Approve Contract To Handle Appeal of Decision in State-Court Lawsuit Regarding Rules 1309.1/1315 and Appropriate Funding

PROPOSAL:

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

SYNOPSIS:

This action is to approve a contract with the firm of Kerr & Wagstaffe to assist in handling the appeal of a recent judgment in the lawsuit involving Rules 1309.1 and 1315. This action is also to appropriate funds from the Designation for Litigation and Enforcement to the District Counsel Budget, Professional and Special Services account, and to authorize the Executive Officer to initiate or amend contracts to expend these funds with outside counsel, as well as firms on the pre-qualified list for outside counsel or other counsel approved by the Board.

COMMITTEE:

Not applicable

RECOMMENDED ACTIONS:

1. Appropriate $175,000 from the Designation for Litigation and Enforcement to District Counsel’s FY 2008-2009 Budget, Professional and Special Services account.
2. Authorize the Executive Officer to initiate or amend contracts with Kerr & Wagstaffe as well as firms on the pre-qualified list for outside counsel or other counsel approved by the Board with monies to be appropriated as the need arises.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

A judgment adverse to the District was recently entered in a lawsuit brought by the NRDC, CBE, and other environmental groups challenging the District’s adoption of Rule 1315 and the 2007 amendments to Rule 1309.1.  The Governing Board has authorized an appeal of this ruling and has also directed staff to identify counsel to handle the appeal.

Staff solicited and received proposals for representation from the following law firms, who also provided an estimated budget for handling the appeal:

Firm	Cost
Jones Day	$250,000
Kerr & Wagstaffe	132,000
Perkins Coie (on the AQMD prequalified list)	$931,000

A copy of the proposals for the three firms are attached.

Sole Source Justification

The Board-adopted contracting policy authorizes sole-source contracts in specified situations, including when circumstances exist when waiver is in the best interest of the AQMD. Here, there is an immediate need to hire outside counsel to prepare an appeal. The delay resulting from competitively bidding a contract for outside counsel would prejudice the AQMD’s prosecution of the appeal.

Proposal

Staff is recommending that the Board authorize the hiring of Kerr & Wagstaffe to represent AQMD in appealing the ruling in the 1309.1/1315 litigation.  Kerr & Wagstaffe’s legal practice is devoted to handling trial and appellate matters.  The firm has significant experience successfully handling CEQA lawsuits both for public entities and environmental clients. 

To handle the cost of representation, staff is also recommending that the Board authorize an appropriation of $175,000 for the appeal from the AQMD budget’s Designation for Litigation and Enforcement to the District Counsel’s FY 2008-2009 budget, Professional and Special Services Account.  The Designation for Litigation and Enforcement, which is contained in the FY 2008-2009 budget, has a current balance of $500,000.

Resource Impacts

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