BOARD MEETING DATE: March 7, 2008
AGENDA NO. 10

PROPOSAL:

Appropriate Funds from Designation for Litigation and Enforcement and Authorize Amending/Initiating Contracts with Outside Counsel

SYNOPSIS:

AQMD District Counsel is currently being assisted in several lawsuits by the law firms of Woodruff Spradlin & Smart, Shute Mihaly & Weinberger, and Stinson Morrison Hecker LLP. These include litigation on the Architectural Coatings Rules, the Priority Reserve Rule, cases involving “hot gas” with the California Public Utilities Commission and the FERC, a lawsuit over a power-plant project in Romoland, and against the State Water Board involving the Salton Sea. This action is to appropriate $350,000 from the Designation for Litigation and Enforcement to the District Counsel Budget, Professional and Special Services account, and to authorize the Executive Officer to amend or initiate contracts to expend these funds with Woodruff Spradlin & Smart, Shute Mihaly & Weinberger, Stinson Morrison Hecker LLP or other counsel approved by the Board.

COMMITTEE:

Administrative, February 8, 2008, Recommended for Approval

RECOMMENDED ACTIONS:

1. Appropriate $350,000 from the Designation for Litigation and Enforcement to the District Counsel’s FY 2007-08 Budget, Professional and Special Services account.
2. Authorize the Executive Officer to amend or initiate contracts with Woodruff Spradlin & Smart, Shute Mihaly & Weinberger, Stinson Morrison Hecker LLP, or other counsel approved by the Board with monies to be appropriated as the need arises.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The FY 2007-08 Budget for District Counsel included $225,000 for litigation expenses. This amount has been spent on litigation for matters other than the railroad lawsuit, which has been funded from a litigation fund created by the settlement in the BP lawsuit. The monies for litigation have been fully expended on lawsuits involving the Architectural Coatings Rules, the Priority Reserve Rule (1309.1 credits for power plants), “hot gas” issues with the California Public Utilities Commission and the FERC, a power-plant project in Romoland, an ultra-low diesel project at the ConocoPhillips refinery, and the State Water Board’s approval of water transfer affecting the Salton Sea. Three law firms, Woodruff Spradlin & Smart, Shute Mihaly & Weinberger, and Stinson Morrison Hecker LLP, have been assisting District Counsel with these lawsuits. It is expected that fees in those ongoing matters, and in new matters that may arise, will total $350,000 between now and the beginning of the new fiscal year in July 2008. Accordingly, District Counsel is recommending the appropriation of additional funds in the amount of $350,000, for a total expected expenditure of $575,000 this fiscal year.

Proposal

In order to defend ongoing and threatened litigation, it is necessary to appropriate additional funds for expenditure by outside counsel. It is expected that ongoing lawsuits, and new litigation that is possible, will require an additional $350,000 to be appropriated to Woodruff Spradlin & Smart, Shute Mihaly & Weinberger, Stinson Morrison Hecker LLP, or other counsel approved by the Board.

Resource Impacts

Sufficient funds are available in the Designation for Litigation and Enforcement.