Reed once worked for the Los Angeles-based firm, which has nearly 1,000 attorneys globally and earned $11 million from Atlanta government for a range of cases since 2010.
Perry’s suit said the allegations against him and others were “provably false” and malicious.
In a statement, Paul Hastings spokesperson Arielle Lapiano said the firm was disappointed the suit was filed.
"We are confident that the court will find that there was substantial justification for the suit against Egbert Perry and Integral Development, that we acted in good faith and that the plaintiffs’ suit has no merit," Lapiano said.
A spokesperson for the City of Atlanta declined to comment. Neither Reed nor Perry's attorney responded to phone calls seeking comment.
The city's lawsuit against Perry, Integral Development, former Atlanta Housing Authority CEO Renee Glover and others was dismissed last year after attorneys said the city's affordable housing goals would best be advanced without continuing the litigation.
The city claimed that Perry and Glover entered into a back room real estate deal that gave away a large portion of housing authority land at a steep discount. The pair have said the city misrepresented the terms of the deal.
Glover has also sued to recoup her legal fees.
In addition to this litigation, Whitner and the Paul Hastings law firm have been pulled in to an ongoing federal corruption investigation at Atlanta's City Hall. Earlier this year, the U.S. Attorney's Office sought records related to work former city attorney Cathy Hampton performed for the firm on matters where the firm billed the city.