Federal legislation benefiting AGs and plaintiffs lawyers, WLF paper says

John O'Brien Jul. 30, 2009, 3:00pm


WASHINGTON (Legal Newsline) - The nation's plaintiffs lawyers are making sure federal legislation gives more authority to the state attorneys general with whom they can team, a recent paper from the Washington Legal Foundation says.

The paper, "The Plaintiffs' Bar's Covert Effort to Expand State Attorney General Federal Enforcement Power," says plaintiffs attorneys have a financial interest in helping state attorneys general gain the ability to bring even more lawsuits.

It was authored by Victor Schwartz, the chairman of the Public Policy Group of Shook, Hardy & Bacon, and Christopher Appel, an attorney in the Public Policy Group.

"Put simply, there is no sound justification for expanding state attorney general enforcement through federal legislation. Rather, there are compelling reasons not to increase the authority of these already extremely powerful state officers," they wrote in the paper, released July 10.

"Congress should take care when meting out federal law enforcement authority, and view with great skepticism the efforts of plaintiffs' lawyer lobbying groups to buoy the office of the state attorney general for the advancement and profit of private attorneys."

It adds that several pieces of legislation -- the Consumer Product Safety Improvement Act, climate change legislation, the Data Accountability and Trust Act, the Federal Trade Commission Reauthorization Act and the economic stimulus package -- contain provisions that allow for state attorneys general to bring federal lawsuits regarding them.

State attorneys general hiring private firms to represent the state on a contingency fee is nothing new. The biggest example came in 1998's Tobacco Master Settlement Agreement, in which 46 states joined.

State attorneys general say the agreement helps their states litigate complex cases without having to use taxpayer money. Critics point to instances in which firms that contributed heavily to a state attorney general are hired for the cases, and that public officials (or the lawyers representing them) should not have a financial stake during the pursuit of justice.

"Private contingency fee lawyers understand that federal legislative expansion represents the next step towards strengthening and legitimizing ties to state attorneys general and reaping potentially huge rewards in state-sponsored 'federal' litigation," the paper says.

"Even more than that, it provides an opportunity for these private attorneys to become the driving force behind initiating the litigation."

The paper details the Consumer Product Safety Improvement Act, which was aimed at giving an underfunded Consumer Product Safety Commission more teeth.

The paper says trial lawyers began spending money to lobby for provisions that would allow them to file product liability claims. The law authorizes state attorneys general to bring actions in federal court to enforce certain CSPC rules, once the CPSC gives its consent.

"Although trial lawyer groups failed in this instance to push through an express enforcement provision permitting claims for monetary damages, they still achieved important gains with the legislation," the paper says.

"First, because there was no constraint placed on combining additional claims, an attorney general can use this federal authority to bolster simultaneous or subsequent state claims which allow monetary damages, such as allegations under state consumer protection laws.

"Second, the law is ambiguous as to whether state attorneys general can contract with
private attorneys to bring claims on a contingency fee basis. Thus, the end result is that this seemingly innocuous enforcement provision may permit expansive state litigation driven by private contingency fee attorneys."

The paper adds that part of the stimulus package that deals with health care information allows a state attorney general to file for injunctive relief or damages, and the Federal Trade Commission legislation allows state attorneys general to enforce federal consumer protection laws through outside counsel on a contingency fee.

"These acts may thus open the door to federal enforcement actions spearheaded by private attorneys, which are fundamentally inconsistent with congressional intent," the paper says.

The Washington Legal Foundation says its goal is to maintain balance in the courts and strengthen the country's free enterprise system.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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