For the past two weeks, the San Diego City Council has met behind closed doors, where, according to meeting agendas, its members discussed "the potential initiation of litigation."
While similar meetings are not rare, the fact that the discussions were led by deputy City Attorney Don McGrath-the man City Attorney Mike Aguirre calls "our generalissimo, our grand poobah... who only works on getting righteousness on the pension issue"-may provide some insight as to the relevant subject matter.
And although lips are sealed as to who exactly may be the target of that potential litigation (a related announcement from Aguirre is expected soon), it seems a legal strategy is coming together and the writing is on the wall-or rather in the report-for those who care to read it.
"Let me make it real simple," McGrath said. "Nobody's exempt."
Last week, Aguirre released the sixth installment in a series of reports detailing his investigation of the deals that created a $1.7-billion debt in the city's pension fund, and it sheds some light on who's in his legal crosshairs and why.
Aguirre focused in part on the outside experts who provided city officials and retirement trustees with what he calls "false," "misleading," "incorrect" and contradictory advice as they considered Manager's Proposal 1 (MP-1), a 1996 agreement that allowed the city to make less than its required contribution to the retirement system in exchange for increased employee benefits.
The report found "substantial evidence that professionals providing expert services... violated their duties of conduct and care in connection with the creation and implementation of MP-1...."
Aguirre takes aim at Jeffrey Leavitt, a partner in a Cleveland, Ohio, law firm, who was hired in 1996 to advise city officials regarding the legality of MP-1. During that process, Aguirre alleges, Leavitt "turned California employee pension trust law on its ear."
Dwight Alan Hamilton, from a Denver, Colo., law firm was another outside attorney brought in to advise retirement-board trustees in 1996. According to the report, Hamilton's advice was "false and misleading to taxpayers, the San Diego media and investors in San Diego city bonds."
Aguirre also singles out Rick Roeder, the retirement system's actuary, who calculates how much the city and its employees need to contribute to the retirement system each year. "With his advice to the pension board in considering MP-1, Mr. Roeder's conduct fell below the applicable professional standards...," wrote Aguirre.
Mark Weinstein, associate dean and professor of law at California Western School of Law, said Aguirre seems to be laying the foundation for several malpractice suits.
Leavitt and Roeder were unavailable for comment, and Hamilton is recently deceased.
In an interview, Aguirre, who made both a fortune and a reputation for himself by suing wayward corporations for fraud and malpractice prior to holding his current office, confirmed he's taking a hard look at all of the professionals involved in MP-1 and MP-2, a 2002 agreement between the city and retirement board that allowed further under-funding in exchange for increased benefits.
Aguirre told CityBeat that some of those professionals "helped to contribute to the mal-administration" of the retirement system. He also specifically mentioned the retirement system's administrator, Lawrence Grissom, as well as its lawyer, Lori Chapin, as potential defendants. Aguirre said Grissom and Chapin are "continuing to compound the malpractice of the third parties by their own malpractice."
"I don't really know what that means, but... I have no interest in getting into a war of words with Mr. Aguirre," Grissom sniffed on Tuesday. As for Chapin, she doesn't talk to the press.
If Aguirre can make potential malpractice claims stick, he may reap millions of dollars in legal settlements paid for primarily by the companies that insure the various professionals.
"It's remuneration," McGrath said. "It's payback. It's time to fill the coffers up again in some way other than raising taxes...."
But legal experts say Aguirre is still a long way from payday and faces numerous hurdles-foremost among them, a statute of limitations, between one and four years depending on circumstances, on alleged malpractice that dates back nearly a decade.
"If I were certainly representing a defendant who was sued for conduct back in 1996, the first thing I would think of would be statute of limitations," said David Steinberg, professor of law at the Thomas Jefferson School of Law. But Steinberg said a component of malpractice law might come into play, which keeps the clock from ticking on claims until a reasonable person should have discovered the malpractice. He said it particularly applies in cases in which defendants have covered up their behavior, but any decision would ultimately be up to a judge.
To prove malpractice actually occurred, California Western's Weinstein said Aguirre must first prove the advice in question was indeed faulty and that it led to damages.
Finally, to file malpractice claims against professionals who advised the retirement board, Aguirre would first have to convince a judge that he is the rightful legal representative of the retirement system. Aguirre attempted to assert his authority over the system earlier this year but was rebuffed when the retirement board countered with a lawsuit against him.
The judge in that case granted Aguirre's request for a 120-day stay, which is due to expire in July.
Aguirre also continues to focus on bringing civil charges against some of those involved in MP-1 and MP-2 who he claims had a conflict of interest and subsequently supported the under-funding in exchange for increased benefits."That's in the works right now," he said. "Just stay tuned."