Fired deputy attorney general for Idaho sues AG’s office, alleging retaliation

Lawsuit alleges her termination came hours after she submitted a document detailing ethical concerns

By: - September 26, 2023 4:39 pm
door to Attorney General Raul Labrador's office

The door to Attorney General Raul Labrador’s office at the Idaho State Capitol building on Jan. 6, 2023. (Otto Kitsinger for the Idaho Capital Sun)

A former deputy attorney general representing the Idaho Department of Health and Welfare has sued the Idaho Attorney General’s Office, alleging it retaliated against her after she raised ethical concerns relating to the representation of her clients.

The concerns raised by former Deputy Attorney General Daphne Huang, whose lawsuit was filed Friday, tie back to an investigation into child care grants distributed by the Idaho Department of Health and Welfare.

During the investigation, the Attorney General’s Office filed civil investigative demands with officials in the state health department – the office’s own client.

After an Aug. 10 ruling issued by an Ada County District judge, the Attorney General’s Office appointed a special prosecutor last month in order to continue its investigation. The judge found the demands represented a conflict between attorney and client, referring to the Attorney General’s Office and the Idaho Department of Health and Welfare.

In Huang’s lawsuit, attorneys representing Huang, who headed the Attorney General’s Office division that represented the state health department since 2018, say she “felt pressured by the” Office of the Attorney General “to take a hostile position towards her client and regarding advice that she herself had given to her client.”

She requests a jury trial in Ada County District Court. 

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Huang was fired after refusing to resign within three hours after she submitted a document detailing her concerns about “being forced into adverse positions with clients, creating an untenable conflict of interest, and creating ethical concerns that she refused to participate in,” also saying that she feared retaliation from her employer.

Huang, in text messages to the Idaho Capital Sun, said in her career serving three attorneys general before Attorney General Raúl Labrador, she had “never been asked by a superior to take a position adverse to my client for the office’s advantage. It was shocking.”

“I stand by my decision to follow my ethical obligations even though it cost me my job. And I hope this suit sheds light on abuses by the office in playing politics rather than fulfilling its constitutional duties,” she said. “I hope it empowers others to speak out or at least be assured they aren’t alone in wanting to do their job and what is right, free from unethical and undue influence by the AG’s executive office.”

Idaho Attorney General’s Office Communications Director Beth Cahill said the office had no comment on the suit, saying it hadn’t yet seen the lawsuit.

What is the investigation into the child care grants?

Idaho Attorney General Raúl Labrador is investigating tens of millions in child care grants distributed by the Idaho Department of Health and Welfare. The Idaho Legislature appropriated $36 million to Health and Welfare in 2022 through legislation that directed the funds be used for community partner grants that address the pandemic’s impacts on school-aged children, including learning loss. The bill specified that the grants should be used for school-aged children 5-13 years old but said that the department should follow federal guidance. The Legislature also awarded grant funds in 2021.

An audit published last month found flaws in how the state health department distributed tens of millions of dollars in child care grants to organizations, but the state health department disagreed with all the report’s findings. The report didn’t clearly state that the health department had broken state law, the Idaho Capital Sun previously reported

Labrador faces three lawsuits over his demands for information from senior Health and Welfare department officials, an ex-department official and 36 organizations that received the grants. Labrador appointed Adams County Prosecuting Attorney Christopher Boyd last month as special prosecutor in the investigation, after being required by a judge to appoint a special prosecutor to continue with his civil investigative demands.

Labrador, by Idaho law, is required to represent the state health department and other state agencies. But since the former congressman took over as the state’s top attorney in January, he has engaged in high profile legal clashes with some of the state’s largest agencies — including the state health department in this case and the State Board of Education, which his office sued alleging open meeting law violations with the University of Idaho’s attempted acquisition of University of Phoenix. 

Former deputy attorney general details what unfolded before her firing in lawsuit

Huang authored legal guidance on the child care grants in November and January, saying that the Department of Health and Welfare’s administration of tens of millions of dollars in grants was legally sound.

Former chief deputy attorney general David Dewhirst, asked to investigate Huang’s opinions in late March, told Huang to retract the opinions because they were “legally inaccurate,” according to the lawsuit. Huang withdrew the opinions, but she disagreed that they were inaccurate.

Huang’s previous supervisor, Chelsea Kidney, resigned upon request by Dewhirst days before Huang’s firing, the lawsuit said. Dewhirst requested to be notified of any changes to data on Kidney’s cell phone, according to the lawsuit. The state health department claimed privilege over the contents of the phone, which would typically be wiped to be provided to another attorney general’s office employee, the lawsuit said.

After receiving the phone back from the state health department, Dewhirst and Theodore Wold, Idaho solicitor general, told Huang it had been wiped. Huang was told in a meeting with Dewhirst and Wold she should have refused to give the phone to the state health department, but she said doing that would be unethical.

Dewhirst and Wold questioned Huang about what attorney client information could be on the phone. Huang said she told them she didn’t know the phone’s contents, the lawsuit said. 

The state health department previously told Idaho Reports that it was standard procedure to wipe the phone.

The lawsuit said Dewhirst and Wold attempted to pressure Huang to agree that the department “acted inappropriately in taking the phone from her and asked her directly if she thought it was a problem they wiped the phone.” Huang refused to answer, saying it put her “in a very awkward position given that they had to continue to represent the department.”

“Mr. Dewhirst’s instructions regarding the phone again put Ms. Huang in an ethically compromised position,” the lawsuit said. “As the constitutional and statutory attorney assigned to represent and advise IDHW, Ms. Huang owed her client a duty of loyalty, among other duties. As IDHW’s lawyer, she also had ethical obligations to not compromise attorney client privileged information and to not otherwise act in a manner inconsistent with her client’s legal interests.”

Dewhirst and Wold then scrutinized the legal guidance Huang drafted for the state health department that said the department’s administration of grants was legally sound, the lawsuit said. The lawsuit said they insinuated the department’s request for legal guidance was nefarious, while Huang said it was routine and “did not raise any red flags.”

Dewhirst and Wold told Huang, the lawsuit said, she needed to view the state health department’s requests for legal advice with a “jaundiced eye.” When Huang replied that would put her in an adversarial position with her client, the two accused her of being “in an adversarial position to her employer.”

COVID playground arrest, Ammon Bundy associate mentioned in lawsuit

The lawsuit also said Labrador met with Idaho Department of Health and Welfare Director Jeppesen before Labrador was elected. In that meeting, Labrador said that he believed that the state health department “mishandled” the child protection case of an infant linked to an associate of former Idaho gubernatorial candidate Ammon Bundy. Labrador, before and after being elected, requested to see the case files related to the infant, the lawsuit said. Labrador said he was personally friends with Diego Rodriguez, the associate of Bundy and grandfather of the infant, according to the lawsuit.

Huang said she was also “troubled” by Labrador dismissing charges brought against Sara Brady, who was charged with trespassing after using a closed playground early in the pandemic, the Idaho Statesman reported. Huang said she believed Labrador dismissing the charges was “personal favoritism” toward Brady, who campaigned for Labrador in his race for attorney general.

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Correction: This story has been updated to correct the spelling of Sara Brady’s name.

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