Bill placing limitations on contingency fee attorneys for Attorney General’s Office passes

BATON ROUGE – A bill that would limit the the Louisiana Attorney General's Office from independently engaging outside attorneys in representing the state and require legislative approval of such contracts has passed the Senate.

The bill, HB 799, is sponsored by Rep. Stuart Bishop (R-Lafayette) and comes after increasing criticism surrounding Louisiana Attorney General James "Buddy" Caldwell’s use of outside attorneys to litigate cases on behalf of the state.

Caldwell has used such attorneys on a contingency basis allowing them to share in the proceeds of the lawsuits, such as multi-million dollar cases filed against 18 pharmaceutical companies for allegedly participating in fraudulent pricing schemes and for ongoing litigation concerning the 2010 Deepwater Horizon oil spill.

Earlier this month Bishop argued in an editorial published by The Louisiana Record that such agreements lack transparency and are ripe for corruption.

Instead of allowing outside attorneys a portion of awards won by the state, HB 799 would cap contingency fees to $500 an hour for all work done on behalf of the state, all of which must be accurately recorded. In addition, attorneys licensed within Louisiana should be given preference for any contingency contracts.

“If we are going to allow one of our state agencies to hire outside counsel on a contingency fee than the legislature should be able to absolutely approve what we are going to pay," Bishop said. "I am not even saying who they are going to hire because they know better than us who the great attorneys are, there is no question about it, but we need to look at the contract and understand what the contract is going to be."

Bishop said Caldwell has come out against the bill saying that legislators are being influenced to vote for the bill by pharmaceutical industry lobbyists.

“They are trying to make it an issue that it is a pharmaceutical deal and it is not, this bill is about transparency and good government,” he said.

According to Bishop the bill would codify a 1997 ruling by the Louisiana State Supreme Court against former Louisiana Attorney General Richard Ieyoub that Caldwell's office has been able to circumvent by paying contingency fee attorneys directly from the proceeds of the lawsuits rather than through his office.

“The opening paragraph of Meredith v. Ieyoub says that you cannot hire attorneys on a contingency fee basis without legislative approval," Bishop said. "There have been loopholes and there have been ways, every single way they have done it and I think this is absolutely concrete evidence that we are going to codify Meredith v. Ieyoub."

Further, Bishop believes the bill will go a long way towards addressing concerns over possible political patronage within the Attorney General’s Office.

“There are things that have been said that friends are hired to take care of things," he said.

"I have no proof of it personally, but the Attorney General himself came to the table in Judiciary A in the Senate Committee and that only 14 people that have ever contributed to his campaign have gotten a (contingency fee) contract. I think that is 14 too many people."

In the end Bishop said HB 799 is all about bringing more transparency to the process of hiring contingency fee attorneys.

“This has nothing to do with control," he said. "This is about the citizens of Louisiana having the ability to open the doors and shine some sunlight on exactly how deals are being done, on how outside counsel was hired, at what percentage they were hired–this is about transparency and good government."

The bill narrowly passed the House in a 60-43 vote in late April. A 31-5 Senate vote yesterday was more favorable and came after an amendment was added that would create a fund to hold monies awarded in lawsuits brought by the state to pay for attorneys’ fees and other staff costs.

The bill now goes back to the House for a vote on the amended version.

The Louisiana Attorney General’s Office did respond to a request for comment.