Oakland spent $13.4 million on Ghost Ship legal defense, records show

Much of the legal fees went for paying high-priced attorneys to sit in court watching the criminal case or filing motions arguing unsuccessfully that the city was not legally liable

Oakland paid $13.4 million to outside law firms defending the city against the Ghost Ship warehouse fire civil lawsuit, newly released documents show.

The legal fees, contained in billings obtained by this news organization through a Public Records Act request, are on top of the $33 million settlement with families of the 36 people killed, a badly injured survivor and people who lived at the artist collective, which caught fire on Dec. 2, 2016.

City Attorney Barbara Parker refuses to say how much of the legal fees and the settlement will be covered by insurance and how much taxpayers will have to bear. Nor would she answer questions about the city’s legal strategy or how the hourly rates were determined.

Much of the money went for paying high-priced attorneys to sit in court watching the criminal case or filing motions in the civil case arguing unsuccessfully — and repetitively — that the city was not legally liable because of broad immunities afforded to public agencies for failure to inspect buildings.

An Alameda Superior Court judge rejected the argument, finding Oakland had a “mandatory duty” to ensure safety at the ill-fated warehouse, a ruling upheld at the appellate court. The California Supreme Court declined to hear the case.

The billing rates from the law firms of Sheppard Mullin and Coblentz Patch Duffy & Bass LLP range between $500 to $990 an hour.

The high-priced legal defense drew criticism from attorneys representing the families of the 36 who perished in the inferno. The city often represented itself as broke, they said. Instead of dragging out the case using failed legal arguments it could have saved money by resolving the case earlier.

“After the fire, the city knowing it could be held accountable, wasted over $13 million on lawyers trying to get out on a technicality,” said attorney Mary Alexander. “Many of the people who died were the city’s own citizens. That money should have been used to compensate the grieving families.”

Dan Siegel, who represents the family of fire victim Sarah Hoda, and has frequently faced the city in legal matters, criticized the hourly charges of the attorneys hired by the city.

“You would be hard pressed to find any city that pays that rate for outside counsel,” he said.

While the settlements were made public last year, the amount the city spent on legal defense was released in response to a public records request made by this news organization. The last batch of records was released March 8, which happened to be the same day Alameda County Superior Court Judge Trina Thompson approved a plea deal for warehouse master tenant Derick Almena, concluding the criminal case.

Parker did not answer questions about the city’s legal strategy or how hourly rates were determined. It’s unclear how much of the $13.4 million the city’s insurance covered.

Billings compiled by the Bay Area News Group show the Sheppard Mullin firm invoiced the city about $4.4 million between March 2017 and December 2018, when the firm was dumped in favor of Coblentz Patch Duffy & Bass LLP. That firm billed $9 million, with the latest invoice arriving in January.

While the Oakland City Attorney’s Office has its own lawyers, it often brings in outside firms specializing in legal fields, and the Ghost Ship case was considered high-stakes, given the potential exposure to 36 deaths. The Ghost Ship warehouse was never inspected as required because it was not on the city’s list of buildings needing a fire inspection. However, police and firefighters were called there often to break up parties, fights between roommates, disturbances and an arson fire that burned the exterior of the 31st Avenue building.

The bulk of the billings were for filing motions in the case, monitoring the Ghost Ship criminal proceedings and conducting about two dozen depositions.

It’s unknown exactly how much the firms billed for attending criminal hearings and the pre-trial and trial of defendants Derick Almena and Max Harris. But a member of the city attorney’s office and at least one lawyer from outside firms were frequent attendees, as were attorneys representing victim families in the civil case.

Attorney Clifford E. Yin, the lead attorney from Coblentz, who usually charged $675 an hour, was often present in court. In many ways, the criminal case proceedings was required homework for the attorneys, with several Oakland police officers and firefighters testifying.

The 2019 criminal trial, one of the longest in Alameda County history, lasted several months. Harris was acquitted and a jury deadlocked on convicting Almena. Rather than retry Almena, Alameda County District Attorney Nancy O’Malley agreed to a plea deal in which Almena pleaded guilty to 36 counts of involuntary manslaughter. Almena was sentenced to 12 years in prison but isn’t expected to serve any more jail time, because of time served and credit for good behavior.

The Ghost Ship was the deadliest single-structure fire in modern California history. All but one of the 36 people who died were visitors to the warehouse, where a party was underway when the blaze erupted, wiping out a main exit route and trapping the victims. The exact cause of the fire was never determined, although multiple fire reports said it was likely due to an electrical issue.

The blaze exposed systemic issues in the Oakland Fire Department’s ability to inspect Oakland’s vast inventory of commercial buildings, schools and multi-unit apartments. City employees witnessed the dangers there first hand, but did nothing to shut it down, attorneys for the victims’ families found.

Former City Administrator Dan Lindehim said when he was in City Hall, Oakland usually paid the first $4 million and the rest was covered by the city’s insurance liability carrier. Lindheim called the Ghost Ship lawsuit a “unique situation” with “unique liability.”

“There was potentially enormous liability, millions of dollars for each of the people who were killed,” said Lindheim, who is also an attorney and faculty director of the Center on Civility & Democratic Engagement at the UC Berkeley Goldman School of Public Policy.

But the $13.4 million of legal expenses, “strikes me as a lot of money,” he said. “Hopefully somebody else paid for it, other than the city.”