Supervisors Sign Conflict Waiver To Let Adversary’s Firm Represent The County

The San Bernardino County Board of Supervisors earlier this month consented to move ahead with the hiring of a law firm to represent it in one case while that firm is representing a party the county is suing in another case.
On February 9, the board of supervisors, in action that County Counsel Michelle Blakemore recommended, approved what is in legal terms referred to as a “waiver of conflict of interest.” That conflict, Blakemore said, “arises out of Reed Smith LLP’s proposed representation of the County of San Bernardino in pursuit of the recovery of insurance coverage and Reed Smith LLP’s representation of a party adverse to the County of San Bernardino.”
Lawyers are prohibited from representing a client who is either a being sued or has sued another of that lawyers clients unless all parties involve sign waivers of their right not to have as a legal representative a lawyer who or a law firm that is working on behalf of someone involved in a legal action against them.
The office of county counsel is San Bernardino County’s stable of in-house attorneys. In addition to the lawyers within the office of county counsel, the county employs outside attorneys when the legal matters the county is involved in entail an area or areas of the law its in-house lawyers do not possess expertise in.
Such a conflict is inherent in a case the county had brought against Blue Cross, a medical insurance provider, according to Blakemore. Reed Smith LLP represents Blue Cross, she said.
In a report dated February 9, 2021, which was prepared for the board of supervisors’ February 9 meeting but which was in actually prepared ahead of time, Blakemore told the board of supervisors, “In 2020, multiple settlement agreements were reached on behalf of San Bernardino County, the San Bernardino County Flood Control District, and various employees and elected officials. Insurance carriers familiar with the underlying cases have indicated they will not provide coverage for these settlements and associated defense costs. Retaining outside counsel that specializes in insurance coverage advice and litigation is essential to assisting the county and flood control district with the process of ensuring the proper recovery from the insurers under the applicable insurance policies. The office of county counsel intends to contract with Reed Smith LLP, a law firm that has the specialized skills, knowledge, experience and expertise in the area of insurance coverage litigation needed to effectively assist, advise, litigate and otherwise represent the county and flood control district in their recovery efforts.”
Blakemore continued, “In considering this representation of the county and flood control district, Reed Smith LLP has identified a conflict of interest from its representation of Blue Cross of California dba Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company in connection with an action filed by the county entitled County of San Bernardino dba Arrowhead Regional Medical Center v. Blue Cross of California dba Anthem Blue Cross, et al. Case No. CIVDS1723565. This Blue Shield action involves various alleged underpayments for certain medical services at the county-owned hospital. The legal issues in the Blue Shield matter are unrelated to the legal services to be provided to the county regarding the insurance recovery services discussed above. No client information received or expected to be received by Reed Smith LLP in the course of its representation of the county in this insurance recovery matter is material to its representation of a party that is adverse to the county in the Blue Shield matter. Furthermore, in conformance with the professional rules of responsibility that govern an attorney’s representation of clients, appropriate ethical screens have been instituted by Reed Smith LLP to ensure that no confidential information pertaining to the county will be shared with Blue Cross or the attorneys acting to represent Blue Cross.”
Blakemore offered the supervisors an assurance that “Reed Smith LLP’s attorneys and staff working on the Blue Shield matter will not perform any work, discuss or have access to documents or information related to the county’s insurance recovery matter. Similarly, Reed Smith LLP’s attorneys and staff working on this matter will not perform any work, discuss or have access to documents or information related to the Blue Shield matter.”
Blakemore said, “County counsel has reviewed the waiver of conflict of interest and believes that as a result of the ethical walls in place, Reed Smith LLP will minimize the risk of prejudice to the county in its representation of the county in this matter.”
The board of supervisors, acting as the top authority overseeing the county, the flood control district and the county hospital, acknowledged a conflict of interest existed and approved the waiver of an actual conflict of interest, authorizing Reed Smith LLP to pursue the recovery of coverage from the flood control district’s insurance carrier.
-Mark Gutglueck

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