Los Angeles is facing a staggering rise in legal liability payouts, with the annual costs surging from $64 million a decade ago to $289 million this fiscal year.
This increase encompasses various claims, including police misconduct, trip and fall accidents, and infrastructure issues.
The reasons behind this financial spike are complex, ranging from aging infrastructure to shifting legal strategies in the city’s attorney’s office, and an overall rise in the number of lawsuits filed against the city.
Over the past five years, the largest share of payouts originated from lawsuits concerning ‘dangerous conditions’ related to city infrastructure, such as malfunctioning elevators, accounting for 32% of total payouts.
Civil rights violations and unlawful uses of force made up 18%, while traffic collisions involving city vehicles also accounted for another 18%.
This ballooning of legal costs has contributed significantly to the city’s nearly $1 billion budget shortfall for the fiscal year 2025-26, prompting layoffs and other spending cuts.
The office of City Attorney Hydee Feldstein Soto, who has been in office since December 2022, is tasked with defending against these lawsuits.
In recent public statements, Feldstein Soto attributed the increase in legal costs in part to a backlog of cases that developed during the COVID-19 pandemic.
During that time, court proceedings were largely stalled, resulting in many cases being settled or reaching trial only in recent years.
Feldstein Soto also noted that structured settlements negotiated by her predecessor, Mike Feuer, have added to the city’s financial liabilities; these settlements are paid out over time rather than as a lump sum.
She believes that juries are becoming increasingly adversarial toward city governments, leading to larger verdicts.
Feuer, who served before Feldstein Soto, suggested that structured settlements were already in use prior to his tenure and did not believe he significantly increased their adoption.
To explain the notable rise in payouts during his time, from about $40 million in 2013 to $91 million in 2022, he pointed to the insufficient investment in city infrastructure that stemmed from the financial crisis of 2008.
Feldstein Soto has publicly indicated that some lawsuit claims are rooted in questionable behavior by the plaintiffs themselves.
In remarks at a local homeowners association meeting, she suggested that specific types of lawsuits, particularly those concerning ‘dangerous conditions’ and employee working conditions, are often exploited by individuals seeking compensation over personal grievances.
Citing a particular case, Feldstein Soto mentioned LAPD Captain Stacey Vince, who was awarded $10.1 million after alleging retaliation from supervisors.
The city later settled the case for nearly $6 million.
Feldstein Soto also chastised an individual who sued the city after crashing his electric scooter into a tree due to an uneven sidewalk, describing him as an ‘idiot.’
She emphasized that ultimately it is taxpayers who bear the financial burden of these lawsuit payouts.
“Every dollar you award is your money,” she stated.
Since the pandemic, the number of lawsuits filed against the city has risen steadily each year, climbing from 1,131 in 2021 to an expected 1,560 in 2024.
Simultaneously, the average payout per case has escalated sharply, rising from under $50,000 in 2022 to $132,180 in 2024.
A notable factor in this trend is the increase in settlements or jury awards exceeding $1 million, with 17 such cases occurring in 2022 and 39 in 2024.
During the period from July 2024 to March 2025, the city disbursed over $1 million in 51 lawsuits.
Payouts for police misconduct cases rose dramatically from $15 million in 2020 to $50 million in 2024, while claims regarding dangerous conditions saw an increase from around $41 million to approximately $84 million in the same timeframe.
One significant case earlier this year involved the city paying $21 million to plaintiffs in lawsuits tied to a disastrous LAPD fireworks detonation, which resulted in injuries to over 20 individuals and disrupted the lives of many residents.
Another case this year led to a $17.7 million verdict awarded to the family of a man with mental health issues, who was fatally shot by an off-duty LAPD officer.
Looking ahead, the city has adjusted its allocation for liability payouts from around $87 million to $187 million for the coming fiscal year.
However, this amount still falls short of the actual costs incurred in recent years.
City Councilmember Eunisses Hernandez, who leads the council’s public works committee, pointed out that the climbing legal payouts reflect a long-term neglect of infrastructure investment.
Hernandez noted that last year, the city allocated approximately 10% of its overall budget to street maintenance and public works—significantly less than the funds directed toward policing.
“As a city, we don’t invest in maintenance,” she stated.
She described her frustrations about the prevailing issues with infrastructure maintenance that have contributed to the rising legal claims.
In one lawsuit resolved this year, the city agreed to pay $3 million to an individual who experienced a traumatic brain injury after tripping over uneven pavement.
Last April, a $21 million settlement was reached with a man whose skull was fractured by a falling street lamp part.
The case initially went to trial, resulting in a jury verdict of $22 million, but the parties ultimately settled for a lesser amount.
Arash Zabetian, the attorney representing the man injured by the streetlight, argued that the increase in payouts stems from prolonged delays and maintenance neglect within the city.
In response to rising liability costs, several plaintiffs’ attorneys are concerned that Feldstein Soto’s legal strategies are exacerbating the situation.
They argue that her office has increasingly taken cases to trial instead of negotiating settlements, resulting in higher verdicts overall.
Matthew McNicholas, a lawyer with experience suing the city on behalf of police officers, reported winning all five of his recent cases that went to trial, leading to a combined payout of over $40 million.
He noted that he would have accepted a total settlement of less than $10 million for all five cases, indicating that the city’s litigation strategy is inadvertently inflating costs.
One case came to a $13 million verdict after two officers were accused of drawing inappropriate imagery on a suspect’s abdomen.
In another instance, a whistleblower alleged retaliation for raising concerns about the LAPD Bomb Detection K-9 Section, which also resulted in a $13 million jury award.
Expressing frustration, McNicholas pointed out that instead of addressing the issues proactively, Feldstein Soto places blame on attorneys and jurors.
Greg Smith, another attorney who frequently litigates against the city, echoed this sentiment, remarking that the current administration exhibits a more aggressive approach, making settlements more difficult to achieve.
Feldstein Soto, however, maintains that her office strives to settle every feasible case and emphasized that taking a case to trial is not beneficial for anyone involved.
“It’s a waste of resources,” she remarked.
Nonetheless, she clarified that settlements will not occur if her office believes the city is not liable or if the claims made are unreasonable.
To help mitigate the financial burden, Feldstein Soto is advocating for legislative changes in Sacramento, proposing a bill to cap lawsuits against California cities at $1 million or three times the economic losses incurred, whichever amount is greater.
According to her office, caps on damages already exist in 38 states, and she has yet to secure a legislative sponsor to champion this bill.
image source from：latimes
