Ending state agency abuse of attorney-client privilege

by Sen. Doug Whitsett

Attorney-client privilege is an uninfringeable pillar of our legal system. That system rightfully and unambiguously protects disclosure of those communications. Further, attorneys are specifically excluded from being compelled to testify regarding most communications with their client in any legal proceeding.

Regrettably, some state agencies are inappropriately manipulating attorney-client privilege as a shield against public disclosure laws.

The Oregon Department of Justice (DOJ) provides legal services to most state agencies. An Attorney General Opinion (Opinion) generally carries the force of law. Agencies are permitted to apply the Opinion as if it were law, until or unless it is overturned by the courts, or by an act of the Legislative Assembly.

Opinions issued by the DOJ are public record. Citizens who may wish to challenge an Opinion have full access to its wording and legal reasoning. Their attorneys may base their arguments on statutes, administrative rules or case law that they believe contradicts the Opinion.

However, Oregon law appears to be silent on the disclosure of “legal advice” provided by a DOJ attorney to an agency. Using that ambiguity in the law, agencies may simply ask their DOJ attorney for “legal advice” rather than requesting a formal written Opinion.

At least two state agencies are now declaring they are not required to disclose “legal advice” from their DOJ attorney. Further, they are refusing to disclose the advice, under the protection of attorney-client privilege, while using the same advice to enact administrative rules or written orders.

The Oregon Department of Energy (ODE) purportedly obtained advice from an attorney regarding the sale of the controversial Business Energy Tax Credits (BETC). That advice allegedly authorized third-party sales of BETCs at discounts that appear to be greater than allowed by statute.

Subsequent to the claimed receipt of that legal advice, ODE allowed BETC sales brokered by private third parties at up to at least 25 percent discounts. The agency also planned to create an administrative rule retroactively authorizing those BETC sales, allegedly based on the same legal advice.

ODE has refused to make the claimed legal advice available to the news media, the public, legislators and even to members of its own staff. The agency has even declined to disclose the source of the advice.

The management at ODE has based its refusal to disclose public information on claims of attorney-client privilege. The Oregon Attorney General appears to concur with that allegation.

The Oregon Water Resources Department (OWRD) claims to have received advice from its DOJ attorney authorizing its regulation of irrigation wells located on the historic Klamath Indian Reservation. OWRD did not regulate the wells prior to its alleged receipt of this legal advice.

The OWRD subsequently issued written orders shutting down many of those wells during the 2015 irrigation season. The agency has repeatedly denied requests to disclose the legal advice upon which it claims it based the regulation of the wells. OWRD claims the legal advice is privileged communication between the agency and its DOJ attorney.

The rules of discovery in a court of law generally do not apply to proceedings in administrative law. Citizens attempting to challenge the validity of those rules or orders are placed at an immense disadvantage when the administrative rules or written orders are based on undisclosed legal advice.

Their attorneys have no way of determining either the content of the legal advice or the legal reasoning upon which the agency based its rule or order. They may be prevented from discovering that critical information both by the rules of administrative law and the shield of attorney-client privilege.

According to Legislative Counsel, the team of attorneys who drafts and interprets state laws for the Legislature, no Oregon statute prohibits this misapplication of attorney-client privilege protection. The two state agencies appear to be within their legal rights.

I am deeply concerned that other state agencies will soon adopt this strategy to avoid disclosure of legal advice that they may subsequently use to regulate the public through administrative rule or order. This unacceptable abuse of attorney-client privilege by state agencies needs to be addressed.

For that reason, I have asked legislative Counsel to draft legislation for that purpose during the February session.

The proposed law will require an order expressed in writing, or an administrative rule adopted by an agency, to include a summary of any legal advice upon which the agency bases the validity or effect of its order or rule. To ensure that it is comprehensive and accurate, the content of the required summary may be appealed to the courts.

I fully expect the bill to meet strong resistance by those who may see its purpose as an attack on the sacrosanct doctrine of attorney-client privilege. That is neither the bill’s intent nor its legal outcome.

The bill actually safeguards attorney-client privilege. It requires no testimony or disclosure of claimed privileged, restricted or confidential information by either client or attorney. Further, it does not even require disclosure of the source of the legal advice.

However, the bill will require an agency to provide an accurate written condensation of the legal theories and precedents included in the legal advice upon which the agency bases an administrative rule or written order. That brief may be reviewed upon request by the courts to ensure a comprehensive and accurate summation.

All of the scandals that lead to the resignation nearly a year ago of former Governor John Kitzhaber amid allegations of corruption and influence peddling demonstrate the lack of transparency and accountability in our state government. Governor Kate Brown called for and promised greater accountability and transparency in her inaugural address.

This bill will help address the Governor’s promise by limiting the ability of agencies to shield their legal opinions from public scrutiny. It will go a long way towards making state government more responsive to the public it is intended to serve.

Senator Doug Whitsett is the Republican state senator representing Senate District 28 – Klamath Falls