Baltimore housing authority racking up legal bills for lead cases
Three private firms billed $228,000 for May and June alone
The Housing Authority of Baltimore City often cites a lack of funds to explain its refusal to pay nearly $12 million in court-ordered judgments to former public housing residents who suffered permanent lead-paint poisoning as children.
But the city's public housing agency has paid private lawyers about $4 million since 2005 to defend against those lead-paint claims. In May and June alone it spent $228,000 on legal fees, a total that works out to more than $5,000 per day, including expenses.
The housing authority's bills for outside legal work, details of which were revealed to The Sun in response to a Maryland Public Information request, show individual charges ranging in price from 15 cents for a single photocopy to $4,304.50 in unspecified "expert fees." One attorney whose firm was fined by a judge for flawed legal work charged the agency an identical amount marked "miscellaneous" — plus more than $1,000 to attend court the day of the fine. The authority paid thousands of dollars to a Towson-based firm for the time its attorneys spent driving back and forth to Baltimore.
Housing authority officials say the legal fees are necessary to provide it with vigorous representation in court, noting that the amount of pending lead-paint claims against the city — $800 million — is enough to bankrupt the agency. "Every dollar we spend on judgments is one less dollar that is available for major capital needs," Executive Director Paul T. Graziano said earlier this year.
The legal costs have incensed some critics, however, who say the victims of lead-paint poisoning should be paid and that every dollar spent on lawyers is less compensation for them. The billing details also provide fresh evidence that the lawsuits are likely to remain a costly issue for the housing authority for years to come. In addition to the legal jousting about existing judgments, there are 185 more cases pending in Baltimore City Circuit Court.
"I don't know how Graziano sleeps at night," said state Sen. James Brochin, a Towson Democrat who last month called on MayorStephanie Rawlings-Blake to take steps to have the judgments paid. He called it "pretty shameful" for the authority to enrich lawyers while taking all available legal measures to avoid compensating victims of lead poisoning.
The U.S. Department of Housing and Urban Development, which has joined the housing authority in the fight to block payment of the judgments, approved the authority's use of federal funds to cover legal fees, a spokeswoman said. One argument the Housing Authority has made in refusing to pay the lead-paint judgments is that federal money cannot be spent to compensate victims.
Civil litigation experts say it may be more economical for the authority to bring its legal work in-house, because salaried staff lawyers often earn less than private attorneys. The city government, which is separate from the housing authority, uses its own lawyers to defend against most liability suits.
Housing Authority spokeswoman Cheron Porter said in a statement that contracting out legal work is "the most cost efficient and effective" way for the agency to defend itself. She said three law firms were selected through a formal evaluation process based on their expertise and track record.
The high volume of lead-paint lawsuits is a legacy of the lead-poisoning scourge that has come to light in recent decades in Baltimore and across the United States. If ingested, even small amounts of lead dust or flaking lead paint can cause brain damage that stunts a child's learning and contributes to behavior problems.
While the housing authority stresses that it has made great strides in making public housing lead-safe for children, individuals who were poisoned as far back as the early 1990s are now seeking compensation from the agency, which has not maintained insurance or set aside money during Graziano's 11-year tenure to cover such costs.
The law firm that accounted for the bulk of the Housing Authority's billings was a Towson-based firm led by J. Marks Moore III. Moore has considerable experience with lead-paint cases. He has represented Baltimore's housing authority for more than 15 years and has helped lead its efforts to avoid paying the judgments.
Porter said in her statement that the housing authority has assigned 190 cases to Moore over the past eight years. Of those, 90 have been resolved, she said, with the authority prevailing 93 percent of the time. She added that a preliminary analysis of cases from 2009 showed that Moore successfully defended against more than $100 million in claims.
Moore's firm submitted one charge for $1,025 marked "miscellaneous." On June 2, Circuit Judge Althea M. Handy imposed a $1,025 sanction against Moore's firm. The judge took the action after concluding that a deposition was unusable because a housing authority employee testified to matters about which he lacked direct knowledge, according to opposing counsel Scott Nevin, who was present for the private hearing. A message left at the judge's chambers was not returned.
The judge's public order stated that Moore's firm, not the housing authority, "shall pay" the fine to cover Nevin's time and the cost of the deposition.
"He did pay, and it was on his firm's check," Nevin said. "Clearly the order was against Mr. Moore and not the defendant."
Maxwell O. Chibundu, a professor at the University of Maryland Law School, said he did not think the housing authority should be billed for such an expense.
"The system doesn't allow people to evade punishment for wrongful conduct by making someone else pay," he said. "It undermines the whole point of the rule."
Porter, while not saying what the miscellaneous charge was for, called it an "error" that Moore "independently found." Porter also said it was an error for Moore's firm to bill $1,302 to prepare for, travel to and attend a hearing on June 2.
The billing invoices released by the housing authority contain basic information for each charge from its outside legal counsel: the date, nature of the legal service, the duration in tenths of an hour, the hourly rate and the resulting cost. But the housing authority redacted, or blacked out, many details.
In one set of entries, Moore's firm billed the housing authority $1,947 for the cost of Moore and a colleague to attend a public hearing before a City Council committee. The purpose of the hearing: to discuss the authority's refusal to pay the judgments.
At the May 31 hearing, the lawyers were observed occasionally whispering to the authority's general counsel, Jannai Goslee, or to Graziano, who also serves as Rawlings-Blake's housing commissioner.
Graziano told members of the Judiciary and Legislative Investigations Committee that he could not answer many of their questions "upon advice of counsel." He pointed to the pending legal battles over the judgments — including several "consent judgments" in which the authority agreed with plaintiffs on a dollar figure and then fought in court to avoid paying.
Councilman James B. Kraft, the committee chairman, wondered about the authority's decision to dispatch both lawyers to the hearing. Although it lasted less than three hours, each lawyer billed 4.7 hours at $775.50 apiece, plus $198 apiece for their travel time.
"I don't know whether those guys really needed to be there for all of that," Kraft said in an interview.
Porter called the lawyers' presence "crucial" and said the 4.7 hours included a "debriefing" after the hearing. She also noted that plaintiffs' attorneys were present.
Unlike the housing authority's contract lawyers, attorneys who represent plaintiffs typically work on a contingency basis. That means if they don't win, they don't get paid. Their agreements with their clients often call for them to receive one-third of any judgment paid.
Lawyers at the outside firms hired by the authority either did not return messages or referred questions to Porter. In a brief interview, Moore said, "What part of 'I don't have any comment' do you not understand?"
Neither Graziano nor Goslee replied to an interview request. Instead Porter released written answers to questions.
Porter said in her responses that federal regulations prevent the authority from "imposing geographic preference" by considering only city firms. She also said bringing the legal work in-house would "substantially exceed" current costs. That's because high salaries would be needed to attract lawyers skilled in lead-paint cases, and more paralegals and administrative staff would be required.
In April, the authority told The Sun it had spent $3.8 million on lead-paint litigation since 2005, with $2.8 million going for lawyer services and $1 million for experts and deposition costs.
After that revelation, The Sun requested legal bills submitted over a two-year period by the outside lawyers. Seven weeks later Porter said the authority would charge an estimated $7,292 for access to those public records — with $5,292 covering the cost of redacting many details.
After scaling back its request, The Sun received about two months' of invoices at no charge. Those show that for May and June the authority received legal bills totaling roughly $174,000 from Moore's firm, $39,000 from Hyatt & Weber in Annapolis and $15,000 from the downtown Baltimore firm of Rollins, Smalkin, Richards & Mackie.
The hourly rates charged by the three firms range from $50, presumably for paralegals, up to $165 for lawyers at Moore's firm. Those rates are considered low, given what private lawyers in Baltimore typically charge.
The invoices also record more mundane expenses, such as postage. Moore's firm charged the authority $4,000 for photocopies, at 15 cents a page.
Some of the higher expenses were for experts. Moore billed more than $45,000 for expert fees in May and June. The names of the experts are blacked out.
University of Baltimore law professor Charles Tiefer said "blanket redactions" make if difficult for the public to evaluate the payments. He also said the authority should have considered by now whether to bring the legal work in-house.
"This litigation has been going on at least since the 1990s," he said. "After it went on even as little as a couple of years, the housing authority should have asked itself whether it would save money by bringing some attorneys on board as employees who would cost much less than $165 an hour."
He acknowledged, however, that "it's hard to change horses in mid-stream."
Because Moore's firm accounted for the bulk of the bills, The Sun examined those charges in detail.
For the two months, the firm billed more than 1,000 hours — equal to three employees working full-time, 40 hours a week.
On 28 occasions in May and June, the firm billed for travel expenses. The longest round-trips lasted one hour, 42 minutes, including one for a May 4 deposition held at a law firm on Calvert Street. On some occasions, the firm charged more to travel to a court hearing than to attend the hearing itself.
Lawyers often bill for travel time, but some clients, particularly large ones, negotiate that or hire lawyers in the jurisdiction where the case is pending, said T. Christine Pham, a Baltimore lawyer who chairs the Maryland State Bar Association's ethics committee.
Some clients are willing to pay travel expenses in order to hire a lawyer with particular expertise, she said.
City Councilwoman Mary Pat Clarke questioned why the authority employs two firms outside the city.
"I believe in buying local," Clarke said. "Now I have one more reason."
Legal fees detailed
The Housing Authority of Baltimore City redacted invoices detailing legal bills it has received for lead-paint litigation. A spokeswoman later confirmed the highlighted charges were for two Towson-based contract lawyers to attend a City Council hearing May 31. The hearing was held to discuss the authority's refusal to pay $12 million in judgments to victims of lead-paint poisoning.