Metropolitan News-Enterprise


Tuesday, February 22, 2011


Page 1


Judge Orders Sheppard Mullin to Produce Retainer Agreement in Cudahy Suit

Weintraub Says Qui Tam Plaintiff Made Prima Facie Showing Under ‘Crime-Fraud’ Exception


By SHERRI M. OKAMOTO, Staff Writer


Los Angeles Superior Court Judge Debre K. Weintraub on Friday ruled that the crime-fraud exception to the attorney-client privilege applied to a motion to compel production of a retainer agreement in a qui tam plaintiff’s lawsuit against Sheppard, Mullin, Richter & Hampton.

Weintraub repeatedly remarked that “this is a close question,” but she found the position asserted by Matthew Monforton—a former Los Angeles deputy district attorney who now practices law in Montana and had sued the firm in the name of its former client, the city of Cudahy, a small municipality in southeastern Los Angeles County—to be  “meritorious.”

She determined Monforton had presented sufficient evidence to make a prima facie showing that members of the Cudahy City Council had a financial interest in the contract retaining the firm’s services since “they knew at the time their legal interests would be represented, at least indirectly, by Sheppard Mullin’s representation of the city…and knew any representation of the city would benefit them.”

Cudahy had hired Sheppard Mullin to represent five council members during a 2001 grand jury investigation by the District Attorney’s Office into allegations that the members had violated conflict of interest laws in the appointment of former Councilman George Perez to the position of city manager.

Monforton asserted that Sheppard Mullin then orchestrated a “stonewall” defense for the individual council members, advising them not to cooperate with the grand jury investigation, which advanced the interests of the individual clients but was detrimental to the city’s interest in having the grand jury investigate the alleged illegality of Perez’s appointment.

     At the hearing, Weintraub issued her tentative ruling granting Monforton’s motion and invited counsel to respond. Monforton’s attorney, Brian R. Condon, declined to speak, but Sheppard Mullin attorney David R. Garcia argued that “there should be a higher standard” for “invading the attorney-client privilege” and so the applicability of the crime fraud exception ought to turn on the “state of mind of the client with respect to the underlying crime,” and whether or not the client engaged the lawyer for the purpose of facilitating the commission of a crime.

     For the exception to apply, Garcia contended, a client “must have the specific intent to take the lawyer in, to use the lawyer, to help commit the crime,” citing as support, Geilim v. Superior Court, (1991) 234 Cal App. 3d 166.

     The court in Geilim had quoted Glade v. Superior Court (1978) 76 Cal.App.3d 738, which interpreted Evidence Code Sec. 956 as requiring an “intention on the part of the client to abuse the attorney-client relationship” for the crime fraud exception to apply in the course of ruling that an attorney’s misuse of confidential information to defraud others did not invoke the exception “if the client did not seek legal assistance to further this purpose, and he was unaware of the attorney’s contemplated wrongdoing.”

     Garcia noted Monforton’s reply brief had not addressed this case, and emphasized evidence of the city council members’ intent when they hired Sheppard Mullin was “completely nonexistent.”

     Weintrab, however, was not persuaded, telling Garcia she had “read all the papers” and found this to be a “tough issue,” but her tentative ruling would stand.

     Garcia then sought and obtained a 20-day stay as to production of the retainer agreement in order to pursue a writ proceeding.  

     The attorney declined comment immediately after the proceeding ended, but the firm’s general counsel, San Francisco attorney Ron Ryland, issued a statement Friday noting Weintraub was “careful to say the Court was not ruling that any wrongdoing by the Cudahy City Council had actually occurred.” The firm “respectfully disagree[s]“ with the finding that Monforton had made a sufficient factual showing to obtain production of the retainer agreement, Ryland said.

Condon said he felt Weintraub’s ruling was “the denoument” of the dispute, remarking this case could have been resolved eight years ago, “if the L.A. D.A.  was on top of the game,” referring to his client’s attempts, while he was working as a county prosecutor, that the agency’s Justice System Integrity Division open an investigation into the matter or have the case be referred to the state Attorney General’s Office.

Monforton, contacted in Montana, said he was “calling upon Attorney General Kamala Harris to open an investigation” as soon as possible.

He called Weintraub’s ruling “a judicial determination that [Sheppard Mullin attorney and] former District Attorney Robert Philibosian and his firm committed criminal acts by illegally extracting fees from Cudahy taxpayers” and predicted “these revelations may well spark a political uprising by citizens of Cudahy against their corrupt city council the way that their neighbors have done in Bell and South Gate.”

A hearing on Sheppard Mullin’s motion for summary judgment challenging Monforton’s standing as a qui tam plaintiff is scheduled for Monday.

The case is City of Cudahy ex rel. Monforton v. Sheppard, Mullin, Richter & Hampton.


Copyright 2011, Metropolitan News Company