WASHINGTON, D.C. (Legal Newsline) - Some state attorneys general have become too involved with the plaintiffs bar and its possible "super-tort," a member of a group against the broadening of public nuisance claims recently said.
Joe Speelman, the spokesman for the Public Nuisance Fairness Coalition, said Thursday that attorneys general have given up their obligation to seek the truth "in favor of being a cheerleader" because of contingency fee contracts with plaintiffs law firms.
Some of the most high-profile public nuisance suits have been brought against the former manufacturers of lead paint and alleged polluters. In many cases, private firms are representing government agencies.
"When a government goes into a contingency fee contract, in effect it is saying it wants to win and it wants to win because it wants more money," said Speelman, associate general counsel for LyondellBasel, Inc.
"They don't want to get permission from someone they have to get it from to spend money. Ordinarily, they have to go to elected officials like a legislature for an attorney general or a city council for a city attorney to spend money and bring a lawsuit.
"They don't want to do that. They sign into a contingency fee contract because it won't cost them anything. They avoid what I think is a very important principle of democracy."
Critics of contingency fee contracts say they violated defendants' Due Process rights because the suing government agency is no longer motivated by the attainment of proper justice, only money.
In its landmark July 1 ruling, the Rhode Island Supreme Court overturned a verdict against three paint companies but also affirmed Attorney General Patrick Lynch's right to hire contingency fee counsel like South Carolina firm Motley Rice.
The opinion said Lynch must be in ultimate control of the suit. During the appeals process, he was supported by a group of 16 attorneys general who said he was doing the right thing.
Those attorneys general were Vermont's William Sorrell, Maine's Steven Rowe, Arkansas' Dustin McDaniel, New Mexico's Gary King, Delaware's Beau Biden, Oklahoma's Drew Edmondson, Florida's Bill McCollum, Oregon's Hardy Myers, Guam's Alicia Limtiaco, Tennessee's Robert Cooper, Hawaii's Mark Bennett, Utah's Mark Shurtleff, Kentucky's Jack Conway, West Virginia's Darrell McGraw, Nevada's Catherine Cortez Masto and then-Ohio Attorney General Marc Dann.
"Public nuisance requires interference with a common right," the amicus brief says. "Where, as here, a state attorney general pleads public nuisance, he or she is seeking to vindicate that public right.
"There are some, but not many, conditions stemming from the distribution of a product that have a widespread and grave enough impact to rise to the level of public nuisance.
"Moreover, state attorneys general can be expected to exercise prosecutorial discretion in deciding which of even these limited conditions warrant denomination as a public nuisance and consequent legal action. Defendants' articulated fears of an assault on products liability law are, in short, grossly exaggerated."
The current battleground over the contingency fee issue is in California, where the state Supreme Court will hear an appeal in the public nuisance claim of several counties and municipalities, led by Santa Clara County.
The trial court ruled the 17-percent contingency fee contract violated existing law, known as the Clancy doctrine. The Sixth District Court of Appeals overturned that ruling, and the Supreme Court accepted the appeal in July.
"The Clancy doctrine says it violates public policy considerations when a government goes into a contingency fee agreement," Speelman said.
The Clancy ruling, the Superior Court said, transpired because a city had a lack of control over its outside counsel. In the Santa Clara case, the court said the outside counsel are "merely assisting" the government attorneys.
"I think the California Supreme Court will look at that decision very carefully and decide if they like a court of appeals criticizing their work," Speelman said.
Another problem with contingency fee contracts is they are often awarded to firms that donate to the public officials handing them out, Speelman said. Motley Rice contributed to Lynch's campaign before he decided to re-file the case (the first one ended in a mistrial under then-Attorney General Sheldon Whitehouse).
Mississippi's Jim Hood and McGraw are two attorneys general who routinely come under fire for their hiring practices.
McGraw's Chief Deputy, Fran Hughes, recently wrote that by hiring outside firms on a contingency basis, the State can "reap all the benefits of litigation while avoiding any of the risks."
"Attorneys fees are paid by the individuals or companies who break the law, not taxpayers," Hughes said. "Attorney General McGraw does not determine the amount attorneys are to receive. This amount is determined by the court.
"The big money in political campaigns comes from business interests and 527s, which always support pro-business candidates designated as 'reformers' by the Chamber of Commerce."
Speelman said hiring campaign contributors is "unacceptable and immoral."
"I think there is a formal, or fairly formal, and clear understanding that there is a quid pro quo between contingency fee counsel, who are very active politically with giving money back to an attorney general or city attorney in the form of a contribution," Speelman said.
Public nuisance claims against paint companies have failed in Ohio, Wisconsin, Missouri and New Jersey, but not because of the contingency fee contracts. New Jersey's suit against Exxon for alleged polluting was recently successful in state Superior Court.
Speelman said public nuisance claims are attractive to the plaintiffs bar because few of the defenses a corporation can use during a products liability claim translate over.
"Whether it will stick or not, I don't know," Speelman said. "It would eliminate 250 years of products liability laws that companies rely on when making investment decisions."
Editor's note: The U.S. Chamber of Commerce's Institute for Legal Reform, owner of Legal Newsline, is a member of the Public Nuisance Fairness Coalition. Reach John O'Brien by e-mail at email@example.com.