The Privilege of Not Proving Your Point Publicly

January 9, 2011
The Privilege of Not Proving Your Point Publicly
Posted on January 9, 2011
by Liam Dillon
Voice of San Diego

San Diego City Councilman Carl DeMaio argues his major pension reform proposal is legal. He says he's got a legal opinion to back it up. But you aren't allowed to see it.

Former head of the city's downtown redevelopment agency Fred Maas believes there are legal problems with requiring the agency to pay off the previous expansion of the city's Convention Center. Maas says there's a legal opinion to back it up. But you aren't allowed to see this one, either.

"I wish it was available," Maas said.

Both opinions are hidden under a veil of secrecy called attorney-client privilege, a legal protection that can keep lawyers' advice private. The idea is to keep legal strategies and opinions confidential so that a client, in this case the city, isn't disadvantaged in litigation.

But circumstances over the past few months have raised potential inconsistencies in how the city uses its legal privilege. It has allowed city leaders like DeMaio and Maas to make their case without having to show the nuance, risk and complexity that often accompany these types of discussions.

The result is that a key element of public debate on significant topics is left out. The proof.

"The public is certainly entitled to be skeptical of their claim that the opinion supports their position," said Terry Francke, head of public records watchdog Californians Aware.

Both situations would benefit from more scrutiny.

DeMaio has an idea to reduce the city's $2.1 billion pension debt. He calls the concept "pensionable pay" and it's central to his financial recovery plan. DeMaio's plan relies on the city excluding specialty pay, such as extra pay for speaking more than one language, from current employees' pension calculations. Doing so would reduce the city's pension debt without affecting employees' take-home pay.

The councilman, who did not respond to a request for an interview, has insisted this idea is legal. He cited a privileged opinion from the city's outside labor counsel as backup.

"We also have written legal opinion from Mayor's own labor counsel Tim Davis confirming this," DeMaio wrote on Twitter last month.

But others argue DeMaio's idea is analogous to a California Supreme Court decision that said a similar move was illegal. Further, 10 years ago the city settled a lawsuit brought by retirees that argued the city was improperly excluding some specialty pay items from pension calculations.

The lawsuit was based on the same principles that DeMaio's plan hopes to follow, said Michael Conger, the retirees' attorney in that case. Conger believes the settlement means you can't do what DeMaio is proposing.

"When parties resolve a dispute, you can't come back 10 years later and say, 'Did not,'" Conger said.

DeMaio also has been on the other side of the debate. He, along with three other council members, want the downtown redevelopment agency to take over the Convention Center bond debt. Doing so would free up $9.2 million annually to pay for general city services, such as police and fire.

A publicly available November opinion from City Attorney Jan Goldsmith asserts the council can shift the Convention Center debt to the downtown agency, the Centre City Development Corp., if the council makes certain legal findings.

But there's another opinion on the Convention Center debt that's private.

"There's a contrary opinion by our own legal counsel that disagreed with [Goldsmith's]," Maas said.

Goldsmith's opinion on the Convention Center includes many caveats. The city would have to determine that the expanded center benefits downtown and there's no other way to pay for it. The Convention Center expansion was finished more than nine years ago and the city has been paying the bond debt out of its day-to-day budget. Goldsmith's opinion concedes that argument is "difficult to make."

The standard for attorney-client privilege is intended to be clear. Privileged information is communication between a lawyer and his client including confidential legal strategy. Because revealing the city's strategy to its potential adversaries could cause harm, privileged documents are exempt from disclosure under the state's public records law.

But the declaration is not without discretion. Goldsmith's Convention Center opinion, for example includes a reference to the private opinion. Francke said it was "certainly not" normal for one opinion to be public and the other privileged on the same subject.

Former City Councilwoman Donna Frye, whose nearly 10-year term ended in December, said Goldsmith's decisions on attorney-client privilege have been inconsistent, especially compared to Goldsmith's predecessor, Mike Aguirre. Aguirre often was criticized for going the opposite way: making too much information public to the detriment of the city's legal position.

Frye questioned why this summer Goldsmith released a memo publicly detailing the legal complications with Proposition D, the city's financial reform and sales tax ballot measure. Lawsuits challenging the ballot measure appeared soon afterward.

Frye added she believes both the private Convention Center and pension opinions should be released because they address public policy issues, not legal strategy. Further, Frye said, if DeMaio and Maas are to be believed the public already knows what they contain.

"If the conclusion is already known, what is the secret, then?" Frye said.

Goldsmith's spokeswoman said the city attorney was busy finalizing a public memorandum of law on pensions and unavailable for comment for this story.

Of course, there's one way the privilege issue becomes irrelevant. There's nothing keeping the person or agency that receive the legal advice — whether that's Mayor Jerry Sanders, the City Council, CCDC or someone else — from waiving privilege and making the information public. Here, that hasn't happened.

"I'd just say this coyness can't and shouldn't be trusted," Francke said. "If the client here won't waive the privilege, the public is entitled to conclude it has something to hide."