Can a city council member who also practices law represent a private client whose interests are adverse to the city, or vote on a council matter that affects that client?

Plain-English summary

Assemblymember Mark Stone asked the AG about a real episode: a city council member, who was also a private attorney, wrote a letter on behalf of clients challenging the city's ban on newspaper racks. Was that allowed? Could the council member also vote on the matter at council? AG Xavier Becerra answered no on both counts, and answered the same way on three follow-up variations (no compensation, pre-litigation only, or non-litigation matter).

The opinion threads two distinct bodies of law. The first is the State Bar's professional-responsibility framework. Rule 3-310 of the Rules of Professional Conduct only forbids representing two clients with conflicting interests, and a council member's office does not create an attorney-client relationship with the city. But Rule 1-100 makes clear that the duty to "protect the public and to promote respect and confidence in the legal profession" extends past the literal text of the rules. California courts have applied that duty to disqualify attorneys whose fiduciary obligations to a non-client (like a corporation they direct) collide with their representation of a client suing that non-client. A council member owes the same fiduciary duty to the city's residents. The AG concluded that an attorney-council member who advocates against the city undermines public confidence in the legal profession, and is therefore precluded from doing so regardless of compensation, regardless of whether the matter is in litigation, and regardless of pre-litigation status.

The second body of law is the conflict-of-interest framework that applies to the council role itself, separately from the attorney's bar duties. Three layered rules apply:

1. Political Reform Act. A council member has a disqualifying economic interest in a decision when their client paid them $500 or more in the preceding 12 months. They must publicly announce the interest, recuse, and leave the meeting room. There is no exception for litigation, real estate, permits, or pre-litigation matters. Pro bono representation does not trigger this particular rule because it is income-based.
2. Government Code section 1090. The felony self-dealing rule applies whenever the council acts on a contract in which the member is "financially interested." The AG read this broadly. A council member representing a client in negotiating a city contract is financially interested in that contract, even pro bono (because of indirect economic gain to the practice). The "attorney of the contracting party" exceptions in section 1091 and section 1091.5 cover unrelated representation, not active advocacy in the contract itself. Section 1090 does not reach pure litigation, permits, or licenses, because those are not contracts; but it does reach settlement negotiations.
3. Common-law conflict-of-interest rule. This rule fills the gaps. Even where the matter is not a contract (so section 1090 does not apply) and where there is no qualifying economic interest under the Political Reform Act, the common-law rule still requires the council member to recuse from any decision affecting the client when the client's interests are adverse to the city. Pro bono representation does not change the analysis.

Together these rules form an overlapping mesh: depending on the matter, one or more of the rules will require recusal or prohibit the representation. The AG also noted that quasi-judicial council actions (such as use-permit votes) raise procedural-due-process concerns separately from the conflict statutes.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The most important changes to watch for since 2018 are: (a) the 2018 replacement of the old Rules of Professional Conduct with a new set patterned on the ABA Model Rules. The opinion noted that proposed new rules had been submitted to the California Supreme Court but were not yet operative. The new rules took effect November 1, 2018, after this opinion issued. The substance of the conflict analysis is unlikely to have shifted, but cite to the current rules rather than the 1992 numbering used here. (b) The 2018 Senate Bill 1436 amendments to Government Code section 1090 attorney-of-the-contracting-party exceptions, and any later FPPC regulation amendments to title 2 conflicts rules.

Common questions

Q: Why doesn't Rule 3-310 by itself solve the problem?
A: Because Rule 3-310 only prohibits taking on two clients with conflicting interests. A city council member is not the city's lawyer; the office does not create an attorney-client relationship. The conflict has to be reached through the broader duty of loyalty under Rule 1-100, plus the case law extending that duty to non-client fiduciary relationships (Raley v. Superior Court, Allen v. Academic Games Leagues).

Q: What if the council member abstains from voting on the matter?
A: For the State Bar duty, abstention does not save the representation. The AG endorsed the State Bar Committee's view that even where the council member abstains, "it will nonetheless appear that the other council members have approved a settlement to the benefit of the attorney-council member. Fellow council members might also be reluctant to oppose a settlement for this reason." Public confidence in the legal profession is the concern, and abstention does not address it. For Government Code section 1090, abstention also does not cure the violation, because section 1090 reaches the body's act of contracting, not the individual member's vote.

Q: Does it matter if the representation is pro bono?
A: For State Bar duties, no: an attorney owes the same loyalty to a pro bono client as to a paying one (Segal v. State Bar). For the Political Reform Act, yes: that statute keys off $500 in income from the client in the preceding 12 months, so a pure pro bono representation usually does not trigger it (though the council member could still have a qualifying interest on another basis, like a $2,000+ business investment). For Government Code section 1090, no: pro bono representation can still produce indirect economic gain to the law firm. For the common-law rule, no: the duty of disinterested skill, zeal, and diligence is not contingent on payment.

Q: What about pre-litigation matters, like a demand letter?
A: For State Bar duties, the prohibition still applies. For Government Code section 1090, pre-litigation work does not implicate section 1090 unless the parties are negotiating a contract or settlement; a letter disagreeing with the city's legal position is not a section-1090 problem on its own. For the common-law rule, the council member must still recuse from any council decision affecting the client. The AG's takeaway: if you are an attorney-council member, treat any client matter adverse to the city as off-limits even at the demand-letter stage.

Q: What about representing a client in a permit application to the city?
A: A permit is not a contract (US Ecology, Inc. v. State of California), so section 1090 does not apply on that basis. But the State Bar duty does apply: advocating for a permit applicant against the city undermines public confidence in the legal profession. And the common-law conflict rule prohibits the council member from voting on the permit. So the answer is still no.

Q: What about pure litigation, where the council member sues the city for a private client?
A: Litigation is not a contract, so section 1090 does not apply unless and until settlement negotiations begin (which the AG noted is hard to avoid in practice). But the State Bar duty applies, the Political Reform Act applies if the client is a $500+ source of income, and the common-law rule requires recusal from any council decision affecting the lawsuit. The AG quoted City and County of San Francisco v. Cobra Solutions to the effect that representing a client at the expense of the city's interests "would insidiously undermine public confidence in the integrity of municipal government."

Q: Are there any narrow exceptions in Government Code section 1090 for attorneys of the contracting party?
A: Section 1091, subdivision (b)(6), and section 1091.5, subdivision (a)(10), each create an exception for an "attorney of the contracting party" who receives no compensation from the public contract. The AG read these narrowly, concluding the phrase covers an attorney who happens to also represent the client in unrelated matters. It does not cover an attorney actively advocating for the client in the very contract with the city, which is the situation here. The conclusion follows the canon that exceptions to section 1090 are construed narrowly to preserve the rule's purpose.

Q: What happens if the council member's vote was quasi-judicial, like a vote on a use permit?
A: Procedural due process kicks in, separately from the conflict statutes. A quasi-judicial decision-maker cannot have an "unacceptable probability of actual bias." A council member representing a client whose interests run opposite to the city in a use-permit matter would have exactly that problem (Nasha L.L.C. v. City of Los Angeles).

Background and statutory framework

The opinion sits at the intersection of professional-responsibility law and government-ethics law. California has long recognized both bodies of law as overlapping but independent. An attorney can be in good standing under the Rules of Professional Conduct and still violate Government Code section 1090, and vice versa.

State Bar framework. Rule 1-100 of the Rules of Professional Conduct (in effect at the time of this opinion) declared the rules' purpose as "to protect the public and to promote respect and confidence in the legal profession." Rule 3-310 is the rule directly addressing representation of adverse interests, but it is limited to attorney-client conflicts (more than one client). The duty of loyalty extends past Rule 3-310 through Rule 1-100 and through case law. The leading cases: Raley v. Superior Court (1983) and Allen v. Academic Games Leagues of America (C.D. Cal. 1993): disqualified attorneys whose fiduciary obligations as corporate directors conflicted with their representation of clients suing those corporations. The AG read these cases as analogous to a council member's fiduciary duty to the city. Two State Bar Formal Opinions (Nos. 1977-46 and 1981-63) had reached the same conclusion in the council-member context decades earlier.

Political Reform Act. Government Code section 87100 et seq. and the FPPC regulations (Cal. Code Regs., tit. 2, § 18700 et seq.) prohibit a public official from making, participating in, or attempting to influence a governmental decision in which the official has a disqualifying economic interest. A client paying the council member $500 or more in the prior 12 months counts as a qualifying source of income (Gov. Code, § 87103, subd. (c); Cal. Code Regs., tit. 2, § 18700.1, subd. (a)(1)). When triggered, the council member must publicly announce the interest, recuse, and leave the meeting room (Gov. Code, § 87105, subd. (a)).

Government Code section 1090. The statute prohibits public officials from being "financially interested" in any contract made by them in their official capacity or by a body they sit on. The Supreme Court reads "financially interested" broadly: "an official has a financial interest in a contract if he might profit from it" (People v. Honig (1996) 48 Cal.App.4th 289, 333). The two attorney-of-the-contracting-party exceptions in sections 1091 and 1091.5 are narrowly construed.

Common-law conflict-of-interest rule. Section 1090 codifies the common-law rule for contracts. For non-contractual matters, the common-law rule operates on its own. It "prohibits public officials from placing themselves in a position where their private, personal interests may conflict with their official duties" (Clark v. City of Hermosa Beach). It reaches financial and non-financial interests alike. When a council member is in a common-law conflict, recusal is required.

The AG layered these rules so that an attorney-council member faces an overlapping mesh of restrictions. Some prohibit the representation outright (the State Bar duty). Others prohibit specific votes or participation (the Political Reform Act, the common-law rule). Section 1090 may void a contract entirely. The AG's broader point was that the rules together protect both the legal profession's reputation and the integrity of city government, and that mixing the two roles in adversarial matters undermines both.

Citations and references

Statutes:

• Government Code section 1090 (felony self-dealing prohibition)
• Government Code sections 1091 and 1091.5 (exceptions for "attorney of the contracting party")
• Government Code section 81000 et seq. (Political Reform Act of 1974)
• Government Code section 82048 (definition of public official)
• Government Code section 87100 et seq. (conflict-of-interest provisions)
• Government Code section 87103 (qualifying economic interests)
• Government Code section 87105 (disclosure and recusal)
• Business & Professions Code sections 6076, 6077 (State Bar rulemaking)
• California Code of Regulations, title 2, section 18700 et seq. (FPPC regulations)
• Rules of Professional Conduct, rule 1-100 (overarching purpose)
• Rules of Professional Conduct, rule 3-310 (avoiding adverse representation)

Cases:

• Raley v. Superior Court, 149 Cal.App.3d 1042 (1983) (attorney with fiduciary duty to non-client may be disqualified from representing adverse client)
• Allen v. Academic Games Leagues of America, Inc., 831 F.Supp. 785 (C.D. Cal. 1993) (extending Raley under current rule 3-310)
• People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., 20 Cal.4th 1135 (1999) (automatic disqualification for simultaneous adverse representation)
• Flatt v. Superior Court, 9 Cal.4th 275 (1994) (duty of loyalty)
• Lexin v. Superior Court, 47 Cal.4th 1050 (2010) (scope of section 1090)
• Thomson v. Call, 38 Cal.3d 633 (1985) (foundational section 1090 case)
• Stigall v. City of Taft, 58 Cal.2d 565 (1962) (section 1090 reaches body, not just voting member)
• People v. Honig, 48 Cal.App.4th 289 (1996) ("financially interested" defined broadly)
• City and County of San Francisco v. Cobra Solutions, Inc., 38 Cal.4th 839 (2006) (city council member's adverse representation undermines public confidence)
• Clark v. City of Hermosa Beach, 48 Cal.App.4th 1152 (1996) (common-law conflict rule)
• Davis v. Fresno Unified School Dist., 237 Cal.App.4th 261 (2015) (common-law conflict tracks section 1090 for contracts)
• Carson Redevelopment Agency v. Padilla, 140 Cal.App.4th 1323 (2006) (financial-interest definition)
• Nasha L.L.C. v. City of Los Angeles, 125 Cal.App.4th 470 (2004) (quasi-judicial decisions and procedural due process)
• Segal v. State Bar, 44 Cal.3d 1077 (1988) (pro bono representation is governed by same ethics rules)
• Hobbs, Wall & Co. v. Moran, 109 Cal.App. 316 (1930) (city official has fiduciary relationship with citizens)

Source

• Landing page: https://oag.ca.gov/opinions/yearly-index
• Original PDF: https://oag.ca.gov/system/files/opinions/pdfs/14-301_2.pdf

Original opinion text

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
XAVIER BECERRA
Attorney General

OPINION
of
XAVIER BECERRA
Attorney General
LAWRENCE M. DANIELS
Deputy Attorney General

No. 14-301
April 3, 2018

THE HONORABLE MARK STONE, MEMBER OF THE STATE ASSEMBLY, has requested an opinion on the following questions:

1. May a city council member who is also an attorney advocate on behalf of a client's interests when those interests are adverse to the city?
2. May a city council member who is also an attorney participate in a governmental decision concerning a client's interests when those interests are adverse to the city?

CONCLUSIONS

1. A city council member who is also an attorney may not advocate on behalf of a client's interests when those interests are adverse to the city.
2. A city council member who is also an attorney may not participate in a governmental decision concerning a client's interests when those interests are adverse to the city.

ANALYSIS

We are told of an elected city council member who, during his term on the council but in his separate capacity as a private attorney, represented clients in a dispute with the city over its ban of newspaper racks on city property. In the course of the representation, the council member wrote a letter to the city on behalf of his private clients, in which he argued that the city attorney's position supporting the ban was legally untenable. The dispute ultimately resulted in litigation, though the council member ceased his representation of the clients before a case was filed against the city.

This episode prompted the questions presented here: whether a city council member who is also an attorney may advocate on behalf of a client's interests, or participate in making official decisions affecting a client's interests, when the client's interests are adverse to those of the city. We conclude that a city council member may not advocate on behalf of a private client's interests under such circumstances, because to do so would violate his or her fiduciary duties to both the client and the city, and would undermine respect and confidence in the legal profession. Moreover, a council member's participation in an official decision involving a private client's adverse interests would in most cases run afoul of one or more statutory or common law conflict-of-interest rules.

We are also asked whether our conclusions would differ if the attorney received no compensation, if the representation were limited to pre-litigation, or if the matter did not involve litigation. These circumstances do not change our conclusions.

1. A city council member who is also an attorney may not advocate on behalf of a client's interests when those interests are adverse to the city.

The Rules of Professional Conduct of the State Bar of California regulate the professional conduct of attorneys licensed to practice law in this state, and serve as the basis for disciplinary action against attorneys. Having been adopted by the Board of Trustees of the State Bar of California, and approved by the California Supreme Court, these rules are binding.

Rule 1-100 provides that the overarching purposes of the rules are "to protect the public and to promote respect and confidence in the legal profession." Rule 3-310 addresses an attorney's representation of adverse interests. Rule 3-310(C) forbids an attorney, without the clients' informed written consent, to accept representation of more than one client when the interests of the clients actually or potentially conflict. Moreover, in cases of actual conflict a client's consent may be inoperative.

As a threshold issue, we must determine whether rule 3-310(C) applies in the circumstances contemplated here. We believe that it does not, because the rule speaks to conflicting attorney-client relationships, and a council member does not have an attorney-client relationship with the city by virtue of his or her office alone.

Our inquiry does not end there, however. As Rule 1-100 admonishes, "The prohibition of certain conduct in these rules is not exclusive," and "[m]embers are also bound by applicable law," including the "opinions of California courts." Further, the rules do not "create, augment, diminish, or eliminate any substantive legal duty of lawyers or the non-disciplinary consequences of violating such a duty." Specifically, the rules do not "supercede existing law relating to members in non-disciplinary contexts" such as judicial authority regarding attorney disqualification from representing a client.

Where an attorney or his or her law firm simultaneously represents clients with adverse interests, "disqualification follows automatically regardless of whether the simultaneous representations have anything in common or present any risk that confidences obtained in one matter would be used in the other" (SpeeDee, supra, 20 Cal.4th at p. 1147). This is because "[a]ttorneys have a duty to maintain undivided loyalty to their clients to avoid undermining public confidence in the legal profession and the judicial process."

Based on the duty of loyalty, courts have held that an attorney is disqualified when a client's interest is adverse to the interest of non-clients with whom the attorney has a fiduciary relationship. In Raley v. Superior Court, a partner in a law firm suing a corporation was also the director of the bank that was trustee of 100 percent of the common stock of the corporation. The Court of Appeal noted, "Professional responsibilities do not turn on whether a member of the State Bar acts as a lawyer." The court observed that a conflict of interest might result from a non-client relationship "where an attorney's relationship with a person or entity creates an expectation that the attorney owes a duty of fidelity." The court further found that the attorney, "acting for the Bank as trustee, has fiduciary duties to the Trust beneficiaries to manage [the corporation] with reasonable skill, prudence and diligence." The attorney's fiduciary relationship with the corporation, and his partnership with the law firm, therefore placed him on both sides of the litigation. The court held that, despite the attorney's attempt to isolate himself from the case, the trial court abused its discretion in not disqualifying the attorney's firm.

Later, in Allen v. Academic Games Leagues of America, the United States District Court for the Central District of California relied on Raley to conclude that one Mr. Wright, a California attorney, had a conflict of interest. Wright represented the defendants in a copyright and trademark infringement case brought by the National Academic Games Project. The court found that Wright had a fiduciary relationship with the business that was "similar to that of corporate director and raise[d] many of the same concerns." The court noted that former rule 5-102, on which Raley relied, had been replaced by current rule 3-310, which does not require disqualification of an attorney representing interests adverse to a non-client. But the court concluded that rule 1-100 compelled the same result, stating that "Wright's actions would undermine the integrity of the legal profession if he is able to utilize a loophole in Rule 3-310 to avoid disqualification." The court ruled that "Wright's conflict of interest and the clear suggestion of impropriety" required disqualification, and must be "imputed to his entire firm."

To determine whether this ethical prohibition applies here, we must examine whether an attorney's fiduciary duty as a council member disqualifies him from representing a client with interests adverse to the city. The State Bar Committee on Professional Responsibility and Conduct has twice addressed this issue, concluding that the adverse representation would be an ethical violation, both in contractual matters and in litigation.

In the first of these opinions, issued 40 years ago, the Professional Responsibility and Conduct Committee concluded that an attorney may not represent a client in a contract negotiation with a city if the attorney is a council member of the same city. The opinion reasoned that, otherwise, "the attorney may be tempted to use his influence of public office to gain advantages and concessions in contract terms for the benefit of his client." Further, "[t]he city employees representing the city in a contract negotiation, who are subject to the council's jurisdiction, may be reluctant to oppose the attorney in his contract demands; or they may be tempted to slant their evaluations and analyses of the matter to favor the attorney." The opinion pointed out that "the client is motivated to maximize his profits, while a prime concern of the city is to minimize its expense." Also, "there is always the possibility that the attorney would seek to influence the vote of other council members not strictly on the merits but by reason of his client's interest."

In view of these dangers, the opinion concluded that "it is highly possible that representation in such cases would be viewed with suspicion that the attorney was using his position and influence with the city for the purpose of extracting favorable or special treatment for his clients, in furtherance of their interests and his own." In such cases, "[e]ven the appearance of such impropriety could operate to weaken the public's confidence in the integrity and fidelity of its public officials."

Four years later, the Committee extended its reasoning to litigation matters, concluding that when an attorney is a city council member, the attorney is barred from representing a plaintiff in a lawsuit against the city. The opinion construed former rule 5-102(B) to forbid such representation because "[t]he public expects its elected representatives to represent them with undivided fidelity."

The opinion spelled out several examples of apparent and actual conflicts that could arise when a council member represents a party adverse to the city: "Even if the council member-attorney abstains and if the council approves settlement, there would still appear to be an attorney[-]council member approving a settlement, and probably also a fee, in his or her own firm's case. Assuming the public appreciates that the attorney-council member has not voted, it will nonetheless appear that the other council members have approved a settlement to the benefit of the attorney-council member. Fellow council members might also be reluctant to oppose a settlement for this reason. City employees could be witnesses at trial and might appear to shade testimony to benefit the attorney-council member's case presentation. A case might require the attorney-council member's firm to criticize prior city council action as contributing to the tort. It could appear that the attorney-council member has influenced other members of the council or city employees and officials."

The opinion reasoned that "the legal profession's interest in maintaining public confidence in lawyers and the judicial system is sufficient to render representation of the type proposed here unethical." Observing that "[i]t is the public official's visibility to the public which places his or her conduct, as an official and as a lawyer, before the public," the opinion asserted a principle: "The greater the public scrutiny to which an attorney's conduct is subject, the greater the legal profession's interest in ensuring that the attorney's conduct appear to be proper." As a corollary, "[a]n attorney must exercise the highest degree of care to avoid giving the public the impression that he or she has improperly used the influence of public office." Applying this heightened standard of care, the opinion concluded that "the city council member's firm may not represent tort claimants in suits against the city."

The public interest in promoting ethical conduct and public confidence in the legal system is founded on the rules of professional responsibility and on case law. We therefore conclude that an attorney-council member may not advocate for a client's interests that are adverse to the city — regardless of the type of matter involved in the representation.

Our view would be the same if the attorney-council member represented the client on a pro bono basis. The California Supreme Court has decided that, "An attorney's standard of professional conduct to a pro bono client should be no different from his or her responsibility to any other client." An attorney's ethical duty of loyalty to the client therefore exists whether or not the attorney is compensated. Likewise, the policies of promoting respect and confidence in the legal profession and of protecting the public remain applicable when the attorney represents the client in a pro bono capacity.

2. A city council member who is also an attorney may not participate in a governmental decision concerning a client's interests when those interests are adverse to the city.

We have concluded that ethical considerations preclude an attorney-council member from advocating for a client's interests that are adverse to those of the city he or she serves. We now address whether conflict-of-interest violations may also occur under the statutes, regulations, and common law governing public officials if the council member nonetheless undertakes the client representation. We examine three types of interests — financial, contractual, and fiduciary — under the Political Reform Act, Government Code section 1090, and the common law. As will be seen, there are areas of overlap between the state bar rules and the conflict-of-interest rules, such that a representation may be barred on more than one ground. For the sake of completeness, we analyze each set of rules in full.

a. Political Reform Act. Under specified circumstances, the Political Reform Act of 1974 prohibits public officials from making, participating in, or attempting to influence governmental decisions if they have financial interests in those decisions. The Fair Political Practices Commission is charged with interpreting and administering the Political Reform Act, and has adopted regulations implementing it. A council member is a "public official" for purposes of the Act. If a council member has a disqualifying financial interest in a matter, then the council member must publicly announce the interest, recuse himself or herself from acting on the matter before the council, and leave the council's meeting room until after the council concludes the matter.

Analyzing questions under the Political Reform Act requires consideration of all the elements of the statute, as well as its exceptions. These include whether the public official is making a governmental decision; whether the official has an economic interest in the decision; whether the decision will have a material effect on the official's economic interest; and whether the material effect is reasonably foreseeable. It is a fact-specific inquiry, and each situation requires separate analysis. Generally speaking, however, when a city council member is also an attorney, he or she has a qualifying economic interest in a governmental decision involving his or her client if the client is a source of $500 or more in income to the council member in the 12-month period preceding the relevant council decision. Whenever all the elements of a violation are satisfied, the council member may not lawfully be involved in the council's decision. There is no exemption for governmental contracts, litigation, pre-litigation, real-estate transactions, or permit applications.

On the other hand, if the council member represents the client without charge, there would not be an economic interest as defined by the Political Reform Act, because the client is not a source of income of $500 or more to the attorney. A council member could have a qualifying financial interest on some other basis, however, such as where the client is a business entity in which the council member has an investment worth at least $2,000.

b. Government Code section 1090. Government Code section 1090 provides that public officials "shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members." The California Supreme Court has explained that "section 1090 is concerned with ferreting out any financial conflicts of interest, other than remote or minimal ones, that might impair public officials from discharging their fiduciary duties with undivided loyalty and allegiance to the public entities they are obligated to serve."

A conflicted official may not avoid the application of section 1090 by abstaining from participating in the body's decision-making process on the contract. There are, however, various statutory exceptions to section 1090, as well as a limited common-law "rule of necessity" that allows a body to make a contract in limited circumstances despite a member's conflict.

The question here is whether a city council member violates section 1090 by participating in the formation of a contract on behalf of the city where the member is also an attorney for a contracting party whose interests are adverse to the city. To answer this question, we must determine whether the council member is "financially interested" in the contract within the meaning of section 1090. We believe that a council member does have a financial interest in a contract in which his or her client is interested.

For purposes of section 1090, courts construe the term "financially interested" broadly, not narrowly or technically. The public's interest in having the undivided loyalty of a public official is just as strong where financial gain is more hoped for than certain. "The phrase 'financially interested' broadly encompasses anything that would tie a public official's fortunes to the existence of a public contract." "Put in ordinary, but nonetheless precise, terms, an official has a financial interest in a contract if he might profit from it." The issue is whether the council member "stand[s] to be paid more or less based on whether the city signs [the] contracts or what terms are included."

In an earlier opinion, we concluded that the law firm of an council member-attorney, by representing the city in a lawsuit, would have a financial interest under section 1090 in the contract for legal services, even if the firm received no fees. First, we stated that "[s]ection 1090 would clearly prohibit the city council from executing the retainer agreement with the council member's law firm if the agreement provided for the payment of legal fees, regardless of the rate or amount charged." Second, we determined that "the result would be the same" if the law firm represented the city without compensation, because "[t]he contract could also bring indirect economic gain to the law firm. . . ." Here, the relevant contract would be one the city enters into with the council member's client, but all the same the council member-attorney would stand to profit from it, whether directly (from payment received for representing the client in connection with the contract), or indirectly (such as from "prestige, publicity, and goodwill associated with any success" in the representation).

There are two exceptions to section 1090 for an "attorney of the contracting party," neither of which applies here. We believe that the Legislature did not intend these exceptions to authorize a council member to advocate for a client in a contract with the city. We find that where a council member advocates for a client in a contract with the city, the attorney exceptions do not apply to lift the section-1090 prohibition.

On the other hand, we conclude that section 1090 would not be implicated based solely on litigation between the city and the council member's client. A contract with a client for attorney representation is not a contract made in the council member's official capacity, so section 1090 would not apply on that basis. And litigation is not a contract, so section 1090 would not apply on that basis, either. As for pre-litigation matters, section 1090 would not apply unless the parties were negotiating a settlement or some other contract. Activity such as a council member's letter to the city on behalf of the client, disagreeing with the city's legal position, does not raise a section 1090 concern. The same goes for representing a client in a permit application to a city, because a permit is not a contract.

Lastly, the outcome would not vary merely because a representation was without compensation. Pro bono representation may still produce economic gains, goodwill, or prestige for the council member's law practice, amounting to a disqualifying financial interest.

c. Common law conflict of interest. "A public officer is impliedly bound to exercise the powers conferred on him with disinterested skill, zeal, and diligence and primarily for the benefit of the public." "Public officers are obligated . . . to discharge their responsibilities with integrity and fidelity." Based on these tenets, the common law doctrine against conflicts of interest "prohibits public officials from placing themselves in a position where their private, personal interests may conflict with their official duties." Where a common law conflict of interest exists, the official may not take part either in the discussion nor in a vote on the relevant matter.

Common law conflicts of interest extend not only to financial interests, but also to noneconomic interests if there is "some personal advantage or disadvantage at stake for the public officer." Common law conflicts are not limited to contracts, and may arise whenever an official's personal or pecuniary interests are at stake.

As to financial conflicts of interest involving contracts, Government Code section 1090 codifies the common law rule against conflicts of interests. Consequently, a conflict of interest under section 1090 constitutes a conflict of interest under the common law.

For non-contractual conflicts, whether pre-litigation or litigation, or involving non-litigation matters such as permit applications, the common law doctrine against conflicts of interest would prohibit a council member from participating in a decision affecting the client's interests when they are at odds with the city's interests. The council member's duty as an attorney to loyally and zealously represent the client's adverse interests would run up against the council member's duty as a public official to exercise his or her powers with disinterested skill, zeal, and diligence. A council member's "representation of the client, at the expense of the best interests of the city, would insidiously undermine public confidence in the integrity of municipal government. . . ."

These loyalties would also conflict if the council member represented the client pro bono, because an attorney always has a duty to zealously represent a client's interests regardless of whether he or she gets paid. Likewise, an attorney has a professional duty to comply with state bar rules regardless of compensation. Pro bono representation could also affect the reputation and resources of the council member's law practice. Hence, under the common law doctrine against conflicts of interest, the council member must recuse himself or herself from such a decision.

Accordingly, we conclude that an attorney's ethical obligations preclude a city council member from advocating for a client's interests when those interests are adverse to the city. Further, we conclude that statutes prohibiting conflicts of interest for public officials, as well as common law conflict of interest principles for public officials, would prohibit a council member from participating in an official decision involving the client's adverse interests.