LA council delays decision on $5M more for law firm in homelessness lawsuit

The Los Angeles City Council decided Wednesday to delay its decision on a request to pay $5 million more to a big law firm representing the city in a long-running federal legal settlement over its response to the region’s homelessness crisis.

Instead, the Council referred the request from L.A. City Attorney Hydee Feldstein Soto to the city's Budget and Finance Committee for further consideration.

"My colleagues and I want to ensure we address it in a way that protects taxpayers and establishes a thoughtful, long-term strategy for managing outside legal expenses," said Councilmember Katy Yaroslavsky, who chairs the budget committee, in a statement to LAist.

The city agreed in May to pay $900,000 to Gibson, Dunn & Crutcher over a two-year period. Since then, the city has racked up more than $2 million in legal bills beyond what the council had originally authorized without telling the councilmembers.

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The firm has 15 attorneys working on the case, each of whom is billing the city $1,295 an hour. The original $900,000 approved by the City Council covered the first few days of work.

Councilmember Monica Rodriguez told LAist said she was “enraged” by how much money was being spent on a settlement reached years ago between the city and a group of downtown business owners and residents called the LA Alliance for Human Rights.

“The city should be more focused on becoming compliant and housing individuals,” Rodriguez said. “There are people in L.A. who know how to stretch $1,300 for longer than an hour.”

And Councilmember Bob Blumenfield said sending the request back to committee was meant to send a message.

"My hope is that the City Attorney and reasonable folks at Gibson will sit down and figure out an alternative bill, " he said in a statement. "We must pursue appropriate cost review based on the fact that this is the public’s money, that every dime spent on lawyers is one less dime spent on homeless interventions, as well as the fact that they exceeded the limits without authorization."

The L.A. City Attorney's Office did not respond to LAist's request for comment Wednesday.

The city’s massive legal bills come as L.A. faces a $1 billion budget deficit and cuts to some homeless services.

Massive legal bills

The law firm billed the city about $1.8 million for two weeks of work in May — double the amount approved for the entire two-year contract, according to a May invoice LAist obtained through a public records request. Altogether, the city has been invoiced for $3.2 million under the contract as of Aug. 8, according to a memo written by Feldstein Soto and obtained by the L.A. Times.

When the council members approved the original contract, they required the city attorney to keep them updated.

But two councilmembers on the city’s budget committee, Blumenfield and Tim McOsker, said they didn’t know the $900,000 had been exceeded until after LAist reached out to them for comment earlier this month.

Blumenfield said he was “not happy” about it.

During the meeting Wednesday, some members of the public criticized the city for legal bills they said were out of control.

“ This is a disgrace and I am begging this council to oppose spending $6 million on litigation instead of on solutions,” said Susan Collins in public comment Wednesday. “Wasteful spending cannot possibly get any more repugnant than this.”

On the city’s online public comment system, Sue Kohl asked: “Why are we not using those funds for actual food and shelter for homeless individuals and families?

Why does LA want legal help?

In 2020, The LA Alliance for Human Rights sued the city and county for failing to adequately address L.A.’s homelessness crisis.

When settling the case in 2022, the city agreed to open nearly 13,000 new shelter beds by June 2027. But the federal judge overseeing the settlement said the city consistently has failed to meet its obligations under the agreement.

The city hired Gibson Dunn in May, as U.S. District Judge David O. Carter was considering a request by The LA Alliance for Human Rights to hand the city’s homelessness programs over to a third-party receiver.

In June, Carter decided against receivership but ruled the city of L.A. had partially breached the settlement agreement because it had not provided a plan for creating thousands of new shelter beds. Carter also ordered quarterly hearings and additional oversight by a court-appointed monitor.

The city has said it plans to appeal that ruling, with Gibson Dunn’s help. The firm did not immediately respond to LAist’s request for comment.

City attorney’s role

Before May, the L.A. City Attorney’s Office had been handling the case itself, without the help of outside counsel.

Feldstein Soto has defended Gibson Dunn’s work. City attorney spokesperson Ivor Pine told LAist the “firm and its lawyers exceeded our expectations and delivered exceptional results.”

LAist asked the City Attorney’s Office to release additional invoices from the law firm, but it declined.

There is no evidence Gibson Dunn has been paid for its efforts yet. The L.A. City Controller’s Office said it would not authorize the payments until the costs are approved by the City Council.

The city of L.A.’s charter requires outside counsel work, like the Gibson Dunn contract, to stay within the allocated dollar amount.

The firm’s attorneys have handled many high-profile proceedings. Last summer, they represented the city of Grants Pass, Ore., before the U.S. Supreme Court in a landmark case that expanded cities’ ability to enforce camping bans against unhoused people.

Councilmembers who oppose increasing the city’s outside legal budget said the city should be spending its dollars more wisely.

“We have targets to meet, and we should be investing our very precious limited dollars in fulfilling those obligations and being compliant with this settlement agreement so that we can be done with it in 2027,” Rodriguez said.