Miss. auditor wants funds collected from AG lawsuits to be public

Jessica M. Karmasek Aug. 4, 2011, 12:46pm


JACKSON, Miss. (Legal Newsline) -- The Mississippi Auditor's Office has asked the state Supreme Court to declare funds that Attorney General Jim Hood collects from lawsuits to be public money.

Arthur Jernigan Jr. argued on behalf of Auditor Stacey Pickering before the Court on Wednesday. Assistant Attorney General Justin Matheny argued for Hood.

According to The Associated Press, Pickering wants all funds collected from lawsuits to be turned over to the state Legislature, including what outside, private firms collect for their work.

At issue is the legal fees those private firms collect, not their hiring. Pickering's office told the Court that the money should go to the state.

The Auditor's Office is challenging a decision last year upholding $10 million in fees paid to private attorneys hired by Hood to represent the state in a lawsuit against computer software giant Microsoft.

Hinds County Chancellor Denise Owens ruled in favor of Hood and his attorneys.

Pickering had argued that settlement funds must be given to the Legislature for appropriation.

"Although the settlement in this action does not provide for civil penalties, it is clear that the recovery is based on civil penalties under the Mississippi Consumer Protection Act," Owens wrote in her ruling.

"There is no other source of recovery. The court finds that the attorney general attorneys fees recovered under the Consumer Protection Act, as specially authorized by the act, are not required to be paid to the state general fund, but constitute part of the 'contingent fund' of the attorney general referenced by (state law)."

The settlement gave consumers $12 vouchers, while the state received $40 million from Microsoft. It also provided $60 million in vouchers to consumers, businesses, governments and public schools for use in buying Microsoft products.

A separate but related case was debated before the Court in June.

The case -- initiated by former Auditor Phil Bryant and since pursued by Pickering -- involves $14 million paid to attorneys who represented the state in a $100 settlement with MCI, which was formerly known as Worldcom before bankruptcy proceedings.

Hinds County Circuit Court Judge Winston Kidd upheld the $14 million that attorneys made in a February 2010 decision.

Bryant filed suit against Joey Langston's firm in 2007, arguing that the Legislature needed to approve any usage of the $100 million in settlement funds, including attorneys fees.

Langston was sentenced to three years in prison after pleading guilty in January 2008 to a charge that he attempted to bribe former Hinds County Circuit Judge Bobby Delaughter with consideration for a job as a federal judge.

The attempt, Langston says, happened when he represented plaintiffs attorney Richard "Dickie" Scruggs in a dispute over attorneys fees earned in asbestos settlements. Timothy Balducci also represented Scruggs in the case and represented the state in the MCI case.

Pickering said the attorneys in the MCI case were paid about $2,000 per hour, based on the information he could gather. He said Hood did not comply with a request for a complete listing of hours and work performed.

Hood refused to defend the Auditor's Office in the dispute with Langston and Balducci.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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