Proposed Code of Conduct to be given to AGs

John O'Brien Oct. 24, 2007, 1:00pm


WASHINGTON, D.C. - Citing a need to end prejudicial practices, the U.S. Chamber of Commerce's Institute for Legal Reform proposed a new code of conduct for state attorneys general Wednesday.

The ILR unveiled the code and the results of a poll of a group of attorneys general at its eighth-annual Legal Reform Summit.

"This proposed code of conduct balances the ability of the AGs to pursue wrongdoers while protecting the due process rights of the targets of the investigation and litigation," ILR President Lisa Rickard said.

"Some state AGs are increasingly using civil litigation to reap power, publicity and political advantage, so it is critical that they hold themselves to the highest ethical standards akin to those applicable to federal and state regulators and other government prosecutors."

Eight points make up the proposed code:

-Attorneys general may not initiate unwarranted investigations or litigation or threaten criminal action to gain an advantage in a civil matter;

-Proper notice must be given to potential defendants prior to bringing a civil action;

-Public statements that could prejudice a case must be forbidden;

-An attorney general must stick to monitoring his or her own state or limit involvement in multi-state activities to issues that significantly impact his or her own state;

-The hiring of outside counsel must be open to public scrutiny, and there can be no contingency-fee agreements in cases involving use of the state's police power;

-Attorneys general should not participate in outside activities that create or appear to create a conflict of interest with their official duties;

-Settlements, fines and awards should be distributed to the state agency or injured party. In the absence of those, they should be given to the state's general fund to be appropriated by the Legislature. West Virginia's Darrell McGraw has created one of the most well-known instances of this with the structuring of his 2004 settlement with Purdue Pharma.

-Attorneys general should reveal information that won't cause injury to governmental interest, private individuals or the public.

Rickard says she plans to roll out the proposal through state chambers of commerce and other business groups.

"We hope (the attorneys general) look at our proposed Code of Conduct and embrace it," she said.

Rickard also released the ILR's Report on Policies and Practices of State Attorneys General, which is the result of a questionnaire sent to the state attorneys general. Of the 51 possible, only 14 chose to participate. Nine were Republican.

Of the participating, the report finds:

-Most do not have standards governing whether to launch an investigation;

-None were able to cite a law that require notice to be provided to a defendant company prior to bringing criminal charges;

-The majority have state laws that govern public statements concerning pending investigation and litigation;

-All have participated in one or more multi-state litigation, though only a minority have actually initiated one;

-Nearly half have hired outside counsel on a contingent fee basis; and

-All can cite laws that dictate, at least in some circumstances, how settlement funds, penalties, fines or awards are distributed.

The participating attorneys general were Alabama's Troy King, Colorado's John Suthers, D.C.'s Linda Singer, Georgia's Thurbert Baker, Indiana's Steve Carter, Mississippi's Jim Hood, North Carolina's Roy Cooper, North Dakota's Wayne Stenehjem, Oregon's Hardy Myers, Pennsylvania's Tom Corbett, Utah's Mark Shurtleff, Virginia's Bob McDonnell, Washington's Rob McKenna and Wisconsin's J.B. Van Hollen.

Bernard Nash, a partner at Dickinson Shapiro, spoke in the morning discussion of state attorneys general. He criticized those who sued businesses that are no longer operating for "wasting the court's time" and those who appropriate settlement funds themselves.

"The power to appropriate is the quintessential power of the state Legislature," Nash said.

He also said using public relations to coax a company, fearful of bad publicity, into settling is inappropriate.

"That is not the way the system is supposed to work," he said.

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