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Ninth Circuit Affirms Dismissal of Lawsuit Brought by Figure in DWP Scandal
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday affirmed the dismissal with prejudice of a complaint filed by Tarzana attorney Michael J. Libman, on behalf of himself and his wife and children, against former Los Angeles County Bar Association President Brian Kabateck and his law firm, former City Attorney Michael Feuer, and other attorneys and related parties.
The events giving rise to the litigation began with Libman’s role as co-counsel in the Los Angeles Superior Court class action suit of Jones v. Los Angeles brought against the Department of Water and Power for overcharges for water and electricity. Judge Elihu M. Berle approved a final settlement in 2017, providing for an award of $1.65 million in fees to Libman.
After the final award, the office of then-City Attorney Michael Feuer brought a related suit against Pricewaterhouse Coopers (“PWC”), which was also heard before Berle. Information came to light in the PWC matter suggesting improper collusion between some attorneys in the Jones matter, and Berle re-opened the Jones settlement to assess its fairness.
Berle appointed Kabateck as a co-counsel in the Jones matter to investigate the potential impropriety. Kabateck did not ultimately find that Libman had been involved in collusion, but did conclude that Libman misrepresented his experience and the quantity of work performed on behalf of the class in order to justify the substantial fee award, filing a motion to disgorge all fees from Libman.
The judge granted the motion, which was upheld on appeal in December 2023.
Search of Home
In 2020, FBI agents executed a search warrant of Libman’s home, while he was home with his wife and children, seeking evidence of any illegal firearms and of any communications reflecting plans to collect information about Berle and Kabateck.
After the raid, Libman filed the instant action, alleging thirteen causes of action, which comprise two main sets of claims.
The first set arises from the investigation led by Kabateck and Berle, with the alleged support and cooperation of other defendants, bringing claims for declaratory relief pertaining to the apportionment of Jones attorney fees, claims for monetary and injunctive relief under 42 U.S.C. §1983, and allegations of defamation and slander.
The second set concerns the search of his home, and involves one class claim for declaratory and injunctive relief against the U.S. and F.B.I. agents, and individual claims on behalf of himself and his family.
After the plaintiffs’ first amended complaint (“FAC”) was dismissed by District Judge Sunshine S. Sykes for the Central District of California, they filed a second amended complaint (“SAC”) which Sykes also dismissed with prejudice having found it to be “substantially identical” to the first.
Fees Claim
The Ninth Circuit panel—comprised of Judges Mark J. Bennett, Morgan Christen, and Kim Wardlaw—pointed out that the individual claim against Kabateck, his firm, and attorneys working for the firm, as well as against the City of Los Angeles, sought declaratory relief. They explained:
“This claim sought declaratory relief against the Kabateck Defendants and the City alleging: (1) Libman is entitled to 29% of the money recovered from the City after the final judgment was entered in Jones v. Los Angeles…; (2) Kabateck is not entitled to any portion of the attorneys’ fees awarded in Jones; (3) Libman is entitled to conduct an independent audit of all payments made by the City in connection to the Jones settlement; and (4) the City is required to pay ‘at least $11,020,000.00’ to the Libmans.”
Sykes dismissed the claim as impermissible forum shopping, and the panel agreed with her assessment, writing:
“At the time the district court dismissed the FAC, the Libmans had not filed a request for post-judgment attorneys’ fees as required in the Jones settlement. Instead, the Libmans sought to preempt a potential rejection of such a request by the state court. The Libmans sought to have a federal court preempt and interfere with a state court’s administration of a settlement agreement.”
Kabateck, Berle Claim
Libman also sought damages under 42 U.S.C. §1983 against Kabateck, Berle, Feuer, and attorneys Eric George, Eric Kingsley, Anastasia Mazzella and Maribeth Annaguey, claiming that the defendants engaged “in a scheme to scapegoat, falsely accuse and deprive [Libman and his law firm] of property in violation of…federal protected rights.” As to that claim, the judges wrote:
“While the Libmans claim the district court failed to accept the FAC’s allegations as true and made ‘inferences contrary to appellants,’ they do not explain what allegations the district court failed to accept nor what inferences the district court improperly made.”
The court said that to allege a conspiracy under §1983, the Libmans must show an agreement to violate constitutional rights, and “[a]s the district court correctly found the FAC’s allegations are ‘wholly conclusory,’ and, as such, the district court properly dismissed the claim.”
Class Claim
As to the Libman’s class claim against the U.S., the plaintiffs challenged the seizure of security cameras in violation of their Fourth and Fifth Amendment rights and alleged that the government frequently engages in the “unconstitutional practice of destroying, disabling, damaging or otherwise rendering inoperable security cameras of American homes or businesses.”
The panel noted that the plaintiffs “must show an injury-in-fact that is fairly traceable to the challenged conduct and can be redressed by a favorable decision,” remarking:
“The FAC vaguely alleges that ‘the government conducted, and has been conducting searches and seizures of homes or businesses during which the government destroyed...surveillance cameras and related equipment,’ but provided no facts to support the claim. The SAC is similarly speculative. The SAC added an allegation that the FBI had not officially closed its investigation into Michael Libman, and as such, his family lives in constant fear of a possible search of his home and business.”
The panel declared that the Libmans’ alleged injury was based on pure speculation, and was insufficient to invoke federal jurisdiction.
Individual Constitutional Claim
The plaintiffs also sought a declaration that the government’s seizure of their personal property, including security cameras, a table and a chair, violated the Fourth and Fifth Amendments, a declaration that the retention of any evidence obtained through the purportedly illegal search violated the Fourth Amendment, and a request for fair compensation for the taking of their property.
The panel found that this claim fails due to it seeking equitable relief for the alleged unconstitutional seizure rather than monetary damages. The judges noted that the availability of compensatory relief precludes equitable remedies.
In the present case, the panel looked to the Tucker Act, 28 U.S.C. §1491, which allows for monetary damages against the federal government for violations of the constitution. They declared “because of that guarantee, the equitable relief sought by the Libmans is unavailable.”
Bivens Claim
The court pointed out that a claim in the Libmans’ suit is based on the 1971 U.S. Supreme Court case of Bivens v. Six Unknown Federal Narcotics Agents. In a decision by then-Justice William J. Brennen Jr., the high court held that there is an implied cause of action for money damages against federal officials for violations of the Fourth Amendment.
The panel noted that if the case is different in a meaningful way from prior cases brought under Bivens, then the new context requires the court to consider whether there are any special factors that counsel against granting the extension of damages. The judges noted that, unlike in Bivens, the defendants had a warrant and did not arrest or perform bodily searches of the Libmans.
Opining that the case presents a new context, the panel declared:
“Because the Libmans’ opening brief fails to address the district court’s conclusion that special factors counseled against extending Bivens to this context, they have waived the argument that the district court erred in this respect…and thus we affirm dismissal of this claim.”
In March 2024, the State Bar of California’s Office of Chief Trial Counsel filed disciplinary charges against Libman. He is accused of deceit and collusion in the Jones matter, two counts of a conflict of interest, two counts of intentionally making false and misleading statements under penalty of perjury, and two counts of failing to obey a court order.
The case is Libman v. United States, 23-554517.
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