Monday, July 30, 2007

Contingent Fees For Government Lawyers, Part 2

Last month, I explained why the argument for treating contingent fee arrangements between state or local governments and private lawyers as violations of state separation of powers principles is unpersuasive bordering on frivolous---notwithstanding the fact that the Louisiana Supreme Court actually bought the argument. Now tort reform advocate Walter Olson accuses me of being "very dismissive of" these arguments, pointing out that a California judge recently threw out a contingent fee arrangement as inconsistent with the ethical obligations of a government lawyer. Mr. Olson points to his own May Wall Street Journal Op-Ed praising that ruling.

Note, however, that the California ruling does not rest on the separation of powers arguments that I disparaged. Rather, it rests on California principles about proper standards of conduct for government lawyers. It cites a 1985 California Supreme Court decision that invalidated contingent fees in government civil enforcement actions as sometimes analogous to criminal cases. Here is the key language of the Cal S Ct case:
The justification for the prohibition against contingent fees in criminal actions extends to certain civil cases. As discussed above, the rigorous ethical duties imposed on a criminal prosecutor also apply to government lawyers generally. “The county attorney is a county officer and as such is a representative of the people, although his duties relate only to civil matters.” (ABA Committee on Prof. Ethics, opn. No. 186 (1938).)

Nothing we say herein should be construed as preventing the government, under appropriate circumstances, from engaging private counsel. Certainly there are cases in which a government may hire an attorney on a contingent fee to try a civil case.
In the recent case, California Superior Court Judge Komar rejected the argument that the earlier precedent doesn't apply in a nuisance suit where the contingent fee lawyers are closely supervised by government attorneys. That may or may not be right as a matter of California professional responsibility law. But California doesn't even bar all contingent fee arrangements in civil cases, and it bars the ones it does on grounds wholly different from the separation of powers arguments that I find unpersuasive.

As I said in my earlier post, there may be good policy reasons to be skeptical about many of these contingent fee arrangements. Olson and other tort reformers are no doubt right that there are some bad contingent fee deals out there. Olson's Wall Street Journal op-ed also raises the disturbing possibility that contingent fee lawyers in Rhode Island got no-bid business as a result of campaign contributions. And guess what? That's a disturbing possibility for all sorts of other programs, including, I don't know, say, billions of dollars to Halliburton and KBR. I'm looking forward to the embrace of campaign finance reform by those who favor tort reform.

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PG said...

If you didn't see it, there was an interesting little argument between Ponnuru of Nat'l Review Online and Fred Thompson about the latter's refusal to cap attorney's fees for work done on behalf of states in tobacco litigation. Thompson's defense of his "siding with the trial lawyers" is that he was upholding freedom of contract. I thought this was more plausible than his claim that he couldn't mention having lobbied for a pro-choice organization because of attorney-client privilege.

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