Time runs out on twice-changed La. contingency bill

John O'Brien Jun. 22, 2010, 1:12pm


BATON ROUGE, La. (Legal Newsline) - A bill that would have allowed Louisiana Attorney Buddy Caldwell to hire private attorneys on a contingency fee to sue BP died Monday before the House could vote on changes made by the Senate.

The House of Representatives had changed Sen. Joel Chaisson's bill to limit the power only to lawsuits involving the BP oil spill, but the Senate rejected that version. The bill was reworked to double the attorneys fees cap to $100 million and passed the Senate, but time ran out on the legislative session before the House could vote.

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 have helped 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.

Chaisson blamed lobbyists and House members for delay tactics, calling the turn of events "despicable," The Associated Press reported. Chaisson's original bill would have allowed contingency agreements for other types of lawsuits, but the House changed it to only those arising from the BP spill.

Other amendments made by the House limited attorneys fees to either 10 percent of the recovery or $50 million, whichever was 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. Currently, private attorneys representing Louisiana are paid on an hourly basis.

Business groups strongly opposed the Senate bill.

"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 jobrienwv@gmail.com.

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