lawsuits over the last two fiscal years, nearly double the $276 million spent in the prior two-year period.

"This certainly reveals that we live in a litigious society," said Jon Coupal, president of the Howard Jarvis Taxpayers Association.

"It's not just cities and counties that have had higher litigation costs. There is probably a connection to the fact that many businesses have left California because of a very aggressive trial bar, and tort reform is certainly warranted, not only to save the California economy, but to save local governments from frivolous or marginal lawsuits."

The report said the $72 million the city spent on legal costs in 2008-09 could have been spent to hire 1,271 LAPD officers. It also said the $65 million the city spent in 2007-08 could have funded the city's annual infrastructure improvements, including streets, storm drains and bikeways.

City Attorney Carmen Trutanich, who recently marked his first 100 days in office, said he's taken a number of steps to reduce costs. This includes personally reviewing each case, bringing more cases in-house and asking outside law firms to discount their fees by 15 percent.

"As we move forward, we are looking at reducing those figures through management, by being involved in every step of the decision-making process, reviewing cases and expenses, being involved in the mediation and arbitration processes and taking more cases to trial rather than settling quickly," Trutanich said.

In an effort to stop frivolous lawsuits, Trutanich said his office is changing its tactics.

"One way you can stop the frivolous lawsuits is to make it costly for those who choose to sue the city," Trutanich said. "If you bring a frivolous lawsuit against the city - thinking we were going to settle - we are going to attach fees and costs. We are no longer just showing up in court with a shield. We are coming to court with a sword and a shield, because it's about protecting taxpayer dollars."

The authors of the report noted the amount the county spent on litigation could have funded its annual budget for county libraries and paid for the sheriff's narcotics enforcement, child abuse prevention and other programs.

County Risk Manager Rocky Armfield said legal expenses have soared because of an increase in hourly rates paid to outside counsel and because of a 10 percent increase in cases.

"When you have more lawsuits and an hourly rate increase," Armfield said, "the costs are going to go up."

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