BOARD MEETING DATE: July 11, 2003
AGENDA NO. 39

Appropriate Funds from Designation for Litigation/Enforcement to District Counsel’s FY 2003-04 Budget and Execute Contract Modification for Continual Legal Representation in Fleet Rules Litigation

SYNOPSIS:

On June 9, 2003, the United States Supreme Court agreed to hear the case challenging AQMD’s fleet rules, Engine Manufacturers Association v. South Coast AQMD. This action is to appropriate $187,500 from the Designation for Litigation/Enforcement to District Counsel’s FY 2003-04 Budget, Professional and Special Services account, and to authorize the modification of the contract with Wilmer, Cutler & Pickering for an additional $137,000 (a total amount not to exceed $187,500) to represent AQMD in the Supreme Court. The Executive Officer will allocate the remaining $50,000 to either Wilmer, Cutler & Pickering or Shute, Mihaly & Weinberger, or both if needed.

COMMITTEE:

Not applicable

RECOMMENDED ACTIONS:

1. Appropriate $187,500 from the Designation for Litigation/Enforcement to District Counsel’s FY 2003-04 Budget, Professional and Special Services Account.
    
2. Authorize the Chairman of the Board to execute a contract modification with the firm of Wilmer, Cutler & Pickering for an additional amount of $137,500 and a total not to exceed $187,500 for continued representation of AQMD in the Supreme Court.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In the year 2000, the Governing Board adopted a series of groundbreaking fleet rules requiring public and some private fleets to acquire clean-fuel vehicles when adding vehicles or replacing vehicles in their fleets. The Engine Manufacturers Association and Western States Petroleum Association sued the District in federal court arguing that these rules were preempted by the Clean Air Act. The District prevailed in the trial court and the Ninth Circuit Court of Appeals. On June 9, 2003, the United States Supreme Court agreed to hear the cases. Arguments will likely be held in December. Staff recommends retaining experienced Supreme Court litigators to help prepare and present the District’s case. The Executive Officer, after consultation with counsel’s office and concurrence with the Board Chair and Vice-Chair, has executed a $50,000 contract with the Washington, D.C. firm of Wilmer, Cutler & Pickering for this purpose. The District’s team includes Supreme Court advocate Seth P. Waxman, former Solicitor General of the United States, and C. Boyden Gray, former White House Counsel. It is necessary to amend this contract to add an additional $137,500 for a total of $187,500 which will cover all work needed by this firm in defending the District. Additionally, the District Counsel’s FY 2003-04 Budget does not contain funds to defend this case in the Supreme Court since hearing had not been granted at the time the budgets were prepared and an attempt was made to keep the budget as low as possible. Existing budgeted funds for environmental litigation ($110,000) will likely be needed to defend the architectural coatings litigation. Therefore, it is necessary to augment the District Counsel budget to defend the fleet rules litigation in the Supreme Court.

Funds are available in the Designation for Litigation/Enforcement for this purpose. The District will also continue to be represented in the fleet rules case by the firm of Shute, Mihaly & Weinberger, which successfully defended the District in the two lower court proceedings. It is anticipated this firm will continue to play a key role in researching and preparing the brief. The amount of $75,000 from FY 2002-03 has been allocated to this firm. However, the firm estimates it may need a total of $110,000-$120,000 to carry the case through the Supreme Court. Staff, therefore, recommends an additional $50,000 be allocated to the District Counsel’s FY 2003-04 Budget from the Designation for Litigation/Enforcement, to be allocated to either firm, as necessary.

Proposal

Staff proposes to appropriate a total of $187,500 from the Designation for Litigation/Enforcement to the District Counsel’s FY 2003-04 Budget for Supreme Court representation by Wilmer, Cutler & Pickering and Shute, Mihaly & Weinberger.

Staff proposes to execute a contract modification with the firm of Wilmer, Cutler & Pickering for continued representation of the District in the Supreme Court in the fleet rules litigation for an additional amount of $137,500 and a total not to exceed $187,500.

Sole-Source Justification

The firm of Shute, Mihaly & Weinberger is included in the eligible list established by the Board for environmental litigation in September 2002. The firm of Wilmer, Cutler & Pickering is selected on a sole-source bases under the District’s Procurement Policy, Section VIII(B)(2)(d) – the best interests of the AQMD require sole-source selection due to the need to immediately select Supreme Court counsel, Section VIII(b)(2)(d)(4) level-of-effort expert consultation services, and Section VIII(B)(2)(c)(1), unique experience and capabilities of the proposed contractor team.

Oral argument before the U.S. Supreme Court is a specialized field requiring experienced counsel to do the best possible job representing the District. Seth P. Waxman was formerly Solicitor General of the United States from 1997 to 2001. In that capacity, he was responsible for all representation of the United States before the Supreme Court. He has personally argued 35 cases before the Court. He successfully argued a case in which the Supreme Court upheld the Clean Air Act after the federal Appeals Court had held that the law was unconstitutional for delegating too much authority to EPA (Browner v. American Trucking Association (2000)). Prior to serving as Solicitor General he served in private practice in Washington, D.C. for 17 years and in several senior government legal positions including Acting Deputy Attorney General. He is a summa cum laude graduate of Harvard College and received his law degree from Yale Law School where he was managing editor of the Yale Law Journal. He has taught at Harvard’s John F. Kennedy School of Government and Georgetown University Law Center and written and lectured extensively in the legal field including federalism and preemption issues.

Also on the District’s team is C. Boyden Gray, former White House Counsel in the senior George Bush Administration, who will assist Mr. Waxman with the case. The firm will also provide other litigation support as needed. The firm provides a unique combination of skills and experience critical to representing the District in this case.

Resource Impacts

At the start of FY 2002-03, the Board-established Designation for Litigation/Enforcement for high profile or high exposure litigation totaled $1,000,000. Last year, the Board authorized an appropriation of $125,000 to District Counsel. $75,000 of this has been allocated to Shute, Mihaly & Weinberger and $50,000 to Wilmer, Cutler & Pickering. In February 2003, the Board authorized $150,000 from this Designation to the District Prosecutor’s FY 2002-03 Budget to pursue major enforcement actions. Also, in the FY 2003-04 Budget, an additional $150,000 of this was allocated to the District Prosecutor’s budget to pursue major enforcement actions. There is $575,000 remaining in the designation. Therefore, staff is recommending an additional $187,500 to be allocated to defense of the fleet rules litigation, leaving $387,500 in the Designation for Litigation/Enforcement. Sufficient funds are available in the Designation to cover this expense.

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