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Jerry Brown sues his own client

Steve Rhodes/FlickrBrown is suing a state agency he represents.

As one of his last acts as attorney general, Jerry Brown has done something so unusual and, in the opinion of one attorney, so questionable it apparently contradicts a ruling by the California Supreme Court.

He's suing his own client – a state agency accused of making an unfair decision against Insurance Commissioner Steve Poizner.

This unexpected maneuver is only the start of a case that gets stranger and stranger as the facts pile up.

Brown's office has filed suit against a state agency – the Office of Administrative Law – that he helped create in 1980. A state agency that just one month ago Brown promised to "reinvigorate" – after vowing to eliminate it a few months before that. And he's suing this agency in apparent contradiction of a Supreme Court case called Deukmejian vs. Brown, in which former Gov. Brown argued against the position he's now taking as attorney general.

Brown's office is both representing and suing the same office over the same legal issue – government agencies that over-interpret the law.

"I’ve never seen anything like it," said Gene Livingston, an attorney representing insurance companies also named in the lawsuit that Brown's office has filed. "I am kind of shocked and disappointed that the attorney general is doing this."

Here's another layer of irony: More than three decades ago, Livingston was Brown's very first director of the agency Brown is now suing.

The case in Los Angeles County Superior Court is "Insurance Commissioner Steve Poizner vs. the Office of Administrative Law." Brown's office, the California Department of Justice, is acting as counsel to Poizner, who is seeking to financially downgrade insurance companies that have investment ties to Iran.

The Office of Administrative Law is a little-known but influential body that approves and interprets regulations. It was created by landmark legislation Brown signed when he was governor three decades ago.

Poizner believes he can downgrade his financial assessment of insurance companies with investments linked to Iran. The Office of Administrative Law ruled that Poizner had written underground regulations, effectively saying he cannot issue blanket orders beyond the scope of his authority.

Rather than use his own in-house attorneys or hire outside counsel to fight the ruling, Poizner has enlisted Brown's office to sue. (Read the lawsuit here [PDF].) The Department of Justice acts as the governor's attorney and counsel to any state agency that needs its help.

To say the least, Brown's lawsuit was jolting to the Office of Administrative Law, since Brown is also representing the agency on another underground regulation case involving the State Lands Commission.

In a Nov. 9 letter to Brown's office, Susan Lapsley, the director of the Office of Administrative Law, noted that her rule-making attorneys are not schooled in litigation and therefore she would normally request Brown's help, not the other way around. She has only 20 employees and no budget for litigation. She wrote:

It appears to me that there is a conflict in the attorney general representing the Insurance Commissioner and the Department of Insurance in an action against this office. This office has no other option but to bring this to your attention and inform you that it does not consent to waive the conflict.

Lapsley suggested that instead of suing her agency – and "wasting taxpayer dollars and state resources" – Brown and Poizner's offices could simply point out where her office had violated the law. If they make their case correctly, Lapsley said she would reconsider the ruling against Poizner.

It's unclear how Brown intends to respond to Lapsley's complaint. Rebecca MacLaren, a spokeswoman for the Department of Justice, told California Watch yesterday: "The AG's office is in discussions with the Office of Administrative Law to understand and address their concerns."

As it turns out, this sort of state-against-state legal conflict has been debated before – in the California Supreme Court.

The 1981 case pitted then-Attorney General George Deukmejian against then-Gov. Brown in a dispute over a state labor-management law. Deukmejian was representing the governor and the state in defending the law, but later supported the Pacific Legal Foundation in its efforts to declare the law unconstitutional.

Brown won the case. The high court wrote [PDF], quite plainly:

The issue then becomes whether the Attorney General may represent clients one day, give them legal advice with regard to pending litigation, withdraw, and then sue the same clients the next day on a purported cause of action arising out of the identical controversy. We can find no constitutional, statutory, or ethical authority for such conduct by the Attorney General.

In summing up the case, the court concluded that the attorney general can withdraw from cases involving state agencies if he or she "believes them to be acting contrary to the law," but the attorney general "may not take a position adverse to those same clients."

As for Poizner, spokesman Ioannis Kazanis said the Department of Insurance asked Brown to represent the office because he's their lawyer in litigation matters. "The AG," he said in an e-mail, "has provided services to the commissioner for many months on the commissioner's efforts related to Iran investments."

 

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