Nessel's office reviews potential conflict in Flint water civil cases

An ethics officer in Michigan Attorney General Dana Nessel's Office is reviewing whether a single assistant attorney general can act on behalf of both the plaintiff and defendant in separate civil cases related to the Flint water litigation. 

The potential conflict arose this month when Solicitor General Fadwa Hammoud fired Special Assistant Attorney General Noah Hall from leading a state-initiated lawsuit related to the Flint water crisis. Hall was replaced with Assistant Attorney General Richard Kuhl, who also has defended the state from state and federal lawsuits related to the Flint lead-contaminated water crisis. 

Kuhl's role in both defending the state against Flint resident civil complaints and representing Flint residents in the separate civil complaint — potentially presenting conflicting arguments in each case — has been a predicament the Attorney General's Office has been trying to avoid for more than two years.

Republican former Attorney General Bill Schuette's office set up ethical walls of separation to deal with the maze of 79 civil lawsuits and 15 criminal cases involved in the Flint water crisis. The so-called conflict walls were erected to prevent state attorneys from disclosing information they obtained for their clients to different state attorneys representing other clients who might benefit from the information.

Michigan taxpayers have paid more than $30 million to finance the complex arrangement covering legal costs for state prosecution, civil litigation and criminal defense lawyers. 

The potential conflict arises as Nessel is working to resolve the civil litigation and Hammoud is reorganizing a team of prosecutors for the criminal cases. 

While the conflict wall between the criminal and civil cases remain, it isn't unusual for the Attorney General's Office to maintain aligned arguments on behalf of both the people of Michigan and the state of Michigan, said Nessel spokesman Dan Olsen. 

Nonetheless, Olsen said, "our department's ethics officer is in the middle of a complete and thorough review" of Kuhl's role representing both plaintiffs and defendants.

Hall, a Wayne State University environmental law professor assigned to the Flint special counsel team in 2016, said he respects Kuhl's "tireless" work defending the state. But Hall argues the attorney's assignment to the state-initiated Flint civil lawsuit presents a clear conflict.

“It’s just plain wrong that the people of Flint are now being represented by the attorneys who represented and continue to represent (former Gov. Rick) Snyder and have maintained no harm was done there,” Hall told The Detroit News.

Legal experts say state assistant attorneys general can ethically maintain plaintiff and defendant roles in both civil cases by carefully crafting their arguments in court to avoid inconsistent stances in the cases. 

Special counsel's review

In March 2016, Schuette appointed Hall to a special counsel team, led by Special Prosecutor Todd Flood, tasked with investigating "all potential civil and criminal law options" related to the Flint water crisis. 

In August 2016, Hall took the lead on a civil lawsuit initiated by the state "on behalf of the people of the State of Michigan" against engineering and consulting firms Veolia North America and Lockwood, Andrews & Newnam (LAN). The litigation, which is ongoing, alleged professional negligence by the firms performed in Flint, where the April 2014 switch to Flint River water resulted in the lead contamination of the city's drinking water.

Hall was fired Feb. 7 by Hammoud, nearly a month after he suggested in a radio interview that the investigation of the Flint water crisis should include a review of potential wrongdoing in the Attorney General's office. 

Hall told Michigan Radio in January that his role in the Flint litigation was to figure out how the lead contamination crisis happened and which structural flaws in government were responsible. Hall told the "Stateside" show that the Attorney General Office's signing of an administrative consent order in 2014 to issue bonds to build the Karegnondi Water Authority was “loaded with fraud.”

Officials switched Flint’s water source in 2014 as an interim measure before joining the Karegnondi Water Authority, which was still being built at the time. State environmental officials failed to tell Flint water officials to put corrosion control mechanisms in place after the switch, resulting in the more corrosive river water leaching lead from the city’s old pipes.

After months of complaints about rashes, strange odors and the discovery of elevated lead-in-blood levels in Flint children, the city switched back to the Detroit water system in October 2015.

Flood has called the administrative consent order allowing Flint to join the Karegnondi Water Authority a “sham.” Schuette’s office has said it approved the order “as to form.”

“Given that the Attorney General’s Office signed off on the administrative consent order, it made investigating the circumstances of that administrative consent order and its approval very difficult and challenging under the previous administration,” Hall told Michigan Radio in January.

“Now, I think we’re free to go and investigate all aspects of wrongdoing in all branches of state government, including the signing of that administrative consent order by the Attorney General’s Office," he said.

Flint water investigations remain confined to the criminal side of the conflict wall "and civil attorneys do not have any authority over those investigations," Olsen said Wednesday, noting that Hall does not speak for the Attorney General's office.

While the office appreciated Halls' "passion and dedication" to the people of Flint, Olsen said, "this case is better brought by the state with its full resources behind it and handled by career prosecutors."

On Feb. 8, a day after Hall was fired, Assistant Attorney General Kuhl petitioned the courts to replace Hall as counsel.

Hall, who took no pay while leading the state-initiated civil lawsuit in order to maintain independence from the state, said he's less concerned about his firing as much as the failure to retain other independent counsel to handle the state’s civil lawsuit. 

"We’re going to keep having these problems, beginning with a lack of trust in government and all the way out to government wrongdoing, if we don’t get true accountability and independence in these investigations," Hall said.

Being plaintiff and defendant

On Feb. 15, Kuhl and three other assistant attorneys general filed a single document in Genesee County Circuit Court on behalf of both state defendants in a class-action lawsuit and the people of Michigan in the lawsuit against Veolia and LAN.

The filing, which dealt with scheduling for the cases, noted that both parties had the same counsel involved “in some respects both on the plaintiffs’ and defendants’ sides.” The document was submitted on behalf of Snyder, the state of Michigan, former state Treasurer Andy Dillon and the people of Michigan.

Such a filing is normal in the given situation, Olsen said, noting that "the attorney general and the state are aligned in requiring any potentially responsible part to be held accountable for any damages related to the Flint water crisis."

Corey Stern, a lead attorney in some of the Flint-related civil lawsuits, said he would like to see the potential conflict resolved and said he has faith Nessel’s office will find a way to do so. If not, Stern said he plans to file one or more motions related to the conflict.

Stern represents 2,500 Flint children suing the state, was appointed lead counsel for plaintiffs involved in Flint-related litigation in state courts in 2016 and is liaison counsel for individual plaintiffs in federal court in 2017.  

“In a litigation this size with so many people affected by it — both plaintiffs and defendants — everyone should take the utmost caution when it comes to conflicts,” Stern said.

While Hall's replacement on the state-initiated civil suit may complicate the case, it doesn't make the arrangement impossible, said Peter Henning, a Wayne State University law professor and former federal prosecutor.

To avoid conflicts within that arrangement, attorneys simply must maintain consistent arguments in both cases, he said.

“This a challenge when you have one attorney general,” Henning said. “Dana Nessel’s office is representing the state on both sides. That office has to be careful about what positions they take, but as long as they're taking the same position in both, they’re fine.”

Washington University Law Professor Kathleen Clark agreed, noting that attorney general offices generally need more leeway on conflicts because of the various parties they represent and the variety of cases in which they represent those parties. 

The appointment of assistant attorneys general to both types of civil cases may be "an attempt by the attorney general to gain control of this litigation in an effort to reach a resolution," Clark said.  

Federal District Judge David Lawson addressed a similar issue two years ago when he denied Schuette the opportunity to file an amicus brief “diametrically opposed” to his assistant attorneys general, who were defending the state from another Flint-related lawsuit. 

Lawson called Schuette's attempt to oppose the state on behalf of the people of Michigan "superficial posturing." Kuhl himself filed a pleading asking to withdraw support for Schuette's motion.

Schuette’s filing would have presented a “positional conflict,” Lawson wrote, in which “a lawyer’s advocacy of a legal position in one case could have negative consequences for a second client in an unrelated matter."

“Allowing him to do so likely would create an ethical conflict that could delay the ultimate disposition of this case, because it would raise the specter of disqualification of his entire office from participating on behalf of any party in the case,” Lawson wrote in the Jan. 23, 2017 opinion.  

Even prior to Lawson’s ruling, Schuette had consulted with his office’s ethics officer to determine whether any assistant attorneys general could advocate on behalf of Flint residents, said Rusty Hills, a former key aide to Schuette.

But the civil lawsuits preceding the criminal investigation had “conflicted out virtually everyone in the department,” Hills said.

The department instead contracted the work out to Flood. When the potential for a civil lawsuit on behalf of the people arose, Hall, already a part of the special counsel team, was appointed to take lead.

“He’s just outstanding in this,” Hills said Monday about Hall. 

eleblanc@detroitnews.com

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