City’s legal bills subject to FOIA, even in heat of litigation

By Peter Vieth, Virginia Lawyers Weekly – 12/13/2018

Although a Virginia city claimed it had special concerns about releasing legal bills to a litigation opponent, the Supreme Court of Virginia found no reason to alter the usual standards for attorney-client and work product materials.

In a Dec. 6 ruling, the justices said Virginia Beach officials went too far in redacting information from lawyer billing records requested under the state Freedom of Information Act. The city’s redactions included items not shielded from disclosure by the attorney-client or work product exceptions in FOIA, the court said.

The decision is a victory for a Virginia Beach dentist who sought details about how the city spent $340,000 fighting him in court.

The ruling came after the justices opened the seal on the unredacted records and announced they were at a loss as to why two example entries would fall under either exception.

The court’s unanimous opinion is Bergano v. City of Virginia Beach (VLW 018-6-088).

Battle over condemnation action
Dentist Allen Bergano has been at odds with Virginia Beach City Hall since 2014. The city bought the building where he had practiced for 32 years and told him he would have to move. He signed a lease for a new office and arranged for renovations, only to be told the city had changed its position and he could stay. He said conditions became difficult with the city as landlord.

He sued in federal court and accepted a $175,000 settlement for his relocation costs. A federal judge later ordered the city to pay $195,000 for Bergano’s legal fees.

Bergano filed a FOIA request seeking details about how the city spent $340,000 to oppose his legal claims. The city provided copies of its legal bills with most of the information blacked out.

Virginia Beach Circuit Judge H. Thomas Padrick Jr. looked at the legal bills and agreed with the city’s position that the redacted information was exempt from disclosure as attorney-client privileged or protected by the work-product doctrine.

City: Litigation required cautious approach
The city contended the contentious ongoing court battle with Bergano justified its conservative approach.

“You have to view this FOIA request in the context in which it was provided,” said Associate City Attorney Gerald L. Harris. “On the day that it was provided, March 15, 2017, Dr. Bergano was engaged in litigation with the city of Virginia Beach,” Harris said in oral argument at the Supreme Court Nov. 2.

“And immediately, the city of Virginia Beach is placed in this difficult position that it has to protect its interests in this ongoing federal lawsuit while simultaneously respecting FOIA, an obligation that every municipal government in Virginia has,” Harris told the justices.

The dispute over attorneys’ fees guided the city’s reticence, Harris said.

“In ongoing litigation, we all know there are oftentimes parallel settlement negotiations that are happening. Wouldn’t it be nice to know how your adversary is spending his time following a settlement discussion?” Harris queried. “There is an advantage to be gained from getting that information.”

“I do believe in the context of litigation, a broader view of the privilege is appropriate,” Harris said. “Certain things that may be privileged on one day may become not privileged on another day.”

Virginia Beach attorney L. Steven Emmert said the exceptions in the state open records law did not expand based on litigation exposure.

“FOIA doesn’t contain an exception for simply being in litigation. If it did, the General Assembly could easily have put it in there,” Emmert told the justices.

Redactions too broad
In its seven-page opinion, the full Supreme Court first endorsed the practice of courts taking a private look at the disputed records. Padrick’s in camera review “constituted a proper method to balance the need to preserve confidentiality of privileged materials with the statutory duty of disclosure under VFOIA,” wrote Justice Stephen R. McCullough for the court.

The high court itself also reviewed the unredacted billing records, and concluded that Padrick had allowed the city to withhold records when those records plainly did not fall within the exemptions.

“We conclude that the City’s redactions were too broad and included items that are not shielded from disclosure by the attorney-client or work-product exceptions,” the high court said.

“We are at a loss for why a cursory entry dated February 2, 2017 for ‘[t]rial preparation and document review,’ would fall under either VFOIA exception,” the Supreme Court said. “Similarly, disclosing the entry dated February 7, 2017 for ‘[a]ttend trial (Day One)’ would not in any way reveal confidential client communications, analytical work product, motives for litigation, or compromise litigation strategy,” McCullough wrote.

The high court remanded the case for further in camera review and disclosure of unredacted records consistent with the opinion.

The Supreme Court also instructed Padrick to consider whether to award reasonable attorneys’ fees and costs under the circumstances of the case.

The high court’s decision was celebrated by Megan Rhyne, executive director of the Virginia Coalition for Open Government. The advocacy group had submitted a friend-of-the-court brief arguing the city’s “Overactive Black Highlighter” was unlawful under the open records law.

“Everything of substance is redacted. Nothing remains on the invoices to explain how the public’s money was spent, apart from a date, number of hours, and the name of a timekeeper,” wrote Christopher E. Gatewood of Richmond, on behalf of VCOG.