The California Court of Appeal, Second Appellate District, recently decided a case that will possibly lead to cities having to hire additional legal counsel in some administrative settings.
FACTS
In Nightlife Partners, Ltd v. City of Beverly Hills (2003) 108 Cal.App.4th 81, the operators of a cabaret in the City of Beverly Hills submitted an application to City for renewal of their adult entertainment regulatory permit. The city’s staff, acting with the advice of Assistant City Attorney Terence Boga, took the position that the application was not complete, and the renewal application was denied. The operators filed an administrative appeal, which was heard by David R. Holmquist, an attorney and City’s risk manager. During the appeal hearing, Holmquist received advice and assistance from Boga while an additional attorney, hired for that purpose, acted as the City’s advocate. Holmquist denied the operators’ appeal, and they filed a petition in the superior court asking for issuance of the denied permit. The trial court ruled in operators’ favor and ordered a new administrative hearing because the trial court believed that Boga’s dual participation had acted to deprive the operator’s of their right to due process. City appealed to the Court of Appeal.
APPELLATE COURT DECISION
The operators argued that City violated their due process rights because Boga had participated in both the application renewal process and the “neutral” administrative review of that same application process. The Court of Appeal agreed, relying on the well-established, general rule that the roles of prosecutor and advisor to the decision-maker cannot be combined. In other words, when counsel performs as an advocate or a prosecutor in a given case, he or she is precluded from advising a decision-making body in the same case. This “objectionable overlapping of the role of advocate and decision-maker occurred when Boga acted as both an advocate of City’s position [in the application renewal process] and as advisor to the supposedly neutral decision-maker.” There was a clear appearance of unfairness and bias, and Boga’s role as advisor to the decision-maker violated Operators’ due process rights.
The Court of Appeal sent the case back for a new hearing, with instructions that the new hearing should not be conducted by Holmquist or any person who had served as City’s advocate in this or any related case. The Court further instructed that the hearing officer should not be advised by any person who had served as City’s advocate in this or any related case.
EFFECT ON PUBLIC AGENCIES
This case appears to extend the previously understood rule. Advice regarding whether or not a permit application is incomplete is not acting as an “advocate” or as a “prosecutor.” Even so, this case poses the possibility that public agencies must utilize separate counsel at each level of a decision. If that is the case, independent counsel may be needed more frequently.
At the least, public agencies are advised to request that their own counsel carefully consider what role he or she will play in administrative decisions. At the least, the case is a warning that counsel may not wear too many hats at one time.