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By Shawn Raymundo

The California Joint Powers Insurance Authority, the state insurance pool, has denied repeated requests from the city to cover Mayor Pro Tem Gene James’ legal costs in a defamation suit filed against him by a former political associate of his.

The lawsuit, which San Clemente resident Jim Bieber filed in Orange County Superior Court last May, raises a series of allegations. Chief among them is an accusation that the councilmember made false claims to constituents by telling them Bieber had threatened to kill James during a heated exchange at a bar in early 2020.

Bieber, in his complaint, denies ever making such a threat. He also claims that the “false and misleading statements attributed to (Bieber)” were meant to cause harm, which reverberated to “his reputation, business and standing in the community.”

James, who was preparing to run for reelection at the time the lawsuit was filed, has argued the complaint was politically motivated. He also has acknowledged speaking with residents via text messages to explain Bieber’s alleged threat—a conversation that came about after being seen meeting with a fellow councilmember.

James has pointed to those texts as an example of communications with constituents, and one that arose from an interaction with another city official. Therefore, James and the city have argued, the councilmember was acting within the scope of his duties, and the JPIA should indemnify him—select and pay for his legal defense, as well as cover any potential damages.

“The circumstances surrounding the events leading to James’ allegedly defamatory statements support the conclusion that the Action arises from James’ position as a city councilmember,” attorneys representing the city stated in a Jan. 25 letter to the JPIA’s appeals committee.

However, the JPIA, which comprises more than 100 government agencies (the majority of them cities), has not seen it that way and has three times in the past year denied requests to provide cover in the defamation suit. The city currently has one more avenue in the appeals process: binding arbitration.

Consideration on whether the city should proceed with that route is anticipated to go before a public vote of the city council next week, according to City Attorney Scott Smith, one of the authors of that late-January letter.

“It hasn’t been possible to assemble a closed session quorum of the Council to decide this matter,” Smith wrote in an email on Monday, April 26.  “As a result, we have decided to recommend at the next City Council meeting that the Council waive the attorney-client privilege and decide the matter in open session.”

Based on a review of the complaint, at no point did it name the city of San Clemente, nor lob allegations against the local municipality or any other elected official—raising questions as to why the city is playing a role in a private-party lawsuit.

City Attorney Scott Smith earlier this month said the city’s role is still to be determined, further noting that any claim made against a councilmember that’s tendered to the city will be tendered to the insurance pool.

“The city owes (elected) officials a determination whether a lawsuit concerns acts within the scope of their office or outside the scope of their office, and the city’s (insurance) carrier has the same obligations,” Smith explained, later adding: “When the city buys insurance, then it expects to have use of that insurance for that intended purpose.”

When San Clemente Times posed to James a list of several questions related to the lawsuit and his request for the JPIA to cover his legal bills, the elected official on Wednesday morning, April 28, responded in an email with the following:

“It would not be prudent to comment on an extraordinarily frivolous lawsuit directed at me as a public official and meant to distract me from conducting my official duties,” James wrote. “However, it is important to note this continued harassment will never deter me from the important issues facing San Clemente such as fighting the Toll Road, keeping vacation rentals from littering our city, cutting our city budget and supporting our businesses as they recover from the pandemic.”

As a follow-up, the question was asked how he justifies asking taxpayers to foot the bill for his legal expenses. In reply, James said he had already responded to the newspaper’s questions.

THE COMPLAINT

Bieber, the owner of Bieber Communications, which provides mailing services for political campaigns, helped work on James’ bid for special election back in 2019. He filed his lawsuit after learning from fellow residents that James had told them of the alleged death threat Bieber had made toward the public official.

In his defamation lawsuit, Bieber cites a text message exchange in which James tells San Clemente residents “Bieber threatened to kill me.” James had sent that text after being told he was seen meeting with then-Councilmember Chris Hamm outside of his home.

“Defendant James demanded to know how they knew Councilman Hamm was at his home, and angrily stated there was a risk to his home,” the suit states, adding that no one would reveal how they knew of Hamm’s visit to James’ home, while also disputing the notion that there was a “safety risk.”

“Defendant James replied in a text: ‘So you refused to tell me … Bieber threatened to kill me, and my wife shouldn’t be freaked out,’ ” according to the lawsuit, which said James allegedly continued to write in the chat that there were witnesses who had heard Bieber’s alleged threat.

Bieber’s complaint further alleges that James, as a then-candidate, misled members of his 2019 campaign with false information that he possessed a prestigious military decoration he was never actually awarded.

In campaign materials the Republican Party of Orange County mailed out to San Clemente voters in the lead-up to the 2019 election, James, a retired Army veteran, was falsely depicted as having received the Legion of Merit for his service.

According to the lawsuit, Bieber had led the push to get the OCGOP’s endorsement of James ahead of the election. Citing James’ alleged claim that he had received the medal, Bieber used the information in an email appealing to members of the local Republican Party.

James has staunchly denied having any involvement in the OCGOP’s mailers. In court filings responding to the lawsuit, James calls Bieber’s allegations related to the Legion of Merit controversy “irrelevant,” and a tool by which to hurt the official’s chances of reelection.

“Regardless of Bieber’s intent, this case is actually about a threat by a party political operative who drafts hit pieces for a living, spoken in a bar, to ‘kill’ an elected official he has it out for—in the run-up to campaign season,” a Nov. 30 court filing from James had said.

Last September, James had asked the court to dismiss the case in an anti-SLAPP (strategic lawsuits against public participation) motion. At the heart of his defense was the claim that his conversation with voters regarding the alleged threat was a matter of public interest.

According to James’ court filings, the incident in question occurred while at a bar in February 2020, when Bieber—a former associate turned political adversary—had walked up to James, using profanity to disparage the councilmember, and allegedly stated, “We’re going to kill you.”

“Mr. Bieber confronted Mr. James and said, ‘You’re an oozing piece of (expletive). We’re going to kill you,’ ” James’ then-attorney, Kevin Brown, argued in a Sept. 8 court filing. “Not wanting to further engage with (Bieber), Mr. James left the bar. Mr. James wasn’t sure whether Mr. Bieber meant it as a political comment or a personal one, but he attributed the hostility to a political adversary.”

Subsequent court documents from Bieber paint a different picture of that evening. According to Bieber, the two met following a city council meeting on Jan. 21, 2020 at the Red Fox Lounge. There, the filing states, the two had a conversation described only as “uneventful.”

As of this posting, Paul Carter, Bieber’s attorney, had not responded to multiple requests for comment.

A few months after the encounter at the bar, court documents stated, James had raised the claim of Bieber’s alleged death threat to constituents, after learning that someone had been surveilling his home and had been reporting to others about visitors such as Hamm.

“Given his office and experience in law enforcement and security, he was concerned for his family,” court records stated.

According to James’ filings, the conversation included Melissa Phelps McCready, Anthony Rubolino and Martina McBurney-Wheeler. Wheeler and Phelps, the filings said, previously worked as volunteers on James’ 2019 campaign.

“Such individuals would undeniably have interest in Bieber’s threat, regardless of whether Bieber meant it literally, i.e., to murder their representative, or metaphorically, to take him out politically during the upcoming election through his hit pieces based on stolen valor allegations,” court filings stated. 

James has also claimed that Bieber had engaged in “incessant political harassment” following their falling-out. The alleged harassment, according to court records, prompted James last spring to contact Steven Knoblock, who at the time was a private citizen and a “then-friend and former political ally” of Bieber’s before being elected to city council this past fall.

“Knoblock is an attorney and significant player in Orange County party politics,” James’ court documents stated. “James requested Knoblock use his influence to have Bieber stop or reduce his political attacks.”

Court documents that Bieber filed also state that Knoblock contacted Bieber by phone in May 2020, advising him of that conversation with James.

James’ Anti-SLAPP motion was denied by Orange County Superior Court Judge David Hoffer in late November, after finding that the text messages with constituents didn’t “involve an issue of public interest.”

“Here, the text at issue concerned an alleged threat privately communicated to (James), was sent to three private individuals, several months after the alleged threat was made, in connection with inquires as to suspected unauthorized surveillance of (James’) home,” the court ruling states. “In this context, the speech did not involve an issue of public interest, dispute, or controversy.”

With the judge’s most recent ruling, the matter will now proceed in court, which is set to hear the merits of the case later this year.

In mid-February, James filed a “substitution of attorney” with the court, opting to represent himself in the case.

SCOPE OF DUTIES

While the lawsuit has continued to play out in court for about the past year, the city and James have worked to lobby coverage from the JPIA.

According to a July 13 email that SC Times obtained, James had reached out to interim City Manager Erik Sund to explain the lawsuit, as well as detail the alleged exchange he had with Bieber at the bar earlier in the year.

“He threatened to kill me and I asked why? He said, ‘because you are not supporting (Councilmember) Laura (Ferguson),’” James recalled in the email. “He (Bieber) went on to tell me I was a piece of (expletive), and he wanted me off Council. Repeatedly saying I want you off Council.”

“It is my belief this lawsuit is directly related to my service on city council,” James concluded.

Additional correspondence between the city and the insurance pool outlines the previous attempts to have the JPIA indemnify James. The city has argued that the allegations Bieber raised in his complaint are directly related to the elected official’s services as a councilmember.

“James can credibly claim that he was acting within the scope of his duties, and accordingly, the JPIA should defend the Action,” Smith and his colleague with Best, Best & Krieger, Christopher Deal, had written in late January.

Citing the text messages between James and the other San Clemente residents regarding the alleged death threat, the city has made the case that those communications represent the councilmember fulfilling his duty to voters. 

“The circumstances surrounding the events leading to James’ allegedly defamatory statements support the conclusion that the Action arises from James’ position as a city councilmember,” the city’s attorneys wrote.

“Specifically, James would testify that the threat he relayed to his constituents were made by (Bieber) during a heated political conversation with (Bieber) earlier that year that included threats against James arising directly from James’ refusal to advance Plaintiff’s local political agenda,” the Jan. 25 letter also stated, expanding on James’ previous retelling of events.

According to James and the city, Bieber had “demanded” that the councilmember get certain city officials fired while the two met at the bar in early 2020.

“When James refused, (Bieber) told James that he is an ‘oozing piece of (expletive)’ and that ‘we’re going to kill you,’ ” the city’s attorneys wrote. “James believes that Plaintiff’s words were motivated by a political adversary.”

As part of the plea to the JPIA, the city cited a 1984 defamation suit involving California Sen. Dianne Feinstein, then on the Board of Supervisors for San Francisco County, and Joseph Mazzola, a labor union manager.

A court had found that Feinstein was acting within the scope of her duties as an elected official when she allegedly made slanderous remarks, off-the-record and outside of an official meeting, to Mazzola.

Prior to the city’s latest appeal effort in January, the JPIA had twice denied James with cover in the lawsuit—on July 22 and on Dec. 15. In December, Jonathan Shull, the insurance pool’s CEO, explained that the allegations against the mayor pro tem were not based on any actions he took as a city official.

“The allegations of threats and defamation made by Plaintiff Bieber do not allege any actions by Council Member James within the scope of his duties as a Council Member,” Shull, in December, wrote as a response to the city’s first appeal.

In the Jan. 25 letter, the city’s attorneys stated that the JPIA’s denial for coverage “puts the City in an untenable position.”

“A trier of fact could reasonably conclude that James’ conduct was within the scope of his duties, thereby obligating the City to indemnify and defend James even though the JPIA has refused to honor its commitments to the City under the (Memorandum of Coverage),” the attorneys wrote. 

The JPIA, however, again denied coverage last month. Shull notified the city that the appeals committee voted to uphold the previous decisions—a move that leaves the city council with its latest choice on whether to enter into arbitration.

CITY’S INVOLVEMENT

When asked whose decision it was to help James get coverage from the JPIA beginning last summer and whether the rest of the council at the time had any say in the matter, Smith declined to comment.

However, he later stated, seeking coverage from the city’s insurance carrier is an ordinary course of action that Smith’s office takes, and that he doesn’t ask the city whether they want him to do so.

“When the City has purchased insurance (including officers’ coverage) and people assert claims against the City (like this claim for defense and indemnity), I consider it part of my job to seek coverage for the City,” he elaborated in a follow-up email.

Councilmember Chris Duncan this week similarly stated, that based on his understanding, the matter initially “did not need to go to city council; it was in the authority of the city attorney to make a decision whether to seek a release from the JPIA—seek coverage.”

It was only recently, he noted, that the council, in closed session, was supposed to vote on proceeding with arbitration.

“It has come up twice as a closed session item and in both cases, we did not have a quorum, so unfortunately we weren’t able to vote,” Duncan said.

The council didn’t have a quorum, because James, along with Councilmembers Laura Ferguson and Knoblock, a witness in the lawsuit, recused themselves.

Speaking with SC Times this week, Knoblock said he wouldn’t talk about the case, as he’s “not at liberty to discuss who said what to who and when.” He did explain that he’s known Bieber for about 16 years, as both have been active on local political issues.

Regarding the city’s involvement in a case, Knoblock, speaking in general terms, said the city has to get involved if it’s a city-related issue.

“The city has to take any action or expend any money on anything else related to that,” Knoblock said, adding: “Generally speaking, the city is only responsible to city-related business.”

Asked whether he’s aware of BB&K, the city’s law firm, billing the city for work related to the lawsuit, Knoblock couldn’t publicly comment, citing it as a closed session matter.

Ferguson, earlier this month, touched on those potential legal costs to the city, stating, “I don’t know what that’s cost us yet.”

Regarding her refusal to participate in the previous discussions on arbitration, Ferguson explained that she recused herself because the matter wasn’t properly noticed to the public. 

“I refused to participate, because there was no proper acknowledgement of this lawsuit being discussed in closed session 72 hours in advance,” she said.

Mayor Kathy Ward has not responded to multiple requests for comment as of this post.

The city council will meet on May 4, when it’s expected to take a public vote on proceeding with arbitration.  

SR_1Shawn Raymundo
Shawn Raymundo is the city editor for the San Clemente Times. He graduated from Arizona State University with a bachelor’s degree in Global Studies. Before joining Picket Fence Media, he worked as the government accountability reporter for the Pacific Daily News in the U.S. territory of Guam. Follow him on Twitter @ShawnzyTsunami and follow San Clemente Times @SCTimesNews.

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