Contingent Fee Agreement Between City and its Outside Counsel is Privileged and Need Not be Disclosed Absent Showing of Facts Supporting an Exception to the Privilege


Contingency fee agreements are protected by the attorney-client privilege under California Business & Professions Code section 6149. However, in certain types of actions, such agreements are not permitted or their use is subject to limitations. These actions include criminal actions (not allowed) and public nuisance actions brought by a private attorney on behalf of a government entity (subject to limitations). The rationale is that critical government authority should not be delegated to an attorney possessing a personal pecuniary interest in the case. See People ex rel Clancy v. Superior Court (1985) 39 Cal.3d 740 and County of Santa Clara v. Superior Court (2010) 50 Cal.4th 35.

In City of Merced v. Merced County Superior Court, Fifth Appellate District, Case No. F059301, the City retained a private attorney on a contingency fee basis to pursue a public nuisance action against Exxon. Exxon sought production of the contingency fee agreement, apparently with the goal of moving to disqualify the City’s counsel on the ground that its agreement violated the limitations stated in Clancy and County of Santa Clara.

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