City Hall Transparency? Not When It’s Paying Lawyers

Since January, Santa Clara has paid $1.4 million to outside law firms. But City Hall doesn’t want Santa Clara residents to know to whom it paid the money.

This year Santa Clara starting redacting the names of law firms on the City’s and Stadium Authority’s Bills and Claims reports, although there has been no public discussion of it. Previously, lawyers were treated like any other City vendors, with their names shown on the Bills and Claims, but without any more specific information than the descriptor “legal services.”

Santa Clara City Attorney Brian Doyle maintains that almost anything having to do with spending on legal services is protected by attorney-client privilege, and as such, is exempt from the requirements of California’s Public Records Act.

Had the new policy been in place before this year, residents would never know that Santa Clara paid $1.5 million in legal fees to fight the voting rights lawsuit it ultimately lost — twice — to an attorney, Steve Churchwell, with no voting rights litigation experience. The Weekly reported Churchwell’s cumulative fees over the four years they were incurred.

In 2017, Doyle persuaded the Council that legal contracts and bills “should not be revealed to the public.”

This view is based on a 2017 California Supreme Court ruling — LA County Board of Supervisors v Superior Court — that details of law firm invoices in active litigation were covered by attorney-client privilege.

“Certain information such as names of law firms and recipients of workers’ compensation have been redacted from the Bills and Claims report,” the City said in a statement. “In accordance with the Supreme Court’s ruling, the names of law firms retained by the City have been redacted from the public report to maintain confidentiality of billing records for legal services.”

However, it’s not clear that the Justices’ intentions were as expansive as Doyle’s interpretation.

“The imperative of protecting privileged communications between attorney and client,” wrote Judge Mariano-Florentine Cuellar, “does not require us to conclude…that everything in a public agency‘s invoices for legal services is categorically privileged.”

“Though the PRA carves out an exemption for privileged portions of government records,” wrote Cuellar, quoting another case. “'[t]he fact that parts of a requested document fall within the terms of an exemption does not justify withholding the entire document.'”

Others read the Supreme Court’s exemption more narrowly. One of them is noted Bay Area litigator James McManis, who won a precedent-setting public records case in 2017 establishing that government business conducted on personal devices is a public record.

McManis dismisses Santa Clara’s reading of the LA County decision. “It’s a matter of public interest what an agency is spending on legal bills,” he said. “Certain details can be withheld, but dates, amounts, totals, lawyers’ names, law firms should be disclosed.”

 

Accounting for Outside Legal Spending

Most of Santa Clara’s spending for outside legal services isn’t litigation.

Almost half of Santa Clara’s legal spending is by City utilities and its housing agency. Currently, these account for nearly half of all spending on outside legal services ($501,000) because of the many regulatory and governmental issues involved.

Some development-related legal expenses are paid for from developer contributions for that specific purpose ($433,000). Settlements and some other legal services are paid from the general fund ($243,000). Finally, the Santa Clara Stadium Authority’s legal bills ($221,000) don’t appear on the City’s Bills and Claims, but are reported separately on the Stadium Authority reports.

The remainder of the City’s outside legal spending ($221,000) is lumped together in the Special Liability Insurance Account, with insurance payments. The City doesn’t report the departments using these services, nor is there any indication of whether the payments are for advice, representation or litigation.

 

Comprehensive Transparency in Neighboring Cities

Santa Clara’s neighbors San José and Sunnyvale, in comparison, are considerably more transparent in their legal spending.

Sunnyvale combines all legal services spending under Comprehensive Legal Services in its budget, and divides that into three accounts: litigation and representation (25 percent), legal advice (54 percent) and services related to development (21 percent). [sunnyvale budget legal spending]

On its Bills and Claims reports, Sunnyvale treats law firms like any other City vendor, showing the company name and amount paid. [Sunnyvale bills and claims.jpg] The outside Council fees are charged to the department they support. [sunnyvale legal fee dept charges]

San José minimizes the use of outside counsel as a matter of policy, preferring to hire staff in the City Attorney’s office — feasible for a city of San José’s size. In its budget, San José breaks out legal representation and “transactions” and appropriates city attorney’s office funding for each department.

San José’s spending on outside attorneys is easily found on the city’s payment register, at San José’s open data portal (data.sanjoseca.gov/organization/finance).  [san jose attorney payment register]