8 Retention of Private Counsel by attorneys general: March 7, 2022 8 Retention of Private Counsel by attorneys general: March 7, 2022

All attorneys general utilize private counsel to represent the state's interest.  In most cases it is because the matter is highly routinized (collecting bills for the state), highly specialized (bond counsel) or non repeating specialites (copyright or state owned patents).  They are also used to provide legal services to remote geographic areas (rural state institutions) far from the State Capitol and for deep conflicts where outside retention is the only ethical answer.

The manner of selection of these outside counsel varies with the issue and the state.   Quite often an assistant attorney general from the civil division will be allowed to keep his or her agency “client” for a period of time upon leaving the office  In other instances law firms have such deep relations with the agency who is “paying” for the services that the attorney general accedes to the agency request to utilize the firm.

CONTINGENT COUNSEL

This Chapter primarily deals with retention of private counsel an attorney general in a very different setting, e.g. contingent counsel on national cases.   This practice broke into the national legal scene in the 1990's in the Tobacco Cases (see Chapter on Tobacco Cases.)  These cases generated an enormous settlement and legal fees of over $1 Billion.  The controversial practice has continued with some states never using contingent counsel and some using them as a matter of course.  

The ability of attorneys general to retain and control contingent counsel has been the subject of significant litigation and controversy as indicated in the readings of this Chapter.   There have been litigation efforts and legislative initiatives by impacted industries designed to eliminate or limit the ability of attorneys general to retain contingent counsel.  While these efforts have been generally unnsucessful they did generate a number of applellate decisions, state laws and academic articles that have limited the unfettered authority of attorneys general regarding the retention and supervision of contingent counsel with a clear increase in the transparency of the practice.

8.1 RI State v. Lead Industries Ass'n , 951 A.2d 428, (2008) 8.1 RI State v. Lead Industries Ass'n , 951 A.2d 428, (2008)

The Rhode Island Supreme Court decision in State v. Lead Industries Association, Inc. is the majority rule. on the ability of state attorneys general to retain contingent counsel as long as the attorney general exercises sufficient control over the counsel so that the litigation does not lose its governmental status.

State v. Lead Industries Ass'n

951 A.2d 428

Nos. 2004-63-M.P., 2006-158-Appeal, 2007-121-Appeal

2008-07-01

 

Neil Kelly, John McConnell, Fidelma Fitzpatrick, Genevieve Allaire-Johnson, James Lee, Providence, for Plaintiff.

John A. MacFadyen, III, Donald Scott, Pro Hac Vice, Joseph Cavanagh, Laura Ellsworth, Pro Hac Vice, Paul M. Pohl, Pro Hac Vice, Thomas Bender, William Kayatta, Pro Hac Vice, John Tarantino, for Defendants.

Present: WILLIAMS, C.J., FLAHERTY, SUTTELL, and ROBINSON, JJ.

 

OPINION

Addressing the issues seriatim for a unanimous Court, Chief Justice Williams authored Tracks I and II and Associate Justices Suttell, Flaherty, and Robinson authored Tracks III, IV, and V, respectively. In this landmark lawsuit, filed in 1999, the then Attorney General, on behalf of the State of Rhode Island (the state), filed suit against various former lead pigment manufacturers and the Lead Industries Association (LIA), a national trade association of lead producers formed in 1928.

After the first trial resulted in a mistrial, a second trial commenced; that second trial, spanning four months, became the longest civil jury trial in the state’s history.1 This monumental lawsuit2 marked the first time in the United States that a trial resulted in a verdict that imposed liability on lead pigment manufacturers for creating a public nuisance.

 

IV

The Propriety of Contingent Fee Arrangements

Although we are keenly aware of the gravity of the issue and of the fact that thoughtful and potent policy-based arguments have been made on both sides of the issue, in the end we have concluded that, in principle, there is nothing unconstitutional or illegal or inappropriate in a contractual relationship whereby the Attorney General hires outside attorneys on a contingent fee basis to assist in the litigation of certain non-criminal48 matters. Indeed, it is our view that the ability of the Attorney General to enter into such contractual relationships may well, in some circumstances, lead to results that will be beneficial to society — results which otherwise might not have been attainable.49 However, due to the special duty of attorneys general to “seek justice” and their wide discretion with respect to same, such contractual relationships must be accompanied by exacting limitations. In short, it is our view that the Attorney General is not precluded from engaging private counsel pursuant to a contingent fee agreement in order to assist in certain civil litigation, so long as the Office of Attorney General retains absolute and total control over all critical decision-making in any case in which such agreements have been entered into.50 See, e.g., County of Santa Clara v. Superior Court, 161 Cal.App.4th 1140, 74 Cal.Rptr.3d 842, 850 (2008). In our view, it is imperative that the case-management authority of the Attorney General, where a contingent fee agreement is involved, be “final, sole and unreviewable.” Philip Morris Inc. v. Glendening, 349 Md. 660, 709 A.2d 1230, 1243 (1998).51

As we have sought to explain in some detail earlier in this opinion, attorneys general are charged with the special duty to seek justice — a duty which is quite different from the responsibilities of the usual advocate. In accordance with that principle, we wholeheartedly agree with Chief Judge Mikva of the United States Court of Appeals for the District of Columbia when he wrote in almost perfervid language:

“Government lawyers * * * should also refrain from continuing litigation that is obviously pointless, that could easily be resolved, and that wastes Court time and taxpayer money. * * * [A] government lawyer has obligations that might sometimes trump the desire to pound an opponent into submission.” Freeport-McMoRan Oil & Gas Co., 962 F.2d at 47, 48.

The usual advocate, on the other hand, is not held to quite such an abnegatory and demanding standard. Accordingly, in order to ensure that a contingent fee agreement is not adverse to the standards that an attorney representing the government must meet, it is vital that the Office of the Attorney General have absolute control over the course of any litigation originating in that office.

At the risk of being repetitive, we would emphasize that the Attorney General’s discretionary decision-making must not be delegated to the control of outside counsel; rather, it is the outside counsel who must serve in a subordinate role. See United States v. Cox, 342 F.2d 167, 192 (5th Cir.1965) (“[The Attorney General] is the representative of the public in whom is lodged a discretion which is not to be controlled by * * * an interested individual, or by a group of interested individuals * * *.”); People v. Superior Court of Contra Costa County, 19 Cal.3d 255, 137 Cal.Rptr. 476, 561 P.2d 1164, 1172 (1977) (“[The] advantage of public prosecution is lost if those exercising the discretionary duties of the [Attorney General] are subject to conflicting personal interests which might tend to compromise their impartiality.”); see also County of Santa Clara, 74 Cal.Rptr.3d at 850 (holding that the duty of government attorneys to seek justice is not contravened when private counsel, retained on a contingent fee basis, “are merely assisting * * * in the litigation* * * and are explicitly serving in a subordinate role * *

In order to ensure that meaningful decision-making power remains in the hands of the Attorney General, it is our view that, at a bare minimum, the following limitations should be expressly set forth in any contingent fee agreement between that office and private counsel: (1) that the Office of the Attorney General will retain complete control over the course and conduct of the case; (2) that, in a similar vein, the Office of the Attorney General retains a veto power over any decisions made by outside counsel; and (3) that a senior member of the Attorney General’s staff must be personally involved in all stages of the litigation.52

Moreover, not only must the Attorney General have absolute control over all stages of the litigation, but he or she must also appear to the citizenry of Rhode Island and to the world at large to be exercising such control. See Offutt v. United States, 348 U.S. 11, 14, 75 S.Ct. 11, 99 L.Ed. 11 (1954) (“[JJustice must satisfy the appearance of justice.”); see also Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787, 806, 107 S.Ct. 2124, 95 L.Ed.2d 740 (1987); Marshall v. Jerrico, 446 U.S. 238, 242, 243, 100 S.Ct. 1610, 64 L.Ed.2d 182 (1980); Superior Court of Contra Costa County, 137 Cal.Rptr. 476, 561 P.2d at 1172 (“[I]t is precisely because the prosecutor enjoys such broad discretion that the public he serves and those he accuses may justifiably demand that he perform his functions with the highest degree of integrity and impartiality, and with the appearance thereof.”)(emphasis added).

V

8.9 Multistate Case Hypothethical, Prof. Peter Brann 8.9 Multistate Case Hypothethical, Prof. Peter Brann

 

Nathan Levenson, a prominent class action plaintiff’s lawyer (and former Assistant Attorney General) located in the State of Connecticut, is poised to bring a private lawsuit against Cote’s Electronics, a prominent bricks and mortar retailer located in the State of Ohio that has recently expanded to become one of the nation’s largest Internet retailers. Although Cote’s claims in the terms and conditions on its website to respect its customers’ privacy, it actually has been selling customers’ personal information to third party marketers. Several Internet blogs had speculated that Cote’s was selling consumer information. The Chief of the Consumer Division of the State of New Hampshire, Cathy McFadden, knows that the speculation was well founded. Her two-person consumer division had served a confidential civil investigative demand (“CID”) seeking documents from Cote’s, and in response had not only received documents suggesting that it had sold information concerning its customers across the country, but obtained an internal email in which a Cote’s VP hoped “to turn bytes into billions.” Unfortunately, McFadden doesn’t have sufficient resources to review all of Cote’s documents, and can’t afford to hire anyone to do so. Also, her two-person consumer division rarely tries cases, and Cote’s lawyer responding to the CID, Mike Kendall, is an aggressive defense lawyer from a large Massachusetts law firm.

 

·      Should New Hampshire bring this case, partner with a private law firm, or refer it to a private law firm?

·      Is this a good case for a multistate investigation or lawsuit?

·      If other States are contacted, should all States be contacted, and if not, how should the decision be made which States to contact?

 

Assume that someone made the decision to turn this into a multistate investigation. One of the States that agreed to participate was the State of Connecticut, which wasn’t that surprising because the Chief of the Consumer Division, Jackie Glenn, frequently worked on multistate consumer cases and often served on the “Executive Committees” running such cases. Her former colleague, Sam Levenson, knew that Glenn was likely to be in the thick of things if there was a multistate investigation.

 

·      When Levenson calls Glenn, and asks if there is a multistate investigation, what does Glenn say?

·      When Levenson tells Glenn that he knows the States lack the resources to pursue this case against a multibillion dollar retailer like Cote’s, and he would like to work with the States “collaboratively,” what does Glenn say?

·      Does Glenn attempt to get any information from her former colleague about his possible class action lawsuit?

·      Should or must Glenn tell the other States about this call from Levenson?

 

The State of Ohio, where Cote’s is located, also volunteered to be on the Executive Committee. In prior calls, Joe Novick, Ohio’s longtime Assistant Attorney General handling consumer issues—who the other States’ lawyers know and trust from years of working together—represented Ohio. On the most recent conference call, Ohio’s new Chief Deputy Attorney General, Sally Grover, also participated and said that she hoped “this investigation would not turn into a witch-hunt against one of Ohio’s most prominent companies.” ·

 

·      Do any of the other States have a problem with Grover participating in the strategy call?

·      What, if anything, should the other States do concerning Grover or Ohio?

 

The State of Arizona also volunteered to be on the Executive Committee. This was interesting because the Attorney General of Arizona, Bob Bone, is very conservative and Arizona had not shown much interest in prior consumer cases. On the other hand, Arizona might simply be looking for additional “investigative costs” and attorneys’ fees that it would receive as a member of the Executive Committee. For whatever reason, Arizona’s consumer protection chief, Joan Emerson, ends up on the Executive Committee. Emerson receives a call from Jerry Hannigan, the former Attorney General of Arizona, i.e., Emerson’s former boss. Hannigan says that he is representing Cote’s, and that the word on the street is that Arizona is investigating Cote’s. He wants to know if it is true Arizona and others are “persecuting” his client, and, if so, he would like a meeting with Emerson and Bone, who he plans on calling next.

 

·      Does Emerson acknowledge the investigation to Hannigan?

·      Does Emerson and/or Bone agree to the requested meeting with Hannigan?

·      Should or must Emerson tell the other States about the call and requested meeting with Hannigan?

Assume that Emerson and Bone meet with Hannigan. Because former Attorney General Hannigan is more of a politician than a litigator, he brings Cote’s lead lawyer, Mike Kendall, to the meeting. Kendall explains that the multistate approach is seriously misguided because most States don’t have statutes that apply to privacy issues, specifically including the lead State, New Hampshire. Kendall also says that the lead lawyer for New Hampshire, Cathy McFadden, has a personal vendetta against Cote’s because she had bought a Nest “smart” thermostat that wouldn’t work in her 18th century farmhouse and Cote’s refused to take it back and refund her money. At this point, Hannigan spoke up, and mentioned that if the States cracked down on Cote’s, they might just move their operation off-shore to avoid “intrusive regulation” and that Cote’s was troubled by “activist” Attorneys General which drive businesses “to China.” Kendall returns the discussion to the law and asks Bone and Emerson for guidance on a “safe harbor” approach to these unsettled privacy issues.

·      Does the argument that the States lack privacy statutes resonate with Emerson or Bone?

·      Do Emerson or Bone have any concerns that McFadden may have a personal issue with Cote’s?

·      Does the argument that Cote’s may send its business overseas resonate with Emerson or Bone?

·      Do Emerson or Bone provide any guidance on a “safe harbor” to Cote’s counsel?

·      Should or must Emerson tell the other States about the meeting with Cote’s counsel?

 

https://wiki.harvard.edu/confluence/download/attachments/273112547/Multistate%20Case%20Hypothethical.pdf?api=v2

8.10 Supplemental Readings 8.10 Supplemental Readings