La. bill would allow AG to dole out contingency fee contracts

By John O'Brien | May 8, 2009

Louisiana Attorney General Buddy Caldwell

NEW ORLEANS (Legal Newsline) - A new bill in Louisiana's legislature will allow the Attorney General's Office to hire outside counsel on a contingency fee, an increasingly controversial practice done in many other states.

House Bill 758 would implement a system with a sealed bidding process but would forbid law firms and attorneys that have entered into contracts with the attorney general from contributing to his or her political campaign.

Any attorney general who breaks this rule would be penalized twice the amount of the contribution.

"The Legislature of Louisiana recognizes the importance of retaining the confidence of its citizens of the United States in the operation of our state and local government by preventing influence and the appearance of influence of the attorney general with respect to campaign contributions made by attorneys or law firms who have entered into contracts with the attorney general to represent the state or any of its agencies, boards, commissions or political subdivisions of the state on a contingency fee basis," the bill says.

Contingency fee contracts have been challenged around the country, notably in Pennsylvania and California. Cases are pending before those states' supreme courts that argue hiring attorneys with a financial interest in the outcome of a case violates the objectivity the office of a public official must display.

Then-Louisiana Attorney General Richard Ieyoub attempted to bring the power to his office in the 1990s but a court decision denied him.

"Therefore, when the Attorney General signs a contingency fee agreement, he is alienating the state's property, a power which resides solely in the Legislature," now-Chief Justice Catherine Kimball wrote.

"Unless the constitution or the Legislature specifically grants this power to the Attorney General, such an action is prohibited. I find no express grant of such authority in our constitution or statutory law."

House Bill 758 also requires detailed reports of the outside firm's costs. It caps the percentage the firm can collect at 25 percent.

The bill is currently in the House Judiciary Committee.

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