Dolan v. King County

• Decision Date: 10 January 2012
• Docket Number: No. 82842–3.,82842–3.
• Citation: 258 P.3d 20,172 Wash.2d 299
• Parties: Kevin DOLAN and a class of similarly situated individuals, Respondents,v.KING COUNTY, a political subdivision of the State of Washington, Petitioner.
• Court: Washington Supreme Court

172 Wash.2d 299

258 P.3d 20

Kevin DOLAN and a class of similarly situated individuals, Respondents,

v.KING COUNTY, a political subdivision of the State of Washington, Petitioner.

No. 82842–3.

Supreme Court of Washington, En Banc.

Argued Oct. 28, 2011.Decided Aug. 18, 2011.As Corrected Jan. 5, 2012.Reconsideration Denied Jan. 10, 2012.

Michael Reiss, Roger Ashley Leishman, Amy H. Pannoni, Gillian Murphy, Davis Wright Tremaine, LLP, Seattle, WA, Philip Albert Talmadge, Emmelyn Hart, Talmadge/Fitzpatrick, Tukwila, WA, for Petitioner.David Frank Stobaugh, Stephen Kolden Strong, Lynn S. Prunhuber, Stephen Kirk Festor, Bendich Stobaugh & Strong, PC, William Robert Hickman, Reed McClure, Seattle, WA, for Respondents.James Kendrick Pharris, Office of the Attorney General, Olympia, WA, amicus counsel for Office of the Attorney General.CHAMBERS, J.

[172 Wash.2d 301] ¶ 1 In Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), the United States Supreme Court guaranteed to indigents the right of legal representation at public expense. King County, like other local governments in this state, sought ways to provide the required defense services to indigent criminal defendants. After investigating several different models, the county settled on a unique system using nonprofit corporations to provide services funded through and monitored by the county's Office of the Public Defender (OPD) (formerly the Office of Public Defense). It is, in many ways, a model system providing quality representation to the poor. Over time, the county has taken steps to improve and make these nonprofit organizations more accountable to the county. In so doing, it has asserted more control over the groups that provide defender services. Kevin Dolan contends that the defender organizations are now no different than any other agency of King County and that the employees of these defender organizations are now, and for some time have been, entitled to be enrolled in the government's Public Employees Retirement System (PERS). After a trial on the record, the trial court agreed with the class. Applying the pertinent statutes and common law principles, we hold that the employees of the defender entities are “employees” under RCW 41.40.010(12) and are entitled to be enrolled in the PERS. We affirm the trial court and remand to that court for further proceedings regarding remedies.

FACTS AND PROCEDURAL HISTORY

¶ 2 Resolution of the issues presented requires a detailed review of the relationship between King County and its public defender organizations. In 1969, the first King County nonprofit public defender entity, The Defender Association (TDA), was created as a joint venture with the city of Seattle and the federal Model Cities Program. The independent nature of TDA was a primary reason for the county's adoption of this model. The county thought public defense “must be divorced as far as possible from the control of the entity which is placing the recipients' liberty in jeopardy, that is, from King County.” Clerks Papers (CP) at 1314 (Report of King County Council Operations and Judiciary Committee).

¶ 3 Over the years, the system evolved into its present form, with four public defense organizations providing almost all indigent defense services for the county. The Associated Counsel for the Accused (ACA) was created in 1973. The Society of Counsel for the Representation of Accused Persons (SCRAP) was formed at the request of the county in 1976. The Northwest Defenders Association (NDA) was established in 1987 in response to the county's desire for an organization with a larger number of minority management and board members. Another public defense organization, the Eastside Defender Association, was formed in 1978 and then discontinued in 1984.

¶ 4 A few years after its formation, TDA had several King County representatives on its board of directors. At the time, local government participation seemed “necessary to assure the visibility and longevity of the program.” CP at 1336 (Letter from King County Executive). However, by 1979, all the nonprofit public defender groups had independent boards and substantial autonomy over operations. See id. at 1336–37; see also CP at 1340–42 (1979 TDA Contract). Each defender organization negotiated a contract with the county for the services the organization would perform for a fee. The county managed its public defense program through the OPD, a division of King County's Department of Community and Human Services and ultimately part of the county's executive branch. The OPD was and is responsible for screening eligible defendants, assigning cases, negotiating and administering the contracts with the four defender groups, and managing the funds provided by the county. The OPD and the public defender organizations negotiate new contracts annually.

¶ 5 Over the course of several decades the county began to exert more and more control over the defender organizations. This evolution of greater county control was in response to several events and the county's desire for efficient budgeting, high quality of defender services, and parity in pay among deputy prosecutors and public defenders doing similar work. An event in 1984 seems critical to the evolution of the relationship between the county and defender organizations. An audit of the Eastside Defender Association revealed that the director was engaged in some self-dealing, including renting space from his daughters and paying his wife for financial advice, and that the organization's board consisted of himself, his wife, and his mechanic. ¹ These revelations caused the county to cancel its contract with Eastside Defender Association, which immediately then ceased to exist. It also caused the county to carefully scrutinize expenditures and to require a reorganization of its relationship with all the defender organizations.

¶ 6 The defender organizations were required to provide the county with a detailed budget of the costs of providing anticipated defender services, and those estimated costs became part of the contract amount between the county and the organization. CP at 1270–71 (Boruchowitz Decl.). By 1990, the county went to a cost pass-through budget system, also referred to as a zero-based budget system.²Id. at 1273, 1275. Expenses of each defender organization became a line item in the county's budget. CP at 628–29 (Chapman Decl.). The contract budgets were based on the defender organizations' actual costs and the county's projection of the case load, which in turn determined the number of defense lawyers needed and the ratios of staff to lawyers. Id. at 629, 634. Later the defender organizations were advised by the county that equipment purchased for $1,000 or more belonged to the county. CP at 1279 (Boruchowitz Decl.). Through this process, the county had effective right of control and approval over all leases and other defender organizations' expenditures. E.g. CP at 2891–92 (Daly Dep.).

¶ 7 Also during the 1980s, the defender organizations argued that defender lawyers should receive the same pay as prosecutors because they did similar work and, unlike prosecutors, defenders were constitutionally mandated. In 1989, the county commissioned the Kenny Group to study prosecutors and public defenders, classify their positions, and address the issue of pay parity for public defenders. The Kenny Group created and classified five levels of deputy prosecuting attorneys, three levels of senior deputy prosecuting attorneys, four levels of public defense attorneys, and three levels of senior public defense attorneys. CP at 627 (Chapman Decl.). The Kenny classifications became known as the Kenny Scale. Id. at 626. The county provided by ordinance that salary parity would be phased in over two years.³ The record before us is less than crystal clear on parity. It appears that while the county made an effort toward parity, the defender organizations never felt parity was achieved. According to the defender organizations, the county failed to provide funding for senior defender positions and therefore the organizations had to classify defenders in lower classifications than prosecutors with similar experience.⁴ CP at 1282 (Boruchowitz Decl.). The county also took the position that parity only applied to base pay and not benefits. Id. at 1277. The county did provide funding for mandatory employer taxes such as the Federal Insurance Contribution Act tax and unemployment insurance. Id. at 1278. The county also provided sufficient funding for medical benefits; however, the county did not provide sufficient funding for the defender organizations to make meaningful retirement contributions. CP at 662 (Chapman Decl.). Apparently the defender organizations had goals of providing retirement benefits of up to four percent but funding only permitted a contribution of one percent, two percent, or nothing depending on the budget. Id.; CP at 1278 (Boruchowitz Decl.).

¶ 8 In 2002, NDA sought to rent some office space in downtown Seattle that carried a higher rent than customary for defender groups. In August 2002, the county audited NDA and found what it considered several irregularities. NDA, perhaps believing it could legitimately do so as an independent organization contracting with the county, was branching out into civil and for-profit work and rented office space for these purposes. The county perceived NDA's actions as using some of the county's funding for improper purposes. Further, the county believed NDA did not have a properly constituted board of directors and had leased a space unapproved by the county. The county's Department of Community and Human Services brought a receivership action against NDA. On September 27, 2002, the trial court granted the county's motion to have a receiver appointed for NDA. The receiver was given “exclusive possession and control over all assets [of NDA], with the power and authority to preserve,...