Results matching “"santa clara"”

Pecora the Prosecutor - PointOfLaw Forum

Erwin Chemerinsky, the Dean at UC Irvine Law School, had a piece in the National Law Journal the other day about prosecutorial misconduct. We’ve all heard about the high profile cases involving the Duke lacrosse team and the late Alaska senator, Ted Stevens.  Chemerinsky’s article, citing evidence from an empirical study conducted by the Northern California Innocence Project at Santa Clara University School of Law, suggests that misconduct (which can run the gamut from outright corruption and malfeasance to simple negligence) might be more widespread than many people realize.

The article got me to thinking about what kind of prosecutor Ferdinand Pecora (the subject of my book The Hellhound of Wall Street) had been.

Pecora was appointed as a deputy assistant district attorney in Manhattan in 1918, and he eventually became the number-two man in the office. During his twelve-year prosecutorial career Pecora was, in the words of his boss, an idealist with “an inveterate passion for justice.”

In one of his earliest cases, the junior lawyer was asked to cover a simple, one-day robbery trial for a sick colleague.  Pecora easily won the conviction of a young black man named Malcolm Wright, but Wright continued to insist on his innocence. Most prosecutors probably would have ignored those claims, but Pecora had a “queer feeling” about the case. He investigated Wright’s arrest and uncovered blatant police misconduct. Pecora presented the evidence to the judge and asked him to set aside the conviction and to order a new trial, at which Wright was acquitted.

Pecora had no tolerance for prosecutorial misconduct either. Here's a brief excerpt from the book:

As a result of his work on the Wright case, Pecora was assigned to investigate another potential wrongful prosecution, this one involving a New York poultry dealer named Joseph Cohen, who’d been convicted of hiring assassins to kill his business rival, Barnett Baff. The murder and trial had been front-page news in all the city papers, and Cohen was on death row in Sing-Sing when the district attorney learned that some of the testimony at the Cohen trial might have been perjured. He set Pecora to investigate the matter. In the face of obstruction after obstruction thrown up by the attorney general’s office, which had originally tried Cohen and which seemed to be implicated in the perjured testimony, Pecora was relentless, spending almost all his time over the next two years tracking down evidence in the case. Thanks to Pecora’s efforts, Cohen was eventually released from prison. (His execution had earlier been stayed just seven minutes before he was scheduled to go to the electric chair.)

Pecora obtained a perjury conviction against one of the witnesses in the Cohen murder trial. The day after the lengthy trial ended was a Saturday, and Pecora went to his then quiet office to clean up some paperwork. There was a timid knock on the door. A small gray-haired woman dressed all in black demurely asked whether he was Mr. Pecora. When he said that he was, she responded, “I am Mrs. Joseph Cohen.” Mrs. Cohen clasped Pecora’s hands and fell at his feet. As she sobbed uncontrollably, the only words she managed to get out were, “I came to thank you for what you have done for my husband.” For the rest of his life, Pecora called it the biggest fee he ever received as a lawyer.

As we discussed in July, the California Supreme Court upheld an arrangement where Santa Clara hired contingent-fee attorneys to bring a public nuisance case against ARCO. ARCO has appealed to the U.S. Supreme Court (No. 10-546) on the theory that the use of private prosecutors who have a pecuniary interest in the outcome of governmental prosecutions violates the Due Process Clause. The Chamber (in a brief with Victor Schwartz as lead counsel) and NAM, inter alia, have weighed in in favor of certiorari. Sean Wajert discusses.

Around the web, September 29 - PointOfLaw Forum

  • MI's Marie Gryphon: Congress shouldn't force citizens to fly blind. [Wash. Examiner]
  • Supreme Court cert grant in Astra v. County of Santa Clara, on whether there's a private right of (class) action over pharmaceutical prices agreed to by HHS. [Santa Clara v. Astra (9th Cir.)]
  • Paycheck Fairness Act criticism roundup. [Overlawyered]
  • Are plaintiffs or defendants worse actors when it comes to confidentiality of documents? [Drug and Device Law]
  • Which CFPB will we get? [Wright]
  • On remand in Rodriguez v. West Publishing Co.,, Judge Manny Real reduces proposed attorneys' fees from $12M to $500,000. [ABA J]
  • "Lawyer Bluster on Display in Oil Spill Litigation" [WSJ Law Blog]
  • Ninth Circuit lawlessly stays an execution planned for a Death Row inmate, Albert Greenwood Brown, who raped and murdered 15-year-old Susan Jordan in 1980, two lifetimes ago for the victim. The grounds: questions over the constitutionality of lethal injection, concerns that the Supreme Court resolved in 2008. Judges can do this because Congress has abdicated its constitutional responsibility to impeach such judges. [SF Chronicle]
  • Lost in the fuss over Stephen Colbert's testimony: Christopher Coates, a former ACLU attorney who joined DOJ in the Clinton years, testified about racial bias in Obama's Civil Rights Division. [Politico; Bader]

On Monday, the California Supreme Court endorsed the corruption of local government hiring contingent-fee lawyers to prosecute cases, notwithstanding its earlier precedent forbidding such a conflict of interest, siding with an appellate court that had reversed a trial-court disqualification of attorneys. [CJAC; Legal Newsline; Mercury News; Steele; Santa Clara v. Superior Court.] We discussed the issue thoroughly in 2008, including a column by John Sullivan. The question now is whether defendants are permitted to engage in discovery of the attorneys suing them (since the Court has created a fact-bound test for determining the required "neutrality" of the contingency-fee attorneys) or whether the "neutrality" test will be de facto toothless and satisfied with the formality of a figurehead government official at the apex of the lawsuit.

You will recall that some of the contingency-fee contracts at issue in this lawsuit explicitly violated the neutrality test, but the appellate court decided to honor self-serving parol evidence; the California Supreme Court did reverse this disingenuousness, requiring that the contingency-fee contracts be modified.

The good news is that the decision is narrowly drawn: the Court relied upon the fact that this was a lead-paint suit so there was no risk that an ongoing business practice would be enjoined, and used that fact pattern to distinguish Clancy. Which means that most other contingency-fee suits could still be challenged.

The bad news is that the Court spoke of an abusive lead-paint public-nuisance suit as if it was an entirely appropriate use of the public-nuisance doctrine, which is certain to lead to more regulation by litigation and empowerment of the attorney general's office. (Which makes one wonder why Jerry Brown is running for governor, since, except for patronage possibilities, the California attorney general is now a more powerful position.)

(Update: Carter Wood, Walter Olson, and James Beck weigh in.)

Around the Web, August 26 - PointOfLaw Forum

Around the web, June 12 - PointOfLaw Forum

  • Wisconsin lawmakers drop proposed return of all-out joint and several liability, but governor signs into law big damages expansion in workplace litigation [WTMJ, WRN, Wisconsin Business, Insurance Journal]
  • Federalist Society Online Debate series tackles Employee Free Choice Act with Thomas Kochan and Patrick Szymanski pro, Richard Epstein and Eugene Scalia con [print version now online]
  • Motley Rice brief in Santa Clara case urges California high court to uphold contingency fees [Genova, part of a series on the briefs, more here and here]
  • Lawyers' insistence on punitive damages derails New Jersey push for bad faith auto insurance cause of action [NJLRA]
  • Mississippi AG Jim Hood extracts $40 million from Microsoft, and his contract lawyers should be happy too [Clarion-Ledger, N. Miss. Commentor] More: YallPolitics on settlement deal including roles of Susman Godfrey and Boies Schiller: first, second, third, fourth.
  • Behrens, Fowler, & Kim, "Global Litigation Trends" [Michigan State Journal of International Law, PDF courtesy Robinette/TortsProf]

Around the web, June 8 - PointOfLaw Forum

Around the web, June 1 - PointOfLaw Forum

Ohio AG dismisses state's lead paint lawsuit - PointOfLaw Forum

A news release from the office of Ohio Attorney General Richard Cordray, "CORDRAY DISMISSES LEAD PAINT LAWSUIT":

(COLUMBUS, Ohio) - After careful consideration, Ohio Attorney General Richard Cordray today voluntarily dismissed the lead paint lawsuit filed by former Attorney General Marc Dann in April 2007. This lawsuit was pending in the Franklin County Court of Common Pleas against ten paint manufacturers and was focused on abatement of lead paint throughout Ohio.

"I understand and strongly agree that exposure to lead paint is a very real problem," said Attorney General Cordray. "But I also know that not every problem can be solved by a lawsuit." After assessing the law, facts, and adverse legal rulings in these types of cases nationally, the Attorney General concluded that those at risk - and Ohio's economy - would be best served by focusing on how public/private partnerships can be enhanced to address any existing problems with lead paint exposure.

Very welcome, although a predictable political move. Given the Rhode Island Supreme Court's dismissal last year of the state's public nuisance suit against paint manufacturers, followed by the city of Columbus' dropping its suit, and other dismissals across the country, Ohio's suit was a sure loser, legally AND politically.

Besides, it was Marc Dann's idea.

UPDATE: Jane Genova at Law and More notes Cordray's decision and brings us up to date on the last of its kind litigation, Santa Clara County, now under review at the California Supreme Court.

Beyond Contingency - Litigation as investment asset - PointOfLaw Forum

Suppose Americans could fund litigation without contingency? That's already possible in England.

As Kevin LaCroix reports in THE D & O Diary, thanks to recent English case law, litigation can be treated as an investment asset. A third-party such as hedge or private equity funds can purchase the claim, sell securities in it, and then operate the case for a profit.

In the U.S., explains Sandeep Salva, that's not possible. In his April 25, 2008 article "Securities Class Actions in London," in CLASS ACTION LITIGATION, he notes in America, "claim assignment is prohibited to a purchaser who has not actually suffered an injury" - see "Independent Investor Protective League v. Saunders," (E.D. Pa. 1974).

The advantage is that this lessens the individual risk in England's "Loser Pays" system. Since barristers's fees tend to be higher than U.S. attorneys's, says Joseph Hetrick of Dechert Law Firm, Loser Pays can limit access to the court. The disadvantage, as Salva notes, is that industries, such as the securities market, might perceive this greater access as a severe threat and not do business in England.

In the U.S., given the controversy surrounding contingency in lawsuits filed by government entities using private law firms and by so-called "ambulance chasers," it might be useful to at least explore this approach now legal in England. Pending in the California Supreme Court is contingency in the Santa Clara lead paint public nuisance case. The trial court nixed contingency, the appeals court okayed it. The arguments against range from alleged violations of due process and separation of powers to the difficulty of government's control over the litigation. The arguments for, as in England, focus on access to the court.

Of course, Americans might not welcome the profit incentive incorporated so directly into the legal system.

Around the web, July 25 - PointOfLaw Forum

  • California Supreme Court agrees to hear appeal of the very important dispute on public contingency fees between Santa Clara County and lead paint defendants [Legal NewsLine; more]
  • More sighs of relief in employee benefits community as Second Circuit joins trend to uphold cash balance retirement plans [NYLJ; background here, here, here, and here]
  • On Scruggs and his "mistakes": "Leaving an 's' out of 'Mississippi' is a mistake; bribing a judge is a crime." [John Agnew, Fort Myers News-Press]
  • Chevron has a website explaining its side in the litigation over Ecuador environmental damage ["Texaco in Ecuador"; earlier here, here, and here]
  • Provoking outrage among plaintiff's bar, employers have found another way to contract around the litigation system, this time via employee agreements to shorten statute of limitations [NLJ]
  • San Diego's city attorney is suing mortgage lenders and says he aims to make his city a "foreclosure sanctuary" [Sorkin, NYT "Dealbook", press release; earlier here, here, etc.]

More West Virginia AG fee bounty; new featured column - PointOfLaw Forum

In West Virginia, a state where government hiring of private lawyers to pursue public lawsuits has been particularly controversial, four law firms including Hagens Berman are set to split $3.9 million for prosecuting an antitrust suit against Visa and MasterCard that resulted in a settlement, per the Charleston Daily Mail. And Attorney General Darrell McGraw has appointed four lawyers to pursue a new suit against a variable annuity life insurance provider. Steve Roberts, who heads the state chamber of commerce, said it's particularly frustrating that the AG's office makes no disclosure about how the lawyers -- many of whom contribute to his campaign -- are selected for the task.

Related to which: our newest featured column is by John Sullivan of the Civil Justice Association of California, and discusses the worrisome recent appellate court ruling that backed off from the state's significant Clancy doctrine, which had long prohibited lawyers pursuing public nuisance actions on behalf of local government from capturing fees contingent on the results of those actions. More on Santa Clara v. Superior Court here, here, and here.

By John H. Sullivan

"Not only is a government lawyer's neutrality essential to a fair outcome for the litigants in the case in which he is involved, it is essential to the proper function of the judicial process as a whole."

These words by Justice Stanley Mosk in his 1985 People ex rel. Clancy v. Superior Court decision have been a beacon for public attorneys. They know, as he also wrote, that "without a belief by the people that the system is just and impartial, the concept of the rule of law cannot survive."

Last week, the 6th District Court of Appeal, in County of Santa Clara v. Superior Court , dismissed most of his decision as dicta. Mosk's opinion has long protected impartiality by prohibiting public prosecutors from hiring lawyers on a contingency fee basis. It is a powerful unanimous statement, joined by then Chief Justice Rose Bird and future Chief Justice Malcolm Lucas. When Mosk wrote of "the heightened ethical requirements of one who performs governmental functions," it was not as a theoretical observer. He served six years as attorney general before a remarkable 37-year career on the California Supreme Court.

The 6th District, in approving government lawyer contingency fee hiring of private lawyers in lead paint nuisance actions, distinguished Clancy from the Santa Clara case. It saw a lack of control by the city of Corona over private attorney James Clancy in a quaint contingency fee contract ($60 an hour for wins, $30 an hour for losses) to hassle adult bookstores. In Santa Clara, the justices found a different contingency fee situation where private counsel are "merely assisting" government attorneys and "lack any decision-making authority or control."

We don't know much about the Corona's control of Clancy because there's little discussion of that in the Mosk decision. But we don't know much for certain either about the various city attorneys' and county counsels' control over the private attorneys in Santa Clara - even though the Court of Appeal gives the topic lots of attention. The seven contingency fee agreements involving each city or county and its private lawyers evidently were control deficient. Most of the cities, counties and private lawyers submitted post-litigation declarations saying the government lawyers were in charge. The city of San Mateo never produced an agreement but wrote to the court that its in-house lawyers retained "complete control ... final authority," etc.

Oakland, which declared that "notwithstanding any documents suggesting the contrary," its city attorney retained complete control and is in the process of revising the contingency fee agreement "so that it reflects the reality of the relationship."

Pity a judge having to determine what's really going on, as Justice Patricia Bamattre-Manoukian in her concurring opinion proposes be done. She would have the agreements plus "the factual circumstances" and "the conduct of the plaintiff's counsel" be among the "many important factors in each case" that courts should henceforth analyze when approval of contingency fee agreements come before them. And come before them they will - in droves, once the contingency fee bar seizes the financial opportunities that lay in a new block of government clients.

Santa Clara focuses on nuisance actions. These will be a springboard. The lead paint cases originally included causes of action for fraud, strict liability, negligence and unfair business practices. If Santa Clara stands, we will soon hear why there's no reason to distinguish between nuisance actions and the others in contingency fee deals.

How these "public-private" cases are managed matters less than who chooses the case in the first place.

In Santa Clara we are not told how the governments and private firms hooked up. Were bids solicited? Or did the firms solicit the cities and counties?

For a dire example of where the latter can lead, look at Mississippi. There, plaintiff lawyer icon Dickie Scruggs brought his Katrina litigation plan to state Attorney General Jim Hood. Their joint contingency fee effort won $80 million in private lawyer profits from State Farm. Scruggs and his firm contributed more than $50,000 to Hood in the 2007 election cycle, according to Wall Street Journal research. The Journal found that over the past five years, Hood and 27 law firms jointly pursued state lawsuits against companies. Those firms gave Hood $543,000 in campaign contributions. Now Mississippi is looking at requiring competitive bidding for private lawyer hiring and limiting contingency fee deals to $1 million.

What might securities lawyers Bill Lerach, Melvin Weiss, et al., have tried, given their willingness to illegally pay clients, if California had not been protected by the Clancy decision?

South Carolina-based Motley Rice, a private firm in the Santa Clara case, boasts that its attorneys have "gained global recognition for their work on behalf of the State Attorneys General."

Our association's amicus brief in Santa Clara noted, without any inference of wrongdoing, that two other law firms hired by the cities and counties in the lead paint litigation made campaign contributions to San Francisco's city attorney, one of the Santa Clara parties. San Francisco's unique city/county status makes its city attorney an elected official, as are all district attorneys in the state. Everywhere else, city attorneys and county counsels are hired by city councils or boards of supervisors. The Civil Justice Association of California's review of contribution records turned up no Santa Clara case private attorney contributions to local elected officials in the jurisdictions involved.

Some county counsels and city attorneys argue they can't afford expensive litigation, that small counties are especially handicapped. But a major product or financial transgression is not going to occur just in Mariposa County. It will be discovered statewide. City and county counsel can combine and coordinate their efforts across jurisdiction lines - just as district attorneys do. Maybe district attorneys and the attorney general should handle these matters.

Our amicus brief recalls how California's attorney general joined with 49 other states in a tobacco public nuisance lawsuit but rejected offers from outside contingency fee lawyers seeking a piece of the action.

Following the 2004 passage of CJAC-sponsored Proposition 64 barring Unfair Competition Law claims by private lawyers without injured clients, the Daily Journal reported that "the plaintiffs' bar has been looking to team up with public prosecutors since the [initiative] limited private attorney general suits." It didn't happen. A Lockyer spokesman told the paper that "it's not a good idea having private lawyers running around with a badge."

This philosophy, flowing directly from Clancy and Mosk, runs strong in district attorneys' offices around the state. Note that neither the attorney general's office nor a single district attorney filed an appellate court amicus brief in the Santa Clara case.

During the plague of private lawyer shakedown lawsuits leading up to Proposition 64, district attorneys called attention to the important distinction between public and private enforcement of civil laws. This distinction, the Los Angeles district attorney's office pointed out in a brief in one of the auto repair shop B&P Code Section 17200 extortion cases, "is especially important in that the systemic checks and balances - including special ethical norms and the democratic electoral process - applicable to public enforcement officials do not apply to 'private attorneys general' litigating representative causes of action."

Mosk died in 2001 at the age of 88, on the very day he was planning to submit his retirement resignation to the governor. In a tribute to him before Congress, it was observed that "while his life has ended, his legacy shines brightly for all Californians and for our great Nation." The Santa Clara ruling has dimmed his legacy. The Supreme Court should restore it.

John H. Sullivan is president of the Civil Justice Association of California in Sacramento, a nonprofit association representing businesses, professionals, and local governments. Information on the association and civil justice issues is at www.cjac.org.

Santa Clara v. Superior Court - PointOfLaw Forum

On April 26 and May 19, Walter noted the important 2007 Santa Clara v. Atlantic Richfield Superior Court decision barring government entities from using contingent-fee attorneys to prosecute governmental claims grounded in public-policy balancing of costs and benefits like public nuisance abatement. The decision was a natural consequence of People ex rel. Clancy v. Superior Court, 39 Cal.3d 740 (1985), where the California Supreme Court noted the ethical conflict of interest stemming from contingent fee agreements:

"[T]he abatement of a public nuisance involves a balancing of interests. On the one hand is the interest of the people in ridding their city of an obnoxious or dangerous condition; on the other hand is the interest of the landowner in using his property as he wishes. And when an establishment such as an adult bookstore is the subject of the abatement action, something more is added to the balance: not only does the landowner have a First Amendment interest in selling protected material, but the public has a First Amendment interest in having such material available for purchase. Thus, as with an eminent domain action [to which the absolute neutrality requirement applies], the abatement of a public nuisance involves a delicate weighing of values. Any financial arrangement that would tempt the government attorney to tip the scale cannot be tolerated."

So the appellate court has ruled in a remarkably poorly-thought-out opinion that, well, financial arrangements that would tempt government attorneys to tip the scale can be tolerated, so long as "in-house counsel retain control over all decision-making."

We'll see if the California Supreme Court believes that Clancy only applies to attorneys named Clancy or has broader precedential value. If the reversal holds, however, all is not lost for defendants: "The record before us contains absolutely no evidence [sic] that private counsel have ever engaged in any conduct that invaded the sphere of control exercised by the public entities' in-house counsel. ... No doubt the companies will seek disqualification of the public entities' private attorneys if they acquire evidence that the private attorneys are improperly exercising control over this action."

1) That "no evidence" line is remarkably disingenuous: the city of Oakland's fee agreement states private counsel have "absolute discretion in the decision of who to sue and who not to sue, if anyone, and what theories to plead and what evidence to present." The appellate court, reached to find facts to override it in Oakland's assertion that the agreement did not actually reflect the deal it had with counsel. It's one thing (and bad enough) for an appellate court to find facts, but it's another to blatantly misrepresent the state of the record. And one wonders if Oakland's contingent-fee counsel will be so eager to ignore the parol evidence rule down the road if there is a later dispute over the size of the fee.

2) Meanwhile, it sure sounds to me like the California appellate court just opened to discovery the internal workings of the relationship between the in-house and outside contingent-fee counsel. Which is normally impermissible under the attorney work product doctrine. Every time a brief is filed, it's cause for additional discovery and scrutiny of whether the line has been crossed. Such are the knots that the court has tied itself in to avoid the bright-line statement of Clancy.

The same appellate court rescued the illegitimate public-nuisance claim from a lower court dismissal in County of Santa Clara v. Atlantic Richfield Co., 137 Cal. App. 4th 292 (2006).

State of legal academia dept.: a law student reader sends along the following email distributed at the University of California, Davis:

From: <...@ucdavis.edu>
Date: Jan 7, 2008 1:42 PM
Subject: Externship Opportunity with Santa Clara County Counsel's Office
[forwarded by a professor]

Externship Opportunities with the County Counsel of Santa Clara County

County Counsel of Santa Clara County is seeking externs to assist in the development of and implementation of affirmative litigation cases involving public interest issues. Although students may need to travel to San Jose occasionally, the bulk of the work can be done in Davis. Regular public interest externship credits will be available (1 unit for every 4 hours of work per week for the semester; minimum 2 units). Please contact [...] if you are interested.

Description

This externship is designed to provide students with the opportunity to work directly with Santa Clara County public lawyers to promote the public interest through litigation and legislation. Students will assist the County Counsel's Affirmative Litigation Task Force in promoting the goals of the County and pursuing affirmative litigation and legislation designed to protect the County's residents and environment.

Students will have an integral role in identifying issues that impact the community, investigating potential sources of litigation and legislation, evaluating and discussing with experienced lawyers potential claims and remedies, conducting legal research, and preparing legal documents ( e.g., pleadings, motions, discovery, proposed legislation, etc.). Students will learn about the organization of County government and the role of the Office of the County Counsel in advising the Board of Supervisors and County agencies and departments on a wide variety of legal issues. Students will also learn how taking action at the local government level can impact decisions made at the state and federal government levels.

The externship objective is to provide students with real-world experience in pursuing social and environmental justice by taking affirmative steps through local and state governments and the courts.

Two examples of the affirmative litigation ideas the office has considered in the past at are:

Around the web, January 29 - PointOfLaw Forum

  • California court hears appeal by Santa Clara County of Judge Komar's landmark ruling restricting contingency-fee outside representation in public nuisance suits [UCL Practitioner; earlier]
  • "Subprime feeding frenzy" seen for big law firms [ABA Journal]; Ohio AG Marc Dann files shareholder suit against federally sponsored Freddie Mac [same]
  • First of its kind? Pioneering U.K. class action wins damages for consumers in "football shirt rip-off" case [Times Online]
  • Construction-defect suits still rage in California [L.A. Times]
  • Journalist Quin Hillyer, often heard from on litigation-reform issues, joins Washington Examiner [a commentary]
  • Since 1998 class actions led by Illinois's Stephen Tillery have taken in at least $1.8 billion [MCRecord]

Around the web, July 30 - PointOfLaw Forum

  • "Litigo": definitely not Michael Moore's next documentary [Placebo Journal via KevinMD]

  • More on that "staunch Republican" trial lawyer quoted by a Chicago Sun-Times reporter [Taranto, Malkin; earlier]

  • Columbia lawprof Michael Dorf is very dismissive of the separation-of-powers arguments against contingent-fee public representation, but appears unaware of the cases in California (Clancy and County of Santa Clara) striking down such representation as violative of the neutrality expected of government lawyers [Dorf on Law; Prof. Dorf responds]

  • Following the asbestos model? Naming long lists of defendants, from BP Amoco to Turtle Wax, seems common in benzene suits [Madison County Record 2005 and lately]

  • Vivas-Fresno State case, on Title IX retaliation, might have turned out differently had O'Connor departed the Court earlier [Michael Fox via Ambrogi]

Tort Travesty - PointOfLaw Columns

By WALTER OLSON

This piece originally appeared in the Wall Street Journal, 5-18-07

The terse four-page judicial order handed down in a California courtroom last month hasn't made much of a ripple among commentators. But if it stands as precedent following the near-inevitable appeal—and if states and municipalities also follow President Bush, who signed an executive order on Wednesday barring the federal government from entering into contingency fee agreements with trial lawyers—the ruling by Superior Court Judge Jack Komar might slow down the destructive litigation trend of ambitious private lawyers' enlistment of government as a client.

Some background: In the case of County of Santa Clara v. Atlantic Richfield, a number of California counties and cities filed suit asking that lead paint manufactured and sold decades ago be (retroactively and creatively) declared a "nuisance" so that the paint's original makers could be ordered to pay for its removal. As usual in such suits, the localities had hired private lawyers on a promise to share in the winnings if a recovery was made.

Long regarded as ethically suspect if not unthinkable, the public-client contingency fee can be traced back to a case in the 1980s when the state of Massachusetts decided to hire private lawyers to pursue claims over asbestos removal. The innovation quickly spread to other states and issues, most notably the late-1990s tobacco-Medicaid crusade which resulted in multibillion-dollar payouts to both the states and their lawyers.

Trial lawyers love these deals. Even aside from the chance to rack up stupendous fees, they confer a mantle of legitimacy and state endorsement on lawsuit crusades whose merits might otherwise appear chancy. Public officials find it easy to say yes because the deals are sold as no-win, no-fee. They're not on the hook for any downside, so wouldn't it practically be negligent to let a chance to sue pass by?

Now, only two decades later, trial lawyers representing public clients on contingency fee are suing businesses for billions over matters as diverse as prescription drug pricing, natural gas royalties and the calculation of back tax bills. The South Carolina law firm now known as Motley Rice moved into the state of Rhode Island and quickly made itself the No. 1 political donor there, just as it was winning a contract from then-Attorney General Sheldon Whitehouse (now a U.S. senator) to file the first action on behalf of a state against former lead paint makers.

Mayors of over 30 cities signed up for a gun-control-through-legal-coercion campaign of suits against firearms makers so abusive and unpopular in other parts of the country that Congress stepped in to pass a law against it. Authorities in New Jersey, California and elsewhere have hired percentage-fee lawyers to pursue groundwater contamination claims; in the resulting litigation, other environmental aims have tended to be subordinated to the overriding goal of maximizing deep-pocket dollar payout.

But the ethical doubts about the practice haven't gone away, which brings us to Judge Komar and his April 4 ruling in the lead-paint case. The defendants were able to cite a 1985 precedent in which the California Supreme Court ruled contingent fee representation improper as "antithetical to the standard of neutrality that an attorney representing the government must meet when prosecuting a public nuisance abatement action." Agreeing that the case was on point, Judge Komar granted a motion to disqualify the private lawyers.

The principle here isn't hard to grasp. Lawyers who act on behalf of government as distinct from private clients come under special ethical obligations of impartiality. If a lawyer claiming to speak in the name of the people charges you with misconduct, his judgment on whether to drop the charges should not be clouded by the prospect that one-third of any penalties extracted from you would drop into his own private pocket.

Such at least is the logic almost universally accepted when it comes to criminal prosecution. Many court opinions confirm that public prosecutors must not be given a financial stake in the success of the actions they press. In a 1987 trademark-infringement case, for example, the U.S. Supreme Court held it a violation of due process for the government to delegate control of a criminal contempt action to a nongovernment party with a financial stake in the outcome.

What about when the fines or penalties are civil in nature? That question came up in a 1985 case from the city of Corona, Calif. The city had enacted a civil nuisance statute aimed at closing adult bookstores, and then to enforce it hired James Clancy, the attorney who'd drafted the statute, with a bonus to be paid if he succeeded in closing the stores. But the high court in Sacramento disqualified Mr. Clancy, saying that such a proceeding "demands the representative of the government to be absolutely neutral" and that "any financial arrangement"—such as a contingent fee—"that would tempt the government attorney to tip the scale cannot be tolerated."

The California counties and cities that had filed the lead-paint suit—including some of the nation's most populous, with some of the richest tax bases—absurdly tried to plead poverty, suggesting it would prove a hardship for them to hire lawyers on hourly fees. Judge Komar rejected this argument. In reality state and municipal plaintiffs often have more extensive resources than the businesses they sue, as when cities like Boston and Atlanta sue family-owned gunmakers. It's also a practical irrelevance, since smaller governments can and do band together in groups to facilitate litigation that is of common benefit.

The fact is that most such suits are dreamed up by the private law firms and sold to the local officials, not vice versa. Competitive bidding is the exception rather than the rule in retaining the law firms, which routinely recycle handsome donations to the campaigns of the mayors, attorneys general and other officials who hire them. Pay-for-play is so routine that it hardly raises even a shrug anymore. When government legal officers refuse the overtures and instead employ their own staff attorneys to handle such suits, they can face bitter resentment and political pressure for not playing the game in the expected way.

On its face the Santa Clara ruling (like the Clancy case before it) applies only to nuisance-abatement cases, and it's uncertain to what extent courts will agree to extend its logic to other sorts of suits filed by states and municipalities. Moreover, a number of courts in other cases have turned down defendants' motions challenging such fee deals. So it's not the beginning of the end for today's trial-lawyer public-entity alliance. It's more likely just the beginning.

County of Santa Clara v. Atlantic Richfield, cont'd - PointOfLaw Forum

I had an op-ed in yesterday's Wall Street Journal ("Tort Travesty") hailing Superior Court Judge Jack Komar's ruling disqualifying private contingency-fee counsel from representing California government entities in lead-paint litigation, and hoping that other courts embrace the decision's logic recognizing the ethical flaws in such representation. The piece had already been in the hopper at the Journal, but was made more timely by this week's announcement that President Bush had signed an executive order barring the federal government from entering contingent-fee arrangements to compensate lawyers or witnesses. Lattman and Kopel @ Volokh have some discussion of that executive order. Separately, Amanda Bronstad at the NLJ covers efforts in seven states (OH, NJ, CA, MS, WS, KS, NV) to adopt greater transparency in the hiring of outside counsel (or reduce the use of such counsel generally) to cut down on the impression of cronyism and pay-for-play.

P.S. And here's yet more from Beck and Herrmann.

An executive order signed today bars United States government agencies from hiring contingent-fee attorneys or expert witnesses to litigate on behalf of the government. The Institute for Legal Reform applauded the decision, and called for state governments to follow suit. A California court recently struck down such arrangements in that state as an inherently unethical conflict of interest. See County of Santa Clara v. Atlantic Richfield Company, No. 1-00-CV-788657 (Cal. Super. Ct. Apr. 4, 2007) (via the increasingly indispensable Beck and Herrmann). (Cross-posted at Overlawyered.)

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