Title
Recommendation to Provide Direction to the City Attorney to Consent, Modify or Reject Law Firm Goldfarb Lipman’s Request to Waive Conflicts of Interest In Connection with Goldfarb’s Legal Representation of the City of Alameda and the Housing Authority of the City of Alameda. (City Attorney)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City Attorney’s Office seeks direction from the City Council in response to law firm Goldfarb Lipman’s (Goldfarb) request to waive potential conflicts of interest (Consent) arising from Goldfarb’s legal representation of both the City of Alameda (City) and the Housing Authority of the City of Alameda (Housing Authority). Goldfarb serves as General Counsel to the Housing Authority and intends to provide legal services to the Authority in connection with the following, (i) that certain Services Agreement for FYs 2019-2020 and 2020-2021 between City and Housing Authority, (ii) Housing Authority's roles and responsibilities in connection with City's Rent Program, and (iii) Housing Authority transfer of affordable housing projects to Housing Authority's non-profit affiliate, which projects include financing from the City and the Successor Agency, such as the Independence Plaza project (collectively, Housing Authority Transactions). Separately, Goldfarb has and continues to serve as special counsel, under the Direction of the City Attorney, for the City in connection with development projects and land use matters (City Transactions). As to the different attorneys who provide legal services to the City and to the Housing Authority, Goldfarb has agreed to implement ethical walls in connection with its current and future representation of City and Housing Authority. Nonetheless, Goldfarb’s proposed representation of the City and the Housing Authority constitutes a “directly adverse conflict” under the Rules of Professional Conduct and requires written consent from the City and the Housing Authority.
BACKGROUND
Goldfarb has an existing client relationship with both City and Housing Authority and wishes to continue representing both City and Housing Authority in the future. Representation of Housing Authority by Goldfarb will be in connection with Housing Authority Transactions. The representation of City by Goldfarb will be in connection with City Transactions and not Housing Authority Transactions.
DISCUSSION
Rule 1.7 of the California Rules of Professional Conduct provides that: “A lawyer shall not, without informed written consent from each affected client . . . , represent a client if there is a significant risk the lawyer’s representation of the client will be materially limited by the lawyer’s responsibilities to or relationships with another client . . . .” This is commonly referred to as a lawyer’s “duty of undivided loyalty and independent judgment” to his/her clients. The duty of undivided loyalty to a current client prohibits undertaking representation directly adverse to that client without that client’s informed written consent. Thus, absent consent, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated. See Flatt v. Superior Court (1994) 9 Cal.4th 275. Both Rule 1.7 and judicial precedents make clear that a “directly adverse conflict” includes the situation where “a lawyer accepts representation of a person in a matter in which an opposing party is a client of the lawyer or the lawyer’s law firm.”
Goldfarb’s intent to represent the Housing Authority with respect to the Housing Authority Transactions creates a directly adverse conflict under Rule 1.7 and thus requires written consent from the City and the Housing Authority. Goldfarb has informed the City that separate attorneys will represent the Housing Authority and the City, and in no circumstance would Goldfarb attorneys be directly adverse to each other. Goldfarb has also committed to screening those attorney teams from each other so that they will not share any information about their respective representations. The City Attorney’s Office does not intend to engage Goldfarb in connection with the Housing Authority Transactions and expects to use in-house attorneys to represent the City. Under these circumstances, the City Attorney’s Office does not object to Goldfarb’s request.
ALTERNATIVES
• Authorize the City Attorney to execute the Consent in the form attached.
• Authorize the City Attorney to execute the Consent with changes, as directed by City Council.
• Do not authorize the City Attorney to execute the Consent.
FINANCIAL IMPACT
There is no financial impact on City from executing the Consent.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment. This action is not a project pursuant to Public Resources Code section 21065 and CEQA Guidelines section 15378.
CLIMATE IMPACTS
There are no climate impacts arising from this action.
RECOMMENDATION
Provide direction to the City Attorney to consent, modify or reject law firm Goldfarb Lipman’s request to waive conflicts of interest in connection with Goldfarb’s legal representation of the City of Alameda and the Alameda Housing Authority.
CITY MANAGER RECOMMENDATION
The firm represents the Housing Authority and has represented the City in connection with City Transactions for many years (unrelated to the Housing Authority).
Respectfully submitted,
Lisa Nelson Maxwell, Assistant City Attorney
Financial Impact section reviewed,
Nancy Bronstein, Interim Finance Director
Exhibit:
1. Consent to Potential Conflict of Interest
cc: Eric Levitt, City Manager