HomeMy WebLinkAbout2008/09/23 Additional Information Item 11
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2] SO] C8bbasas Road
Suite 1015
CalLlbasas, CA 91302
8187040195
Fax 818.7044729
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Green, de Bor~nowsky & Dnintanilla, LLP
il.Uomeys at Law
35~325 Date Palm Drive
SUite 202
Cathedral City, CA 92234
7607700873
Fax 760.770.1724
\VVivv,gdqlaw.C0111
Direct E-m8il Address:
sq LI intan illa@gdqlaw.com
Reply to.
Cathedral City Ofcce
SUBJECT TO ATTORNEY/CLIENT PRIVILEGE
Exempt from Public Disclosure
Government Code Section 6254, subd. (k)
MEMORANDUM
To:
Bart Miesfeld, Interim City Attorney
City of Chula Vista
Steven B. Quintanilla, Special Counsel
July 3, 2008
Reimbursement of Attorneys Fees and Other Legal Costs
CHVA.0001
From:
Date:
Re:
Our File:
Backqround:
it is my understanding that City Council member Steve Castaneda was subpoenaed to
testify in an investigatory Grand Jury proceeding regarding his participation (as a
councilmember) in approving a tentative map and his potential future participation (as a
councilmember) in approving the subject final map. I further understand that as a result of
the Grand Jury investigation, Mr. Castaneda was indicted on multiple counts of perjury
("Subject Charges"), but in the end he was I\JOT convicted on any of the Subject Charges.
I also understand that all of the Subject Charges were disposed of as follows: (a) Mr.
Castaneda was acquitted by a jury of some of the Subject Charges: (b) some of the
Subject Charges were dismissed by motion; (c) the jury reach a deadlock on some of the
Subject Charges; and (d) the remaining Subject Charges were dismissed in the "interest of
justice" by the District Attorney.
In light of the above, Mr. Castaneda has submitted (via his legal counsel) a request for
reimbursement of his attorneys' fees and costs in an amount of approximately $200,000
Reimbursement of Attorneys' Fees and Other Legal Costs Page 1 of 4
which he claims he incurred in his defense of the Subject Charges. Mr. Castaneda submits
that he is entitled to reimbursement of his attorneys' fees and other legal costs pursuant to
California Government Code section 995.8 and Chula Vista City Council Policy 346-oi
Issue:
Is a councitmember entitled to reimbursement of attorneys' fees and other legal costs
incurred by the councilmember in the defense of criminal charges brought against the
councilmember by the District Attorney as a result of a grand jury investigation?
Brief Answer:
A councilmember is entitled to be reimbursed by the City of attorneys fees and other legal
costs incurred by the councilmember in the defense of criminal charges brought against the
council member by the District Attorney as a result of a grand jury investigation if:
(a) the criminal charges were related to the councilmember's responsibilities and/or
duties as a councilmember;
(b) the city council determines that the defense was in the best interest of the city;
and
(c) the councilmember did not act with malice against the interests of/he city.
Analysis:
Government Code Section 995.8
Pursuant to Government Code section 995.8, the City may provide for the defense of a
criminal action or proceeding brought against a councilmember if:
(a) The criminal action or proceeding is brought on account of an act or omission in
the scope of his or her office; and
(b) The city determines that such defense would be in the best interests of the
public entity and that the official acted, or failed to act, in good faith, without
actual malice and in the apparent interests of the public entity.
In this particular case, it appears that the above findings can be made to support
reimbursement2 of Mr. Castaneda's attorneys' fees and other legal costs based on the
facts as I understand them.
I Chula Vista City Council Policy 346-02 essentially tracks the same language as California Government Code
section 995.8.
2 When read in conjunction with the stated purpose of Chula Vista City Council Policy 346-02 which is to
provide for defense costs in criminal actions, It is clear that providing for the defense of an offiCial in a criminal
proceeding also includes the option of reimbursing the official for defense costs.
Reimbursement of Attorneys' Fees and Other Legal Costs Page 2 of 4
It is clear that that the crux of the Subject Charges were directly related to Mr. Castaneda's
responsibilities and duties as a councilmember with respect to approving a tentative map
and potentially reviewing and approving a final map. As I understand the situation, the
indictment supporting the Subject Charges indicated thatthe basis of the Subject Charges
pertained to possible financial conflicts of interests under the Political Reform Act3 and/or a
possible Government Code Section 10904 violation related to the following: (a) Mr.
Castaneda renting a unit in a residential complex called "Sun bow" after Mr. Castaneda
voted to approve a telltative map to subdivide Sunbow into condominiums and (b) whether
Mr. Castaneda received or intended to receive any special benefits (because of his status
as a public official) by renting the subject unit. In addition, I understand that another issue
germane to the Subject Charges was whether Mr. Castaneda intended to purchase one of
the Sunbow condominiums after the conversion (i.e., approval of the final map).
In light of the above, I sincerely believe that the Subject Charges were only brought on
account of an act or omission that was clearly within the scope of Mr. Castaneda's duties
as a councilmember, particularly since the Subject Charges would not have likely been
filed against Mr. Castaneda if he was NOT a councilmember. (Note: The above-referenced
conflict of interest regulations and Section 1090 law would not have applied to Mr.
Castaneda as a non-City official under the subject circumstances.)
In addition, I believe that the defense of the 'Subject Charges," albeit provided by Mr.
Castaneda himself rather than the City, was in the best interest of the City since there was
no proven evidence that Mr. Castaneda acted with any malice and it is clear that the
subject act was performed in the course of Mr. Castaneda's duties and responsibilities as a
councilmember. Providing reimbursement of attorneys' fees and other legal costs under
such conditions would be wholly consistent with the stated purpose of Chula Vista City
Council Policy 346-02 which is to provide for defense costs in criminal actions where the
City official has acted in good faith in the course of employment. In summary, it is my
recommendation that since there was no malice involved in light of the fact that Mr.
Castaneda was NOT convicted of any of the Subject Charges as more particularly
described above and since the act of approving the Sunbow tentative map (which was the
basis of the Subject Charges) is an act that falls within the scope of Mr. Castaneda's role
as a councilmember, the City Council should find that Mr. Castaneda's defense against the
Subject Charges was in the best interest of the City particularly since providing
reimbursement under such circumstances would be wholly consistent with the stated
purpose of City Council Policy 346-02.
~ The Political Reform Act prohibits a public official from making, pa11icipating in the making, or in any way attempting
to use his official position to influence a governmental decision ifhe or she know or has reason to Immv that he or she has
El tlnancial interest in that decisioll.
-4 Section 1090 provides that members of the legislature, state, county, district, judicial district and city officers or
employees shall not be financially interested in any contract made by them in theil- official capacity, or by any body or
board of \vhich they are members.
Reimbursement of Attorneys' Fees and Other Legal Costs Page 3 of 4
Finally, as discussed above, Government Code section 995.8 provides that reimbursement
is permitted if the City Council finds that the subject official acted, or failed to act, in good
faith, without actual malice and in the apparent interests of the public entity in addition to
finding that criminal action was brought on account of an act or omission in the scope of
the subject official's office and that the defense was in the best interests of the City. As
more fully discussed above, since Mr. Castaneda was not convicted of any of the Subject
Charges, this lends support to the conclusion that Mr. Castaneda did not act with any
malice that was adverse to the City's interests.
Recommendation:
1. That the City Council find, based on the facts presented by the City's legal counsel,
that: (a) the Subject Charges were filed against Mr. Castaneda on account of an act
or omission within the scope of his duties and responsibilities as a councilmember;
(b) the defense of the Subject Charges by Mr. Castaneda was in the best interests
of the City; and (c) that there is no proven evidence that Mr. Castaneda acted with
actual malice that was adverse to the City's interest.
2. That the City Council approve the requested reimbursement subject to: (a) the City
Attorney's review and approval of the submitted legal invoices; (b) a refund of all or
a portion of the fees and costs to the City upon a determination by a court of law in
any subsequent legal proceeding that Mr. Castaneda is guilty of any of the Subject
Charges; and (c) a refund of all or a portion of the fees and costs to the City in
proportion to any recovery of such fees or costs by Mr. Castaneda via insurance
coverage or any other source.
P:\APPS\WPDATA\CHVA\0001 General Matters\MEMO\002-1 Opinion Re Reimbursement of Attorneys Fees (07.13.08).doc
Reimbursement of Attorneys' Fees and Other Legal Costs
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CllY OF
CHULA VISfA
Confidential Attorney-Client Privileged
Communication
OFFICE OF THE CITY ATTORNEY
LITIGATION DEPARTMENT
DATE:
July 15, 2008
TO:
The Honorable Cheryl Cox, Mayor and
City Councilmembers
FROM:
Jill D.S. Maland, Deputy City Attorney
VIA:
Bart C. Miesfeld, Interim City Attorney
RE:
Councilmember Castaneda's Formal Request for Payment of Legal Fees
I. INTRODUCTION
The City Attorney's office recently received a written request from Marc Carlos, of the
law firm Bardsley & Carlos, for the payment of legal costs and fees incurred by Councilmember
Castaneda in connection with his defense in the criminal action entitled, People v. Steven
Castaneda, SDSC No. SCDl938451 Mr. Carlos represented Councilmember Castaneda in the
action. Mr. Carlos provided invoices in the amount of $194,314.90 for legal costs and fees
incurred in Councilmember Castaneda's defense and requested that the City pay for those costs
and fees. This memorandum is intended to provide the City Council with a summary of the
factual background that gave rise to this request and an analysis of the associated legal issues for
the Council's consideration in responding to the request.
II. FACTUAL BACKGROUND
Councilmember Castaneda took office as an elected member of the City Council in
December, 2004. In March 2005, the City Council approved a Tentative Map for a
condominium conversion project known as Sunbow Villas ("Sunbow"). Councilmember
Castaneda voted in favor of the Tentative Map. The Tentative Map provided for certain
relocation assistance for residents who rented an apartment at the project. In August 2005, after
approval of the Tentative Map, Councilmember Castaneda rented an apartment in the Sunbow
project. The Final Map for the Sunbow project was presented to the Council for approval on
1 A copy ofMr. Carlos' letter, dated May 5, 2008, is attached to this memorandum for your reference.
The Honorable Cheryl Cox. Mayor and
City Councilmembers
July 15, 2008
Page 2
March 14, 2006. The item was pulled from the agenda by our office because we were made
aware, on that day, that Mr. Castaneda was renting an apaliment at Sunbow. As a result, we
needed additional time to ensure there were no potential conflicts of interest under the Political
Reform Act or Government Code Section 1090.
The Political Reform Act (the "Act") prohibits a public official from making,
pmticipating in the making, or in allY way attempting to use his official position to influence a
governmental decision if he or she know or has reason to know that he or she has a financial
interest in that decision. Section 1090 provides that members of the legislature, state, county,
district, judicial district alld city officers or employees shall not be finallcially interested in any
contract made by them in their official capacity, or by any body or board of which they are
members. Accordingly, in light of Mr. Castaneda's rental interest, we reconmlended that he
abstain from voting on the Final Map.
Subsequently, Councilmember Castaneda was subpoenaed to testify in an investigatory
Grmd Jury proceeding brought by the Sm Diego County District Attorney's Office and its
Public Integrity Unit. The investigation involved issues related to Mr. Castaneda's role as a City
Councilmember, his approval of the tentative map and his potential future action on the final
map. The activities that Mr. Castmeda was questioned about during his Grmd Jury testimony
werc alleged to have happened while he was a sitting Citv Councilmember. According to the
indictment supporting the perjury charges filed against him, Mr. Castaneda testified that:
(i) when he rented the apartment at Sunbow, he was told he would not be eligible for allY
benefits or relocation fees; (ii) he did not plan to buy a condo at Sunbow md did not tell myone
he was pI arming to do so; (iii) he agreed to the fact that he would not receive a $1,000 benefit
from Sunbow and did not expect any benefit; and, (iv) he did not tell the Sunbow representative
that he was a City Councilmember. It is our understmding that Mr. Castaneda was questioned
about these matters because of his status as a functioning City official when he rented the
Sunbow apaliment. Specifically, we believe that the reason the District Attorney's Office
pursued this line of questioning with Mr. Castaneda was because, if he had accepted a benefit or
had intended to purchase a condominium at Sunbow, this may have created a financial interest in
the Sunbow project. If Mr. Castaneda voted on a project in which he had a financial interest, it
may have been a violation of the conflict of interest laws applicable to legislative body members.
The District Attorney apparently found no wrong doing by Mr. Castalleda in connection
with the underlying investigation and did not file allY charges against him in connection with that
matter. However, the District Attorney alleged that during the Grand Jury investigation Mr.
Castaneda perjured himself during his testimony. As detailed above, the principle area of
perjury, as alleged, centered on whether Mr. Castaneda ever intended to purchase one of the
Sunbow condominiums after the conversion and whether he received or intended to receive any
benefits by renting the Sunbow unit. Again, it is our understanding that the reason Mr.
Castaneda was questioned about potential benefits received from Sun bow and his intent to
purchase one of the condominiums was that doing so may have created a financial conflict of
interest due to Mr. Castaneda's status as a sitting Councilmember. The tentative map for the
Sunbow project had come before the City Council for approval prior to Mr. Castaneda renting
J:\Alwrney'.JILLM\ME!'vIOS\Council Memo. Castaneu" Fees - fic,~l.d~c
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The Honorable Cheryl Cox, Mayor and
City Councilmembers
July 15,2008
Page 3
his apaliment unit. The final map was slated for Council consideration after Mr. Castaneda
rented the apartment. If Mr. Castaneda had a financial interest in the project and proceeded to
vote on it, he may have violated goveming conflict of interest laws. These laws were at issue
solelv because Mr. Castaneda was a sitting Councilmember. Thus, his status as a City official
appears to have been at the crux of the perjury charges that were filed against him.
Mr. Castaneda was subsequently indicted on multiple counts of perjury. Mr. Carlos
represented Mr. Castaneda in defending the perjury charges. On April 23, 2008 a jury acquitted
Mr. Castaneda of six felony counts of perjury (three charges were apparently dismissed upon a
defense motion by the court after the prosecution's case-in-chief) alld deadlocked on four
remaining counts. On May 2, 2008, the District Attorney dismissed all remaining charges
against Mr. Castaneda. As a result, Mr. Castaneda, through his attorney, has requested that the
City pay all legal costs and fees incurred as a result of his defense of the criminal prosecution
against hin1.
III. LEGAL AUTHORITY AND ANALYSIS
A. Legal Authority
Legal authority relevant to the City's obligation to provide Mr. Castaneda's legal
defense in this action can be found in the City Charter, the California Government Code and
Council Policy 346-02. Under periinent portions of the City Charter of Chula Vista found in
sections 503 (a) and (b) the City Attorney is required to:
(a) Represent. . . the City Council al1d all of city officers in all
matters of law pertaining to their offices; [and]
(b) Represent. . any city officer. . . in any or all actions and
proceedings in which. . . such officer. . . by reasons of his or her
official capacity is concemed or is a party.
California Government Code at section 995.8 permits a city to pay legal fees
incurred by its employees under certain conditions. (See section 995.8 attached.) Such section
provides that a public entity is not required to provide the defense of a criminal action but may
do so if it finds the following conditions:
(a) The criminal action or proceeding is brought on account of an
act or omission in the scope of his employment as an employee of
the public entity; and
(b) The public entity determines that such defense would be in
the best interests of the public entity and that the employee or
former employee acted, or failed to act, in good faith, without
actual malice and in the apparent interests ofthe public entity,
J:\Attorr.ey"J1LLlvf\MfrvlOSICouncil MemD - Castaneda Fees - Fim.I.Joc
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o
The Honorable Cheryl Cox, Mayor and
City Council members
July 15,2008
Page 4
Section 995.8, therefore, provides two conditions upon a public entity authority to
provide for the defense of a criminal action against one of its employees. First, the criminal
action must be brought on account of an act or omission of the employee while his was acting in
the scope of his public employment. Second, the public entity mnst make findings that paying
the defense would be in the best interests of the City and that the employee acted in good faith
without actual malice in the apparent interests of the City.
It should also be noted that Council Policy 346-02 for the City of Chula Vista
clarifies the conditions ul1der which the City will provide for the cost of criminal defense. (See
Policy 346-02 attached.) It is the stated purpose of the policy to provide for defense costs in
criminal actions where the City official has acted in good faith in the course of employment. The
policy provides that the following findings must be made by the City Council:
(a) The criminal action or proceeding is brought on account of an
act or omission in the scope of employment as an employee of a
public entity;
(b) Defense would be in the best interests of the public entity;
and
(c) The employee or former employee acted or failed to act in
good faith without actual malice and in the apparent interest of the
public entity.
B. Legal Analysis
In this case, Mr. Castaneda's perjury trial arose out of testimony he gave during a
Grand Jury investigation. During the investigation, Mr. Castaneda was specifically questioned
about events that took place during his tenure on the City Council, including his involvement
with the Sunbow Villas. The Sunbow Villas condominium conversion was the subject of
Council action, including approval of the Tentative Map on March I, 2005. Mr. Castaneda's
subsequent rental of a unit at Sunbow Villas raised issues because he was a member of the City
Council. Specifically, the interest he held in Sunbow Villas may have given rise to violations of
the Political Reform Act, or Section 1090. This was the precise reason our office advised him to
abstain from voting on approval of the Sunbow Final Map. But for Mr. Castaneda's status as a
public official of the City, his interest in the Sunbow Villas would not have implicated the Act,
or Section 1090 and likely would not have been the subject of a Grand Jury investigation.
Once Mr. Castaneda was subpoenaed by the Grand Jury, it was his obligation to
appear and answer questions as part of his duties as a Councilmember. It is our understanding
that Mr. Castaneda cooperated fully in the investigation and provided testimony in conjunction
with it. The testimony was incident to his duties as a Councilmember and was not performed for
the benefit of himself or to serve his own purposes or convenience. It would seem logically to
J:\A_ttorn~y'JlLL,,1\!v!E,,10S\Council Memo. (aClaned" Fees. Fioal.doc
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The Honorable Cheryl Cox. Mayor and
City Councilmembers
July 15,2008
Page 5
flow that any prosecution arising out of responses he provided to the Grand Jury would also flow
indirectly or directly from the same scope of employment These facts seem to support findings
that the criminal action was brought as a result of acts taken within the scope of ML Castaneda's
course of employment with the City.
The Council may find that the payment of the defense costs in this instance would
be in the best interest of the City. The duties of Cowlcilmembers are performed for the benefit
of the public. The public obviously would be directly concerned with preserving and protecting
Councilmembers from the hazards of attacks and litigation, including criminal prosecutions, to
which the performance of their official duties might expose them. With such protections
afforded, the public can expect that a Councilmember will be able to zealously act for the benefit
of the public without hesitation by considerations of possible personal involvement in defending
resulting litigation or unfounded prosecutions.
The costs of potentially defending litigation brought against one personally can be
significant When the litigation is incident to one's service as a public official, the City can
benefit by providing coverage for those fees, when the required findings can be made. Not doing
so would likely chill the application of decent and good members of the community in seeking to
serve as public officials. In addition, it may subject the City to additional costs and fees if the
City official or employee chooses to litigate the matter against the City.
Finally, this Council may find that ML Castaneda was only acting in good faith,
without any actual malice and in the apparent best interests of the City when he appeared and
testified before the Grand Jury. After a full criminal trial it was found that charges that ML
Castaneda acted inappropriately were such that he was either acquitted or the remaining charges
dismissed. It would appear that Mr. Castaneda was simply answering questions posed by the
Grand Jury in the best interest of the City and that his actions were done without malice.
IV. INDEPENDENT LEGAL CONSULTATION
In addition to our review and analysis of this matter, we consulted with outside legal
counsel to obtain an independent analysis. Specifically, we retained Steven Quintanilla. ML
Quintanilla is a member of the law firm Green, de Bortnowsky & Quintanilla and has
approximately 16 years experience specializing in municipal law.
Based on ML Quintanilla's review of the facts and law sUlTounding this matter, he
provided us with his written legal opinion and reconunendations. His recommendations are set
forth below:
1. That the City Council find, based on the facts presented by the City's legal counsel,
that: (a) the Subject Chares were filed against Mr. Castaneda on account of an act or
omission within the scope of his duties and responsibilities as a councilmember; (b)
the defense of the Subject Charges by Mr. Castaneda was in the best interests of the
City; and (c) there is no proven evidence that ML Castaneda acted with actual malice
J\Attorr.eyVILLM\IVfE~'IOS\Counci] Memo - Casl~ned, Fee, - Final.doc
5
The Honorable Cheryl Cox, Mayor and
City Councilmembers
July 15,2008
Page 6
that was adverse to the City's interest.
2. That the City Council approve the requested reimbursement subject to: (a) the City
Attorney's review and approval of the submitted legal invoices; (b) a refund of all or
a pOliion of the fees and costs to the City upon a detelmination by a court of law in
any subsequent legal proceeding that Mr. Castaneda is guilty of any of the Subject
Charges; and (c) a refund of all or a portion of the fees and costs to the City in
propOliion to any recovery of such fees or costs by Mr. Castaneda via insurance
coverage or any other source.
V. CONCLUSION
The City of Chula Vista has adopted a Policy with the stated purpose of providing
defense costs to City officials in criminal actions where the official acted in good faith in the
course of employment. In this case, Mr. Castaneda was charged with several counts of perjury.
Based on the pleadings and other information available to us, we believe the charges were filed
due to Mr. Castaneda's status as a City official and arose out of what the District Attorney
perceived as potential violations of the conflict of interest laws governing the action so
legislative body members. Ultimately, each count was either dropped or resulted in a not guilty
verdict.
Based upon the foregoing, we would recommend that the Citv Council make the required
findings and authorize reimbursement of Councilmember Castaneda's defense costs and fees that
are in conformance with those findings.
J:\An()mey'JILL~.f"'vIEMOS\Councjl Memo - Ca.,taned" Fees - Finnl.duc
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August 8, 2008
tvIr. Bart tvIeisfeld, City Attomey
City ofChula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Re: Castaneda Attomey Fee issue
Dear tvIr. Meisfeld:
This letter is in response to your request for an opinion regarding a recent allegation of a
Brown Act violation involving the holding of closed sessions to discuss a credible threat of
litigation brought by the criminal law attomey of Council member Steve Castaneda. Our office
has reviewed the documents related to this matter and have discussed the issue with various
representatives in the City Attorney's otIice. It is our opinion that no Brown Act violation has
occurred ancl we do not recommend that the City Council seek to cure the matter within thil1y
days. in that seeking a public cure would probably jeopardize existing settlement negotiations
regarding payment of attorney's fees.
DEFENSE OF COUNCILMEMBER CASTANEDA
A tter the successful defense of several criminal charges brought against Councilmemher
Castaneda, his attorney submitted a formal written demand to the City Attorney's oCtice for
payment of attorney's fees. A copy of this letter is attached as Attachment A. The letter argues
that Councilmcmber Castaneda's lawyer is entitled to compensation because Councilmember
Castaneda successfully defended criminal charges related to the course and scope of his official
duties as a City Council member. In the letter, Attollley Marc X. Carlos stated in part as follows:
In this regard, please consider this letter a f01111al request for payment oflegal
fees. A copy of an itemized legal bill for services is attached to this letter. tvIr.
Castaneda has spent over a year and a half of his life defending this case and is
prepared to fully litigate his legal rights under the Charter including any
damages resulting ii'om the City's actions. (Correspondence of Marc X. Carlos
to City Attollley Ann Moore, dated May 5, 2008, page 3.)
Castaneda Attollley Fee Issue
August 8, 2008
Page :2
This leller clearly states that legal action will be taken if payment is not received for
Coul1cilmember Castaneda's legal bills. Accordingly, this letter would fall under the "threat of
litigation"~ that would result in "significant exposure to litigation against a local agency."
(Government Code section 54956.9(b)( 1) & (3 )(C).) under this subsection of the "pending
litigation" of the Browl1 Act, the Council is free to discuss the matter in closed session. While
Government Code section 54957.5 indicates that the letter from Mr. Carlos is a public record
subject to disclosure, the Council may meet and discuss the matter in closed section.
When meeting in closed session, the Brown Act requires that the legislative body state on
its agenda thc subdivision of the section that authorizes the closed session. (Government Code
section 54956.9.) Since the matter does not fall under Subdivision (a) (fonnally initiated
litigation), the title of the litigation does not have to be listed. (Government Code section
54956.9.) Our office has reviewed the agendas in which this matter was discussed, and the
subsectiol1 (e) was listed on each agenda in which the matter was discldSsed, in compliance with
the Brown Act.
CLOSED SESSION DISCUSSIONS
During the closed session, it is our understanding that threat oflitigation brought up by
the letter from Attorney Carlos was discussed. As part of those discussions, the City Council,
with Counci]member Castaneda absent to due a conflict of interest, made preliminary
determinations on the ability of the City to pay attorney's fees incurred by Councilmember
Castaneda. Two legal memos have been reviewed by this office discussing this issue, and both
mcmos indicate that payment of the fees would be justified in that the Council had the ability to
make the finding in question. After reviewing the findings required and the memOS discussing
the law, we concur in the recommendations givcn to the City Council.
It is our understanding that the City Council directed the City Attorney's office to engage
in negotiations with Mr. Carlos regarding the potential payment of attorney's fees. Those
negotiations are sensitive and on-going.
Under the Brown Act, nothing prevents a City Council Ii-om discussing an actual threat of
litigation 1I1 closed session. When so doing, the Council agenda need only list the subsection
under which the closed session is being held. Further, the subject of those discussions cannot be
disclosed outside ofthc control group (attending City Councilmembers, legal staff and peninent
City personnel). Our office concurs in the legal opinion ofthe City Attorney's office and the
opinion of outside counsel that this matter has been properly discussed and the City Council is
within its legal rights to give the interim directions that have been given so far.
ANNOUNCEMENT OF FORMAL DECISION
To dale. no "final action" has been taken on this matter. Under the Brown Act. a public
report of action taken must be given of all actions taken in closed session. While the Council has
made a preliminary determination to pay fees and make the findings required by law to allow for
, Castaneda Attorney Fee Issue
August 8, 2008
Page 3
their payment, no final decision has been made at this point. Under Government Code section
54957.1 (,,)(3): a public rep0l1must be given:
(3) including the vote of every member present, approval given to its legal
counsel of a settlement of pending litigation, as defined in section 54956,9, at
any stage prior to or during ajudicial or quasi-judicial proceeding shall be
reported after the settlement is final.
It is our understanding that, while negotiations continue, the matter has not been finally
resolved. Since the matter has not been finally resolved, no action has been taken that could be
the basis of a cure at this point. Therefore, the City COlll1cil and staff would have difficulty in
framing an action to meet the cure requirements under the Brown Act as demanded by Attorney
",loot in his correspondence. enclosed as Attachment "B," Public disclosure of potential
sett]en1ent negotiations is considered a reason for not disclosing the nan1e of a case that has
actually been filed. The authors of the Brown Act realized the sensitivity ofsetllement
negotiations and the impact the glare of publicity may have on those negotiations. Considering
the current status of those negotiations, it is not recommended that a cure be sought at this time.
First, no final decision has been rendered upon which a cure can be crafted. Second, the
underlying reasoning of the Brown Act of the settlement negotiations could be impacted by
adverse publicity would give justification not to proceed to a cure at this point.
CO"lCLUSION
The current status of this particular negotiation makes it difficult to follow the n01111al
practice of seeking a cure at this time, NOIlllally, this office advises that no haIlll can be done in
seeking a cure, even if an action was taken in full compliance of the Brown Act. This situation
seems to be unique in that seeking a cure at this point could jeopardize settlement negotiations
and also not solve the problem since no final action has been taken.
The discussions in closed session have been properly noticed under tbe appropriate
subsection as required by the Brown Act. Tbe discussions in those sessions have related directly
to the threat of litigation received from the attoIlley for Councilmember Castaneda.
Councilmember Castaneda's attorney has threatened litigation if this matter is not resolved.
Such a threat, as always, is needed to go to closed session and seek counsel advice and wisdom
as to how to handle the threat in questions.
I f you have any questions regarding the above-mentioned matters, please feel free to
cont:lct the undersigned.
Yours very truly,
James p, Lough, Special Counsel