What lies beneath? City declines to release its Mountain Water legal bills. 

With the city's legal bill for the Mountain Water condemnation nearing $7 million, the city of Missoula continues to refuse to provide a detailed receipt for its attorneys' fees. In response to a formal request from the Independent, Communications Director Ginny Merriam says the city's attorneys argue that they can legally justify withholding the information.

"We've had this request from another news organization a while ago, and our city attorney, Jim Nugent, says that the invoices are covered by confidential attorney-client privilege because they would reveal legal strategy to opponents," Merriam wrote in an emailed statement.

Contacted directly, Nugent additionally justifies the refusal by citing public meeting law, which allows elected officials to close public meetings when they're discussing litigation strategies. He says he expects the invoices to remain private as long as the Mountain Water takeover remains unfinalized. The city is still awaiting completion of the condemnation and City Council approval of a financing package. According to a Feb. 21 ruling by District Judge Leslie Halligan, the city is expected to pay $88.6 million for the utility, which includes $22 million owed to developers who invested in extending the water system.

"As long as our retained attorneys have concerns that detailed examination of the billings could disclose city strategy and could have a detrimental effect on city litigation strategy, the City asserts the privileges previously identified herein," Nugent writes.

Missoula marked legal victories in 2015 and 2016 when a district court judge and then the Montana Supreme Court agreed that it's in the public interest for the city to own and operate its water system. Asked for specification regarding remaining hurdles that require protection of the city's legal strategy, Nugent referred questions to Scott Stearns of Boone-Karlberg. Stearns responded via email that he's out of the office and unavailable to provide comment until early March.

The city does release Mountain Water-related legal billing statements every few weeks when Missoula City Council votes to approve the expenditures, but those statements contain no detailed information about how the money is spent, nor how much of each invoice is paid out to the three firms hired to represent the city or to any retained experts. The city did disclose in court proceedings in mid-2016 that its local counsel, Boone-Karlberg, bills at about $250 an hour, and that Seattle-based firm Perkins-Coie bills at about $700 hourly. Datsopoulos, MacDonald & Lind is also listed among the city's retained counsel in some of the Mountain Water documents.

click to enlarge The city’s attorneys fees in the Mountain Water case total close to $7 million. Missoula City Attorney Jim Nugent says the invoices detailing those expenditures are privileged. - PHOTO BY CHAD HARDER
  • photo by Chad Harder
  • The city’s attorneys fees in the Mountain Water case total close to $7 million. Missoula City Attorney Jim Nugent says the invoices detailing those expenditures are privileged.

Under eminent domain law, the city is also obligated to pay for the opposing side's fees. In July 2016, counsel for Mountain Water and the Carlyle Group told the courts their fees were about $7 million.

The city's attorney-client privilege argument doesn't hold water with Mike Meloy, a Helena-based attorney and Freedom of Information Act expert who is retained by the Montana FOI Hotline for journalists. In his opinion, the legal bills clearly fall under the public's right to know.

"The attorney-client privilege belongs to the client, not the attorney," Meloy says in an email. "Nothing prevents the client from disclosing communications from the attorney...and in this case, the Constitution mandates disclosure."

Meloy says he doubts the invoices would expose much legal strategy in any case. In his experience, attorneys' invoices are typically vague, with line items detailing the number of hours that an attorney or staffer spent drafting memos, deposing witnesses and writing briefs.

Republican State Rep. Adam Hertz served on Missoula City Council in 2014, when the city initiated the Mountain Water eminent domain proceeding. He was the sole council member to vocally oppose the takeover, and continued to oppose the condemnation throughout his term, which ended in 2015. Hertz says council members, who must vote to approve the expenditures every two weeks, don't typically see detailed legal bills explaining the expenses. He recalls seeing only bills with tallies of hours worked by the attorneys.

"There was never lot of detail provided to City Council, and never a process for choosing the law firms that were chosen, as far as I know," Hertz says. "They were chosen by the mayor. So I think those invoices should very much be public records."

When the city first began condemnation, Mayor John Engen told the press that the city's attorneys estimated the lawsuit would cost $400,000.

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