BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 471
Assemblymember Nava
As Amended June 11, 2009
Hearing Date: June 23, 2009
Government Code
GMO:jd
SUBJECT
Legal Services: State Agencies and the Attorney General
DESCRIPTION
This bill would clarify the rules relating to the employment of
in-house counsel and outside counsel by state agencies,
commissioners, or officers for the provision of legal services
or representation in a judicial or other proceeding. It would
clarify the role of the Attorney General as the statutorily
designated legal services provider for all state agencies,
commissioners, or officers, and provide guidance to the AG when
considering whether to consent to employment of an in-house
counsel or outside counsel. The bill would define "in-house
counsel," "outside counsel," and "judicial or other proceeding"
for which the Attorney General may provide services to state
agencies, commissioners, or officers.
BACKGROUND
The Office of the California Attorney General employs more than
1,000 attorneys who are charged with representing the State and
its many agencies, boards, commissions, and officers in a wide
range of issues, often of great statewide significance. These
attorneys appear regularly before all levels of federal and
state courts, including administrative courts. According to the
Attorney General (AG), the Office has vast experience in
litigation, and a deep understanding of the impacts litigation
may have on statewide public policy. The Office also has an
army of experienced support staff to organize, monitor, and
maintain control over literally thousands of active litigation
matters. In short, "the depth and breadth of this litigation
(more)
AB 471 (Nava)
Page 2 of ?
and subject matter expertise is not replicated in any other
state agency legal office."
Despite the statutory mandate to use the services of the
Attorney General and the ability and expertise of the AG's
office to deliver the services, many state agencies hire
in-house counsel for non-litigation legal services, without
clear statutory authority and often without the consent of the
Attorney General. As to the hiring of outside counsel, the law
requires the written consent of the Attorney General prior to
employment of counsel for the representation of a state agency
or employee, unless this requirement is waived by statute or the
state agency or employee is specifically authorized to employ
outside counsel without the AG's consent.
This bill is intended to clarify the need for the Attorney
General's written consent when employing in-house or outside
counsel, and the factors the AG may consider in determining
whether to provide that written consent.
CHANGES TO EXISTING LAW
Existing law establishes standards for the use of personal
service contracts outside the civil service system, if
contracting would achieve cost savings, as defined, or if
certain conditions are met. (Gov. Code Sec. 19130.)
Existing law requires, with certain exceptions, the consent of
the Attorney General prior to the employment of outside counsel
for representation of any state agency or employee in a judicial
proceeding. (Gov. Code. Sec. 11040.)
Existing law exempts specified agencies and officers from the
requirement that the Attorney General consent to the employment
of outside counsel. (Gov. Code Sec. 11041.)
Existing law prohibits a state agency, commissioner, or officer
from employing any legal counsel other than the Attorney General
or one of his assistants or deputies, in any matter in which the
agency, commissioner, or officer is interested or is a party as
a result of office or official duties. (Gov. Code Sec. 11042.)
Existing law permits the Attorney General to employ outside
counsel in cases involving the escheat of property, whenever a
special prosecutor is necessary to substitute for a district
attorney disqualified to prosecute, or whenever the employment
AB 471 (Nava)
Page 3 of ?
of outside counsel for state agencies is justified. (Gov. Code.
Sec. 12520.)
This bill would:
(1) provide that except for specified agencies and as waived by
statute, a state agency, commissioner, or officer may employ
in-house legal counsel to provide legal services, but may not
employ in-house counsel for services relating to a judicial or
other proceeding in which the agency or officer is interested,
or is a party as a result of office or official duties, unless
express written consent is given by the AG to employ in-house
counsel;
(2) provide that nothing prohibits a state agency,
commissioner, or officer from obtaining legal services from
the AG that are unrelated to a judicial or other proceeding;
(3) provide that when the AG consents to a state agency,
commissioner, or officer employing in-house counsel or outside
counsel in a judicial or other proceeding, the AG may
nevertheless intervene in the proceeding, or appear as amicus
curiae to the extent permitted by the court;
(4) where the Attorney General's consent is sought by a state
agency, commissioner, or officer to employ in-house or outside
counsel in a judicial or other proceeding, provide the AG with
several factors that the AG may consider, such as conflicts of
interest, the staffing needs of the Office of the Attorney
General, and the availability of subject matter expertise; and
(5) define, for purposes of the provisions dealing with the
employment of "in-house counsel" and "outside counsel" by a
state agency, commissioner, or officer, the terms used,
including "judicial or other proceeding."
COMMENT
1. Need for the bill
The Attorney General, sponsor of AB 471, contends that a state
agency is required to obtain the Attorney General's express,
written consent, prior to the agency's employment of in-house
counsel to perform any legal services. However, the AG states
that because this has never been crystal clear in statute, and
the practice of hiring in-house counsel has become prevalent in
many state agencies, it is time to clarify the statutes and
implement the intent of the Legislature in enacting the original
statutes governing the use of the Attorney General's services.
AB 471 (Nava)
Page 4 of ?
The Attorney General states that there is no objection to not
requiring written consent by the AG in cases where the legal
work for which in-house counsel is being hired does not involve
litigation. "It is appropriate that the widespread agency
practice of employing in-house counsel be acknowledged in the
law, and authority be given to state agencies to employ legal
counsel to provide advice in non-litigation matters, without the
necessity of obtaining the Attorney General's consent," the AG
states. However, where litigation is involved, the AG cites one
case handled by in-house counsel at the Department of Veterans'
Affairs, that went all the way to the Supreme Court without the
AG having been told about the case or having had the opportunity
to handle the case. Because of the statewide significance of a
case that goes to the Supreme Court is a given, the AG believes
that the rule requiring the AG's consent in matters of
litigation should be enforced. "[W]here a state agency intends
to retain private counsel outside of state employment, it
remains an appropriate 'check and balance' in the contracting
process for the Attorney General's approval to be required, as
it currently is by Government Code Section 19130."
This bill would clarify when the AG's written consent will be
required. The AG mentions, in defining this need to clarify
existing law that clear authority over civil litigation has been
highlighted by recent events involving client agencies that have
litigated matters without the Attorney General's consent, or
have "insisted on too prominent a role in litigation, creating
unnecessary conflict in the conduct of litigation on behalf of
the State."
2. Written consent to be required for representation in
judicial or other proceedings, litigation
While the law is already clear that the Attorney General's
written consent is required for the employment of outside
counsel, it is not clear for the hiring of in-house counsel to
perform work related to judicial proceedings and other
proceedings in which the agency, commissioner, or officer must
be represented in an adversarial setting. Thus, AB 471 would
clarify that while a state agency, commissioner, or officer may
hire in-house counsel to provide legal services, unless
otherwise provided in another statute or specifically authorized
by another statute, the hiring of in-house counsel in relation
to a judicial proceeding or other proceeding in which the
agency, commissioner, or officer is interested as a result of
official duties must be consented to in writing by the Attorney
AB 471 (Nava)
Page 5 of ?
General.
To be sure, there are state agencies that are authorized by
statute to employ outside counsel for any purpose, to be paid
for by the state agency. Following is the list of state
agencies not required to obtain the consent of the Attorney
General in order to employ outside counsel:
Regents of the University of California
Board of Trustees of the California State University
(who must pay costs of outside counsel within their
existing resources)
Legal Division of the Department of Transportation
Division of Labor Standards Enforcement of the
Department of
Industrial Relations
Workers' Compensation Appeals Board
Public Utilities Commission
State Compensation Insurance Fund
Legislative Counsel Bureau
Inheritance Tax Department
State Lands Commission
Secretary of State
Alcoholic Beverage Control Board (except when the
board affirms a decision of the Department of Alcoholic
Beverage Control)
State Department of Education
Treasurer, with respect to bonds
Any other state agency authorized to employ outside
counsel after enactment of Chapter 213, Statutes of 1933
As to other state agencies, however, the employment of outside
counsel will always be required, whether for litigation or
judicial or other proceedings or not. And, under this bill,
these state agencies, commissioners, or officers would be
required to obtain the AG's written consent in order to hire
in-house counsel in relation to a judicial or other proceeding.
In determining whether to consent or to what extent consent
would be given, this bill would authorize the Attorney General
to consider factors such as conflicts of interest, the staffing
of the AG's office, and the availability of subject matter
expertise within the AG's office.
3. Judicial or other proceedings defined
In addition to defining "in-house counsel" (a licensed attorney
AB 471 (Nava)
Page 6 of ?
employed in state service by a state agency, commissioner, or
officer) and "outside counsel" (a licensed attorney engaged in
the private practice of law), this bill would define "judicial
or other proceeding" that would trigger the need for the
Attorney General's written consent prior to hiring of counsel.
"Judicial or other proceeding" would be defined as litigation in
a civil court, an administrative adjudicatory proceeding
governed by the Administrative Procedure Act, the United States
Administrative Procedure Act, or an arbitration proceeding.
Proceedings before the State Personnel Board, the Department of
Personnel Administration, or the Unemployment Insurance Appeals
Board would be exempt from this definition and will therefore
not require the written consent of the Attorney General.
4. Suggested technical amendment
On page 2, line 36, strike out "commission" and insert:
commissioner
Support : None Known
Opposition : None Known
HISTORY
Source : Attorney General
Related Pending Legislation : None Known
Prior Legislation :
AB 862 (Firebaugh, Ch. 883, Stats. 2003) required state agencies
and the AG provide specified notices to designated
representatives of State Employees Bargaining Unit 2 rgarding
contracts with outside counsel and the consent given by the AG
for those contracts.
AB 1037 (Firebaugh, 2002) would have required that attorneys
subject to the collective bargaining process and employed by the
State of California, including the Attorney General, be
compensated, at a minimum, with wages and benefits that are
consistent with the specified salary parity. The bill died
without any hearing.
AB 471 (Nava)
Page 7 of ?
SB 1628 (Sher, Ch. 396, Stats. 2002) authorized the Attorney
General to represent specified state agencies jointly, with
agency consent.
SB 213 (Kopp, 1997) would have limited the prohibition against
the hiring of legal counsel without the AG's consent to only
insurance delinquency judicial proceedings, including ancillary
judicial proceedings. The bill was enrolled, but not signed.
AB 3458 (Speier, Ch. 386, Stats. 1996) provided that the
Department of General Services, in approving a contract for
legal services, has required a state agency seeking to contract
with private legal counsel to demonstrate that the AG has
consented to the employment of outside counsel.
SB 1452 (Kopp, 1994) would have required the AG, upon request of
the Insurance Commissioner, to petition the court for a
determination in the event of a disagreement between the AG and
the Insurance Commissioner about the need to employ outside
counsel or about the compensation for that counsel. The bill
failed to pass the Assembly Insurance Committee.
Prior Vote :
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Appropriations Committee (Ayes 15, Noes 0) (Consent)
Assembly Floor (Ayes 76, Noes 0)
**************