County of Santa Clara v. SUPERIOR COURT OF SANTA CLARA CNTY.

235 P.3d 21, 50 Cal. 4th 35, 112 Cal. Rptr. 3d 697, 2010 Cal. LEXIS 7241
CourtCalifornia Supreme Court
DecidedJuly 26, 2010
DocketS163681
StatusPublished
Cited by39 cases

This text of 235 P.3d 21 (County of Santa Clara v. SUPERIOR COURT OF SANTA CLARA CNTY.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
County of Santa Clara v. SUPERIOR COURT OF SANTA CLARA CNTY., 235 P.3d 21, 50 Cal. 4th 35, 112 Cal. Rptr. 3d 697, 2010 Cal. LEXIS 7241 (Cal. 2010).

Opinions

Opinion

GEORGE, C. J.

A group of public entities composed of various California counties and cities (collectively referred to as the public entities) are prosecuting a public-nuisance action against numerous businesses that manufactured lead paint (collectively referred to as defendants). The public entities are represented both by their own government attorneys and by several private law firms. The private law firms are retained by the public entities on a contingent-fee basis. After summary judgment was granted in favor of defendants on various tort causes of action initially advanced by the public entities, the complaint eventually was amended to leave the public-nuisance action as the sole claim, and abatement as the sole remedy.

Defendants moved to bar the public entities from compensating their privately retained counsel by means of contingent fees. The superior court, relying upon this court’s decision in People ex rel. Clancy v. Superior Court (1985) 39 Cal.3d 740 [218 Cal.Rptr. 24, 705 P.2d 347] (Clancy), ordered the public entities barred from compensating their private counsel by means of any contingent-fee agreement, reasoning that under Clancy, all attorneys prosecuting public-nuisance actions must be “absolutely neutral.” The superior court concluded that Clancy therefore precluded any arrangement in which private counsel has a financial stake in the outcome of a case brought on behalf of the public. On petition of the public entities seeking a writ of mandate, the Court of Appeal held that Clancy does not bar all contingent-fee agreements with private counsel in public-nuisance-abatement actions, but only those in which private attorneys appear in place of, rather than with and under the supervision of, government attorneys.

We must decide whether the Court of Appeal correctly construed our opinion in Clancy, or if that case instead broadly prohibits all contingent-fee agreements between public entities and private counsel in any public-nuisance action prosecuted on behalf of the public. Clancy arguably supports 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. As set forth below, however, a reexamination of our opinion in Clancy suggests that our decision in [44]*44that case should be narrowed, in recognition of both (1) the wide array of public-nuisance actions (and the corresponding diversity in the types of interests implicated by various prosecutions), and (2) the different means by which prosecutorial duties may be delegated to private attorneys without compromising either the integrity of the prosecution or the public’s faith in the judicial process.

I

The procedural history of this case is not in dispute. The public entities’ claims against defendants originally included causes of action for fraud, strict liability, negligence, unfair business practices, and public nuisance.1 (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 300 [40 Cal.Rptr.3d 313] (Santa Clara).) The superior court granted defendants’ motion for summary judgment on all causes of action. The Court of Appeal reversed the superior court’s judgment of dismissal and ordered the lower court to reinstate the public-nuisance, negligence, strict liability, and fraud causes of action. (Id. at p. 333.) Thereafter, the public entities filed a fourth amended complaint that alleged a single cause of action, for public nuisance, and sought only abatement. Throughout this litigation, the public entities have been represented both by their government counsel and by private counsel.

Upon remand following Santa Clara, supra, 137 Cal.App.4th 292, defendants filed a “motion to bar payment of contingent fees to private attorneys,” asserting that “the government cannot retain a private attorney on a contingent fee basis to litigate a public nuisance claim.” Defendants sought “an order that precludes plaintiffs from retaining outside counsel under any agreement in which payment of fees and costs is contingent on the outcome of the litigation.”

Defendants attached to their motion a number of fee agreements between the public entities and their private counsel, and the public entities filed opposition to which they attached their fee agreements and declarations of their government attorneys and private counsel. The fee agreements and declarations disclose that the public entities and private counsel agreed that, [45]*45other than $150,000 that would be forwarded by Santa Clara to cover initial costs, private counsel would incur all further costs and would not receive any legal fees unless the action were successful. If the action succeeded, private counsel would be entitled to recover any unreimbursed costs from the “recovery” and a fee of 17 percent of the “net recovery.”

Some of the contingent-fee agreements in the present case specify the respective authority of both private counsel and public counsel to control the conduct of the pending litigation. The fee agreements between private counsel and San Francisco, Santa Clara, Alameda, Monterey, and San Diego explicitly provide that the public entities’ government counsel “retain final authority over all aspects of the Litigation.”2 Private counsel for those five public entities submitted declarations confirming that their clients’ government counsel retain “complete control” over the litigation.3 The two remaining fee agreements contained in the record—those involving Solano and Oakland—purport to grant private counsel “absolute discretion in the decision of who to sue and who not to sue, if anyone, and what theories to plead and what evidence to present.” During proceedings in the trial court, Oakland disclaimed this fee agreement and asserted that its government counsel had retained “complete control” of the litigation and intended to revise the agreement to reflect this circumstance.4 Solano’s private counsel asserts that its public counsel have “maintained and continue to maintain complete control over all aspects of the litigation” and “all decision making authority [46]*46and responsibility.” The record before us does not contain the fee agreements between the three other public-entity petitioners and their respective private counsel.5

The various fee agreements provide different definitions of “recovery.” Some of the agreements define the term “recovery” as “moneys other than civil penalties,” whereas others define this term as the “amount recovered, by way of judgment, settlement, or other resolution.” Some of the agreements include the phrase “both monetary and non-monetary” in their definitions of “recovery.” The San Diego agreement defines “net recovery” as “the payment of money, stock, and/or ... the value of the abatement remedy after the deduction of the costs paid or to be paid.” The Santa Clara fee agreement provides that, “[i]n the event that the Litigation is resolved by settlement under terms involving the provision of goods, services or any other ‘in-kind’ payment, the Santa Clara County Counsel agrees to seek, as part of any such settlement, a mutually agreeable monetary settlement of attorneys’ fees and expenses.”

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Cite This Page — Counsel Stack

Bluebook (online)
235 P.3d 21, 50 Cal. 4th 35, 112 Cal. Rptr. 3d 697, 2010 Cal. LEXIS 7241, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-santa-clara-v-superior-court-of-santa-clara-cnty-cal-2010.