Costa Mesa’s Legal Bills for Outsourcing Top $400,000

Costa Mesa has spent $409,000 so far in attorneys fees defending against a lawsuit challenging its plan to outsource numerous city services, according to the Orange County Register.

The vast majority of the work is being done by the Jones Day law firm, which the city is paying nearly $500 per hour, the paper reported.

After the City Council issued layoff notices and announced its outsourcing plans last March, the city employees union filed a lawsuit alleging that Costa Mesa breached its labor contract and is prohibited from that much outsourcing under state law.

In the early decisions so far, the court has ruled in favor of the union.

Last summer a Superior Court judge issued a preliminary order barring the city from outsourcing to the private sector for now. The court later dismissed a city request to dismiss the breach of contract portion of the suit. The trial is scheduled to begin in April.

The cost of the case has been a source of criticism among residents who oppose the council's plans.

The City Council majority, however, says outsourcing will ultimately save the city money in the long term.

From the Register story:

After the trial begins in April, an unknown number of motions and appeals could be filed, potentially drawing out the process — and attorney fees along with it.

Residents and union leaders have voiced concern at meetings and public forums that the seemingly limitless cost of the lawsuit could exceed the savings the council hopes to attain from outsourcing.

The city could not put a dollar limit in its contract with Jones Day, which is mounting a "vigorous" legal defense, city spokesman Bill Lobdell said.

"In litigation, you can't have a cap because when you hit that cap what are you going to do?" Lobdell said. "When you're being sued, there's no choice." …

While the council's goal in outsourcing is to save money on future pension expenses, critics have questioned the plan's net savings after all the legal bills are paid.

"We wouldn't have to go to court if they would have followed the law," said Jennifer Muir, spokeswoman for the Orange County Employees Association. "Taxpayers should be furious because this is just a waste. Instead (the council majority) wanted to make a political statement in Costa Mesa."

The City Council also decided last month to start the process of placing a proposed city charter on the June ballot. If passed by voters, it would likely free the city from the state restrictions on outsourcing.


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