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HomeMy WebLinkAbout10 - CC-12 - Retention of Jones Day for Legal Service - 9/6/2011CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 6, 2011 ITEM NUMBER: SUBJECT: RETENTION OF JONES DAY FOR LEGAL SERVICES DATE: AUGUST 31, 2011 FROM: CITY ATTORNEY'S OFFICE PRESENTATION THOMAS P. DUARTE, CITY ATTORNEY BY: FOR FURTHER INFORMATION CONTACT: Thomas P. Duarte, 714-446-1400 RECOMMENDATION: Authorize City Attorney to execute an Engagement Letter with Jones Day for legal services in connection with the preliminary injunction sought by the Costa Mesa Employees Association ("CMEA") in Costa Mesa Employees Association v. City of Costa Mesa (Case No. 30-2011 00475281) ("Suit"). BACKGROUND: On May 16, 2011, the Costa Mesa Employees Association filed suit seeking a halt of potential lay offs of a substantial portion of the City's in-house staff due to fiscal crisis. As part of the suit, the CMEA has requested a preliminary injunction be granted by the court in order to temporarily stop the lay offs until resolution of the lawsuit. This preliminary injunction was granted. Therefore, in order to adequately litigate the suit filed by the CMEA, it was determined that this case required special attention and special skills to seek a resolution that is desirable to the City. To that end, Jones Day offers an enormous body of both experience and resources. In particular, Jones Day has highly regarded and experienced Trial and Appellate teams. ANALYSIS: The Engagement Letter outlines the limited scope of Jones Day's representation of the City. Essentially, Jones Day is only representing the City in litigating the suit filed by the CMEA. Any representation beyond requires the City's and Jones Day's mutual agreement. Jones Day will charge the City a $495.00 an hour fee for all attorneys who work on this matter. Jones Day issues periodic billing statements (generally, monthly) that are due and payable upon presentation. In this instance, Jones Day has waived an initial retainer that is applied to any unpaid fees, disbursements, or charges. Note that this fee does not include any costs that Jones Day may incur and require City reimbursement. Finally, the City Attorney will be the primary point of contact for Jones Day with the City. ALTERNATIVES CONSIDERED: The Council could choose not to approve the Engagement Letter, in which case, Jones Day's work on behalf of the City would simply not commence. FISCAL REVIEW: The potential fees to be paid to Jones Day are charged at $495.00 an hour. Because their representation of the City has not yet commenced, the costs associated with this retention agreement are still unknown. LEGAL REVIEW: The City Attorney's office has reviewed and approved the retention agreement as to form. CONCLUSION: Council is requested to approve the Engagement Letter and authorize the City Attorney to sign it on behalf of the City, and authorize the City CEO to pay any fees billed by Jones Day in connection with the Suit. THOMAS R. HATCH Chief Executive Officer ATTACHMENTS: 1 Engagement Letter THOMAS P. DUARTE City Attorney E JONES DAY 3161 MICHELSON DRIVE • SUITE 800 • IRVINE, CALIFORNIA 92612 TELEPHONE: (949) 851-3939 • FACSIMILE: (949) 553-7539 August 31, 2011 VIA E-MAIL AND U.S. MAIL Thomas P. Duarte, Esq. City Attorney City of Costa Mesa 3777 North Harbor Boulevard Fullerton, California 92835 Re: Engagement Letter Dear Mr. Duarte: ATTACHMENT 1 Direct Number: (949) 553-7516 javogt@jonesday.com This letter confirms the scope, terms and conditions or our engagement by the City of Costa Mesa with respect to Costa Mesa Employees Association v. City of Costa Mesa [Orange County Superior Court Case No. 30-2011 00475281], as well as any appeals (the "Action"). Thank you for retaining Jones Day in this engagement, and for your consideration and cooperation concerning the matters covered in this letter. 1. Limited Scope of Engagement and Client Relationship The City of Costa Mesa have asked us to represent it in the Action. Any new or expanded engagement beyond that described above will require our agreement. Similarly, except as expressly set forth in this letter, any representation in this engagement of any person or entity other than the City of Costa Mesa will require our agreement. That is, our client is, and we are entering into an attorney-client relationship with, the City of Costa Mesa. We do not and cannot guarantee an outcome in the Action. We are being retained after a preliminary injunction has been issued against the City of Costa Mesa in the Action, and we do not and cannot guarantee that we will be able to have this injunction dissolved or otherwise succeed in the case. 2. Staffing You have designated yourself as the person from whom we will take direction and to whom we will report in connection with this engagement. I will have primary responsibility for this engagement and will be assisted by such other lawyers and service personnel as I deem appropriate from time to time in order to provide high quality services in a cost-efficient manner. I will be the Partner generally responsible for Jones Day's representation of the City of Costa Mesa, including matters related to billing and staffing. ATLANTA • BEIJING • BRUSSELS • CHICAGO • CLEVELAND • COLUMBUS • DALLAS • DUBAI FRANKFURT • HONG KONG HOUSTON IRVINE • LONDON • LOS ANGELES • MADRID • MEXICO CITY • MILAN MOSCOW • MUNICH NEW DELHI • NEW YORK • PARIS PITTSBURGH • SAN DIEGO • SAN FRANCISCO • SHANGHAI • SILICON VALLEY • SINGAPORE • SYDNEY TAIPEI • TOKYO WASHINGTON Thomas P. Duarte, Esq August 31, 2011 Page 2 3. Potentially Adverse Representations or Conflicts of Interest; Advance Waiver Jones Day represents and in the future will represent many other clients. Some may be direct competitors of the City of Costa Mesa or otherwise may have business interests that are contrary to the City of Costa Mesa's interests. It is even possible that, during the time we are working for you, an existing or future client may seek to engage us in connection with an actual or potential transaction or pending or potential litigation or other dispute resolution proceeding in which such client's interests are or potentially may become adverse to the City of Costa Mesa's interests. Jones Day cannot enter into this engagement if it could interfere with our ability to represent existing or future clients who develop relationships or interests adverse to the City of Costa Mesa. We therefore ask the City of Costa Mesa to confirm that Jones Day may continue to represent or may undertake in the future to represent any existing or future client in any matter (including but not limited to transactions, litigation or other dispute resolutions), even if the interests of that client in that other matter are directly adverse to Jones Day's representation of the City of Costa Mesa, as long as that other matter is not substantially related to this or our other engagements on behalf of the City of Costa Mesa. In the event of our representation of another client in a matter directly adverse to the City of Costa Mesa, however, Jones Day lawyers or other service providers who have worked with the City of Costa Mesa will not work for such other client, and appropriate measures will be taken to assure that proprietary or other confidential information of a non-public nature concerning the City of Costa Mesa acquired by Jones Day as a result of our representation in this matter will not be transmitted to our lawyers or others in the Firm involved in such matter. In other words, we request that the City of Costa Mesa confirm that (1) no engagement that we have undertaken or may undertake on behalf of the City of Costa Mesa will be asserted by the City of Costa Mesa either as a conflict of interest with respect to, or as a basis to preclude, challenge or otherwise disqualify Jones Day from, any current or future representation of any client in any matter, including without limitation any representations in negotiations, transactions, counseling or litigation adverse to the City of Costa Mesa, as long as that other matter is not substantially related to any of our engagements in this matter, (2) the City of Costa Mesa hereby waives any conflict of interest that exists or might be asserted to exist and any other basis that might be asserted to preclude, challenge or otherwise disqualify Jones Day in any representation of any other client with respect to any such matter, (3) the City of Costa Mesa has been advised by Jones Day, and has had the opportunity to consult with other counsel, with respect to the terms and conditions of these provisions and their prospective waiver, (4) the City of Costa Mesa's consent to these provisions is both voluntary and fully informed, and (5) the City of Costa Mesa intends for its consent to be effective and fully enforceable, and to be relied upon by Jones Day. M01 WEEMS= Thomas P. Duarte, Esq August 31, 2011 Page 3 4. Compensation and Disbursements Our fees are generally determined by the time devoted by each lawyer or other service provider involved in the engagement and the hourly billing rates assigned to each such person. Although Jones Day normally charges its hourly rates for lawyers who work on a matter, we have agreed that, at the present time, Jones Day will charge the City of Costa Mesa an hourly rate of $495.00 for all attorneys who work on this matter. We submit periodic billing statements (generally monthly), which are due and payable upon presentation. We ordinarily require a retainer at the commencement of any relationship, which we will apply to any unpaid fees, disbursements and charges. We have, however, agreed to waive that requirement with respect to the City of Costa Mesa. Unless we specifically agree, any fee estimate that we may provide is not a commitment to perform the services within a fixed time or for a fixed fee. In addition to our fees, we expect our clients to defray certain costs and expenses incurred during our representation of them. A description of our Disbursements and Charges Billing Policies is enclosed. Please note that although our charges for non-cash costs incurred by the Firm reflect our good faith estimate of our actual, fully absorbed, out-of-pocket costs, those estimates may differ from our actual costs. Normally, disbursements and charges will be subject to reimbursement from the City of Costa Mesa in the regular billing cycle. In some circumstances, however, such as in the case of particularly large items, we may ask the City of Costa Mesa to pay these items directly or in advance. 5. Audit Letter Issues We further want to advise you that, in responses to any of your requests to provide information to your auditors, our policy is to comply with the American Bar Association Statement of Policy Regarding Lawyers' Responses to Auditors' Requests for Information regarding the scope and content of such responses, except when such Policy is clearly inapplicable. 6. Procedures upon Termination; Return of Documents; Intellectual Property Unless previously terminated, our representation of the City of Costa Mesa will terminate upon our sending the City of Costa Mesa our final statement for services rendered in this matter. In that case, or otherwise at your request, any papers and property sent by you to us will be returned to you. Our own files pertaining to the matter, including lawyer work product and administrative records, as well as document copies, will be retained by the Firm in accordance with our document retention policy. All documents retained by the Firm will be transmitted in the ordinary course to the person responsible for administering our records retention program. Subject to our obligations under the bar requirements applicable attorneys admitted to the California bar, we reserve the right to destroy or otherwise dispose of any documents or other materials, including electronic versions, retained by us after the termination of the engagement. • 1 _Y`Wil Thomas P. Duarte, Esq August 31, 2011 Page 4 All intellectual property and other know-how developed by us in connection with this engagement, including subject matter expertise, whether or not preserved in written or electronic form, may be retained by us and used in connection with engagements on behalf of other clients, so long as no confidential information relating to the City of Costa Mesa is thereby disclosed. Please sign and return to us the enclosed copy of this letter in order to confirm that it accurately reflects the scope, terms and conditions with respect to this engagement. If you would like to discuss any of these matters, please give me a call. 1y yours, t Vogt On behalf of the City of Costa Mesa, the undersigned confirms that this letter accurately reflects the scope, terms and conditions with respect to this engagement and that the undersigned's execution and delivery of this confirmation on behalf of the City of Costa Mesa has been duly authorized by the City of Costa Mesa. Dated: Signature: Name: Thomas P. Duarte, Esq Title: City Attorney ATTACHMENT 1 S Billing Policies for Disbursements and Charges Computer Research Services. The actual charges to the Firm from Lexis, Westlaw, and other on-line computer research services for research done in connection with specific client matters are billed to the client. Copying. Copying charged to the client includes documents, exhibits, and other papers that are filed with a court or administrative agency; documents produced for the client at its request and/or convenience; and documents produced as may be required by other parties in relation to litigation or transactions. Clients are billed $.20 per page for non -color photocopying and $1.00 per page for color photocopying done at the Firm. The actual charges to the Firm for outside, third -party duplication services used for specific client matters are billed to the client. Documents required for the Firm's use only are charged to the Firm. Courier Services. The Firm utilizes an overnight "pouch" service among its offices, both foreign and domestic; clients are not charged for deliveries through the pouch service. Courier services such as Federal Express are used when the circumstances of specific client matters dictate the need for such service. Clients are billed for the actual charges to the Firm for any such courier service. Electronic Databases. Clients are billed actual charges from the external vendor hosting services we use to store and maintain computer databases and electronic versions of such materials as court filings, transcripts, case dockets and calendars, correspondence, discovery materials, and deposition or trial exhibits. The Firm does not maintain such electronic databases internally. Food Services. When food services are required to enhance the efficient handling of specific client matters, clients are billed the actual cost of the food and/or beverages plus the expense of the food service personnel or service providers who serve the food and/or beverages. Long Distance Telephone and Facsimile Services. Clients are not charged for local calls/facsimiles, interoffice calls/facsimiles, or calls/facsimiles costing less than $1.00. Clients are billed for audio and video conference calls. Messenger Services. Clients are billed for messenger services required for specific client matters at the actual rates charged by outside delivery services or the Firm's out-of-pocket expenses for bus fares, cabs, and similar items when Firm personnel are used. Postage (U.S. Mail). Clients are not billed for postage when the amount on a particular mailing is less than $1. Standard rates are charged for all postage over $1 and for large mailings done on behalf of the client even when individual item postage is under $1 as well as for special postal services, e.g., Express Mail, Special Delivery, and Certified and Registered Mail. Special Services. A client and the Firm may agree that certain special services are required, in connection with a specific matter, such as litigation support, extraordinary office supplies, temporary agency paralegals, project assistants or other staffing, video/audio production services/equipment, off-site location, imaging services, off -hour HVAC and related expenses, and document production services requiring trained personnel and specialized equipment. Before the client is billed for any such services, the client and Firm must agree on the type, scope, and cost of the services. Staff Overtime. Staff overtime costs are billed to clients only when the overtime staff services are for the convenience of the client, rather than the convenience of the Firm. In such circumstances, clients are billed for the Firm's costs of providing the staff overtime, including actual overtime compensation (and a factor for benefits expenses) and necessary meal and transportation costs. Travel. Clients are billed for travel charges (including, for U.S. travel, a $40 transaction charge covering a portion of the contracted cost of arranging air travel) incurred by Firm personnel for specific client matters. For domestic travel, we use coach fare only unless the client has authorized first or business class. We expect our lawyers to incur only reasonable meal, lodging, and other travel costs. Other Charges. We prefer that third -party charges (e.g., consultants, court reporters, etc.) incurred on behalf of a client be billed directly to the client by the third party. If this is not possible, such charges are passed through at cost. CLI -6935350 Last Edited: 05/20/09