One of America’s bedrock legal principles is prosecutorial neutrality.  Any lawyer acting for the government while exercising its sovereign power must be motivated by the public good, not personal profit.  Attorneys representing the government must not have a personal financial stake in the outcome – they must be financially neutral. When public officials delegate the sovereign power of government to private lawyers to create and file public nuisance lawsuits under contingency fee arrangements, the financial neutrality and impartiality required of the government is destroyed.  

Public officials, who would never think of using their offices for personal benefit, must not delegate sovereign power to private contingency fee lawyers who stand to enrich themselves from the prosecution of public claims.  We don’t pay police officers a bounty for each arrest, we don’t pay prosecutors a stipend for each conviction, and judges don’t receive a percentage of damages they award.  The financial self-interest in public nuisance cases in which the lawyers acting for the government are retained on a contingent fee basis is antithetical to the principle of government impartiality.
 
In the case, County of Santa Clara, et al. vs. Atlantic Richfield Co., et al., former manufacturers of lead pigment used in paint argue that the lawsuit raises important issues involving the constitutionality and legal ethics of contingency fee agreements in public nuisance cases brought on behalf of the public.  The California Supreme Court has agreed to review an intermediate appellate court decision that would allow a public nuisance action brought by counsel retained under a contingent fee agreement to proceed.  The appellate court decision reversed the trial court.  The case has attracted amicus curiae briefs from a broad number of associations, coalitions, think tanks and other organizations.  Below are excerpts from some of those briefs.

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Excerpts from select amicus curiae briefs.  Briefs are available for download by clicking on the name of the association et al. that submitted them.

CALIFORNIA DISTRICT ATTORNEYS ASSOCIATION (CDAA)

CDAA has approximately 2,500 members, including the elected district attorneys and prosecutors employed by the district attorneys, the Attorney General’s office, and various local law enforcement offices.“Prosecutors,” it said in its brief, “play a leading role in safeguarding and vindicating the rights of the public through civil law enforcement efforts under a variety of statutes.”

The group added in its brief:“The CDAA believes that the Court of Appeal’s decision…allowing contingent fee attorneys with a direct, personal, financial interest in the outcome to represent the People in civil law enforcement actions will undermine the integrity of the judicial system in general and will jeopardize significant consumer and environmental protection statutes.”

Excerpts:

Contingency fee counsel are “investors in a for-profit venture.”“No doubt personal bonds have been forged between the government attorneys and the contingent fee outside counsel with whom they have shared the litigation trenches.Acting as investors in a for-profit venture, they have invested untold dollars and hours in this commercial enterprise which could all be for naught if this lawsuit fails.It would be illogical to suggest that the contingent fee outside counsel, who have been hired because of their competence, experience, expertise, and their financial recourses, have not placed themselves in positions where they are able to exercise substantial influence over decisions made by the government.” (Page 21)

Government and contingency fee attorneys will “most assuredly not” air disagreements in the presence of a judge.“The government attorneys and the contingent fee attorneys are most assuredly not going to air their disagreements about strategy, tactics, settlement offers, and other matters in the presence of a judge or a member of the defense team.Those discussions will take place behind closed doors, protected by the attorney-client privilege and work product doctrine….It is thus impossible for the defendants to determine the nature and extent of either the control or the influence wielded by the contingent fee outside counsel.” (Pages 27-28)

Loss in Rhode Island may “ratchet up the pressure on those contingency fee attorneys.” “The fact that some of these contingent fee attorneys received nothing from their investment in the Rhode Island case and that similar public nuisance theories have failed in other jurisdictions may ratchet up the economic pressure on those contingent fee attorneys and serve to increase the sympathy which the government attorneys have for the financial predicament in which their private colleagues now find themselves.” (Pages 24-25)

Other Excerpts:

• “The Clancy rule prohibiting contingent fee attorneys in public nuisance cases can not be trumped by the claims of public entity poverty.Fundamental prosecutorial ethical rules can not be subordinated to mere fiscal considerations.” (Page 34)

• “Permitting contingent fee attorneys to represent public law enforcement interests will necessarily and inevitably inject improper personal financial interests into the balancing process required in civil law enforcement cases and will undermine public confidence in the civil justice system.” (Page 3)

• “The judicial system as a whole is dependent for its credibility on the impartiality of those who play critical roles in fairly balancing interests in civil and criminal law enforcement cases, the prosecutors and the judges.” (Page 10)

NATIONAL ORGANIZATION OF AFRICAN AMERICANS IN HOUSING (NOAAH)

NOAAH is a national nonprofit organization that advocates “cooperative partnerships with industry and government to design and implement fair housing policies and programs, to formulate innovative strategies that improve the quality of housing and services delivery, and to promote healthy, vibrant communities.”

NOAAH’s brief added:“NOAAH is familiar with California’s comprehensive lead programs and it has monitored California’s success in reducing incidences of new cases of children with elevated blood lead levels….This litigation against manufacturers diverts attention and resources and threatens to interfere with existing programs that have a meaningful impact on improving the quality of housing available to poor, minority populations living in older, deteriorated housing.”

Excerpts:

Private lawyers “are not mere scriveners...” “These private lawyers are acting in the shoes of government lawyers; they have filed appearances; they appear on behalf of the Government.They are not mere scriveners, whose job it is to deliver papers that others have drafted.” (Page 10)

“We have no idea how (or if) the Government lawyers can supervise all the discretionary judgments…” “We have no idea how (or if) the Government lawyers can supervise all the discretionary judgments that any litigator has to make in the course of discovery, interrogatories, negotiation, and trial because, once again, the opaque curtain of the attorney-client and work product privileges cover their actions.We also have no idea how the Government lawyers can claim that the private lawyers have ‘unique skills, ability, and experience’ but yet simultaneously claim that the Government lawyers will consistently second-guess these lawyers with unique skill.We do not accuse anyone of wrong-doing; we simply point out that there is no way to know.” (Page 12)

“There is no effective way the trial court can supervise…”“Trial judges, like the trial judge in this case, know that there is no effective way the trial court can supervise the contingency fee lawyers to make sure that they are not motivated by the golden ring of a large contingency fee.The invocation of the Attorney Client and Work Product Privileges will forever shield scrutiny….We should not sacrifice ethics on the altar of budgetary exigencies.” (Page 24)

“Money corrupts judgment.”“History reinforces what our common sense already knows: money corrupts judgment.If whether and how much a lawyer is paid is contingent on winning that will affect the kind of advice that the lawyer gives and how he acts.In the 20^th century, Ryszard Kapuściński, the famous Polish journalist, advises us, ‘Money changes all the iron rules into rubber bands.’” (Page 4)

Private lawyers have a personal “financial stake.”“It is hard to think of something more personal than a financial stake in the litigation.That stake is substantial.The private lawyers personally invest millions of dollars in mammoth lawsuits like this one by paying all litigation expenses upfront.” (Page 5)

Private lawyers paid a contingency fee “will act differently.”“The prosecutors – the private lawyers paid a contingency fee – will act differently because they are paid by a contingency fee.The contingency fee motivates the private lawyer to win big at all costs.That incentive is inconsistent with the duty of public lawyers prosecuting public nuisance actions.” (Page 24)

CIVIL JUSTICE ASSOCATION OF CALIFORNIA (CJAC)

CJAC is a broad-based coalition of government and non-governmental members, including businesses, professional organizations and local government associations.The coalition, as it describes below, decided the issue was so important that it required filing a brief even though its membership was divided on the issue.

In its brief, the group said resolving the question posed in the case “is fundamental in determining what kind of civil justice system California provides….Its importance to the public interest as well as its divisiveness amongst lawyers and litigants is mirrored within CJAC’s own membership.Our governmental members side with their co-government plaintiffs herein, arguing that cash-strapped budgets necessitate this kind of fee arrangement if various wrongdoers…are ever to be prosecuted for public nuisance abatement.Our non-governmental members, however, are adamant that use of the contingency fee in this kind of case perverts justice by distorting the necessary neutrality required of public prosecutors when enforcing vague laws in which complex interests are to be delicately balanced.

“While CJAC usually abstains from participation in cases where our members’ views sharply diverge, this one is an exception because it clearly implicates our central purpose: to educate the public about aspects of our civil liability laws which further ‘fairness, efficiency, economy and certainty’ or that require amendment to better do so….

“CJAC contends the question this case presents is…plainly answered in People ex rel. Clancy v. Superior Court; and that answer is a unanimous and unequivocal, No.”

Excerpts:

“Any attempt by in-house counsel to ‘control’ the litigation is…unworkable.” “Moreover, any attempt by in-house counsel to ‘control’ the litigation is…unworkable.The questions to be answered in determining who actually exercises ‘control’ of the litigation are so numerous and would involve such a high degree of involvement by employed governmental counsel as to render nugatory any supposed savings to government through retention of contingency fee counsel.” (Page 25)

Two policy objectives for a ban on payment. “The policy objectives of the ban on paying government attorneys’ fees for successful prosecution of public nuisance claims are twofold – to prevent government lawyers from targeting and prosecuting unpopular non-governmental defendants in order to extract money from them to fatten the public purse and line the attorneys’ pockets; and preclude injection of pecuniary interests into the ‘neutrality’ required of public prosecutors charged with the delicate task of balancing factors pertinent to enforcement and implementation of vague laws.” (Page 6)

A financial “kicker” is a clear incentive for government lawyers.“No clearer incentive exists for government lawyers to arbitrarily and unfairly enforce laws entrusted to them than the promise of a financial ‘kicker’ at the conclusion of a successful prosecution.Indeed, the taint of private, self-interested persons making government decisions that may burden others while pecuniarily benefiting them has long been of constitutional concern.” (Pages 16-17)

Perception that contingency fee counsel are selected because of “close political ties.” “Besides conflicts between public and private counsel or the appearance of such conflicts, there is the perceived problem that contingency fee counsel for government are selected, not necessarily because of their skill or prowess in the field of public nuisance litigation, but because of their close political ties with certain public officials.” (Page 22)

PRODUCT LIABILITY ADVISORY COUNCIL (PLAC)

The Council is a non-profit group with 108 product manufacturers and hundreds of leading product liability defense attorneys.

Excerpts:

Issues “go the core of governmental legitimacy.”“Ceding governmental authority to private attorneys motivated by financial gain raises a host of troubling issues – bias, undue influence, erosion of public confidence, and diminution of the ethical standards and integrity of public office.These issues go to the core of governmental legitimacy.When the substance of the litigation is pregnant with public policy implications, as in this unprecedented, industry-wide public nuisance litigation, the result is the hijacking of governmental public policy by financially motivated attorneys.” (Page 2)

“The interested private attorney is not a robot.”“Interested private attorneys are hired to deploy their judgment and particular expertise as well as their technical skills to pursue a successful outcome.The interested private attorney is not a robot.He or she is obviously expected to provide counsel, to make and explain recommendations, to debate courses of action, and to influence and guide the decisionmaking, even if ultimate control remains in the hands of someone else.Under these circumstances, the assumption that there is a bright ethical line between those who make decisions and ‘subordinates’ who ‘merely assist’ is divorced from reality.The influence of interested outside counsel necessarily reduces the overall level of neutrality brought to the government’s decisionmaking, to something less – often much less – than absolute.Neutrality is compromised.”

Boilerplate provisions “do little to prevent the erosion of public confidence.”“Boilerplate provisions in contingent fee contracts with private attorneys, or empty assurances of control, do little to prevent the erosion of public confidence and the perception that sovereign power has been conferred upon the legal equivalent of a bounty hunter, or a hired gun.” (Page 19)

NATIONAL PAINT AND COATINGS ASSOCIATION

The Association represents some 300 manufacturers in the coatings industry.

Excerpts:

Governments that did not respond to “siren song” of private attorneys continued with successful programs.“The private attorneys retained by the Government Entities have, over the past decade, waged a concerted solicitation campaign of state and local governments to sign on to public nuisance lawsuits against NPCA member companies with the lure of no-cost-to-the-government contingent fee arrangements.The vast majority of state and local governments properly rejected these solicitations, continuing instead with their successful legislative, regulatory and educational approaches to reduce [blood lead levels], and those governments who did respond to the private attorneys’ siren song have seen their lawsuits uniformly rejected by every court to finally address the issue.” (Page vii)

NATIONAL FEDERATION OF INDEPENDENT BUSINESS, SMALL BUSINESS LEGAL CENTER

The Legal Center is a nonprofit, public interest law firm established to be the voice for small business.

Excerpts:

Control raises issues of attorney-client confidentiality.“As a practical matter, courts can hardly determine how much control the government attorneys should or could exercise over outside counsel.Implementation of such a rule would require courts to scrutinize the details of day to day interactions between outside counsel and government attorneys.Such scrutiny might even raise ethical questions by infringing on attorney-client confidentiality.” (Page 7)

Fee arrangements typically enrich lawyers, do little for public.“Both scholarly and practitioner commentary on the public policy consequences of contingent fee arrangements suggests the opposite: that contingent fee arrangements typically enrich plaintiffs’ lawyers, but do little to benefit the public.” (Page 7)

PUBLIC NUISANCE FAIRNESS COALITION

AMERICAN CHEMISTY COUNCIL

ASSOCIATION OF CALIFORNIA INSURANCE COMPANIES

PROPERTY CASUALTY INSURERS ASSOCIATION OF AMERICA

NATIONAL ASSOCIATION OF MANUFACTURERS

“Absurd” to claim that petitioners are incapable of pursuing lawsuits.“Given their power and resources, it is absurd for the Petitioners to claim that they are incapable of continuing these lawsuits without giving outside counsel a financial stake in the litigation’s outcome.” (Page 33)

No middle ground in control debate.“[We] believe there is no ‘middle ground’ in this debate. Although the court of appeals adopted a compromise rule that permitted contingent fee representation by private counsel conditioned on adequate ‘control’ by a supervising government lawyer, the compromise fails because…there is no practical way to assure litigants or the public of the adequacy and sufficiency of ‘control’ measures, or to effectively review and evaluate the application of the measures once they are implemented.” (Page 3)

U.S. CHAMBER OF COMMERCE

AMERICAN TORT REFORM ASSOCIATION

Government-hired private lawyers are often political donors, friends or colleagues. “The experience of other states that have engaged in the practice of entering contingency-fee contracts demonstrates that government-hired private attorneys are often political donors, friends, or colleagues of the hiring government official – creating the appearance of impropriety , and sometimes worse.” (Page 5)

THE HEARTLAND INSTITUTE

Case is an attempt to circumvent tools governments already have. “This case is a blatant attempt to circumvent the statutory enforcement tools that the Government Entities already have..” (Page 6)