CLEVELAND - Ohio Attorney General Marc Dann spoke on behalf of investors and against the federal government and two legal reform organizations in a speech he delivered Friday.
At Cleveland's City Club, Dann claimed that his office needs to become more active in cases of consumer and investor fraud because certain regulatory bodies -- like the Securities and Exchange Commission, Department of Justice and Federal Trade Commission -- have not been active enough.
"I will continue to use the resources of my office to protect Ohioans because when we stand up for consumers, when we pursue antitrust cases, when we fight securities fraud and stock manipulation, when we enforce the prevailing wage laws and fight to keep our air and water clean, we are creating an environment in which honest, ethical businesses can thrive," Dann said.
"If the federal government refuses to do what is necessary to create that environment, I believe we have demonstrated conclusively that we are more than willing and able to do the job ourselves."
And that's despite the fact, Dann thinks, the U.S. Chamber of Commerce and the American Tort Reform Association are trying to handcuff his office. He says the two have launched a legal and public relations campaign against the practice of hiring outside counsel on a contingency fee basis to assist the Attorney General's office on certain cases.
"Why? Because they know that public officials don't have the resources to finance complicated law suits that often take years to work their way through the courts," Dann said. "If these groups get their way, attorneys general around the country will be disarmed."
Dann recently changed his office's protocol for hiring outside counsel. The ATRA polled five states, including Ohio, in April, and found that Ohioans wanted the public disclosure laws concerning outside counsel tightened.
Nowhere was the use of outside counsel more evident than in 1998's Tobacco Master Settlement Agreement, which allows approximately 40 tobacco companies to sell their products in 46 states and six territories.
The Competitive Enterprise Institute says trial lawyers were paid an estimated $13 billion for their work, which, in some occasions, amounted to tens of thousands of dollars per an hour of work. The settlement was worth $246 billion.
Critics of such deals say all too often those same attorneys hired to represent a state turn out to be campaign contributors to the attorney general who hired them.
Dann said he will fight through opposition from the Chamber and ATRA.
"Despite these and other challenges we face, my office is pressing ahead with our commitment to seize the regulatory gauntlet that has been cast aside by the federal government," he said.
One of his larger battles is taking place in the U.S. Supreme Court, in the case Stoneridge Investment Partners v. Scientific-Atlanta, Inc. The case will determine if third parties (i.e. investment banks, accountants and law firms) can be held accountable for being a part of a company's fraud.
Dann led in the filing of an amicus brief in the case, upset that Solicitor General Paul Clement did not side with investors who, if the case is successful, will be able to bring the suits against, as Dann said, "those who intend to deceive investors through their actions but believe they are free from liability simply because they made no statement on which investors relied."
If the lower court ruling is not overturned and third parties remain free from liability, Dann says he will work with Congress and other attorneys general "to change the law."
Dann's full speech can be found here.