> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # City Hall clamps down on attorney expenses - URL: https://www.smdp.com/city-hall-clamps-down-on-attorney-expenses/ - Published: 2005-10-24T15:00:00.000Z - Updated: 2026-10-23T08:01:40.000Z - Author: Carolyn Sackariason - Tags: Government & Politics, Santa Monica, #archive-import *Contract did not define ‘reasonable’* CITY HALL —The question of what “reasonable” expenses are for high-profile trial attorneys representing City Hall has raised an ethical dilemma about what’s in the best interest of the public. This dilemma lies at the heart of a bitter battle in which lawyers who ate, stayed and flew in apparent high style have proposed that Santa Monica taxpayers foot their bills, even if those taxpayers might not consider them “reasonable.” The lawyers involved are outside attorneys who are to be paid contingency fees for their representation of City Hall in its lawsuit against oil companies for contaminating Santa Monica’s drinking water. The trial lawyers include some of the richest and most successful in the business. But some of their bills in the case have raised an ethical question, especially considering the clients are taxpayers whose lifestyles may subsist far beneath those of their lawyers. The case, over the contaminant MTBE in the water supply, resulted in a settlement of $121 million, plus an offer to build a water treatment plant to clean up seven water wells. The outside trial lawyers racked up nearly $1 million in expenses, aside from their undetermined chunk for winning the case. The expenses caused a round of jaw-dropping at City Hall, which had hired the lawyers who ran up the bills. The expenses included everything from expensive meals at high-end restaurants, stays at the Ritz Carlton, limousine services, private jet travel and first-class airline tickets. Experts say the result of City Hall’s refusal to pay such bills will rest both on what’s “reasonable,” and the understanding between City Hall and the trial lawyers when the case began. And it appears that they need a judge and jury to figure it out. City Hall already has paid $620,000 in expenses to contingency lawyers hired to fight 18 oil companies over their admitted role in letting the gasoline additive MTBE seep into Santa Monica water wells. Hundreds of thousands of dollars more in expenses are being refused by City Hall, which argues the law firms took advantage of the public and breached their fiduciary duty in representing the city. NOTHING EXCEEDS LIKE EXCESS Attorneys have a duty to act in the best interests of their clients. That includes controlling costs, said Maureen Weston, an associate professor at Pepperdine School of Law. “Most clients would pay for reasonable expenses, but if they are deemed excessive, it’s an abuse of that relationship,” she said. “It’s just a matter of what’s deemed excessive, which seems obvious to me and you... most clients aren’t willing to pay for private jets.” City officials coughed at an invoice that included $88,543 for air travel billed by Dallas-based attorney Fred Baron in 2002\. Other travel expenses apparently included the billing of a chartered private jet and other airfare costs that weren’t necessary to the case, city officials say. City Hall brass also felt $300.21 for a meal at Capo restaurant, $214.98 for dinner at Jiraffe and $168.31 at Valentino were a bit extravagant. Those meals were billed to City Hall in January 2003 by Miller, Sher & Sawyer, a Sacramento-based law firm. To some, it’s a case of good lawyerly manners. “People should pay for their own dinner,” said Dan Cislo, a Santa Monica attorney and past president of the Santa Monica Bar Association. “It’s outrageous that they would do that. They took advantage of the situation because it’s not a bonafide expense.” Marshall Grossman, a Santa Monica attorney representing the contingency lawyers in their lawsuit with City Hall, doesn’t agree. He won’t apologize for the pricey charges, saying dinner meetings at high-end restaurants are sometimes appropriate, depending on who’s at dinner, which he claims included city attorneys. He and other contingency lawyers deny that private jet use was billed to City Hall, or that it even involved Santa Monica business. They also claim that City Hall has reneged on just about every aspect of its agreement with the contingency lawyers, including what percentage they should get from the multimillion-dollar settlement. As a result, City Hall is spending millions of dollars in public money fighting them in court. “The total amount of damages to the lawyers has not been fully quantified,” Grossman said. “This case has gotten so ridiculous, so absurd, that it would cause a 15-year-old to roll his eyes.” Sources have said the contingency lawyers routinely flew into Santa Monica Airport, which only serves private aircraft. What’s more, city officials on one occasion flew with Baron to San Francisco on a private jet. After expressing their reluctance in getting on board and being assured by the private attorneys that the expense would-n’t come back to the taxpayers, City Hall reimbursed the law firm the equivalent of commercial, coach airfare for the three public employees who traveled on the plane. Now, those charges may come back to haunt them, as the firm is apparently billing it back to City Hall. That could pose a problem for City Hall in arguing the excessive costs, Weston said. “If they participate in that, their objection after the fact is not credible,” she said, adding that regardless of what transpired, there obviously was a breakdown in communication between the two sides. “The lawyer has to communicate with the client with what’s going on in the case and the spending of money, especially taxpayer money,” she said. A QUESTION OF REASON There is only one paragraph that addresses costs in the 16-page legal services agreement signed by city attorneys and the law firms. It says that City Hall will pay all “reasonable” costs, which will be billed on a monthly basis. The agreement says nothing about what is reasonable. It notes, “costs include, but are not limited to, expert fees and expenses, investigation costs, deposition costs, messenger service fees, travel expenses, local counsel fees for out-of-state proceedings and other specialized legal services, and the like.” City Hall’s guidelines on what it considers a reasonable expense might make trial lawyers blanch. City guidelines, at $45 a day in expenses for meals, include $8 for breakfast, $12 for lunch, and $25 for dinner. They include no alcohol reimbursement. Nightly lodging costs of up to $175 are considered reasonable. Reasonable commercial airfares are in coach class. The lawyers hadn’t been informed of the city’s expense guidelines until they got a letter from City Attorney Marsha Moutrie on Feb. 10, 2003, in response to their invoices. Weston said the issue of expenses should have been addressed at the time the deal was signed. “The contingency fee agreement has to be in writing, and the provisions for expenses should also be set forth, the question is how much detail,” Weston said. “The courts have discretion to determine what’s reasonable.” That’s likely what will happen since the dispute over contingency fees from the settlement is scheduled for trial on Feb. 6\. “(The expenses are) still an ongoing issue, and it will be hashed out in court,” said David Halbreich, an attorney from Los Angeles-based Morgan Lewis & Bockius, the firm now representing City Hall in its dispute with the contingency lawyers. Halbreich’s firm is billing City Hall by the hour, of which hundreds of them have been spent on the case thus far. He declined to say at what rate he is charging City Hall, but that it’s at a discount. He added that expenses are being kept to a “reasonable” level. “We are working with a public entity, and we try to be sensitive to the client,” Halbreich said. “If there is any doubt, you should be cautious and error on the side of less, not more.” CULTURE CLASH Hal Light, a Santa Monica-based trial lawyer, agrees the issue of expenses should have been dealt with before the deal was signed — particularly if the city is retaining lawyers who are accustomed to living well. The case has shed light on a kind of culture clash between high-powered attorney lifestyles and the expectations of a City Hall charged with protecting taxpayers’ money. “As a lawyer, it should be dealt with up front, expenses should be disclosed and in writing, it should be said that ‘we operate at this level, we use private jets and limos, and you should be aware of this,’” Light said, adding as a Santa Monica taxpayer, he doesn’t believe the expenses in question are reasonable. “It seems to me that it’s excessive.” Cislo, the Santa Monica attorney, said trial lawyers who litigate high-profile cases often believe they’re entitled to exorbitant fees, especially in class action cases in which they negotiate apparently rich settlements. “It’s a niche to exploit,” he said, adding he flies coach when traveling on his client’s dime. “Someone gets a nickel, and they get millions. “No one benefits except the trial lawyers,” Cislo added, saying judges must do a better job in controlling payments to attorneys in cases where the clients get what’s left over. There’s a larger question in the case over whether the lawyers did a good job in pushing for a settlement rather than a trial. That dispute is headed for a judge and jury, as well as the question of how to calculate “contingency fees” on a non-cash offer like a water plant. Baron, one of the trial lawyers in the case, has come out in opposition to capping attorney fees. In an Oct. 10 article on Law.com, a legal news and information Web site, Baron noted his position, which opposed Harriet Miers, a current Supreme Court nominee. Miers, while a corporate attorney in 1995, stepped into a battle between trial lawyers and lawmakers over the issue. She was at the time lobbying a Texas governor to let the state’s supreme court limit the fees. She called trial lawyers “greedy,” according to Law.com. The governor was named George W. Bush, who later made Miers his nominee. *Originally published in the Santa Monica Daily Press print edition on October 24, 2005.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/102405.pdf?ref=smdp.com)