People ex rel Clancy v. Superior Court

People ex rel Clancy v. Superior Court (1985) 39 Cal.3d 740, involved the City of Corona's lengthy attempt to shut down an independent adult bookstore. Following a federal court's determination that the city's previous ordinances attempting to regulate the bookstore were unconstitutional, the city hired James Clancy on a contingency fee basis to represent it in a public nuisance abatement action against the bookstore. (Clancy, supra, 39 Cal.3d at p. 743.) Initially, the city listed James Clancy as its "'special attorney'" on the complaint filed against the bookstore owners. (Id. at p. 744.) The city amended its complaint, however, "substituting 'City Attorney of Corona' as Clancy's title in the action." (Ibid.) The court openly discussed the terms of the contingent fee agreement, but made no mention of how it came to discover the terms. (Id. at p. 745.) The court described the contract terms: "The contract of employment between the City and Clancy contains a fee provision according to which Clancy is to be paid $ 60 per hour, 'provided, however, that with respect to each and every suit undertaken by Attorney hereunder which results in a final judgment against CITY, said fee shall be reduced to $ 30.00 per hour ... and provided further that said fee of $ 60.00 shall also be reduced to $ 30.00 per hour ... in each and every suit undertaken by ATTORNEY hereunder in which CITY is a successful party if and to the extent that the CITY does not recover its attorney's fees from the unsuccessful party or parties.'" (Clancy, supra, 39 Cal.3d at p. 745.) The Clancy court found that "the contingent fee arrangement between the City and Clancy is antithetical to the standard of neutrality that an attorney representing the government must meet when prosecuting a public nuisance abatement action." (Clancy, supra, 39 Cal.3d at p. 750.) In reaching its conclusion, the Supreme Court focused on three primary considerations: a) the duty of neutrality imposed on government attorneys in criminal prosecutions and its extension to civil cases (id. at p. 745-748); b) the need to balance the interests of the public and the landowner, including constitutional interests of free speech (id. at p. 748-749); and, c) the potential for criminal prosecution and liability triggered by the civil suit. (Id. at p. 749.) After examining the duty of neutrality required of criminal prosecutors, the court concluded "the justification for the prohibition against contingent fees in criminal actions extends to certain civil cases," and noted "the rigorous ethical duties imposed on a criminal prosecutor also apply to government lawyers generally." (Clancy, supra, 39 Cal.3d at p. 748.) The court specifically disclaimed, however, an overbroad reading of its opinion, stating "nothing we say herein should be construed as preventing the government, under appropriate circumstances, from engaging private counsel. Certainly there are cases in which a government may hire an attorney on a contingent fee to try a civil case." (Ibid.) The court went on to analogize public nuisance abatement actions to eminent domain actions, noting the necessity of "a balancing of interests" between the public and the landowner. (Clancy, supra, 39 Cal.3d at p. 749.) In eminent domain actions, the court noted, the government attorney has a duty to perform "a sober inquiry into values, designed to strike a just balance between the economic interests of the public and those of the landowner." (internal quotations and ) (Ibid.) Likewise, in public nuisance actions, a balance lies between "the interest of the people in ridding their city of an obnoxious or dangerous condition" and "the interest of the landowner in using his property as he wishes." (Ibid.) The court also noted the particular public nuisance action at issue implicated First Amendment interests that warranted greater weight for an absolute neutrality requirement that would preclude a contingency fee agreement: "the landowner has a First Amendment interest in selling protected material, and the public has a First Amendment interest in having such material available for purchase." (Ibid.) The court thus concluded, "any financial arrangement that would tempt the government attorney to tip the scale cannot be tolerated." (Ibid.) The court finally noted, "a suit to abate a public nuisance can trigger a criminal prosecution of the owner of the property. This connection between the civil and criminal aspects of public nuisance law further supports the need for a neutral prosecuting attorney." (Clancy, supra, 39 Cal.3d at p. 749, ) Based on these considerations, the Supreme Court appeared to categorically bar public entities from entering into contingency fee agreements with private counsel in public nuisance actions. (Ibid.)