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Conflict Of Interest? - Questions Surround Fire Counsel
Stan Consolidated

Attorney William D. Ross represents the Stanislaus Consolidated Fire District. Ross was also the district legal counsel for the Oakdale Rural Fire Protection District. So when the two entities met to draw up agreements, such as merger plans from earlier this year, the question has been asked if Ross had a conflict of interest and could adequately provide legal advice and represent the legal concerns of both sides.

Going back to 2000, several contracts between the two entities are on file with Ross signing as counsel of record for each district “approving as to form” the agreements. Some of these contracts are for command services provided by Stanislaus Consolidated at a cost to Oakdale Rural Fire District.

In one document obtained regarding the Oakdale Fire Protection District merger to Stanislaus Consolidated dated June 24, 2014, Oakdale Rural requested mediation regarding action taken by the Stanislaus Consolidated Board of Directors at a June 19 meeting.

Other agreements are the recent absorption of Oakdale Rural Fire Protection District by the Stanislaus Consolidated Fire Protection District affecting employees, equipment, and property.

The American Bar Association states a conflict of interest exists, “if there is a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s own interests or by the lawyer’s duties to another current client.”

Nothing prohibits one attorney from representing both municipalities.

“A conflict letter was signed by both entities,” said Ross when contacted at his Palo Alto office in regards to both agencies. “It’s consistent with state bar rules.”

Ross, who has been the district counsel for both fire districts for over 20 years, said in the letter both sides knowingly waive any later claim to a conflict so that the negotiations can proceed.

According to the ABA, one lawyer can, with appropriate care, represent multiple parties with similar interests with a waiver from each client acknowledging the joint representation.

However, some transaction conflicts simply cannot be waived. The average good business lawyer will have a pretty good nose for transactions that are simply too difficult for joint representation, officials said. There may be too many contentious issues to be negotiated, which the parties cannot resolve without their own lawyers.

According to the California League of Cities, each municipality requires legal advice and authority that is specific to their situation. If one attorney represents both parties, the chance arises that the contract or agreement down the road will be voided.

Oakdale City Attorney Tom Hallinan represents many other smaller cities in the area – Patterson, Riverbank, Newman as well as the communities of Grayson and Denair.

In a recent dealing between the cities of Oakdale and Newman for police dispatch services (see related story), Hallinan represented Oakdale but used the city attorney of Turlock to represent Newman’s interests.

The key, according to the ABA, is whether the lawyer’s exercise of independent professional judgment is likely to be unduly influenced by the other interests. The ABA suggests the involved lawyer should ask himself that with the presence of any interest, are they likely to do, or be tempted to do, something different from what a truly independent lawyer would do. If the answer is yes, it is fair to say there is a conflict.

Even though the appearance of impropriety is no longer formally part of the rules, the ABA also urges lawyers to take that into account when making a determination of representing both sides in a legal matter.

“I’ve always had a problem with it,” said Oakdale Councilman Tom Dunlop, who sat in when the city and both districts were discussing a possible three-way merger and contracts for various services – management services and fire protection – during this year. “Legal or not, it looks inappropriate.”

Dunlop said that during negotiations many parties are affected including employee interests, resident interests, and property and equipment from each entity.

“Who’s protecting who from the other side in that case?” Dunlop asked.

Dunlop said he would have felt better in the process if each lawyer had been “at arm’s length” on all sides.

“Individual representation would have been a cleaner process,” Dunlop said.

On Sept. 1 Stanislaus Consolidated absorbed the Oakdale Rural Fire Protection District services which included the hiring all 12 Oakdale Fire Protection District employees. The City of Oakdale entered into a five-year contract with Stanislaus Consolidated that also included the hiring of all 12 Oakdale City Fire employees.

Stanislaus Consolidated has been providing management services to both fire agencies since February, 2012.

In August, Gov. Jerry Brown signed into law legislation that prohibited attorneys from representing both sides of commercial real estate sales or leasing transactions.