On Thursday, August 22 the New Orleans City Council voted to pay tens of millions owed to plaintiffs whose decades-old judgments against the city have never been collected. Among the types of cases lining up for payments include disputes over city contracts, accidents involving police vehicles, and wrongful death judgments. The estimated amount of funds needed to wipe out all the city’s unpaid judgments exceeds $30 million, according to a staff report provided to Councilmember Joe Giarrusso who was the lead author of the new ordinance.
The plaintiffs will only receive the principal amount due without any accumulated interest. The oldest debts – going back to the 1990’s – will be paid first. Judgments won after January 1, 2006, will be paid off by 2027.
Where will the money come from to pay the millions in debts? Giarrusso says he plans to use general fund dollars. During the last few years, New Orleans has been blessed with significant one-time funds from the federal government for relief from the pandemic. Using those dollars for debt relief might limit the ability of other city departments to apply for additional funding for pothole repair, catch basin cleaning, blighted property removal, or even preschool for disadvantaged children.
There’s a stash of approximately $35 million from Uber Technologies that the City of New Orleans could tap into if Mayor LaToya Cantrell gave the green light. In 2018 while Uber was in its early years of operation in New Orleans, more than 100 of their drivers – hired through Uber’s subsidiary Raiser LLC – received tens of thousands of citations for various city code violations including a lack of driver background checks and vehicle inspections. More than 150 Uber-sanctioned vehicles in Orleans Parish had invalid or fraudulent brake tags. Uber later received 73,300 citations for drivers who had not undergone the mandated background checks.
Uber retained Sher Garner, the preferred law firm of the Cantrell and previous administrations, to mitigate the fines. According to Wesley Pfeiffer, the former supervisor over the Ground Transportation Bureau, several negotiating sessions with Cantrell’s designated representatives were held. Sher Garner eventually offered $250,000 to settle all the claims. Yet the Cantrell Administration never approved the settlement or moved forward to collect the fines. Almost five years have passed since the settlement offer.
Taxicab drivers have long argued that when Uber set its sights on New Orleans, the city created a two-tier system of fees and standards that tightened the reins on the taxicab industry while giving a wide berth to the ride-sharing industry. New laws passed by the City Council limited the age of taxi vehicles and required cab owners and operators to install security cameras, GPS devices, and credit card machines. Many taxicab owners and operators found their investments then worthless and left the industry. The Council also required that Uber conduct driver background checks and verify inspections on all vehicles. Requirements for eligibility also included having a Louisiana driver’s license and a Louisiana licensed vehicle with an up-to-date inspection sticker.
More than five years ago, a lawsuit was filed by a group of taxicab owners alleging that the city violated Louisiana’s Unfair Trade Practices Act. It has been winding its way through Civil District Court under Judge Ellen Hazeur.
Sher Garner continues to work for Uber while also providing various legal services for the Cantrell administration. Lawyers for the taxicab industry filed a motion in Civil District Court to disqualify the firm from the case due to a conflict of interest. Sher Garner attorney James Garner argued that the city provided him a letter waiving any potential conflict. Garner never produced the letter arguing it was sealed under attorney-client privilege. Judge Hazeur concurred. Sher Garner’s work on behalf of Uber continues.
Apparently, Uber is used to paying multi-million dollar fines for their missteps. In three cases settled in New York, Chicago and with the U.S. Justice Department, Uber forked over more than $300 million. Last year in Australia, Uber agreed to pay $271 million to settle a class action lawsuit won on behalf of more than 8,000 taxi and hire car owners. Recently New York Attorney General Letitia James settled a $328 million wage theft settlement against Uber and Lyft that will benefit 80,000 drivers. The $35 million case in New Orleans is small change in comparison.
Councilmember Giarrusso – who also chairs the city council’s budget committee – is aware of the potential $35 million due from Uber. In an interview with The Advocate almost six months ago, Giarrusso said he hoped to discuss the Uber violations with fellow councilmembers during an upcoming executive session. It appears that conversation never took place.
Giarrusso further indicated to The Advocate that he inquired with the Cantrell Administration regarding the fines and the city’s ability to recover them but never got a response. The Advocate also posed questions about the Uber fines to the mayor’s office and received no answers. Because of the City Council’s decision to begin paying more than $30 million in old judgments, attorneys for the cab industry are again requesting that Giarrusso get to the bottom of the issue.
Why would Cantrell want to sweep Uber’s fines under the rug? Court deposition testimony in the taxicab lawsuit by a former city official implied that both Cantrell and CAO Gilbert Montano were informed of the Uber debt and did not act upon it. Why would the City of New Orleans seek a restraining order prohibiting Cantrell’s chief of staff Clifton Davis and Montano from being deposed in the lawsuit? Members of the Sher Garner law firm are frequent contributors to political campaigns. Has the weight of their donations silenced Cantrell and her staff or is one hand washing the other?
