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Lawsuits Impact San Diego’s Finances

Your browser does not support this object. View the original here: http://www.youtube.com/watch?v=kBjmu1OZZ-I

Video published December 17, 2010 | Download MP4 | View transcript

Above: San Diego is besieged by claims and lawsuits against the city. They range from accidents involving city sidewalks to floods from broken water pipes. According to the Watchdog Institute at San Diego State University, the number of cases has dropped, yet the cost of dealing with them has tripled, And you, the taxpayer, are paying. Reporter Kelly Thornton gives us the details.

Guest

Kelly Thornton, contributing reporter at The Watchdog Institute at SDSU

Transcript

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

SAN DIEGO IS DESIEGED BY CLAIMS OF LAWSUITS AGAINST THE CITY RANGING FROM ACCIDENTS INVOLVING CITY SIDEWALKS TO FLOODS FROM BROKEN WATER PIPE. ACCORDING TO THE WATCHDOG INSTITUTE AT SAN DIEGO STATE UNIVERSITY THE NUMBER OF CASES DROPPED. YET THE COST OF DEALING WITH THEM TRIPLED. YOU THE TAXPAYER ARE PAYING. WITH ME TO EXPLAIN IS REPORTER KELLY THORNTON. WELCOME.

THANK YOU.

I MENTIONED ACCIDENTS AND FLOODSMENT WHAT ARE SOME OF THE OTHER CLAIMS AND LAWSUITS THAT THE CITY HAS AGAINST IT?

THE BIG ONES THAT ARE COSTING ALL THE MONEY INCLUDE LIKE THE LANDSLIDE WHERE ALL THE PEOPLE HAD LANDSLIDE ISSUES AND THEIR HOUSES WERE DAMAGED. THEY CLAIM IT WAS THE FAULT OF THE CITY FOR NOT MANAGING WATER PIPES CORRECTLY. THERE IS EVERYTHING FROM TRAFFIC ACCIDENTS OF ITS OWN VEHICLES TO ITS OWN PEOPLE FILING LAWSUITS FOR EMPLOYMENT ISSUES, DISCRIMINATION, SEXUAL HARASSMENT, THAT KIND OF THING.

LATELY WE HAVE BEEN HEARING ABOUT SOME SUITS THAT THE POLICE UNIONS BROUGHT AGAINST THE CITY.

RIGHT. THAT'S BEEN INTERESTING BECAUSE FROM OUR ANALYSIS OF THE DATA THERE WERE THREE KEY CASES THAT THE POA BROUGHT. COMBINED THOSE THREE CASES COST THE CITY $8.6 MILLION TO FIGHT. THAT MAKES THEM THE MOST EXPENSIVE LEGAL ADVESARIES THE CITY HAS.

HOW DOES THE CITY INCUR THOSE KIND OF COSTS IN THESE CASES?

WELL, THE CITY HAS TO DECIDE HOW TO FIGHT IT. IN THIS CASE, IN THE POA CASE THEY HAD CONFLICTS OF INTEREST. THE POLICE OFFICERS ARE THEIR OWN EMPLOYEES SO THEY HAD TO BRING IN OUTSIDE LAWYERS TO FIGHT IT. THAT'S A BIG PART OF THE EXPENSES THAT THE CITY HAS TO PAY. IF THEY BRING IN OUTSIDE LAWYERS.

WE HAVE HEARD ABOUT THE OUTSIDE LAWYER. I REMEMBER A COUPLE YEARS AGO THEY WERE CHARGING SOMETHING LIKE $750 AN HOUR.

RIGHT. IT KIND OF STARTED WITH THE ROCKY CASE, THE BUSINESS MAN IN SOUTH BAY WHO FILED A SUIT AGAINST THE CITY FOR BREECH OF CONTRACT REGARDING ONE OF HIS PROPERTIES. IF CITY LOST. IT WAS LIKE A $94 MILLION JUDGMENT. WHICH WAS DEVASTATING FOR THE CITY. WHEN CASEY, THE THEN CITY ATTORNEY DECIDED TO HIRE LATHEM AND WATKINS WHICH IS AN EXPENSIVE AND EXCELLENT LAW FIRM. THEY GOT THE JUDGMENT REVERSED. THAT CASE IS ON-GOING.

THAT'S WHAT I THOUGHT. THAT'S BEEN ONE OF THE LONGEST CASES. AND MOST EXPENSIVE CASES FOR THE CITY.

DEFINITELY.

THAT PROBABLY DROVE THE TOTAL COST UP. YOU TALKED ABOUT THE COST TRIPLING. WHY HASN'T THE COST TRIPLED SINCE THE VOLUME HAS DECREASED?

I THINK IT WAS A NUMBER OF THINGS. MAINLY THOUGH IT WAS THAT THE CITY HAD A NUMBER OF BIG CASES COMING DOWN BETWEEN THIS TIME PERIOD. WE LOOKED AT 2003 TO 2010 AND THE KEY CASES WERE THE POA CASES, THE LANDSLIDE CASES AND ALSO ROCKY DELAFUENTE AND THE FCC CASES. THE CITY WAS BEING TRIED FOR THE FEDS TO THE STATE AND THE SCC. THEY HAD TO PAY LEGAL BILLS FOR FOLKS BEING INVESTIGATED.

WHAT ARE WE TALKING ABOUT IN TERM OF COSTS? YOU MENTIONED $8 MILLION HERE. AND $3 MILLION HERE.

TOTAL COST TO FILE ALL CLAIMS AND LAWSUITS BETWEEN 2003 AND 2010 WAS $130 MILLION. A LARGE AMOUNT OF THAT WAS TO OUTSIDE COUNCIL. HOWEVER, JUST TO MAKE A POINT, LATHEM AND WATKINS WAS $18 MILLION THEY CHARGED DURING A FIVE OR SIX YEAR PERIOD. THEY WERE ABLE TO RECOVER A LOT OF THOSE, ALL OF IT BASICALLY FROM INSURANCE COMPANIES.

SO YOU ARE TALKING ABOUT $130 MILLION. THE CITY IS NOW FACING A DEFICIT OF $73 MILLION.

RIGHT.

SO IF THEY DIDN'T HAVE TO PAY OUT ALL THIS MONEY, WHAT IS THE EFFECT ON THIS CITY FINANCIALLY?

IT IS NOT A HUGE AMOUNT WHEN YOU LOOK AT THE BIG PICTURE OF THE CITY'S BUDGET. BUT I THINK WHAT A FEW PEOPLE THAT I TALK TO ARE SAYING, LOOK THIS IS JUST ONE EXAMPLE OF HOW THINGS AREN'T MANAGED THE RIGHT WAY. IF WE DON'T GET THIS DEPARTMENT IN ORDER IT IS GOING TO UNDERMIND THE CITY'S ABILITY TO REBOUND FINANCIALLY.

BRIEFLY, IT IS THE CITY ATTORNEY JAN GOLDSMITH SITTING ON TOP OF THIS. WHAT KIND OF REACTION HAVE YOU HAD FROM HIM?

TO BE FAIR IT IS A BROADER ISSUE THAT INVOLVES RISK MANAGEMENT DEPARTMENT. THERE IS AN AUDIT, INTERNAL AUDIT THAT CAME OUT IN AUGUST THAT LOOKED AT THE DEPARTMENT AND HOW IF CITY HANDLES CLAIMS. IF YOU HAVE A BEEF WITH THE CITY YOU HAVE TO FILE A CLAIM. THEN THE RISK MANAGEMENT EVALUATES THE CLAIM AND DECIDES HOW TO REACT. IT GETS TO THE CITY ATTORNEY'S OFFICE AT THE LAWSUIT STAGE. GOLDSMITH TOOK OVER IN 2009. HE NEGOTIATED THEM DOWN TO A LOWER FEE OF $550 AND HOUR AND HE HAS NOT HIRED THEM SINCE FOR NEW CASES.

THANK YOU VERY MUCH.

THANK YOU.

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