Moorlach Urges Halt to Inter-Agency Suits

Pointing to the millions spent by public agencies suing each other, Orange County Treasurer-Tax Collector John M.W. Moorlach called Tuesday for a special arbitration board to resolve such government disputes before they mushroom into costly courtroom showdowns.

Moorlach said he launched his own investigation by filing more than a dozen public-records requests, seeking to find out how much various government agencies were spending on legal disputes. Most of the agencies told him it would be impossible to determine such legal tabs, he said.

Only the city of Anaheim was able to provide a detailed analysis, he said. The city accounted for staff attorney time down to six-minute increments.

“When local agencies sue each other, we all pay for that,” Moorlach told a lunchtime gathering of the Orange County chapter of Citizens Against Lawsuit Abuse. “I was pleased that at least one agency keeps detailed time records.”

Moorlach said local government needs to figure out a way to become more accountable for such costs. He suggested that many of the county’s retired judges who work on arbitration cases could be used to resolve disputes without the added expense of going to court.

Anaheim’s sensitivity to litigation costs was heightened by decades of legal wrangling, Mayor Tom Daly said in response to Moorlach’s findings. In the 1970s and ‘80s, the city found itself embroiled in long-running, expensive lawsuits with the Angels baseball and the Rams football teams over Anaheim Stadium, now called Edison Field. The city’s public electric utility also was locked in a lawsuit with Southern California Edison.

Earlier this year, the city paid $400,000 in legal fees after a minority of warring City Council members hired a special prosecutor--an unprecedented action in California--to pursue campaign charges against Daly and others. A judge ultimately ruled that special prosecutor Ravi Mehta was hired illegally and voided his authority, but only after the city paid for both the prosecution and the defense.

“I think that fiasco forced our city attorney, who is a very efficient manager already, to pay extra-close attention to the cost of legal actions, because I, for one, was asking for an accounting,” Daly said.

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The legal lesson lingers still: A measure on next week’s city ballot would forbid the City Council from hiring outside counsel for criminal cases.

Moorlach said he was able to get some figures from county government for the legal fallout from the 1994 bankruptcy. That tab came to about $62 million, money that was spent on fees, litigation and other bankruptcy expenses. But other bankruptcy costs--including that for prosecuting former Assistant Treasurer Matthew Raabe for his role in the county’s risky investments--could not be broken down, county attorneys told Moorlach.

“How do you justify your legal staff if you’re not keeping accurate records?” Moorlach asked.

In another case, Moorlach said, the Orange County Transportation Authority spent $174,000 in legal fees while paying $8 million to settle a lawsuit filed by Santa Ana after the authority tried to acquire property for a bus yard. Cost of legal fees from Santa Ana, meanwhile, were unavailable.

Moorlach said he also discovered that six agencies involved in a dispute with the Orange County Water District ended up paying nearly $900,000 in legal costs after the water board voted against charging a fee to three other agencies that wanted to become full members in the district.

In another case, Orange County spent $82,000 suing its own retirement board--of which Moorlach is a member--over a decision on retirement benefits that ultimately was upheld by a judge. The retirement board spent $184,000 defending itself.