REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
TOM BUNTON, County Counsel
SUBJECT
Title
Ratification of Legal Services Agreement with Gibson, Dunn & Crutcher, LLP for Specialized Legal Services
End
RECOMMENDATION(S)
Recommendation
Ratify approval of Legal Services Agreement, including non-standard terms, with Gibson, Dunn & Crutcher, LLP for specialized legal services, in an amount not to exceed $275,000, for the retroactive contract period effective June 13, 2023, until terminated by either party.
(Presenter: Tom Bunton, County Counsel, 387-5455)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Improve County Government Operations.
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). Sufficient appropriation for the $275,000 cost is included in the Litigation 2022-23 Budget (1340001000) and will be included in future recommended budgets, as necessary.
BACKGROUND INFORMATION
On November 3, 2020, Measure K, dealing with Board of Supervisors’ (Board) compensation and term limits, appeared on the ballot and was approved by the voters. The County is challenging the validity of Measure K. This item will approve a the Legal Services Agreement (Agreement) with Gibson, Dunn & Crutcher, LLP (Gibson Dunn) to provide legal services regarding the challenge to Measure K.
The proposed Agreement contains non-standard or omitted contract terms. Pursuant to County Policy 11-05, contracts containing non-standard terms must be approved by the Board. The non-standard and missing terms include the following:
1. The County is responsible for Gibson Dunn’s attorneys’ fees related to any and all claims arising out of the firm’s representation of the County.
• The County standard contract requires each party to bear its own costs and attorney fees, regardless of who is the prevailing party.
• Potential Impact: In the event of a claim arising from the representation, the County will be responsible for the firm’s attorneys’ fees, which is an additional, unknown cost.
2. The County is required to indemnify Gibson Dunn against all claims, actions, losses, damages or liability arising out of the law firm’s representation of the County.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify Gibson Dunn, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time limited, or expense limited could be brought against Gibson Dunn without such limitations and the County would be responsible to defend and reimburse Gibson Dunn for costs, expenses, and damages, which could exceed the total Agreement amount.
3. The Agreement omits the clauses regarding the naming of the County as an additional insured and a waiver of subrogation rights as required pursuant to County Policy 11-07.
• The County standard contract requires that Gibson Dunn name the County as an additional insured, agrees to a waiver of subrogation rights, and maintains insurance with specified coverage.
• Potential Impact: Due to the requirement that the County indemnify Gibson Dunn, the standard County contract clauses requiring that the County be named as an additional insured and that all carriers waive subrogation rights against the County are omitted. Because the County is not a named additional insured, the clauses that require all insurance policies to be primary and non-contributory are inapplicable and have been removed. Due to the fact that the County is not a named additional insured, the clause requiring coverage to be applicable separately to each insured has also been deleted. The County will not be named as an additional insured and has no recourse against Gibson Dunn’s insurance carriers, and these carriers may seek subrogation against the County. If the County attempts to seek recourse against Gibson Dunn’s insurers, the coverage of volunteers for workers compensation and for contractual liability will be limited.
4. The Agreement contains deviations from the County’s standard insurance coverage pursuant to County Policy 11-07 in that Gibson Dunn’s worker’s compensation policy does not cover volunteers, and the general liability policy does not cover contractual liability.
• The County standard contract requires that the Workers compensation and liability policy cover volunteers and contractual liability.
• Potential Impact: the coverage of volunteers for workers compensation and for contractual liability will be limited.
5. All disputes arising out of the Agreement are to be submitted to binding arbitration.
• The County standard contract requires that the parties shall use their best efforts to settle the dispute through negotiation with each other in good faith.
• Potential Impact: The County is required to submit all claims to binding arbitration. The arbitrator’s decision will be final and binding on the County with no ability for any court to review or overturn the award.
Gibson Dunn has also included a waiver of potential prospective conflicts in the proposed Agreement. A waiver of potential prospective conflicts will allow Gibson Dunn to represent clients with which the County conducts business or provides oversight. The waiver does not include any actual conflicts and Gibson Dunn agrees not to represent another client on any matter substantially related to Gibson Dunn’s representation of the County. Approval of the Agreement retroactively effective on June 13, 2023, including non-standard terms, is recommended due to the need for a law firm with specialized expertise in appellate matters.
PROCUREMENT
Gibson Dunn was selected due to their expertise and high degree of success in seeking review in the California Supreme Court and has handled similar election related matters for other public entities.
Pursuant to Title 1, Division 2, Chapter 19, Section 12.1908 of the County Code, County Counsel is authorized to select and retain through a purchase order, specialized counsel for a particular matter not to exceed $200,000 per fiscal year. Contracts for services in excess of that amount require the Board's approval.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Cynthia O’Neill, Principal Assistant County Counsel, 387-5455) on June 13, 2023; Purchasing (Leo Gomez, Purchasing Manager, 387-2063) on June 13, 2023; Risk Management (Victor Tordesillas, Director, 386-8623) on June 15, 2023; Finance (Carl Lofton, Administrative Analyst, 387-5404) on June 14, 2023; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on June 15, 2023.