By Ashly McGlone.
More than three years ago, a jury ordered the city of San Diego to pay former lifeguard Alison Terry $100,000 because the city discriminated against her for being a woman. Last month, the city finally settled up with Terry’s attorney in the case, Michael Conger. He got almost $1 million in fees.
Conger’s name might sound familiar – and that healthy payout certainly is. He was one of the key players in uncovering the city’s pension scandal a decade ago. And few, if any, attorneys have earned more than Conger from suing local governments in recent history.
Here are four things you need to know about the man costing local agencies a pretty penny.
He’s made $10 million off San Diego government blunders.
Conger’s firm has been paid at least $9.8 million by local public agencies as a result of more than a dozen lawsuit settlements or court victories in the past 25 years.
Several cases centered on pension funding schemes, while others zeroed in on alleged employee discrimination or other mistreatment.
His largest fee recovery to date – more than $3 million – came from a single class-action case settled in 2004 with the city of San Diego and its pension fund. The agencies split the fees bill and the city agreed to fully fund, instead of shortchange, its pension system going forward for an estimated $140 million a year, nearly triple what it was paying previously, city records show.
Conger remortgaged his house twice to finance that legal battle, which he took on free of charge with the hope of getting paid if successful.
He’s much more selective now about taking on cases under that arrangement, called a contingency fee, and makes sure to have steady revenue coming from other clients who can pay as they go, like the San Diego Police Officers Association and a Century 21 franchisee he recently defended in court.
One of Conger’s gambles recently paid off. After nine years of free work suing the city over its lifeguard promotion practices, he received $875,000 in fees last month. The amount – nearly nine times what Terry, his client, received in damages – accounts for the hours spent fighting for his client and the value of his work.
“The reason for the rule – that you compensate the prevailing discrimination lawyer – is because low-wage earners should get access to competent counsel too,” said Conger, who lives and works in Rancho Santa Fe. Otherwise, he said, big government will go on discriminating and suppress any wimpy legal challenges that may come.
Seventeen years later, he’s still suing the city.
Attorneys for the Unified Port of San Diego and the city and county pension systems have all found themselves across the table from Conger, but none more than those representing the city of San Diego.
“The city of San Diego is terribly run,” Conger said. “I have been in litigation with them every day since 1998. Every day, at least one case.”
Since going out on his own in 1999, Conger’s had no shortage of clients with good cases against the city, he said. He keeps only two employees on the payroll: himself and his secretary, who doubles as his paralegal.
Two longstanding city cases wrapped up last month, including the lifeguard case and a lawsuit by a city employee named Janet Wood that didn’t pan out for Conger.
Wood, who worked for the city for 32 years, said the city’s surviving spouse benefits discriminated against single people. Last month, she took the city’s first settlement offer – $68,000 with no attorney fees. After 12 years of litigation, Conger will walk away with nothing.
The city attorney’s office said it paid outside lawyers $2 million to defend the case in state and federal court before settling on the eve of trial. The city’s lawyers hailed the deal as “an outstanding victory.”
Four of Conger’s cases are still active.
The remaining claims range from disputes over retiree health benefits to a city auto mechanic’s claim that he suffered disability discrimination when the city flunked him on a random drug test for needing to use the restroom due to a medical condition. He was then fired.
“What keeps me going when I am at my darkest or most depressed times or something, is these people have nowhere else to go,” Conger said. “They really don’t. There are not that many people that do what I do.”
Conger’s career path appears to include more highs than lows, and he’s amassed an array of lawyerly awards since graduating from Vanderbilt Law School in 1986 to show for it. He began at a law firm in Tulsa, Okla. before relocating to a San Diego firm in 1990 for $25,000 more pay a year.
Early success against the city earned him a reputation as a pension expert. Conger said he’s achieved more precedent-setting pension decisions in California than any other attorney.
“It just turned out to be an issue where there is a lot of shenanigans going on,” he said.
He helped expose San Diego’s pension crisis.
Lots of people have tried to take credit for exposing San Diego’s pension debacle. Conger was there almost from the beginning.
The lawsuit that earned Conger $3 million in fees from the city was hugely important in sounding the alarm on the city’s pension problems. It was filed on behalf of the city’s deputy planning director at the time, James Gleason.
“The lawsuit was a threat to the entire artifice that had been propping up City Hall,” author Roger Lowenstein wrote in his 2008 book, “While America Aged.” “If Conger could force the city to restore full funding, it would unravel the convenient lie on which San Diego had been figuring its budget. … Its elected officials could suddenly be vulnerable.”
He did, and they were.
The case revealed the city had an unfunded retiree debt of $1 billion to $2 billion thanks to two deals struck between the city and its pension board that let the city skip making pension contributions in exchange for retroactive benefit increases.
The revelations led to numerous federal investigations, a cratering of the city’s budget and the resignation of Mayor Dick Murphy in 2005.
Gleason said Conger was the right man for the job.
“It’s a complex (retirement) system and he came to grips with the intricacies of the system,” Gleason said. “He remains the best single authority of anyone in town, as well as people at the system.”
Bill Corbett, a longtime litigation investigator in the city attorney’s office, also tapped Conger for legal help after seeing his prowess in a personal injury case against the city.
“I thought he was extremely thorough. He was assertive. He was very, very competent as an attorney and just a very intelligent man,” said Corbett. “He was probably the first and only attorney I thought of who could handle a very important case against San Diego.”
Corbett’s case in 1998 was the first to lead Conger down the pension litigation rabbit hole. The settlement that ended it two years later forced the city to follow its own rules that include add-on pay in addition to salary in the amount used to calculate employee pensions, a move that increased the city’s debt.
“I’m not saying it was a smart promise, but you made the promise,” Conger said. “It’s like if you tell a laborer, ‘I’ll give you 20 bucks if you cut my lawn,’ and he cuts your lawn and you say, ‘Did I say 20? I mean 10.’ The lawn’s cut. You just don’t treat people like that.”
He credits bad city attorneys with his success.
Conger’s clients talk about his own legal prowess, but Conger actually says other lawyers are largely to thank for his success. Namely, the city attorney.
Former City Attorney Mike Aguirre, who served from 2005 to 2008, and current City Attorney Jan Goldsmith have both wielded the city’s large budget to defend illegal acts rather than fix the city’s problems, Conger said.
“I think that Goldsmith has a temper and he gets mad and he throws his budget against people that he’s mad at, like he did in the lifeguard case,” said Conger. “Taxpayers should be pissed” about the fees in the lifeguard case and blame Goldsmith and Joe Cordileone, chief deputy city attorney.
“They spent taxpayer money foolishly and both of them should be held accountable for it,” Conger said.
He said Aguirre was destructive, and there were “so many good lawyers they had that just got sacked by Aguirre.”
“I just don’t think Jan Goldsmith has frankly done any better than Mike Aguirre did. I think he’s a politician, not a lawyer. He’s Mike Aguirre with fewer press releases,” Conger said.
“I really am looking forward to two years from now when we get a new city attorney, because I just think that for the past 16 years the city has been without good guidance. I really believe that,” he said.
Goldsmith did not respond to multiple requests for an interview, but his spokesman Gerry Braun provided a statement.
“Mr. Conger is one of these attorneys who make outlandish settlement demands on the city and then wonder why the city attorney and City Council reject them,” the statement said. “In the Terry case, he demanded $3 million for attorney fees alone, and ended up with $875,000. In the Wood case, he ended up effectively losing and getting no attorney fees. We suspect Mr. Conger is a bit sore and would rather have a city attorney and City Council less protective of the taxpayers’ money.”
Aguirre also questions Conger’s motives.
“People like Conger rode and exploited the wave of political backlash from the pension players to support their (union) campaigns to discredit the work we were doing in the city attorney’s office,” Aguirre said. “When the honor roll is called for those who tried to help San Diego through hard financial times Conger’s name will not be called. When those of us who are working to reduce the pension debt are meeting in Golden Hill, Conger will be counting his money in Rancho Santa Fe.”
Conger said he’s proud of his record.
“I won’t make any money if they don’t break the law,” he said. “I help the person that has nowhere else to go against a powerful entity that they have no hope of matching up against if they don’t get a good lawyer.”
Conger’s Major Cases
In July 2004, Superior Court Judge Patricia Cowett approved a class action settlement on behalf of 6,300 city pension system members that required the city to fully fund, instead of shortchange, its pension system for an estimated $140 million a year, nearly triple what it was paying previously.
The deal also awarded $3 million to Conger. The amount was split between the city and SDCERS, with the city paying $1.85 million.
In May 2000, Superior Court Judge Robert May approved a $160 million class action settlement on behalf of 15,000 retirement system members that increased benefits by adding ancillary pay to the compensation used to determine a retiree’s pension.
It also called for SDCERS and the city to pay $1.2 million in attorney fees, an amount shared by five attorneys. As lead counsel representing retirees, Conger’s firm received about $1 million, he said.
In February 2002, Superior Court Judge Stuart Pollak approved a $1.2 billion class action settlement agreement on behalf of more than 27,000 retirement system members that increased benefits by adding ancillary pay to the compensation used to determine a retiree’s pension.
It especially benefitted probation officers by moving them into the same benefit category as police and fire employees, which has a lower retirement age.
It also called for the county and SDCERA to jointly pay $1.45 million in attorney fees for Conger and attorney Stephen Silver.
A jury in 2011 found the city’s lifeguard service discriminated against women and awarded Terry $100,000 in damages. Terry was the fifth female lifeguard to sue the city; the others settled.
After years of wrangling over attorney fees, the city recently paid $875,000 to Conger.
In November 2001, Superior Court Judge Robert May approved a $15 million class action settlement for more than 850 current and former Port employees, including the San Diego Harbor Police. The deal increased benefits by adding ancillary pay to the compensation used to calculate a retiree’s pension.
The port district and SDCERS agreed to split $600,000 in attorney fees for Conger and Attorney Michael Lackie; Conger received about $500,000, he said.