BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 471|
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THIRD READING
Bill No: AB 471
Author: Nava (D)
Amended: 8/26/09 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-2, 6/23/09
AYES: Corbett, Florez, Leno
NOES: Harman, Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-0, 5/28/09 (Consent) - See last page
for vote
SUBJECT : Legal services: state agencies and the
Attorney General
SOURCE : Office of the Attorney General
DIGEST : This bill clarifies 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 clarifies the role of the Attorney General
(AG) as the statutorily designated legal services provider
for all state agencies, commissioners, or officers, and
provides guidance to the AG when considering whether to
consent to employment of an in-house counsel or outside
counsel. The bill defines "in-house counsel," "outside
counsel," and "judicial or other proceeding" for which the
CONTINUED
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AG may provide services to state agencies, commissioners,
or officers.
Senate Floor Amendments of 8/26/09 exempt the Director of
Managed Health Care and the Department of Managed Health
Care from the new requirements of the bill.
ANALYSIS : 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 AG 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 AG 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 AG
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 AG 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 of outside counsel for state agencies is
justified. (Gov. Code. Sec. 12520.)
This bill:
1.Provides that except for specified agencies and as
waived, exempted, or excepted 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
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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.Provides 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.Provides 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 AG's consent is sought by a state agency,
commissioner, or officer to employ in-house or outside
counsel in a judicial or other proceeding, provides the
AG with several factors that the AG may consider, such as
conflicts of interest, the staffing needs of the Office
of the AG, and the availability of subject matter
expertise.
5.Defines, 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."
6.Requires the Attorney General to render to the director
opinions upon all questions of law, relating to the
construction or interpretation of any law under the
director's jurisdiction or arising in the administration
thereof, that may be submitted to the Attorney General by
the director and upon the director's request shall act as
the attorney for the director in actions and proceedings
brought by or against the director under or pursuant to
any provision of any law under the director's
jurisdiction. Sections 11041, 11042, 11042.1, 11042.2,
11042.3, and 11043 of the Government Code do not apply to
the Director of the Department of Managed Health Care or
to the Department of Managed Health Care.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 8/27/09)
Office of the Attorney General (source)
ARGUMENTS IN SUPPORT : The Attorney General contends that
a state agency is required to obtain the AG'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 AG's services.
The AG 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 AG'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 AG's approval to be required,
as it currently is by Government Code Section 19130."
This bill clarifies 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
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AG's consent, or have "insisted on too prominent a role in
litigation, creating unnecessary
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Feuer, Fletcher, Fong, Fuentes,
Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore,
Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue,
Bonnie Lowenthal, Ma, Miller, Monning, Nava, Niello,
Nielsen, John A. Perez, V. Manuel Perez, Portantino,
Price, Ruskin, Salas, Saldana, Silva, Skinner, Smyth,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Duvall, Evans, Mendoza, Nestande
RJG:nl 8/27/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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