LEGAL NEWSLINE

PROVIDENCE, R.I. (Legal Newsline) - After nine years of work, plaintiffs law firm Motley Rice is now wondering if it will be paid for its landmark lawsuit against the former manufacturers of lead paint, while others ponder if it should be.

Rhode Island Attorney General Patrick Lynch's decision to hire the firm on a contingency fee basis to represent the State in its public nuisance lawsuit was argued Thursday during oral arguments before the state Supreme Court.

"We've got a case here where -- right or wrong, good or bad -- the attorneys are on a contingency fee basis and they get paid if they win and they don't if they lose," said John Tarantino, an attorney for Atlantic Richfield.

"Neutrality" was a key word during Tarantino's argument. He cited a 1985 California Supreme Court decision, People ex rel. Clancy v. Superior Court, determined that an outside attorney hired by the City of Corona to bring public nuisance claims against violators of a new ordinance, specifically an adult bookstore.

Because the attorney was paid more for successful prosecutions than unsuccessful, the Court sided with the bookstore owner. It said an attorney prosecuting a public nuisance claim had to remain neutral.

"There is a difference between being an advocate and the issue of neutrality for purposes of the constitution," Tarantino said.

The Clancy decision was the reason the County of Santa Clara's lawsuit was rejected by the California Superior Court. It has been appealed to the state Supreme Court.

Millennium Holdings, NL Industries and Sherwin-Williams were all found liable for creating a public nuisance in 2006 by a state Superior Court jury in a trial presided over by Judge Michael Silverstein.

The companies may be forced to fund Lynch's $2.4 billion abatement plan, and several other state attorneys general may file their own suits if Lynch's succeeds.

Lead paint was outlawed in 1978, and South Carolina-based Motley Rice convinced former Rhode Island Attorney General Shelden Whitehouse to hire it on a contingency fee basis to bring the first state-backed case over the issue in 1999.

The trial resulted in a mistrial, but the second (filed by Lynch) was more successful for the State.

Thursday, the Rhode Island Justices wondered what gave Lynch the right to choose how funds from an award or settlement would be used. Motley Rice's original agreement with the State provided a 16.7-percent haul.

Assistant Attorney General Neil Kelly said all who are working on the case take their orders from Lynch, and that attorneys fees would not need to be placed in the state's general fund.

"Here we have a contract with counsel that would not be revenue under that contract," Kelly said.

"This is a unique situation, not one that comes up very often but it is a tool used by the Attorney General where the attorney General does retain control of the litigation."

When asked what the agreement provides for if the State loses its suit, Kelly said he believes Motley Rice "assumed the risks of litigation."

Tarantino said there was a difference between being paid on an hourly basis and on a contingency fee agreement, and that Lynch could benefit from the suit being successful when he hits the campaign trail.

After the first trial ended in a mistrial and Whitehouse prepared to leave office in 2002, Motley Rice's Jack McConnell, of the firm's Providence office, contributed $1,000 to Lynch's election efforts.

In Lynch's next campaign, McConnell gave him $2,000. In between, in Lynch's non-election year of 2004, McConnell still gave him $2,000.

"The money belongs, if there is any, to the people of the State of Rhode Island," Kelly said. "It's not something the Attorney General can negotiate away."

Kelly then warned the Court if it sides with the State it will be conflicting with another state Supreme Court's decision on a federal issue.

"Well, when has that ever stood in our way," Chief Justice Frank Williams replied to a round of laughs.

From Legal Newsline: Reach John O'Brien via e-mail at john@legalnewsline.com.