Off the hook, on Katrina case

Pierce O’Donnell wants you to know he’s back in business.

“I’ve always been larger than life,” he told me the other day in his downtown Los Angeles law office. “But I’ve been quiet for a couple of years, on the advice of my attorneys.”

That would mean the attorneys who defended O’Donnell, 62, one of Southern California’s most prominent business litigators, on charges of violating federal campaign law. The three-count indictment filed last summer alleged that he illegally funneled $26,000 to John Edwards’ 2004 presidential campaign by reimbursing employees and other people for contributions they had made in their own names.

Two of the counts were dismissed by a Los Angeles federal judge in early June, on grounds that the election law prosecutors cited doesn’t actually prohibit what O’Donnell did. The third was dropped by mutual agreement June 29.

In O’Donnell’s view, that means “I have my life back.”

Followers in the Los Angeles legal community may well have wondered where he’s been. A burly man with a zealous style that surely serves him well in the courtroom, O’Donnell was a fixture on the academic lecture circuit and, for newspapers and TV producers, handy with a quote.

Over the last 15 years there has been scarcely an area of trial law on which he didn’t leave a mark.

Entertainment? There’s the landmark case Art Buchwald vs. Paramount Pictures, in which the humorist alleged that the Eddie Murphy vehicle “Coming to America” was based on a treatment he had submitted to the studio. The case was notable for Paramount’s claim that the movie, which cost $48 million to make and collected $145 million at the box office, showed no profit. Buchwald won $1 million, and O’Donnell exposed Hollywood accounting as the movies’ foremost fictional genre.

The environment? In 2005 O’Donnell won a settlement of more than $100 million from BP Arco for the South Coast Air Quality Management District over pollution at the company’s Torrance refinery. He calls the settlement, which he says was the largest in an air pollution case up to then, his “most satisfying” because it included money for “breathmobiles” -- rolling asthma clinics -- to treat underprivileged children.

The California energy crisis? O’Donnell was lead trial attorney in the case pitting 13 million utility customers against Sempra Energy, the owner of San Diego Electric & Gas Co. and Southern California Gas Co. The case, which alleged that Sempra had manipulated natural gas supplies and prices during the 2000-01 crisis, was settled for $1.8 billion, including $375 million in cash -- of which more than $160 million went to attorneys’ fees.

O’Donnell also played on the corporate side of the fence. He helped Firestone Tire & Rubber and Lockheed Martin Corp. fend off plaintiffs suing over alleged toxic exposure, and Pfizer Inc. fight consumer safety cases involving such products as heart valves and the diabetes drug Rezulin.

His blockbuster case of the moment stems from Hurricane Katrina, a lawsuit that could lead to billions in government settlements to tens of thousands of victims of the 2005 disaster in New Orleans and make landmark law on federal liability in natural disasters.

The case links the damage in some of the city’s worst-hit neighborhoods to the improper design and construction of a ship channel by the U.S. Army Corps of Engineers in the 1960s. What allowed this one case to escape the fate of numerous other lawsuits against the federal government, which were dismissed in accordance with a federal law giving the feds legal immunity when its flood-control projects fail, is that the ship channel isn’t a flood project but a navigation structure.

A federal judge in New Orleans heard the case in April, legal briefs are due next month, and a ruling will come within a few months after that.

The Katrina case helped lend high drama to O’Donnell’s 2007 campaign finance indictment. Some of his fellow attorneys called it politically motivated -- designed to throw him off his game after the New Orleans case began to make notable progress. (O’Donnell never made that claim explicitly.)

As it happened, that was the second time O’Donnell had been nabbed for a similar offense. In 2006 he was charged with reimbursing employees and associates for donations they made to the 2001 mayoral campaign of former Los Angeles Mayor James K. Hahn. O’Donnell paid more than $300,000 in fines to state and city authorities and pleaded no contest to five misdemeanor counts in connection with that case.

The federal case, which involved felony charges, was much more serious because a conviction would have meant disbarment.

O’Donnell doesn’t deny that he made the reimbursements cited in the indictment; he maintains that they weren’t violations of the law under which he was charged. (Election law experts say Congress should promptly repair that loophole because the law plainly frowns in spirit on indirect donations that circumvent individual contribution limits.)

“Certainly I wouldn’t do it again,” O’Donnell said. “I take full responsibility. I was haunted for three years by what I did. I was mortified. I turned down cases because I wasn’t sure I’d still be a lawyer when it was over.”

Federal prosecutors, incidentally, don’t agree that the case is finished. They’ve appealed the dismissal of the first two counts to the U.S. 9th Circuit Court of Appeals, which won’t render a decision for months. But O’Donnell and his lawyer, George Terwilliger III, are treating the dismissal as a done deal with the self-confidence that almost makes you think they know something the prosecutors don’t. Possibly they assume the liberal appeals court will uphold the dismissal or that the Democratic Justice Department in Washington will pull the plug before the appellate panel speaks.

O’Donnell says he has discovered, thanks to a medical exam mandated by a State Bar disciplinary body, that he had a bipolar personality -- in laymen’s terms, a manic-depressive. (I’d bet that many acquaintances of the irrepressible O’Donnell will wonder where the depressive episodes were hiding themselves.) He says he’s been successfully treated for the condition, in which, he points out, “you need constant highs -- what my profession gives me.” Nevertheless, he seems to thrive on activity -- including commuting weekly to Los Angeles from the Santa Barbara home he shares with his wife, Dawn, also a lawyer, and three children, all under the age of 15. He also has two adult children from a previous marriage.

O’Donnell says he’s now making a “profound shift” in his practice, moving from hourly fee (that is, corporate) litigation to contingency cases -- that is, public interest cases. He paints this as a sort of risk-taking in itself, because plaintiffs’ trial lawyers often have to invest millions of dollars in their cases without knowing whether a payoff lies ahead. It’s also something of a return to his roots in the 1970s and ‘80s, when he served as a law clerk to U.S. Supreme Court Justice Byron R. White, worked as one of “Nader’s Raiders” in Washington and ran a quixotic campaign for Congress as a Democrat in a heavily Republican San Gabriel Valley district.

“As a business proposition, this is a crapshoot,” O’Donnell says of the Katrina lawsuit. But he says, having built a lucrative law practice from years of defending Fortune 500 companies, he’s now motivated by the chance to act where prosecutors and regulators won’t.

On the other hand, he allows that if a big corporation called and asked him to represent them, “I probably would -- I’m a trial lawyer.”

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Michael Hiltzik’s column appears Mondays and Thursdays. Reach him at michael.hiltzik@latimes.com.