La. contingency bill now only for oil spill lawsuit

John O'Brien Jun. 15, 2010, 12:18pm

Louisiana Attorney General Buddy Caldwell

BATON ROUGE, La. (Legal Newsline) - A Louisiana House committee has amended a bill that allows the attorney general to hire private attorneys on a contingency fee to only apply to litigation concerning the BP oil spill.

The bill was amended Monday after several hours of debate by the House Civil Law Committee and now goes to the full House. Currently, private attorneys representing the State must be paid on an hourly basis.

Louisiana is one of only two states -- the other is Wisconsin -- that does not allow its attorney general to hire on contingency fees. The original bill narrowly passed the Senate last week.

The legislation would help Caldwell find firms interested in suing BP on behalf of the State. The BP-leased Deepwater Horizon rig exploded off the Louisiana coast April 20, killing 11 workers, and the cause of an underwater leak has yet to be plugged.

Amendments also limit attorneys fees to either 10 percent of the recover or $50 million, whichever is less. Attorneys would also have to submit disclosure statements to avoid their fees exceeding $1,000 per hour.

Contingency fees also won't apply to claims for natural resources damages.

Business groups strongly opposed the Senate bill, introduced by Sen. Joel Chaisson.

"Louisiana's attorney general currently has authority to contract with private attorneys on an hourly fee basis when pursuing legal action on behalf of the state," a letter to senators signed by several business groups states.

"He can and does pursue litigation for a variety of actions. If he needs additional resources, the Legislature can appropriate; and the Legislature can also approve a higher fee schedule to pay for expertise. There is absolutely no need to authorize contingency fee contracts."

The business groups feel contingency fee contracts will allow private attorneys who want to pursue class actions to circumvent federal class action laws that require most class actions to be heard in federal court.

An exception allows suits brought by attorneys general to be heard in state courts. They say that the legislation will encourage more abusive state class actions.

Caldwell's neighbor, Mississippi Attorney General Jim Hood, went to Congress in May to ask for new legislation that would keep state-powered lawsuits against businesses like BP in state courts.

The U.S. Chamber Institute for Legal Reform signed the business groups' letter. The ILR owns Legal Newsline.

From Legal Newsline: Reach John O'Brien by e-mail at

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Louisiana Attorney General
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