May 3, 2022
City Attorney's Office
DATE: May 3, 2022
TO: Vice Mayor Johnson and Members of the City Council
FROM:
Dave Aleshire, Interim City Attorney
Subject:
Approve second amendment to a legal services
agreement with Meyers Nave LLP and request
appropriation from the General Fund
FINANCIAL IMPACT: Approval of the proposed second amendment will increase the total contract amount to $300,000. The
City Attorney is requesting an additional
appropriation of $215,000 from the General Fund to
account string 01151014-400206 to pay for the
contract amendment.
PREVIOUS COUNCIL
ACTION:
December 14, 2021
STATEMENT OF THE
ISSUE:
To ensure the City has appropriate legal
representation related to general municipal law
advice and litigation, the City Attorney requests
approval of a second amendment in the amount of
$215,000 to an existing legal services agreement with
Meyers Nave, LLP for a total contract amount of
$300,000. In addition, the City Attorney requests a
$215,000 additional appropriation from the General
Fund to pay for the second contract amendment. This
amendment relates to authorized litigation against
Mayor Butt and requires Mayor Butt’s recusal on the
matter.
AGENDA
REPORT
May 3, 2022
RECOMMENDED ACTION:
APPROVE a second amendment in the amount of
$215,000 to a legal services agreement with the law
firm of Meyers Nave, LLP, for a total amount not to
exceed $300,000; APPROPRIATE $215,000 from the
general fund to pay for the second contract
amendment; RATIFY the first amendment executed
by the Vice Mayor; and AUTHORIZE the Vice Mayor
to execute the second amendment and any other
necessary documents. – City Attorney’s Office
(Heather Mc Laughlin 510-620-6509).
DISCUSSION:
In November of 2021, the City Attorney retained the law firm of Meyers Nave to represent the City in municipal law litigation involving constitutional law issues. The initial contract amount was $10,000. Meyers Nave was on the 2018 approved list of legal services providers and has submitted a response for the Request for Proposals process currently underway. After interviewing three firms, the City Attorney selected Meyers Nave because Meyers Nave partner, Deborah Fox, is an expert in First Amendment issues.
The Mayor posted certain confidential attorney -client privileged communications on his blog. The City sued the Mayor because the blog disclosed, without prior authorization from the City Council, certai n confidential attorney-client privileged communications between the City Attorney and the City Council. Despite requests to remove the offending posts from his E -Forum, he continued (and continues) to maintain the posts on his E-Forum. The City has obtained a temporary restraining order, preliminary injunction, and also defeated several motions seeking intervention and defeated an appeal of the same. To date, the City has prevailed on all aspects of this high profile matter. The matter has been stayed for the last several weeks while negotiations with attorney Daniel Butt and the City Attorney were moving forward.
At this time, the City would like to terminate the litigation with each side to bear its own costs. Those efforts to end the litigation have not been successful and once the parties’ agreed upon stay is lifted there will be additional litigation at the trial court and appellate court level.
On December 14, 2021, the City Council approved a first amendment to the existing $10,000 legal services agreement in the amount of $75,000 for a total contract amount of $85,000. This $75,000 amendment was signed by the Vice Mayor, but no payments were made as the Mayor raised objections. Total outstanding unreimbursed services to Meyers Nave are $226,000. The City Attorney requests a second
May 3, 2022
amendment in the amount of $215,000 for a total contract amount of $300,000 to allow Meyers Nave to continue representing the City in the pending civil litigation matter City of Richmond vs Thomas King Butt . However, if the parties do not reach a satisfactory agreement, Ms. Fox estimates that some $75,000 -$150,000 more in legal fees and costs may be needed.
Because the Mayor is the subject of the litigation, specific authorization is requested for the Vice Mayor to execute the necessary agreements and amendments and any other documents needed.
Despite the success of the City efforts, if this matter is to continue, it is anticipated that at least another year of legal action could follow, at which time the Mayor would be out of office. The litigation could be extensive including the following: (i) defense of the pending appeal of the City’s preliminary injunction victory and denial of motion to intervene; (ii) the City proceeding to obtain a permanent injunction at the trial court; (iii) a cross complaint by the Mayor for defense and indemnity; (iv) an anti-SLAPP action by the Mayor contending his First Amendment rights were violated; (v) efforts by the Mayor to force the City to pay his attorney fees; and (vi) litigation over various subsidiary matters. Deborah Fox has estimated potential attorney fees in all of these matters to exceed what has already been spent, or another roughly $190,000.
The City Attorney has worked extensively to find a compromise in this matter which avoids these extensive fees, from deleting only one of the offending posts; to proceeding with the appeal, but not litigate the other matters; to simply abandoning all actions with both sides absorbing their attorney fees. The Mayor has been unwilling to enter into any sort of agreement of any nature.
Given this situation, the options seem to be (i) go forward with the most minimal effort possible until the Mayor is out of office (estimated cost: $25,000), or (ii) simply abandon the matter without any understanding or agreement with the Mayor. The City Attorney is now fully aware of the (i) many actual litigation matters in which the City is involved; (ii) the possible future litigation matters it faces; and finally (iii) the very difficult financial issues it faces, deferred employee increases, debt needing refinancing, and other financial obligations. The parties have framed this as a matter of principle, but the City Manager has requested we reduce the legal budget by $2M, and it is frankly a frivolity to spend another $190,000 prioritizing this above the City’s other obligations. Accordingly, I recommend that the City Council instruct us to dismiss and abandon these legal proceedings and authorize the Vice Mayor to execute the 2nd Amendment.
DOCUMENTS ATTACHED:
Attachment 1 – Original Legal Services Agreement
Attachment 2 – First Amendment to the Legal Services Agreement Attachment 3 – Second Amendment to the Legal Services Agreement