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Supreme Court: Public Official May Not Rely On Government Attorney’s Advice As to Conflict of Interest Rules

By: Lloyd W. Pellman
02/22/07

Public officials throughout the state face a thorny issue whenever they consider making a decision that may affect them personally.  A recent decision of the California Supreme Court, People v. Maria Socorro Chacon, No. S125536 (February 8, 2007) ("Chacon"), holds that a public official may not use reliance upon the advice of his or her government agency's counsel as a defense in a prosecution for an alleged conflict of interest. 

Chacon involved a city council member who was chosen by the council to be the city manager while she was still serving on the council.  At the same time, the council repealed an ordinance providing that someone who had served as a council member could not be employed by the city until a year’s time had passed.  Ultimately she resigned from the council to take the job as city manager.  The District Attorney prosecuted Chacon for violation of California Government Code section 1090, which prohibits council members, board members and other government officials from participating in "making," or even serving on a body which "makes," a contract in which the official has a financial interest – here, her contract as city manager.  In defense, Ms. Chacon argued that she had relied upon the advice of the city attorney, who, she said, advised her that the entire arrangement was legal.  All of this arose in a criminal proceeding, as section 1097 of the Government Code authorizes criminal prosecution for violation of section 1090.

The matter ended up before the California Supreme Court.  After first stating that advice of counsel was not a defense to a criminal violation of section 1090, because the accused's knowledge of the illegality of her actions was not an element of proving the crime, the Supreme Court went on to consider a defense offered by Chacon known as "entrapment by estoppel."  This defense arose out of a 1959 civil rights case, Raley v. Ohio (1959) 360 U.S. 423, in which defendants were convicted of contempt because they refused to answer a state commission’s questions, although the chairman of the commission had advised them (contrary to Ohio law) that they had the right to be silent by invoking the privilege against self – incrimination.  The U.S. Supreme Court held that a criminal conviction under such circumstances was not defensible because it violated the due process clause of the United States Constitution – otherwise the court would have been sanctioning an entrapment by the government.  In the recent case, Chacon argued that she was in the same position; she relied upon the City Attorney’s advice, and not to permit that as a defense would violate the doctrine of entrapment by estoppel. 

The California Supreme Court held that the doctrine did not apply to Ms. Chacon.  The Court noted that, unlike individuals who had successfully used the defense previously, "defendant was not an ordinary citizen confronting the power of the State.  Defendant was a member of the executive branch of government.  A public office is a position held for the benefit of the people; defendant was obliged to discharge her responsibilities with integrity and fidelity."  (Id. at p. 14.)  The Court therefore refused to extend the defense to public officials, citing a number of public policies.  Interestingly to attorneys, in discussing one of the public policies involved, the opinion assumes that an attorney employed by a public agency might not carry out his or her ethical duties under the rules of professional responsibility, but might instead tell his or her ultimate employers, the council members, only what they wanted to hear. 

In addition to the problems arising from Chacon, the public official who has relied upon advice of the government agency’s attorney is also precluded from seeking damages for the incorrect advice from that attorney, under another decision.  That was the holding of the Fourth District Court of Appeal in Chapman v. Superior Court (2005) 130 Cal. App. 4th 261 ("Chapman"), which the California Supreme Court declined to review.  In Chapman, a public official of the San Diego Port District, David Malcolm, had pleaded guilty to one count of "willfully" violating section 1090 because of his relationship with an energy company that contracted with the Port.  After pleading guilty, Malcolm filed suit for legal malpractice against the Port and its attorney, David Chapman, stating that the attorney had advised that his conduct was legal and not in violation of section 1090.  The Court of Appeal was potentially faced with the issue of whether there was an attorney-client relationship between the government entity’s attorney and Malcolm, one of the Port’s commissioners.  Even though the Court found the advice to the commissioner to be "inexplicable," in the end it determined that Malcolm was not entitled to rely upon the advice from the government entity’s attorney in the section 1090 context, just as a person could not claim to rely upon an attorney’s advice in committing perjury.  The Court cited several public policy reasons in support of its conclusion.  Having decided against Malcolm on this issue, the Court did not reach the precise issue of whether a board member could have an attorney – client relationship with an attorney employed by the government in other contexts.

Putting the two cases together, public officials throughout the state should be on storm watch.  One can understand the public policy reasons driving both the Chacon and Chapman decisions:  the public needs to be assured that its officials are free from any personal interest that would interfere with impartial government.  All well and good.  But that ignores the practical issues confronting public officials, especially those who serve on boards, some with minimal or even no compensation.

The State of California is made up of a multitude of local government agencies, all of which have councils, commissions or other types of boards.  The boards of many government agencies have conflicts of interest built into their membership, such as landowner districts or boards where it is a requirement that the members have a certain background or represent a certain interest.  The legality of conduct where there may be conflicts is sometimes obscure under section 1090.  It is often even more difficult to determine the legality of conduct under the Fair Political Practices Act (Cal. Gov. Code, §§ 81000 et seq.) and its regulations (2 Cal. Code Reqs., §§ 18109-18997), which are more extensive and sometimes more obtuse, and which similarly can apply a criminal or civil penalty to misconduct (Cal. Gov. Code, §§ 91000 et seq.).

Given the rule that a board member may not rely upon the government’s attorney in determining whether or not conduct is legal under conflict-of-interest rules, all board members must consider going outside of the agency and retaining their own attorneys where there is a close call, even if their positions are not compensated.  If the conduct required of the board member were simply to determine whether to stop at a red light or to go when the light is green, this would not be a valid concern.  But the complexity of determining what is legal and what is not under conflict of interest rules is not so simple a matter.

Short of the government entity paying for outside counsel each time there is a difficult question, it is hard to see a solution to this dilemma without a change of laws.  Pending that possibility, which may be a long time in the making, agencies should be diligent in arranging for public officials to attend the ethics training required by AB 1234 (Chapter 700 of the 2005 legislative session), and public officials throughout the state should be alert to the necessity of seeking advice beyond the agency’s attorney on more occasions than has traditionally been the case.

Lloyd W. Pellman is a Partner with Nossaman and can be reached at (213) 612-7802 or lpellman@nossaman.com.

Stephen N. Roberts is a Partner with Nossaman and can be reached at (
415) 438-7224 or sroberts@nossaman.com.

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