Quentin M.

Rhoades
Nicole L. Siefert
Robert Erickson

April 16, 2018

Jim Nugent, Esq.

Missoula City Attorney
435 Ryman St.
Missoula, MT 59802

RE: Attorney-client privilege and Mountain Water attorney fees

Dear Jim,

Recently City Councilman Jesse Ramos asked me to look into a matter for him regarding
the attorney fees paid by the City of Missoula to Boone Karlberg, P.C. and others in
connection with City of Missoula v. Mountain Water. As I understand it, the City refuses
to allow Mr. Ramos, a serving City Councilman, to review the attorney fee statements of
the attorneys in the case, even as he has been asked to approve payment of those fees. He
indicated that you and Natasha Prinzing Jones have told him that to allow you to see
their billing statements would violate attorney-client privilege.

The law on this issue is clear. Retainer agreements are not protected by the attorney-
client privilege or work product doctrine. United States v. Blackman, 72 F .3d 1418, 1424
(9th Cir. 1995) (“As a general rule, client identity and the nature of the fee arrangement
between attorney and client are not protected from disclosure by the attorney client
privilege."); see also, Hoot Wine, LLC v. RSM McG/adrey Fin.Process Owsourcing. LLC, 2009
U.S. Dist. LEXIS I 03045, at *5 (S.D. Cal. Nov. 4. 2009) ([T]he Ninth Circuit has repeatedly
held retainer agreements are not protected by the attorney-client privilege or work
product doctrine.)

In addition, the idea that billing records are somehow protected from disclosure based
on attorney client privilege or work-product doctrine has been specifically rejected by the
Montana Supreme Court:

Tacke further argues that even if she wanted to produce the billing records,
both the attorney-client privilege and work-product doctrine preclude her
from doing so. In asserting the attorney-client privilege, Tacke cites to Clarke
v. American Commerce Natl. Bank, 974 F.2d 127 (9th Cir.1992). However,
assuming Clarke applies, it does not support a blanket prohibition on

T: (406) 721-9700 F: (406) 721-5838 430 Ryman Street, Missoula, Montana 59802 www.montanalawyer.com
Trial Attorneys licensed in Montana, Nevada and New Mexico
Mr. Nugent
April 19, 2018
Page 2
providing billing records. There, the American Commerce National Bank
(ACNB) allegedly paid the personal legal expenses for its chairman. Clarke,
974 F.2d at 128. The Office of the Comptroller of the Currency investigated
the matter further, and eventually issued an administrative subpoena to
ACNB for the production of billing statements from outside legal counsel.
Clarke, 974 F.2d at 128. ACNB asserted the attorney-client privilege, and
after reviewing the records, the Ninth Circuit concluded:

[The billing statements] do not contain privileged

communications between attorney and client. The statements
contain information on the identity of the client, the case name
for which payment was made, the amount of the fee, and the
general nature of the services performed.

Clarke, 974 F.2d at 130. While Clarke protects records “which also reveal the
motive of the client in seeking representation, litigation strategy, or the
specific nature of the services provided,” it does not support a blanket
prohibition on the use of billing statements. Clarke, 974 F.2d at 129. In-
camera review by the district courts, accompanied with the use of redaction
when necessary, will accommodate the need for such records in order to
demonstrate the reasonableness of fee awards in fee-shifting cases while
also protecting the attorney-client privilege. See e.g. Huether v. Dist. Ct. of
the Sixteenth Jud. Dist., 2000 MT 158, ¶ 22, 300 Mont. 212, 4 P.3d 1193.

Equally unpersuasive is Tacke’s argument that the work-product doctrine

also prohibits the use of billing statements to support an attorneys’ fees
claim. The work-product doctrine, as delineated in M.R. Civ. P. 26(b)(3), “is
broader in application than the attorney-client privilege, but it is not an
absolute privilege.” Kuiper v. Dist. Ct. of the Eighth Jud. Dist., 193 Mont. 452,
462, 632 P.2d 694, 700 (1981). To interpret the doctrine as imposing a blanket
prohibition on the use of administrative records, such as time and billing
documents, stretches the privilege too far. As generally noted, “the work
product rule cannot be invoked by an attorney in connection with an
affirmative claim for recovery of attorney’s fees to avoid a discovery inquiry
concerning possible apportionment of fees among compensable and
noncompensable claims.” 23 Am.Jur.2d Depositions and Discovery § 45
(2002) (citing Martin v. Paunovich, 632 So.2d 611 (Fla.App. 5th Dist.1993));
see also First Union Natl. Bank of S.C. v. Soden, 333 S.C. 554, 511 S.E.2d 372,
380 (App.1998) (analyzing billing statement as not falling within work
product). To the extent billing records may contain “ordinary work
product” or “opinion work product,” the records are, again, subject to
Mr. Nugent
April 19, 2018
Page 3
redaction of such information. See e.g. Palmer by Diacon v. Farmers Ins. Exch.,
261 Mont. 91, 115, 118, 861 P.2d 895, 910, 912 (1993).

Tacke v. Energy W., Inc., 2010 MT 39, ¶¶ 36-37, 355 Mont. 243, 227 P.3d 601 (emphasis
added).

Moreover, work-product does not even apply after litigation concludes. Prindel v. Ravalli
Cty., 2006 MT 62, ¶ 63, 331 Mont. 338, 133 P.3d 165. The proposition that billing records
are protected as privileged – especially in the face of a request from a serving council
member being asked to vote for approval of a fee payment—lacks all legal basis. The
obvious conclusion is that the officials who refuse to supply you with these records have
something they feel they need to hide.

Finally, these billing records should be made available to the public under Montana’s
right to know law. The Montana Constitution at Article II, Section 9 grants the public's
right to know:

Section 9. Right to know. No person shall be deprived of the right to

examine documents or to observe the deliberations of all public bodies or
agencies of state government and its subdivisions, except in cases in which
the demand of individual privacy clearly exceeds the merits of public
disclosure.

Corresponding statutes protect public access to government documents, including § 2–

6–102(1), MCA, which provides, “Every citizen has a right to inspect and take a copy of
any public writing of this state....” We have previously concluded that the rights granted
by the right to know provision extend not only to individuals, but also to media entities.
Jefferson County v. Montana Standard, 2003 MT 304, ¶ 13, 318 Mont. 173, 79 P.3d 805
(citation omitted).

As stated in Becky v. Butte–Silver Bow Sch. Dist. 1, 274 Mont. 131, 136, 906 P.2d 193, 196,
(1995) and reiterated in Bryan, ¶ 33:

Any review of Article II, Section 9, of the Montana Constitution necessarily

involves a three-step process. First, we consider whether the provision
applies to the particular political subdivision against whom enforcement is
sought. Second, we determine whether the documents in question are
“documents of public bodies” subject to public inspection. Finally, if the
first two requirements are satisfied, we decide whether a privacy interest is
present, and if so, whether the demand of individual privacy clearly
exceeds the merits of public disclosure.
Mr. Nugent
April 19, 2018
Page 4

In the instant case, the City cannot dispute that it is a political subdivision against which
the right to know provision is enforceable. Neither can the City contest that the billing
records constitutes documents of a public body subject to public inspection. As such, the
City has an absolute constitutional duty to turn such records over to the you.

This episode would appear to be yet another black-eye for financial transparency
delivered by the City of Missoula. It is absurd that attorney fees cannot be reviewed by
the taxpayers who paid them. I trust you will advise the City to take steps to rectify the
situation.

Thank you for your kind attention. Please feel free to

Sincerely yours,
RHOADES SIEFERT & ERICKSON PLLC

Quentin M. Rhoades

QMR/ar

cc: Jesse Ramos

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