No Happy Ending

The trouble started on November 24th, 1999, when Chanti Prattipati, 17, and her younger sister Lalitha, 15, were found unconscious in a Berkeley apartment owned by Lakireddy Bali Reddy, a wealthy East Bay realtor and owner of the restaurant Pasand on Shattuck Avenue in Berkeley. Reddy was caught trying to stuff the two unconcious bodies and the woman who found them into the back of a van. Lalitha managed to survive the ordeal; Chanti was pronounced dead of carbon monoxide poisoning.

In a feat of 'citizen journalism,' it was two students at Berkeley High who first started questioning the relationship between Reddy and the Prattipatis (who were castless Dalits from Reddy's home village of Velvadam in southern India). While Reddy was never convicted of Chanti's death, he was indicted on federal charges stemming from immigration fraud and trafficking in minors for sex. In 2001, he plead guilty to smuggling teenage girls for sex and labor as part of a plea bargain with the Assistant U.S. Prosecuting attorney, who recommended that he receive no more than 6 1/2 years in prison and pay $2 million in restitution (though his land holdings in Berkeley were estimated at over $80 million). Other members of the Reddy family also copped pleas, and were handed much lighter sentences.

Concurrently, civil suits accusing Reddy of 'wrongful death' were filed on behalf of the Prattipatis by the firm of Altshuler, Berzon, Nussbaum, Rubin & Demain -- who, based on the case history published on their website, seem to be champions of the little guy against the big guys that would exploit them. Michael Rubin was the original counsel on the case, but as the case dragged on, requested help from the John Flynn of Latham & Watkins -- who, based on the description published on their website, seem to be champions of the big guy against the little guys who would prefer not to be exploited. Odd couple, no?

The original fee agreement drafted by Altshuler and signed by the Prattipatis stated that the firm would receive one third of any settlement, 40% if the matter went to trial, and 45% if it progressed to appeal. But when they teamed with Latham, the two firms signed their own mutual fee arrangement before presenting Latham's fee agreement to the Prattipatis (who did not speak English and lacked basic education). There was a striking difference between the otherwise identical fee agreements that Altshuler and Latham originally presented, though -- Latham's fee agreement calls for any disputes to be arbitrated by a panel of three retired judges -- a pricey proposition, and doubly costly to the Prattipatis who would have to fight two, separate, legal battles to dispute the agreement, one in court against Altshuler and one out of court against Latham.

During settlement negotiations, the Prattipatis purportedly urged their counsel to settle as soon as possible. Apparently, the counsel for the defense approached the plaintiff's counsel several times with settlement terms, and were rebuffed. When the Prattipati's asked if any offers had been made, they were reportedly told by their attorneys that the offers were 'very small' and 'not enough.' When they were finally told of an offer to settle at $7.5 million, the Prattipatis say that they instructed their counsel to accept the offer, as they didn't want the case to go to trial.

Further shenanigans are described in detail in a case that has been brought on behalf of the Prattipatis by legal malpractice specialist William Gwire. The complaint [um, some weird scanned document format we'd never heard of, but worked in Quicktime], listed as CGC-05-441105 in San Francisco Superior Court, alleges that Altshuler and Latham manipulated their clients by isolating and misinforming them so that they could get the highest settlement offer possible ($8.9 million) and then claim the higher 40% fee for it having been brought to trial -- in this case, the case was settled shortly after the jury had been empaneled, but before any opening statements had been given.

Based on the settlement, the two firms were due $3.9 million to be split according to their mutual fee agreement (SFist noted that the hourly rates for the Latham attorneys and support staff were considerably higher than those for Altshuler). The Prattipatis, then, would be due $5 million. As Michael Rubin told the press, "They have enough money to be financially comfortable for the rest of their lives...They can now afford the best doctors and the best therapy available."

Except at least $1 million was locked up in escrow because the Prattipatis disputed some of the expenses of the case, with independent counsel arguing that the firms tried to further bolster the potential for settlement largesse with an ill-advised, and ultimately failed attempt to bring the suit as a class action. Also at the crux of the story is Althuser and Latham's contention that the final changes to the fee arrangment were authorized by the Prattipatis with oral consent. As Gwire points out in the complaint:

Attorneys are, and at all times were aware that oral modifications of written fee agreements are invalid and unenforceable, for amonth [sic] other reasons, Business and Professions Code 6147 (requiring all contingency fee agreements to be in writing, signed by Attorneys and clients).

What the Prattipatis experienced in losing their daughter to the hands of an admitted rapist who snuck impoverished immigrants into the country using H1-B visas and forged marriage licenses could never be assuaged with any amount of money. And to take up their cause fight for all they are entitled to is certainly a noble ideal. Maybe it's William Gwire who is trying to milk the system, as he surely stands to benefit from winning the malpractice suit (we've got the "settlement" square picked in the SFist office pool). It could even be the Prattipatis for all we know, but we're guessing somewhere in this story, a greedy lawyer has taken a case that they knew they couldn't lose and milked it for all it was worth to themselves, without regard to the wishes of their client.

All the while, Lakireddy Bali Reddy is due to be released from the minimum-security facility in Lompoc in 2007, to be reunited with his sons and his wealth.

Background sources include the site of Diana Russell, rediff.com, and Wikipedia.