Jindal signs bill limiting Attorney General’s use of contingency fee attorneys

BATON ROUGE – Gov. Bobby Jindal has signed a bill into law that limits the attorney general’s ability to engage in contingency fee contracts with outside attorneys to handle lawsuits brought on behalf of the state.

Louisiana Attorney General James “Buddy” Caldwell has used attorneys on a contingency basis in 432 cases and by bringing in outside counsel Caldwell cut them into the shares of the proceeds of the lawsuits.

Those cases include multi-million dollar lawsuits filed against 18 pharmaceutical companies for allegedly participating in fraudulent pricing schemes and for ongoing litigation concerning the 2010 Deepwater Horizon oil spill.

Caldwell spoke out against the bill saying that legislators are being influenced to vote for the bill by pharmaceutical industry lobbyists. But since the bill passed the House and Senate in late May, he has been silent.

The bill, HB 799, was sponsored by Rep. Stuart Bishop (R-Lafayette) and came after increasing criticism surrounding Caldwell’s potential use of contingency fee attorneys who were connected to him politically.

“There are things that have been said that friends are hired to take care of things,” Bishop 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 said 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 addition, Bishop said the bill will codify a 1997 ruling by the Louisiana Supreme Court against former Louisiana Attorney General Richard Ieyoub that sought to stop the practice and 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.”

The law caps contingency fees at $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.

Jindal did not release a statement on the bill and instead signed it along with several other piece of legislation.