Loading...
Colantuono, Highsmith, & Whatley, PC - FY2020-076 CO LANTUO N O 790 E Colorado Boulevard,Suite 850 Michael G Colantuono Pasadena,CA 91101-2109 H I G H S M I T H (530) 432-7359 Voice(213)542-5700 MColantuono( chwlaw us Fax(213)542-5710 WHATLEY, PC March 18, 2020 VIA ELECTRONIC MAIL SCE Coalition Clients c/o City Attorney or County Counsel Re Letter Agreement for Legal Services — Proposed Suit Against Southern California Edison for Under-Collection of Utility User Taxes Colleagues Introduction I wnte to propose the terms under which we agree to represent your agency along with several others in a suit we are to file against Southern California Edison arising from its under-collection of utility user taxes Colantuono, Highsmith&Whatley, PC and all of its professionals are very pleased to have the opportunity to represent you This letter sets forth the basis upon which our firm will provide legal services to you and bill you for services and costs Conflicts of Interest The firm maintains a conflict of interest index which lists all clients of our firm and matters in which we represent them We will not represent any party with an interest that may be adverse to an indexed person without first determining if a professional conflict of interest would arise We propose to index the following with respect to this matter Client-Affiliated Parties All UUT taxing agencies in SCE's service area Adverse Parties Southern California Edison Please let me know if any of these names are incorrect or if there are other parties with an interest in this matter that we should list such as, for example, any particularly large power consumers in your City or County unincorporated areas or emissions- intensive or trade-exposed(SITE) customers in the City which benefit from SCE's under- / 225635 2 SCE Coalition Agencies March 18, 2020 Page 2 collection of the City's tax. Unless we hear from you to the contrary, we will assume the listing above is accurate and complete Given the nature of this representation, which involves representing a large number of agencies in a dispute involving 160 California cities and four counties that impose utility users taxes on electricity consumption, careful thought must be given to conflicts of interest First, we have multiple clients for purposes of this engagement It is possible, perhaps likely, that differences of opinion and different interests may exist or develop among them This could occur if a settlement proposal were made, for example, that offered different terms to taxing agencies based on the language of their tax and claiming ordinances Different clients might have different views on strategy, settlement, whether to appeal, and other issues In addition, our firm serves as City Attorney for the Cities and Towns of Auburn, Barstow, Calabasas, Chico, Grass Valley, Lakeport, Ojai, Sierra Madre, South Pasadena and Yountville and we have current general- and special-counsel relationships with other local governments throughout California However, none of our clients in those other matters, nor of the public agencies which have interests adverse to our clients, has an interest u1 this case that is not comparable to the interest of the agencies retaining us to prosecute it It is adverse to SCE and UUT taxpayers and we represent very few pnvate parties who pay such taxes All cities and counties in California that tax electricity consumption have a common interest in full collection of their taxes Nevertheless, an attorney cannot represent clients in unrelated matters if those two clients have a legal conflict or other adversity between them,even if that conflict is unrelated to the work the attorney is handling without their informed, written consent Nor can we undertake this representation if it would impair our ability to continue to represent our existing clients Accordingly, your retention of our firm to represent you along with other cities and counties in this case,and m similar cases against Pacific Gas&Electric Company and San Diego Gas & Electric Company, represents your agency's agreement to waive any conflict of interest that does or may hereafter exist among the plaintiff agencies,accepting any limitation on our ability to represent individual cities' and counties' interests made necessary by our service to the group as directed by the Client Relations Committee referenced below in light of the efficiency, cost savings and other benefits to you of joint representation You agree not to share with us any confidential information of your agency which you do not wish us to share with the Client Relations Committee and the other agencies which retain us in this case and to look to your own City Attorney or 223633 2 SCE Coalition Agencies March 18,2020 Page 3 County Counsel or other independent counsel for any advice you may desire as to issues in which your interests do not align with those of other agencies we represent Further, you agree that we may represent you m this case and continue to represent our existing general and special counsel clients, and new clients, on matters unrelated to this case even if you have a legal conflict or other adversity with that other client, such as a different position on a claim against a risk pool, a boundary dispute, a commercial dispute, any other disagreement You agree not to share with us any confidential information unrelated to this case which might impair our ability to represent our existing general and special counsel clients and other clients in unrelated matters notwithstanding any legal conflict or other adversity between you and those other clients You should consider these conflict waivers carefully and consult with your own City Attorney, County Counsel or other independent counsel before signing this letter agreement Agreement Among Agencies By signing this agreement and retaining our firm to represent you in this case, you agree that we may take direction regarding the case, including action on a settlement proposal (although no agency can be bound to a settlement or to filing an appeal without its independent consent),from a Client Relations Committee made up of seven or fewer members selected by the participating agencies, with each agency having one vote and each member of the Client Relations Committee having one vote on that committee,with a majonty of the committee required to establish a quorum and to take action The Client Relations Committee is currently comprised of Santa Barbara City Attorney Ariel Calonne, Santa Monica Deputy City Attorney Susan Cola, Moreno Valley City Attorney Martin Koczanowicz, and Torrance Finance Director Enc Tsao and up to three others named by the Committee, all of whom will continue to serve until a meeting of all participating agencies' representatives selects others to serve in their place Upon any vacancy on the Committee, the remaining Committee members may appoint a successor to serve until a meeting of all participating agencies representatives confirms or replaces that appointee You agree that our fees and charges for services in this case will be divided among our clients in proportion to the amounts they have at stake. Unless and until the Client Relations Committee approves a better estimate of the amount at stake for each City or County, our clients' relative stakes will be determined according to our current estimate 225635 2 SCE Coalition Agencies March 18, 2020 Page 4 of the amount of residential taxes in issue for each agency shown on the attached spreadsheet Please confirm that the figures shown there for your agency are correct Your share of fees and costs will change if any listed agency leaves the group,or if others Join Unless the Client Relations Committee otherwise directs, you will be responsible for your share of the cost of all of our services and all of the costs incurred in preparing the case beguuung on June 26, 2019 and ending on the date of your termination of our representation. However, if particular issues arise in the case that affect only some agencies — such as decisions to settle — the Client Relations Committee may direct us to bill work on those issues separately In that case, those charges will be borne by the benefited agencies in proportion to the amounts they have at stake, as determined by the Clients Relations Committee as described above Enclosed is an estimate of our fees for work on the case through trial court judgment These four paragraphs labeled "Agreement Among Agencies"represent a contract among the plamhff agencies which retain us to prosecute this matter We cannot be involved m negotiating or interpreting that contract or resolving any disputes regarding it, as doing so would necessarily involve us m a matter as to which our clients have conflicting interests Accordingly, you agree that you will seek independent legal advice whether to enter into this Agreement and that arty dispute among our clients in this case that cannot be resolved by the Client Relations Committee or in mediation will be resolved by binding arbitration in Los Angeles to be conducted by ADR Services, Inc according to its commercial arbitration rules and that our firm and its professionals will represent no party in such a dispute Estimated Fees;Billing. The$220,000 estimate of fees for work through trial court Judgment is an estimate, not a guarantee It does not cover the cost of an appeal or advocacy before the Legislature or Public Utilities Commission, which may be likely. If our assumptions are not realized or we believe the budget bears review for other reasons, we will present a revised budget to the Client Relations Committee for its review and approval We will, of course,make every effort to represent you as efficiently as possible You will receive monthly statements stating our fees and costs incurred during the previous month Please make payments payable to Colantuono, Highsmith &Whatley, PC directly to our Grass Valley office at 225635 2 SCE Coalition Agencies March 18, 2020 Page 5 Colantuono, Highsmith &Whatley, PC 420 Sierra College Drive,Suite 140 Grass Valley, CA 95945-5091 Our federal employer identification number is 75-3031545 John L Jones,II and I will have primary responsibility for your representation,and the firm will use other attorneys and legal assistants m the best exercise of our professional judgment If you have questions, concerns or cnticisms at any time, please contact me at once Naturally, we expect you to keep us reasonably informed of all significant developments regarding this representation We review all statements before they are issued to ensure the amount charged is appropriate The statement for fees is simply the product of the hours worked multiplied by the hourly rates for the attorneys and legal assistants who did the work. Our hourly rates are based upon the experience, reputation and ability of the lawyer or legal assistant performing the services, and for 2020 range between $220 and $525 per hour for attorneys' time, and between$125 and $170 for the time of paralegals and legal assistants As a courtesy to you, however, we agree to cap our rates at$395 per hour unless SCE or another third-party should be ordered to reimburse our fees, in which case our full rates will apply. Our rate structure in general and the rates of particular lawyers may be increased from time to time,and are usually adjusted as of the beginning of each calendar year However,we will not lift the conditional$395 per hour cap without first discussing that change with you It may be necessary to bill you for items such as, but not limited to, authorized travel, long distance telephone calls, filing fees, photocopying, computerized legal research outside the scope of our Westlaw contract and the like These items are separately itemized on our statement as "disbursements" These amounts will be billed m addition to our fees We will send you monthly statements, and expect payment within 45 days of the billing date If payment is not received within 60 days of the billing date, we reserve the right to charge interest on the unpaid balance at the rate of 1%per month and to terminate our representation 225635 2 SCE Coalition Agenaes March 18, 2020 Page 6 Fee Disputes. We rarely have disputes with clients over our fees. Nevertheless, you should be aware that you are entitled to require that any fee dispute be resolved by binding arbitration in Los Angeles or Nevada Counties pursuant to the arbitration rules for legal fee disputes of the respective County Bar Association We agree that all disputes between us regarding the services rendered or fees charged not resolved via County Bar fee arbitration will be submitted to binding arbitration in Los Angeles to be conducted by ADR Services, Inc in accordance with its commercial arbitration rules YOU SHOULD REVIEW THIS PARAGRAPH CAREFULLY AND, IF YOU WISH, SEEK INDEPENDENT LEGAL COUNSEL REGARDING IT, AS YOU AND WE ARE AGREEING TO FOREGO SIGNIFICANT RIGHTS IN THE EVENT OF A DISPUTE BETWEEN US, INCLUDING THE RIGHT TO A JURY TRIAL. Termination You have the right to terminate our representation at any time We have the same right, subject to an obligation to give you reasonable notice to arrange alternative representation In either circumstance, you agree to secure new counsel to represent you as quickly as possible and to cooperate fully in the substitution of the new counsel as counsel of record Notwithstanding the termination of our representation,you will remain obligated to pay to us all fees and costs incurred previously File Management You agree that we may, in our discretion, maintain all or part of your client file in electronic format.The firm may store part or all of your documents using secure cloud storage services If so, the firm will apply all reasonable methods to maintain the confidentiality of your files,just as it does for your non-digital information Your data will be password protected and encrypted using currently available technology. Clients requiring information from their files may obtain that information only by written request to us You also agree that following termination of our attorney-client relationship, we will not be required to maintain your client file for more than two years If you ask us to deliver your file to you, you agree that delivery of an electronic version, together with any materials that cannot be saved electronically, satisfies our obligation to release all your client papers and property to you Two years after termination of our relationship, and after reasonable notice, you agree that we will be free to destroy your client file, including all electronic records We may also discharge our obligation to maintain your file before two years expire by mailing a copy to you at your address last known to us You agree that "reasonable notice" means our mailing a notice of our intent to destroy your client file to you at that address 225635 2 SCE Coalition Agencies March 18,2020 Page 7 Conclusion. I apologize for the formality of this letter, but we are required by California law to provide this information to you in writing. We are also required to inform you that we currently maintain professional liability insurance coverage Please review the foregoing and, if it meets with your approval, execute it and return it to me If you have any questions, please feel free to call me at the direct-dial number above Thank you for the opportunity to represent you! ~ Very truly your C ' --.____.___— —--} Michael G.Colantuono MGC.mgc On behalf of the agency named below,I agree to retain Colantuono, Highsmith& Whatley, PC to provide legal services as set forth above and to waive the conflicts of interest and consent to simultaneous representation with other agencies in Southern California Edison's service areas which impose utility users taxes. Date: /412-4t, , 2020 ASigna re By. MiHQ,'rt4v Title Cct`( M/tNPtt,s.P City/Ce rty of: F- Crlo PALcb Va 4> S 2256352