From sanitation workers to the mayor’s office and everywhere in between, local governments deal with the public in ways that expose them to a range of liability claims and potential lawsuits.
State laws provide varying levels of immunity particularly for ministerial or legislative actions such as passing zoning ordinances or building codes, yet that doesn’t stop local governments from needing legal representation and liability insurance.
Darcee Siegel, city attorney of North Miami Beach, Fla. says municipal officials have qualified immunity on legislative matters that generally protects them from lawsuits as long as they act impartially and in good faith. Siegel is also on the council of the American Bar Association’s Tort Trial and Insurance Practice Section, although she is not speaking for the organization.
“If the individuals are sitting up on the dais as an elected official and they are discussing an ordinance or a resolution or some sort of a policy that clearly is legislation, they would be immune,” Siegel says. “The test is did you give them a fair hearing, did you listen to the testimony, did you allow them to present evidence, did you keep a open mind, did you have no prejudice against them prior to them coming forward?”
Ministerial immunity is similar to the protections provided to judges, who are not legally liable for their decisions even if they make a mistake, according to Cynthia Baker, professor of law and director of the program on law and state government at Indiana University’s Robert H. McKinney School of Law.
“If a judge makes a mistake in issuing her opinion, lets a murderer go free, makes a mistake of law, there’s judicial immunity because if we didn’t have that no one would ever want to be a judge,” Baker says. “It would just be too risky, so the law sets up official immunity for officeholders, elected officials etc.”
Of course this immunity doesn’t mean citizens won’t try to take their frustrations out on mayors, county administrators and the like by suing them. If they can’t win at city hall, they might opt for the legal system.
Charles W. Thompson Jr., general counsel and executive director with the International Municipal Lawyers Association and an adjunct professor of local government law at the National Law Center of George Washington University, says he’s seen this happen many times.
“I was a county attorney for about 30 years and my county executive was sued all the time,” Thompson says. “I would say primarily they were suits that were frivolous but every once in a while it would be for an action that the county had taken and basically he was being sued because they didn’t have anybody else to sue.”
Government officials are more exposed when it comes to their discretionary or proprietary functions, such as choosing a vendor or deciding where a road will be built. For example, if a city had to make a choice between leaving floodgates open or closing them, Thompson says it would face the risk flooding one area vs. saving another and potential lawsuits either way.
Public vs. special duty
Local government liability can also be broken down into two concepts known as the public duty doctrine and the special duty doctrine. The public duty doctrine refers to the government’s general obligation to the community at large and the immunity it receives in exercising its authority.
For example, the local police are required to keep the public safe but can’t be sued if someone’s house is burglarized or a drunk driver causes an accident. Yet the public duty doctrine does not mean local governments are entirely free of liability on this.
Governments have a general obligation to keep roads and sidewalks safe, so a large pothole or a decaying sidewalk could result in a lawsuit. Siegel says in order to prove negligence someone would have to show they were damaged or injured because the government failed in its duty to address a problem under its jurisdiction that it knew or should have known about.
The special duty doctrine goes beyond a government’s obligation to the public at large and deals with a specific obligation to an individual, which makes it easier to prove a breach of that responsibility.
“If it’s just a 911 operator taking your call and says ‘we have help on the way’ generally that’s probably not enough to trigger the special duty doctrine,” Thompson says. “It’s when they say ‘we have help on the way, don’t do anything.’ It’s sort of stepping that one step further into the relationship, telling them that you can rely on me to make sure that this is happening for you and it’s that reliance that you’ve created that causes the potential liability.”
Another example would be a local building department. It has a general duty to the public to enforce building codes, but a special duty is established when an inspector signs off on construction work. It creates a special duty obligation between the inspector, the local government and the building’s owner.
Baker says there have been lawsuits against building inspectors over this, such as condominium buyers who sued an inspector for approving substandard construction. The courts ruled that a special duty relationship had been established between the inspectors and condo buyers.
The opposite came true in a Vermont case in 1998, stemming from a young child that died in an accident at a daycare facility. The parents sued the state’s daycare regulatory agency and its inspector, accusing them of negligence.
In rejecting their case the Vermont Supreme Court noted the staggering number of people affected by state and local regulators and the impact it would have if officials were liable to every citizen individually, rather than the public at large.
“Nearly every resident or visitor to Vermont has daily contact with one or more entities licensed and inspected by the state,” the court ruled. “To recognize a tort duty of care arising from a day-care licensing and inspection scheme would thus have broad fiscal and policy ramifications for state and local governments, well beyond the parameters of this particular case.”
No joy rides
Of all the things local governments do, running a police department presents the greatest liability by far. Not only do police officers tend to have the most interaction with the public, they often see people at their worst and in adversarial situations. Thompson says most lawsuits at this level involve someone accusing the police of a civil rights violation from excessive force or making an arrest based on improper motives.
Under Florida state law if an employee was doing their job and their actions were within the scope of their employment, Siegel says the local government that employs them would be held liable for their actions.
Someone driving a sanitation truck to a landfill would be covered, but not if they took the truck on a joyride to another town and got into an accident. If this happened the city would still provide legal representation for the employee, but the employee would be on the hook personally for any judgment leveled against them.
In one notorious case years ago, a South Miami Beach police officer took a squad car to the home of his estranged wife where he found her naked boyfriend, chased him down the street and shot him in the posterior. The officer was fired and sent to prison, while the boyfriend sued the city in court and lost.
“We were able to show that it was not part of his duty as a police officer and even though he was wearing his uniform and even though he was driving the cruiser it put no liability on the city,” Siegel says.
If an alderman were accused of violating the state’s open meetings law, which would be a crime, an independent attorney would represent them while the city attorney’s office would represent the government itself. If an alderman were exonerated from such an accusation it would be up to the city council to decide whether to reimburse the alderman’s legal fees.
Although governments are generally protected if an employee acts outside the scope of their employment, Thompson says this would not be the case if an official new about misconduct but failed to address it, or was negligent in hiring someone.
Insuring coverage
Any discussion of local government liability naturally includes the issue of insurance. Thompson has been an attorney for two different Maryland counties and each had a different approach to this issue.
One of them, in a rural area, obtained insurance through a statewide insurance pool created by local governments in the 1980s. Although the pool was created in reaction to rising premiums in the commercial insurance market, Thompson says another advantage to insurance pools is they tend to cover more areas of liability than commercial policies.
The other county, which was more urban and affluent, created its own self-insurance program that included the county and its agencies but also the school board and some smaller local governments. Thompson says most large local governments tend to self-insure, with perhaps an excess liability policy from a commercial provider in case of extraordinary losses.
Siegel says smaller cities and towns with a nominal amount in liability claims may find it cost-effective to seek commercial insurance as the premiums would be more affordable.
North Miami Beach self-insures itself completely with no outside liability coverage. Siegel says it’s a cost-effective approach for her city, in part because its in-house legal team saves money by handling lawsuits without the need for outside representation. The city also doesn’t have to worry about any exclusions or deductibles that would come with a commercial policy.
Another factor is that Florida has liability caps on most lawsuits, apart from civil rights cases, which helps limit liability losses for local governments. The city has an outside auditor who monitors its liability fund and consults with the city’s legal, finance and risk management departments. Any settlement of more than $50,000 has to be approved by the city council.
Siegel estimates her city paid out $1.8 million to $2 million in claims over the past 20 years, which she says is much less than what it would have cost in commercial liability premiums.
This article was originally published by Consumer Insurance Guide
