In 1989, Beverly T. Purrington had hoped to become the new director of the Women's Resource Center at the University of Utah. She had worked for the center for four years as a program coordinator and had become acting director when Shauna Adix resigned earlier that year.
But when a university search committee decided to name someone else as director, Purrington quit her job and filed a $250,000 lawsuit against the University of Utah, then-university President Chase Peterson, and four university employees.Purrington claimed in the lawsuit that she had been denied the promotion in retaliation for sexual-harassment charges she had earlier filed against her boss, Adix. In fact, it was Adix's ongoing sexual harassment of women on campus that contributed to her resignation, Purrington alleged.
But University of Utah counsel John Morris says he conducted an internal investigation and concluded "the university had no liability in that case. We had done nothing illegal, and I recommended that we not settle the matter."
Not only did the U. refuse to settle, but it hired the prestigious law firm of Parsons, Behle and Latimer to defend itself. Two years and more than $915,000 in attorney fees later, U.S. District Judge David Winder ruled that Purrington's lawsuit was without merit. The U. had been vindicated.
Years after the fact, the Purrington case still gives current Utah Attorney General Jan Graham heartburn. The issue, she says, in not whether it was appropriate to vigorously defend the U., but whether it was really necessary to spend almost $1 million on private attorneys for a job that could have been done just as competently by attorneys in the attorney general's office.
And at little or no cost to taxpayers.
"If they (the U.) were to come to us today with the Purrington case, it absolutely, positively would be handled in this office," Graham said. "It was a garden variety case with no unique claims or complicated legal issues, and there was no need to hire whom they did."The hiring of private attorneys to represent the state, as was done in the Purrington case, is hardly unique. Over the past five years, more than 75 cases have been farmed out to private attorneys at a total cost of more than $10.5 million to taxpayers - despite the fact the Utah attorney general's office is the largest law firm in the state with 162 attorneys now on staff (see accompanying chart).
Good public policy?Most of the outside counsel cases were initiated during the term of former Attorney General Paul Van Dam and a few during the administration of Van Dam's predecessor, David Wilkinson.
Graham, who campaigned on the pledge to eradicate the practice of hiring outside attorneys, has contracted only three cases in her first 18 months at a cost to taxpayers of $50,000.
Graham calls the historical practice of hiring private law firms "irresponsible" from both an economic and a public policy point of view. It costs the state two to six times as much to hire private attorneys to do the same job that could be done by the attorney general's office.
"And when we lateral the ball to a private law firm, we no longer have accountability and control," she said. "All we see are the bills they send us. Where is the public accountability in that?"
Van Dam makes no apologies for hiring outside counsel to represent the state, calling it a philosophical choice of "you can pay me now or you can pay me later. We could defend it well or it would end up costing us a lot more than what we paid in outside counsel."
One such case involved oil royalties on the Navajo Indian Reservation. Hundreds of thousands of dollars was spent on outside legal counsel, but that amount was minimal when compared with the $100 million or so the state stood to lose if the case had been lost in court.
Van Dam says his reasons for hiring so much outside counsel were three-fold: He inherited a drastically understaffed office wherein there simply were not enough attorneys to handle all the state's legal business; a good share of the lawyers on staff were entry-level attorneys who just did not have the experience in complicated legal cases; and Van Dam was under constant pressure in those days (1988 to 1992) from state agencies who demanded that outside legal counsel be hired for specific cases.
And the Legislature agreed by appropriating money directly to state agencies to hire outside counsel.
"The state needed to be competently defended and that was my objective," he said. "I think Jan is in a lovely position and it is great she is trying to eliminate the outside counsel. I wish I had had her staff and been in her position."
A vigorous defenseGraham's crusade began in early January 1993, when after just two days in office she met with Gov. Mike Leavitt to propose that the state's costly defense of the 1991 anti-abortion law be taken away from private counsel Mary Anne Wood and given to in-house assistant attorneys general. State lawmakers had insisted on outside counsel, fearing Van Dam would not defend the laws vigorously enough.
Leavitt said no, and Wood continued on the case for 18 more months until Graham fired her in a controversial decision opposed by Leavitt.
Still, defending the 1991 law ultimately cost Utah taxpayers more than $850,000 in outside counsel.
Originally, then-Attorney General Van Dam hired the law firm of Jones, Waldo, Holbrook and McDonough. That action in itself turned controversial, first because Graham, at the time Van Dam's solicitor general, had been a partner in Jones Waldo before coming to work for Van Dam; second, because it turned out that an attorney in the large firm had once done work for one of the Salt Lake clinics that perform abortions.
After Jones Waldo resigned from the 1991 case, Wood was hired by Van Dam and later fired by Graham in what pro-life members of the Legislature called a politically motivated act. Graham insisted then, as now, that the firing of Wood was motivated solely by economics.
And it was economics, she said, that prompted her to settle out of court on high-profile cases involving the University of Utah. In the past five years, the state has paid private attorneys $7,842,216 to represent the university and its employees in four different cases, all of which have now been resolved.
Litigation: a cost of educationIronically, the lion's share of the university's legal bills - $3,350,799 in attorney fees and another $650,000 in consultant fees and costs - was spent hiring attorneys to defend the university against a Department of Justice investigation alleging antitrust violations at University Hospital - an investigation initiated by then-Attorney General Van Dam, whose job was also to defend the U.
Because Van Dam had initiated the investigation before turning it over to the Justice Department, neither he nor the attorney general's office could defend the U. against the allegations.
Graham also initiated a settlement in a second action by the Department of Justice in which a researcher at the U. was accused of falsifying research in connection with a federal grant. That settlement cost the state $950,000 in penalties and $2.5 million in outside counsel - about one-half of what it could have cost the state had the private attorneys lost in court.
Graham calls the high cost of the U.'s legal bills "unconscionable, but in some cases unavoidable," while Morris says the legal bills are simply a cost of doing business. "It sounds like a lot of money, and it is, but we have to put those defense costs in the context of the entire budget."
Morris says the university's total budget is about $800 million a year.
And besides, not all of the $7.8 million in legal bills was paid by taxpayers, Morris said. As much as 40-60 percent of the tab was paid out of non-appropriated university funds, including grants and donations.
Why hire private attorneys?Just why are private attorneys hired by the attorney general? In many cases, complex legal issues like bonding and patent law require expertise far beyond the abilities of the attorney general's office staff.
More often than not, the contracts are the result of intense political pressure exerted by state lawmakers, government officials and, in some cases, the governor's office.
"There is incredible pressure put on me to go to outside lawyers for one reason or another," Graham says. "I have to resist and say our lawyers are as good as any and we are going to do it." Graham called the pressure exerted by lawmakers over the decision to fire Wood "brutal."
"It's like pulling teeth to tell these people no," she said.
Other decisions by previous administrations to hire outside counsel are not clear cut. For example, why did the state pay private attorneys almost $25,000 for litigation surrounding the acquisition of the Heber Valley Historic Railroad?
"I haven't a clue," Graham says of the Van Dam decision. "It shouldn't have happened."
And when a private company sued the Department of Health and KUTV over the use of the phrase "Baby Your Baby" in a public health campaign, for unknown reasons the state paid KUTV's private attorneys more than $46,000.
Other decisions to hire outside counsel appear to have stemmed from perceived conflicts of interest. For example, when Van Dam's office initiated an action against David Early Tires, private attorneys were hired to represent the state.
The reason? David Early was a contributor to Van Dam's political campaign.
In a more publicized case, the state paid $163,000 in private legal bills to fight William Andrews' death penalty appeals. The reason the attorney general's office didn't prosecute the case? Van Dam's chief deputy at the time, Joe Tesch, briefly represented Andrews when Tesch was in private practice.
Tesch was in no way connected to the Andrews prosecution, but the mere appearance of a conflict of interest mandated that attorneys outside the attorney general's office be hired.
Less outside, more insideWhile Graham has slowed the outside-counsel gravy train, she has also significantly increased the number of full-time lawyers in the attorney general's office.
Almost 25 new attorneys have been hired since Graham was elected, and Graham's staff of 162 attorneys and six top-level administrators is more than double the size of the office when Van Dam was elected in 1988. It is nearing three times the number of attorneys that Wilkinson had in 1985.
Graham says her office is just now reaching the staffing level required to handle almost all litigation involving the state - a luxury her predecessors did not enjoy.
Historically, the Legislature has always kept a tight rein on the attorney general's budget, preferring to pay outside counsel for high-profile cases rather than increase the attorney general's budget. Lawmakers wanted it that way because it gave them greater influence over the state's legal decisions.
For example, lawmakers were openly resentful of Attorney General Wilkinson and approved only token increases in Wilkinson's staff. That trend continued until Van Dam, elected in 1988, issued his "Quiet Crisis" report that graphically illustrated just how underfunded the office was.
Lawmakers agreed in 1990, and Van Dam's staff grew from about 80 attorneys to almost 110 his first year in office. The 1990 budget increase allowed the state to hire seven attorneys for tax collections, eight for the Department of Corrections, six for criminal enforcement and appeals, and four for other divisions of state government.
Over the next two years, 30 more attorneys were hired, bringing the total to about 140 at the end of the Van Dam administration. Last legislative session, lawmakers approved the hiring of 16 child-welfare attorneys, two water-law attorneys and an attorney for the Department of Insurance.
Worth the investment?But if Van Dam enjoyed the benefit of the largest staff increase in the history of the attorney general's office, why did the state continue to spend so much money on outside counsel?
And what did taxpayers get for that $10.5 million? It depends on the case, Morris says. In the case of Purrington, "We have probably deterred cases because they recognize we are not simply going to settle, even if it is very expensive. My own personal belief is that we have already made up the million dollars in defending the case in terms of new cases that have not been brought."
Morris said the University of Utah has also taken steps to reduce the need for expensive litigation. One step was in hiring him to institute compliance programs and policies to prevent litigation.
"One of the first things President (Arthur) Smith did when he became president was to start the process for in-house legal counsel to provide the advice and things necessary to prevent these cases from ever coming up," he said.
Morris has a staff of five attorneys to assist him with legal issues arising at the U. None of those attorneys is an employee of the attorney general's office. By comparison, all attorneys at the state's other colleges and universities are employed by the attorney general and are assigned to specific institutions.
But the biggest savings to taxpayers, Graham says, could be the fact that outside counsel will only be hired in extraordinary circumstances. "I will not allow it to happen," she said. "That's a practice of the past."
Well, almost. Graham says she has hired a hot-shot law firm from Texas (as well as a Utah firm) to represent the state in negotiations with the federal government over the value of state lands being traded for federal coal reserves. The litigation is expected to cost the state millions of dollars with an anticipated return to the School Trust Fund of $50 million to $200 million.
"That is a unique case, the kind of case that happens every decade or so," she said. "In those kinds of cases, it makes sense to hire outside counsel."
As it does, Graham says, to enter into a contingency fee arrangement with private attorneys in a lawsuit against the manufacturers of asbestos used in state buildings. The same type of arrangement is being considered in a possible lawsuit against tobacco companies to recover health-care costs paid by the state in connection with tobacco-related illnesses.
"The garden-variety cases, the kinds of cases the attorney general's office is supposed to handle, there is no justification for going outside. And that practice has been dramatically reduced."