Government Entities Acting as Private Litigants

In City of San Diego v Kinder Morgan Energy Partners, (2008 WL 3565795, No.08-70678, Aug. 12, 2008), the Ninth Circuit Court of Appeals issued an order last week that the California Supreme Court's decision in People ex rel. Clancy v Superior Court (1985) 705 P.2d 347 [findlaw login required], barring the government from hiring private counsel on a contingent fee basis, applies when the government is acting in its sovereign capacity rather than in the capacity of a private litigant:

"In Clancy, the Supreme Court of California held that a municipality may not hire private counsel on a contingent  fee basis to bring a public nuisance abatement action. . . . There, the municipality was acting solely in its capacity as a sovereign, and its only substantive claim was for public nuisance abatement. Here, however, the City, [is] acting as a property owner and a sovereign . . . . Clancy does not bar the City from hiring private counsel pursuant to a contingent fee agreement to bring its private tort claims, i.e., its claims for trespass and negligence. Additionally, to the extent the City brings its public and private nuisance claims in its capacity as a private property owner - and not in its capacity as a sovereign -  Clancy does not apply."  [Emphasis added.]

A similar distinction has been adopted by a number of courts, as noted elsewhere on nuisancelaw.com, because the valid concern that contingent fee counsel will compromise the neutrality and impartiality of the government prosecution diminishes when the government is acting merely as a private litigant seeking compensation for its own injuries rather than as a law enforcement agency exercising discretion to bring enforcement actions on behalf of the general public, as is the case with public nuisance claims.