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HomeMy WebLinkAbout5 General Counsel Representation Agenda Item # DATE: October 10, 2007 TO*-, Board of Directors,Truckee-Donner Public utility District FR011 : Steven C. Gross, General Counsel RE: Representation by General Counsel I am writing to the Board to follow-up on an inquiry from Director Thomason as to whether 1, as General Counsel, represent the Board of Directors or the General Manager. While I responded to Director Thomason, I understand that he wanted to make certain that the information I provided to him has been provided to and received by all Directors. The answer to the question is that I represent the Truckee-Donner Public Utility District itself, as a separate legal entity. I do not represent the Board of Directors as whole or individual members of the Board or the General Manager individually. The attorney-client relationship is between me and the District. The District, as an "institutional client" gives direction to counsel through its authorized officers and agents. Most typically this occurs through a quorum of the Board acting as the Board and through the General Manager. However, the General Manager will often authorize other District staff to provide direction to counsel, i.e. —request legal advice on specific matters, review and/or draft contracts, etc. Without detailing all of the intricacies of legal representation, it is possible that at times General Counsel may represent individual Board members and/or staff members. For example, if the District and individual Board members and or staff members are sued, General Counsel may represent the District and the individuals. The role of General Counsel as representing the District as a legal entity, conforms with Rule 3-600 of the Rules of Professional Conduct adopted by the State Bar of California. This Rule states in part, "In representing an organization, a member shall conform his or her representation to the concept that the client is the organization itself, acting through its highest authorized officer, employee, body, or constituent overseeing the particular engagement." {00025159.DOC I} A copy of Rule 3-600 is attached for your reference. Also attached to this Memorandum is a copy of the District Resolution 8107, adopted by the Board on January 19, 1981, and a copy of the minutes of the January 19, 191 Board meeting. Resolution 8107 appoints the firm of Wood,Porter, Simon and Graham(the predecessor to the current firm Porter Simon) as general counsel of the District. Among other things, this Resolution states that services of counsel may be requested by the Board or by the General Manager. (00025159.DOC 1) State Bar of California Rules of Professional Conduct Rule 3-600. Organization as Client (A) In representing an organization, a member shall conform his or her representation to the concept that the client is the organization itself, acting through its highest authorized officer, employee, body, or constituent overseeing the particular engagement. (B) If a member acting on behalf of an organization knows that an actual or apparent agent of the organization acts or intends or refuses to act in a manner that is or may be a violation of law reasonably imputable to the organization, or in a manner which is likely to result in substantial injury to the organization, the member shall not violate his or her duty of protecting all confidential information as provided in Business and Professions Code section 6068, subdivision (e). Subject to Business and Professions Code section 6068, subdivision (e), the member may take such actions as appear to the member to be in the best lawful interest of the organization. Such actions may include among others: (1) Urging reconsideration of the matter while explaining its likely consequences to the organization; or (2) Referring the matter to the next higher authority in the organization, including, if warranted by the seriousness of the matter, referral to the highest internal authority that can act on behalf of the organization. (C) If, despite the member's actions in accordance with paragraph (B), the highest authority that can act on behalf of the organization insists upon action or a refusal to act that is a violation of law and is likely to result in substantial injury to the organization,the member's response is limited to the member's right, and, where appropriate, duty to resign in accordance with rule 3-700. (D) In dealing with an organization's directors, officers, employees, members, shareholders, or other constituents, a member shall explain the identity of the client for whom the member acts, whenever it is or becomes apparent that the organization's interests are or may become adverse to those of the constituent(s) with whom the member is dealing.The member shall not mislead such a constituent into believing that the constituent may communicate confidential information to the member in a way that will not be used in the organization's interest if that is or becomes adverse to the constituent. (E)A member representing an organization may also represent any of its directors, officers, employees, members, shareholders, or other constituents, subject to the provisions of rule 3-310. If the organization's consent to the dual representation is required by rule 3-310,the consent shall be given by an appropriate constituent of the organization other than the individual or constituent who is to be represented, or by the shareholder(s)or organization members. Discussion: Rule 3-600 is not intended to enmesh members in the intricacies of the entity and aggregate theories of partnership. Rule 3-600 is not intended to prohibit members from representing both an organization and other parties connected with it, as for instance(as simply one example) in establishing employee benefit packages for closely held corporations or professional partnerships. Rule 3-600 is not intended to create or to validate artificial distinctions between entities and their officers, employees, or members, nor is it the purpose of the rule to deny the existence or importance of such formal distinctions. In dealing with a close corporation or small association, members commonly perform professional engagements for both the organization and its major constituents.When a change in control occurs or is threatened, members are faced with complex decisions involving personal and institutional relationships and loyalties and have frequently had difficulty in perceiving their correct duty. (See People ex rel Deukmejian v. Brown (1981)29 Cal.3d 150[172 Cal.Rptr. 478]; Goldstein v. Lees (1975)46 Cal.App.3d 614[120 Cal.Rptr. 253];Woods v. Superior Court(1983) 149 Cal.App.3d 931 [197 Cal.Rptr. 185]; In re Banks (1978) 283 Ore. 459 [584 P.2d 284]; 1 A.L.R.4th 1105.) In resolving such multiple relationships, members must rely on case law. 100025174.DOC 1 i RESOLUTION NO. 81 D, OF THE 7 TRUCKEE DONNER PUBLIC UTILITY DISTRICT APPOINTING GENERAL COUNSEL ej BE IT RESOLVED by the Board of Directors of the Truckee Donner Public Utility District as follows: 1. The firm of Wood, Porter, Simon and Graham, a Professional Corporation of Truckee, California, is hereby appointed general counsel of this District, to serve at the pleasure of the Board. 2. James E. Sign, a member of that firm, shall attend each regular meeting of this Board, unless excused by this Board, and shall be reasonably available to attend special meetings, upon appropriate notice, except with the consent of the Board, all advice and representation of general counsel shall be by or through Mr. Simon. 3. General counsel shall be compensated at the rate of Six Hundred and Twenty Five Dollars ($625) per month for at- tendance at both regular meetings of the Board, and in ' addition thereto, at the rate of Seventy Five Dollars ($75) an hour for all other services requested by this Board or the General--Manager and performed by general counsel including, but not limited to, consultation, legal research, attendance at special or committee meet- ings, preparation for regular meetings, litigation, major project review, and legal opinions. General counsel shall submit bills for such compensation monthly, and shall pro- vide such breakdown of such compensation among the func- tions of the Board as the General Manager shall require. 4. This resolution shall take effect immediately. PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District at a meeting held within said District on the day of _ 1981, by the following roll call vote: AYES: NOES: ABSENT: s►r ABSTAIN: TRUCKEE DONNER PUBLIC UTILITY DISTRICT PW / J w RESOLUTION NO. 81 D,;' OF THE TRUCKEE DONNER PUBLIC UTILITY DISTRICT APPOINTING GENERAL COUNSEL BE IT RESOLVED by the Board of Directors of the Truckee Donner Public Utility District as follows: 1. The firm of Wood, Porter, Simon and Graham, a Professional Corporation of Truckee, California, is hereby appointed general counsel of this District, to serve at the pleasure of the Board. 2. ,Tames E. Simon, a member of that firm, shall attend each regular meeting of this Board, unless excused by this Board, and shall be reasonably available to attend special meetings, upon appropriate notice, except with the consent of the Board, all advice and representation of general counsel shall be by or through Mr. Simon. 3. General counsel shall be compensated at the rate of Six Hundred and Twenty Five Dollars ($625) per month for at- tendance at both regular meetings of the Board, and in addition thereto, at the rate of Seventy Five Dollars ($75) an hour for all other services requested by this Board or the General Manager and performed by general counsel including, but not limited to, consultation, legal research, attendance at special or committee meet- ings, preparation for regular meetings, litigation, major project review, and legal opinions. General counsel shall submit bills for such compensation monthly, and shall pro- vide such breakdown of such compensation among the func- tions of the Board as the General Manager shall require. 4. This resolution shall take effect immediately. PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District at a meeting held within said District on the �� day of �, 1981, by the following roll call vote: AYES: NOES: , ABSENT: ABSTAIN: TRUCKEE DONNER PUBLIC UTILITY DISTRICT - /"-D - 4 'x/ REGULAR MEETING January 19, 1981 The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order at 7:10 P.M. by President Huber in the Tahoe Truckee Unified School District Board Room. ROLL CALL: Directors Duffy, Kuttel, Maass and Huber were present; Director Sutton was absent. ti EMPLOYEES PRESENT: D. Eugene Holt and Susan Craig were present. CONSULTANTS PRESENT.: District Engineer Cook and Special Counsel McDonough y` were present. OTHERS PRESENT: Among those present were James E. Simon, Mira Shea, Thomas Van Horne, John Rogers, Roger Boren, Don Strand, Randy Chance, Lisa Brewer, Jenni Huffman, Scott Reid, Brooke Boren, F. G. Kohler, Fred Katz and Glenn ". McGettigan. APPROVAL OF MINUTBS <: Since preparation of the minutes of September 8, September 15, September 19, September 24, September 29, October 6, October 20, October 21, October 22, November 3, November 17, November 24 and December 1, 1980, in,final form had not yet been accomplished, this matter was tabled to the next regular meeting. Director Duffy moved, and Director Maass seconded, that the minutes of i. December 15, December 17 and December 30, 1980, be prepared in final form as Y.. corrected. ROLL CALL: Sutton, absent; all other Directors, aye. SO MOVED. STATEMENT OF GENERAL FUND AND BILLS FOR BOARD APPROVAL No bills were presented for Board approval and it was rioted that the y Statement of General Fund would be prepared for review at the first regular meeting of each month. only. WEST RIVER STREET ASSESSMENT DISTRICT - TRANSFER FOR BOARD APPROVAL The Board briefly reviewed the West River Street Assessment District status report prepared 'by the Bookkeeping Department on December 31, 1980. The requested transfer relating to.payment in full of Assessment No. 3 plus interest on Parcel #19-300-003 was not clear to the Board, and they asked ' that the matter be put over to the next meeting with proper clarification being provided prior to: that time. COMMITTEE REPORTS President Huber advised that she, the Manager, Bill Dendy and District Engineer Cook attended the TTSA Board Meeting held on January 14, 1981, to discuss the Dendy report prepared on the District's behalf with respect to concern over groundwater quality in Martis Valley. It Was the Tahoe Truckee Sanitation Agency's decision to bear the cost of a monitoring well to be located between Airport Well No. 2 and the disposal site. Direction with re- spect to the location of the monitoring well will be given by the Board later in the meeting. Also, TTSA will assist in financing the monitoring of other significant wells within the area. CONSIDERATION OF RESOLUTION APPOINTING GENERAL COUNSEL; POSSIBLE ACTION After review of the proposed,resolution, Director Maass moved, and Direc- tor Duffy seconded, that the Board adopt Resolution 8107 appointing General Counsel. ROLL CALL: Sutton, absent; Kuttel, abstain; all other Directors, aye. SO MOVED. The resolution appoints the firm of Wood, Porter, Simon and Graham, a Professional Corporation, as general counsel with all advice and representa-tion by or through James' E. Simon of that firm.