La. contingency fee bill introduced after oil spill
BATON ROUGE, La. (Legal Newsline) - The BP oil spill might play a role in changing the way the Louisiana attorney general does business.
The Louisiana Senate is currently mulling a bill that would give the attorney general the power to hire private lawyers to represent the state on a contingency fee basis. Currently, Attorney General Buddy Caldwell can hire outside counsel, but they are paid an hourly wage.
The legislation, introduced by state Sen. Joel Chaisson, sets up a tier system for attorneys fees and requires approval of the contingency contract by lawmakers.
"Louisiana's attorney general currently has authority to contract with private attorneys on an hourly fee basis when pursuing legal action on behalf of the state," a letter to senators signed by several business groups states.
"He can and does pursue litigation for a variety of actions. If he needs additional resources, the Legislature can appropriate; and the Legislature can also approve a higher fee schedule to pay for expertise. There is absolutely no need to authorize contingency fee contracts."
The business groups feel contingency fee contracts will allow private attorneys who want to pursue class actions to circumvent federal class action laws that require most class actions to be heard in federal court.
An exception allows suits brought by attorneys general to be heard in state courts. They say that the legislation will encourage more abusive state class actions.
Caldwell's neighbor, Mississippi Attorney General Jim Hood, went to Congress in May to ask for new legislation that would keep state-powered lawsuits against businesses like BP in state courts.
"When companies are allowed to remove to federal court every action brought against them in state court, as is routinely practiced, it causes a breakdown in the system due to overloaded federal dockets," Hood told the House Judiciary Committee.
"When it is a state itself who is the plaintiff party in interest, this encroachment on state sovereignty is a particular insult."
The legislation could help Caldwell find firms interested in suing BP. The BP-leased Deepwater Horizon rig exploded off the Louisiana coast April 20, killing 11 workers, and the cause of an underwater leak has yet to be plugged.
Dozens of lawsuits have already been filed against BP.
"The oil spill is simply another high-profile excuse to allow plaintiff attorneys to get contingency fees," said Ginger Sawyer, vice president of the Louisiana Association of Business & Industry.
Sawyer said her group has been fighting attempts at similar legislation for years. It argues that settlements and jury awards can reimburse money spent by the Attorney General's Office on experts and private lawyers.
Caldwell recently asked state lawmakers for $2 million before the end of the month and another $25 million during the next budget year.
He entered into a $24 million settlement with drugmaker Eli Lilly & Co. The settlement provided $4 million for private attorneys hired by former Attorney General Charles Foti.
The U.S. Chamber Institute for Legal Reform signed the business groups' letter. The ILR owns Legal Newsline and the Southeast Texas Record.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.