Citizen lawsuits weigh down already burdened city halls

The next time your local property taxes go up or the neighborhood garbage service starts to slip, take a look at how often your City Hall is being taken to court.

Lawsuits filed against local governments in recent years have been rising at what many city lawyers insist is an astronomical rate. Civil rights suits against cities, for example, covering everything from police brutality to improper firing of employees, shot up from just 270 in 1960 to 13,534 in 1980.

The dollar claims, often in the millions, can rival and sometimes exceed a city's total annual budget. Richmond, Va., for instance, is facing an antitrust suit from a hotel developer in which the triple damages sought would, in effect, wipe out the city's $250 million annual budget.

While that case awaits trial, a court has ordered South Tucson, Ariz., a community with a $3 million annual budget, to pay $3.6 million (actually $4.5 million with interest) over five years in a negligence case involving the accidental shooting by a local policeman of a colleague from neighboring Tucson. South Tucson, with insurance coverage of only $100,000, is appealing the order.

Though many people assume that cities are well insured against such contingencies, the fact is that policies covering many of the newer and more expensive claim areas are difficult to get and often unaffordable.

''No one ever banks on the catastrophic case,'' notes Tom Petkewitz, law director for Dayton, Ohio. His city recently settled out of court a personal injury case in which it was blamed for a missing stop sign. Dayton is one of a fortunate few cities that have a cash reserve enabling it to pay the $1 million settlement. ''If you take $1 million to $2 million out of a normal city's budget , somewhere there's going to be a drastic effect on city programs,'' Mr. Petkewitz notes.

''That's enough to knock out any city other than the top 10,'' agrees Randy Arndt of the National League of Cities (NLC). ''The big bucks have to come from somewhere, and often it's the taxpayer who must pay.''

Even when cities win cases, the cost of defense must be paid. Frequently, special lawyers must be hired.

There is one major reason for the increase and expansion of suits against cities beyond what lawyers call the ''slip and fall'' cases. Both state and federal courts have been interpreting more liberally the laws that govern city liability. For decades it was assumed that the same immunity from federal antitrust laws that states enjoy also applied to cities. But, in a case involving Boulder, Colo., and a cable-TV company, the US Supreme Court last year ruled that cities, even if they have home-rule power, are not exempt from antitrust claims in regulating businesses unless state law specifically directs them to act as they do.

''There's a lot of concern nationwide about this because there are many traditional things cities do that aren't spelled out in state law,'' notes Ted Fischer, city attorney for Eau Claire, Wis., which was sued a few years ago by four neighboring towns. They charged that Eau Claire was in effect operating an unfair monopoly in sewage collection and treatment services. Though the case is being appealed, Eau Claire so far has successfully argued that its apparently monopolistic behavior is sanctioned by state policy and laws.

Similarly, cases filed under the 1871 Civil Rights Act were rare until the Supreme Court in the past five years ruled that cities as well as local employees could be held liable and that having acted in ''good faith'' was no longer a viable defense. The loser in such cases also must pay the attorneys' fees.

''The civil rights area is far and away the most devastating one for cities, '' insists Stephen Chapple, general counsel for the US Conference of Mayors. ''The law is only six lines long, but every word has been thoroughly litigated. And, unlike antitrust suits, cities are losing most civil rights cases.''

In an effort to keep lawsuits to a minimum, cities are working hard to train employees, particularly police, to be more sensitive to legal liability. ''That kind of awareness is becoming as much a part of the standard job description as computer training,'' insists the NLC's Mr. Arndt.

But some legal observers, such as Charles Haar, Brandeis professor of law at Harvard University, argue that heightened caution is already having an impact on policymaking. ''If you want to do something innovative on zoning or land-use control, this becomes a real hindrance.'' By contrast for suers, he says, changes in interpretation of the law have ''opened the door to ingenuity.'' Others argue that even the most earnest attempts to ward off suits may not succeed.

''In just about every action a city takes, you can argue that it's being anticompetitive,'' says William H. Hefty, city attorney for Richmond, Va. ''Everytime you award a cable-TV or taxicab franchise or tell someone to build in one area rather than another, you're in effect favoring someone.''

''It's difficult to think of anything government does which doesn't subject it to charges of liability,'' agrees Richard G. Carlisle, a Kansas City, Mo., attorney who chairs the American Bar Association's committee on government liability. ''Government is in the business of establishing order. Individuals and corporations do not want to be regulated. Wherever there's a clash between regulation and individual freedom, there's potential for liability.''

In addition to trying harder to avoid lawsuits, many cities are prodding their states to establish some kind of liability ceiling. Some cities are filling the gaps by writing their own policies or making pool purchases with other communities.

Also, legislation now under discussion on Capitol Hill may tighten some areas of local liability. One bill would establish antitrust immunity for cities acting as agents of the public in regulating such areas as licensing and franchising.

Most legal experts who monitor the patterns of suits against cities say that in time they think courts and lawmakers will work out a better balance between individual rights and government liability.

''I anticipate that over the next 10 years there will be a general reappraisal and readjustment - but, for the short term, litigation against cities has a lot of momentum,'' observes Ross Davis of Davis & Simpich, the Washington, D.C., law firm that represents the National League of Cities.