Tuesday, July 27, 2010
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S.C.: Cities Can Hire Private Counsel in Nuisance Actions
By STEVEN M. ELLIS, Staff Writer
A public entity may retain private counsel to prosecute a public nuisance abatement action under a contingent fee agreement, the California Supreme Court ruled yesterday.
The justices held that a 1985 decision to the contrary should be narrowed to recognize the wide array of public nuisance actions and the diversity in types of interests implicated. They also cited the means in which prosecutorial duties may be delegated to private attorneys without compromising the integrity of the prosecution or the public’s faith in the judicial process.
Los Angeles County and the City of Los Angeles, in connection with a number of other California counties and cities, are prosecuting a public-nuisance action against numerous businesses that manufactured lead paint, including the Atlantic Richfield Company.
The company objected to the entities’ use of private law firms in addition to government attorneys, and sought to bar the entities from compensating privately-retained counsel through contingent fees.
Santa Clara Superior Court Judge Jack Komar, relying on the California Supreme Court’s decision in People ex rel. Clancy v. Superior Court 39 Cal.3d 740, granted the request, reasoning that Clancy requires all attorneys prosecuting public-nuisance actions to be “absolutely neutral.”
In Clancy, the City of Corona hired private attorney James Clancy on contingency to bring nuisance abatement actions against an adult bookstore following several attempts to shut the establishment down.
The bookstore contended that it was improper for Clancy to have a financial stake in the outcome of a public nuisance abatement action, arguing that an attorney prosecuting the case must be neutral, like an attorney prosecuting a criminal case. The Supreme Court generally agreed, finding the arrangement between Corona and Clancy “inappropriate under the circumstances.”
Komar concluded that the Clancy decision precluded any arrangement in which private counsel has a financial stake in the outcome of a case brought on behalf of the public.
The Sixth District Court of Appeal, however, held that Clancy does not bar all contingent-fee agreements with private counsel in public-nuisance abatement actions. Instead, Justice Nathan D. Mihara wrote, it precludes only those in which private attorneys appear in place of, rather than with and under the supervision of, government attorneys.
On review, Chief Justice Ronald George wrote that Clancy arguably supported the defendants’ position favoring a bright-line rule barring any attorney with a financial interest in the outcome of a case from representing the interests of the public in a public-nuisance abatement action.
But he said that a reexamination of the opinion suggested that it should be narrowed because neither a liberty interest nor the right of an existing business to continue operating—lead paint was banned in 1978—was threatened. George also observed that the role played by government and private attorneys differed significantly from that played by Clancy in the other case.
George wrote that private attorneys who prosecute public-nuisance abatement actions “although not subject to the same stringent conflict-of-interest rules governing the conduct of criminal prosecutors or adjudicators, are subject to a heightened standard of ethical conduct applicable to public officials acting in the name of the public.”
Adopting a test set forth by the Rhode Island Supreme Court, he said that “contingent-fee agreements between public entities and private counsel must provide: (1) that the public-entity attorneys will retain complete control over the course and conduct of the case; (2) that government attorneys retain a veto power over any decisions made by outside counsel; and (3) that a government attorney with supervisory authority must be personally involved in overseeing the litigation.”
George then remanded the matter so that public entities that wished to go forward assisted by private counsel on a contingent-fee basis could revise their respective retention agreements.
Justices Joyce L. Kennard, Ming W. Chin and Carlos R. Moreno, and Court of Appeal Justice James A. Richman of the First District’s Div. Two, sitting by assignment, joined George in his opinion.
Justice Kathryn Mickle Werdegar concurred separately, joined by Court of Appeal Justice Maria P. Rivera of the First District’s Div. Four, also sitting by assignment.
The case is County of Santa Clara v. Superior Court (Atlantic Richfield Company), 10 S.O.S. 4219.
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