National Study Lauds Louisiana Contingency-Fee Laws; Cautions AG Caldwell Not To Skirt Them

From a release today by the American Tort Reform Association, something interesting which might well become an issue in the statewide elections next year…

Today the American Tort Reform Association (ATRA) released a study documenting inappropriate uses of contracts between certain state attorneys general and political campaign contributors who stand to make millions by being selected to litigate cases on behalf of state governments. The study cites Louisiana’s exemplary law preventing such contracts and cautions that some state contingency fee lawsuits and “no-fee” side-deal lawsuits create ethical problems.

The study by ATRA’s AG Agenda Watch project, entitled Beyond Reproach? Fostering Integrity and Public Trust in the Offices of State Attorneys General, examines ethical, fairness and conflict issues related to state attorneys general hiring private attorneys. It reports the findings of campaign finance research linking donations by plaintiffs’ firms and lawyers to some attorneys general who subsequently administered state contracts potentially worth millions of dollars in fees for those same lawyers.

Louisiana is one of a few states in the U.S. with good laws governing the use of outside counsel in state lawsuits, although to some extent attorneys general and plaintiffs’ firms have found ways to circumvent the state’s prohibition. Considering the well documented problems contingency fee lawsuits have raised across the country, recent efforts by Attorney General Buddy Caldwell and the plaintiffs’ bar to roll-back the law for Gulf oil spill lawsuits are of particular concern.

“The plaintiffs’ bar is aggressive in Louisiana and notorious for pushing anti-business, litigation-expanding legislation,” said ATRA President Sherman “Tiger” Joyce. “Attorney General Caldwell should be commended for his 2007 campaign stance against contingency fee state lawsuits and his review of his predecessor’s questionable state lawsuits. The position he takes on the contingency-fee bill expected next legislative session will likely determine his legacy in this area.”

Beyond Reproach? spotlights five additional states – Alabama, Mississippi, New Mexico, New York, and West Virginia – with varying public records of attorney general and plaintiff lawyer partnerships, ranging from outright abuse, to the appearance of impropriety to cause for concern. Collectively, events in these states point to variations of an alarming nationwide trend characterized by a cyclical flow of cash between attorneys general and plaintiffs’ lawyers. This “unholy alliance” jeopardizes public trust in attorneys’ general offices across the country.

“At the top of the ‘to-do’ list for attorneys general should be setting policies that engender stronger public confidence in the office of the attorney general – particularly in those special circumstances when the hiring of private lawyers to litigate on behalf of the state is justified. In those cases it should be done on a competitive, transparent, accountable and value-driven basis,” said Jerry Kilgore, the former Attorney General of Virginia and an adviser to ATRA.

In addition to documenting abuse, Beyond Reproach? also points to positive examples where reforms, policies or practices successfully govern outside counsel contracts to prevent abuse. In 2007, ATRA introduced the Attorney General Transparency Code as a system of good-government principles to serve as a guide to help state attorneys general avoid pitfalls historically associated with outside counsel contracts. The Transparency Code serves as model policy to ensure that contracts are adequately disclosed, are fundamentally fair and provide value to taxpayers.

Importantly, the National Association of Attorneys General (NAAG) recently called attention to private attorney hiring and included the topic in an orientation session for new attorneys general at its winter meeting from November 29 – December 2 in Fort Lauderdale, Fla. ATRA commends NAAG’s acknowledgement of this issue and calls NAAG’s decision to develop training on the use of outside counsel a step in the right direction toward safeguarding against future abuses. 

Moreover, as attorneys general work to institute sound policies in their offices, they can serve as influential advocates for legislation to permanently codify the principles embodied in ATRA’s Transparency Code. The adoption of legislation, such as the American Legislative Exchange Council’s Private Attorney Retention Sunshine Act, is an additional step that can be taken to correct the problem and protect against future indiscretion.

The American Tort Reform Association, based in Washington, D.C., is the only national organization dedicated exclusively to tort and liability reform through public education and the enactment of legislation. Its members include nonprofit organizations and small and large companies, as well as trade, business and professional associations from the state and national level.

AG Agenda Watch is a project of the American Tort Reform Association that monitors the litigation and political agendas of state attorneys general who, since the mid-1990s, have increasingly, if quietly, worked with personal injury lawyers to target entire industries with lawsuits, sometimes turning accepted legal practices and theories on their heads while seeking to create public policy through the courts instead of legislatures.



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