Board of Supervisors - Regular Meeting

this is the iowa district court for madison county the case before the court's entitled michelle brand as madison county auditor and concerning heather stancil and jessica hobbs as members of the madison county board of supervisors the case number is cbcb 036143 there are pre motion separate hearing today. The first is the motion to disqualify plaintiff's counsel. That's at docket number eight. That's filed by attorney Bohl, who is representing the Board of Supervisors. There is no resistance on file, but I'll note that County Attorney Steve Swanson is here today. The second matter is motion to dissolve the stay. That's at docket number 10. and then at docket number 12 there's a motion for a definitive statement it's courts perception that we need to address the plaintiff's motion to disqualify counsel first because if that motion is granted and successor counsel needs to be appointed or will appear in this case then So that council shouldn't be bound by anything that the conflicted council has done. And so this is the motion of the defendant. Just for the sake of efficiency, I'll refer to the defendant's support supervisors. and the plaintiff is auditor. Mr. Boll, on behalf of your client, any preliminary record before you make your argument? No, Your Honor. And Mr. Swanson, on behalf of your client, any preliminary record?

Obviously, we're resisting the motion.

I'll have you turn your microphone down.

I'm having trouble hearing you. Obviously, we're resisting the motion other than that.

Say that again? We're resisting the motion other than that. All right, so we've got a unique scenario in this case in which the county attorney, Mr. Swanson, is representing one of the county officials against the Board of Supervisors. And so, Mr. Swanson, some questions for you. Do you dispute that the auditor is suing in her official capacity? And do you dispute that the Board of Supervisors are being sued in their official capacities?

No.

With regard to both the auditor and the Board of Supervisors, have you sought a conflict waiver from either? No. And is that because it's your position that there is no conflict?

My position is that the Board of Supervisors has repeatedly for the last eight months that they had a conflict with me in my office. They have been using the conflict as a sword and a shield. When it's useful to them, there's a conflict with me. When it's not useful for them, there's not. This would be another situation where it's useful for them. And when it's not, are you representing the board? I answer questions for the board from time to time, but generally they use their outside counsel since they got them in August of last year.

So when they generally don't use outside counsel, do you represent the board?

I would if I was asked to. I've been excluded from meetings on litigation since August 25th last year. do you believe that any conflict of interest is not waivable no and why is that i believe case law points that extreme versus gordy the uh county attorney suits the board of supervisors um in their in their capacities of that was a lot to go for as that the hang up on that was that they tried to use an outside council without getting approval from the board ahead of time. Section six of Iowa Code 331-756 says that the county attorney shall commence, prosecute, and defend all actions or proceedings against a county officer in the officer's official capacity or the county's interested party. The problem with the handle of it as a conflict is that the board would receive, would get an outside counsel to represent them because there's a compliment from the county attorney in this matter and that's what they've done.

Now, it appears obvious then that, from your argument, the Board of Supervisors is choosing to represent them and so is the auditor. In that circumstance, don't the cases that the defendant cite or the Board of Supervisors cites in their motion, there are two. One is called Liquor Bike LLC and the other is New Star Farms. Don't those stand for the proposition that even if everybody's happy with the counsel that they got, sometimes disqualification is required over the litigant's choice?

I would say that those are both different situations which involve private attorneys and private matters. This is complicated because of the situation of being government offices. How so? As a county attorney, I mean, I bring all the litigation we have in the county of what the board appears to be doing is to shield themselves from any litigation or any responsibility, any oversight. They simply say, well, the county attorney can't investigate that because it's conflict, then making it so they're immune from any oversight by anybody.

And in that circumstance, where do your loyalties lie as an attorney?

The loyalty of the county, what's the best interest of the county.

And what political entity determines that? I don't know.

There's situations where this has happened in the past and it hasn't been with those cases. So I don't know why it would be different in this manner.

The Court of Supervisors cite another case in their motion, City of Davenport v. Office of Auditor, which is a relatively new case. And in that circumstance, it appears that rule of Professional Conduct 32.17 apply. Is that not the case here?

I just believe this is a different situation. That was about subpoena of powers of the Auditor's Office, I believe. which is a different situation than we're in here well does the underlying nature of litigation matter if an attorney owes a duty of loyalty perhaps to two sides of the case i mean again it's it's a confusing situation due to the conflicts and the nature of the conflicts in this case i have been removed from meetings on numerous occasions because of the conflict i've been sued by one of the warrants advisors personally and my professional capacity So there's conflicts all around. And so it makes it kind of a unique situation here.

Does one of those conflicts involve your representation of potentially both sides of the case?

They, the court of supervisors, was able to get their own attorney. That's what, so I'm representing the auditor side. They are able, and that's the remedy for them is if there's conflict with the county attorney's office, for them to get outside the household.

Understood as it relates to this particular dispute, but in any other matter it is not the Board of Supervisors your client.

They don't say so. What do you say? They would be if they asked me a question I'd answer it. They just haven't really done that very often since August 25th.

Do you have information that could be used to the board's disadvantage in this case that you learned as their attorney no and have you sought a waiver from michelle brand to act as the auditor's attorney even though you have been and may be in the future the attorney for the board supervisor no why not

I didn't think it was necessary. I haven't seen any case law that says that that was required for me to represent her.

Okay. Mr. Boll, on this particular topic, I've had a chance to review your motion as well as rule of professional responsibility 32.17 subparagraphs B3. And that appears to bar consent when representation, quote, involves the assertion of a claim by one client against another client represented by the lawyer in the same litigation is it your condition then that mr swanson represents the board in this litigation

Mr Swanson represents the county. We would, as it relates to the posture of this case, we would submit that the conflict is not waivable. When one county official brings a lawsuit against two others, that's an instance where the county attorney simply cannot represent either side of the litigation.

Even though in this case the board has hired you as outside counsel?

that's correct your honor the county attorney's duties of loyalty and generally run from chapter 331 and chapter 331 recognizes that the county attorney does represent county officials in his capacity as county attorney so outside counsel does not remedy any conflict

In your motion, did you cite the subsequent rule in Chapter 32, and I won't expect you to necessarily remember it, but subparagraph A2 would require perhaps the court to find a risk that Mr. Swanson's representation of the auditor would be limited. How would that be the case?

So I think you're right. As a threshold matter, we believe disqualification is proper under A1. If the court would get to A2, which, as the courts pointed out, is a significant risk that is responsibilities to one materially limits the other. Um, there was a long course before this litigation, potentially after this litigation where the county attorney does represent, um, the county board on whatever they asked. I think that was kind of part of the questioning here. And so I don't know, and outside of, you know, asking for specific testimony as to what conversations were, I don't know the scope of what the county attorney advised board members prior to this litigation. Um, so to say there's nothing that was exchanged in those conversations, many conversations that wouldn't limit his representation. I don't know. I'm not sure. But in my opinion and in the defendant's position, that just clears the way for A1 to say this is litigation between two existing clients and Mr. Swanson cannot proceed.

If we accept the premise that Mr. Swanson doesn't currently represent the Board of Supervisors in this litigation, why would either of these sections apply?

Because I think by nature of the office, the county attorney does represent the board in all litigation and non-litigation matters. So I don't think either chapter 331 or chapter 32 of the Iowa court rules contemplate that a county attorney can not represent a client only in one litigation matter while continuing to represent the county and its officials in all other matters.

You may have addressed this earlier, but do you believe Attorney Swanson has information about the subject matter of this case that would benefit your clients that he learned in that representation? I don't definitively know. Now, what about this issue of the board hiring you as outside counsel? Does that eliminate this risk?

No, it does not, Your Honor. The reason being, the question is whether Mr. Swanson owes a duty of loyalty and to whom Mr. Swanson owes a duty of loyalty, no matter whether matters are in litigation or not. And so if the board, under statute, wants to elect to vote to seek outside counsel that is fine if i were to represent ms brant on something that you could potentially see it's different when the wires cross but the board saying we want to supplement using our county attorney and outside counsel on matters no matter whether they're in litigation or they're not that doesn't create the same wires cross type of conflict as if mr swanson is representing the board on matters litigation on litigation matters and then simultaneously directly adverse to the board in any litigation

If the court grants your motion, what issues are raised by having to either hire or appoint outside counsel?

Yeah, this is the second part of our motion. I'm glad the court brought it up. Because both sides are being named and this litigation results to conduct in their official capacities, under normal circumstances, if outside counsel was needed for an official capacity suit the board of supervisors would appoint that council we believe under the circumstances it would not be appropriate to have the board appoint counsel to a case that it is at first due kind of selecting its opponent so to speak so there's another option which is under 331.759 in which this court would appoint a subsequent substitute counsel with the caveat mr swanson mentioned the stream versus gordy case which clearly says that when the board does not authorize lawsuits by or involving the county the county fist is not implicated and so we believe under the circumstances that disqualification is granted a subsequent counsel would have to be appointed by the court with the clarification that no public funds could be used to pay that outside counsel

And if the court declares that Mr. Swanson is disqualified by the rules of conduct representing the auditor, is that the same as him withdrawing for cause?

I believe the court could enter an order disqualifying Mr. Swanson and could direct him to be removed from the case for cause. That part of the statute is a bit clunky, but admittedly.

But I think under the circumstances the court would direct them to withdraw for cause in which case the statute would And in terms of Briefing this issue post hearing is it the board's request to do so and do include a information about this issue of appointing counsel and related cause.

That's correct. The defendants would primarily rely on their briefing as was submitted almost a month ago on June 26th. I would note for purposes of the record that there was no resistance filed. So if there is post hearing briefing, the defendants would respectfully request that briefing schedule be tightened.

As there is a pending stay in this matter But if there is a request for post hearing briefing, obviously the board will accommodate and would simply request that the timeline be shortened given the motions in your motion you cited the case of Smith versus Board of Supervisors Does that case stand to the proposition that There's a lack of authority to award fees or just a lack under a particular claim In other words, how would it apply to this circumstance?

We go to the circumstances in the Smith v. Gordy case, which I recognize is not, or excuse me, the Stream v. Gordy case, which is not the Smith case. The court observed, just based on the pleadings, that that was a case that clearly was not brought by the board. And they recognize that a county board is the decision maker for what litigation the county must fund. And so without having the Smith case in front of me, I think how it applies is that if there was no authority to file this suit with the public face backing the suit, then this court would be without authority to direct the county to pay for that suit over its objection. And I'd be happy to take a look at that case and include it in briefing at the court of law. Okay, thank you, counsel.

And now to that latter issue, Attorney Swanson. If the court does grant disqualification, what is the auditor's position on court-appointed counsel under Iowa Code Section 331.759? Is that the appropriate mechanism or is there a better way to do it?

That's probably the appropriate mechanism. The issue is, of course, It's not very likely or possible to imagine a scenario in which the board votes to pay for outside counsel to sue them. It makes it very difficult for people to bring claims against the board for their actions when they control the purse strings, which is part of why the county is handling this one. well if the board of supervisors didn't authorize the lawsuit what's the appropriate funding mechanism then if disqualification is appropriate right well the board of supervisors doesn't approve lawsuits they just approve outside counsel so they don't have any say in what lawsuits are brought or what isn't brought except for for the purpose of paying for outside counsel my understanding is for all of that I guess I don't know. There's holes in the law everywhere and that would just be another one, I guess. It would be more appropriate for the county to pay for it, but I don't think there's a mechanism for that.

All right. Well, the motion was filed June 26. We rotate on a quarterly basis. As the council knows, at that time a different judge was presiding. The hearing was set for today. So I will need some briefing on this. I understand request for expedited relief is well founded and so that would be appropriate this is the defendant's motion so mr bold by what time can you file your post hearing brief um honestly the post hearing brief will largely mirror the motion um so if it helps speed things up i would say you can rely at least

as a reply on the initial motion. If not, we'd be able to file within a week.

Well, I guess I'm not quite following what you're telling me then. Do you want the opportunity to file a post-hearing brief In support of your motion or you're just waiting for the other side to breathe and then you want to require I think that's the latter your honor. There's a resistance file and we've just asked for the opportunity to reply to that. Okay So attorneys wants and there's no resistance on file. I don't know what the position is of the auditor. Do you want an opportunity to brief it? uh yeah i mean most of the position was laid out in the initial motion but i will i would want an opportunity based on hearing today so how much time do you need 10 days so uh if we say july 30th at noon that will be enough time for you uh yeah and then mr bull how much time would you need to respond i'd ask for seven days I'll enter an order that continues our trial scheduling conference until later date but sets a briefing deadline for the auditor of noon on july 30th with a reply from the board by august 6th at noon anything further on behalf of the board and on behalf of the auditor okay thank you folks i'll take the mandarin advisement after those briefs are submitted initially we're willing as soon as i can thank you