Sure, We’ll Sue for You, But We Want a Cut, a BIG Cut

By April 28, 2009Briefly Legal

The National Association of Manufacturers this week joined other business and insurance groups in filing an amicus brief with the California Supreme Court in the nation’s most prominent case involving the government hiring of contingent fee attorneys to sue business, Superior Court of Santa Clara County v. Atlantic Richfield.  

As the NAM’s Legal Beagle summarizes, 10 cities and counties in California retained Motley Rice and three other law firms to bring a lead pigment public nuisance action against a group of manufacturers. The retainer agreement specified that the government would “retain final authority over all aspects” of the litigation, but the trial court ruled that a previous ruling in the Clancy case precluded the government from hiring lawyers on a contingency-fee basis.  The California Court of Appeal ruled otherwise, holding that the “control” language in the retainer agreements means that the outside lawyers are merely “assisting” the government in a subordinate role and lack any decision-making authority or control over the case. It’s quite a lengthy brief – which you can read here – that covers a number of critical arguments. We’ll cut to the conclusion, a statement of principle.

When the pursuit of public justice is tainted by the pursuit of personal gain, or even the appearance or possibility of such a taint is presented, our nation’s most precious political asset – the confidence of its people in their government’s absolute devotion to their interests – is compromised. When that occurs, every citizen’s liberty is imperiled. More than ever before, courts must not abandon traditional ethical guarantees and replace them with exceptions that merely promise justice in “extraordinary circumstances”, especially when those exceptions primarily arise from economic considerations, as opposed to historical jurisprudence.

The other amici curiae are the Public Nuisance Fairness Coalition, American Chemistry Council, and Property Casualty Insurance Association.

By coincidence, the Wall Street Journal today publishes an editorial on contingency attorneys, quite a generous group of people when it comes to making campaign contributions. “Mr. King and His Courtiers” covers New Mexico Attorney General Gary King’s hiring of Bailey Perrin to sue Janssen Pharmaceuticals; the Journal previous editorialized on Pennsylvania Governor Ed Rendell’s similar approach to suing Janssen, “The Pay to Sue Business.”

In the New Mexico case, what’s interesting is that the contingency contract between the AG’s office and Bailey Perrin  lapsed for a five-month period in 2008 – when the suit was actually served upon Janssen. The Journal observes: “It’s possible that the lapsed contract was an innocent mistake that happened to go unnoticed until late November of 2008. Then again, it’s also possible that Mr. King didn’t want to renew the contract earlier because Bailey Perrin might have been required to disclose Mr. Bailey’s generous campaign contributions to Mr. King back in 2006. A New Mexico law says that prospective contractors with the state must disclose political donations above $250 made in the previous two years. We can see how Mr. King would prefer to have that law firm-contractor gift kept under wraps.”

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