Amid a feverish lobbying effort that reaches to the U.S. Chamber of Commerce, House leaders say that Attorney General Buddy Caldwell's quest for wide authority to hire outside attorneys on contingency is "dead on arrival." A House committee will decide Monday whether a more limited version, applying only to lawyers representing the state's interest in the Gulf of Mexico...
Amid a feverish lobbying effort that reaches to the U.S. Chamber of Commerce, House leaders say that Attorney General Buddy Caldwell's quest for wide authority to hire outside attorneys on contingency is "dead on arrival."
Louisiana Attorney General Buddy CaldwellA House committee will decide Monday whether a more limited version, applying only to lawyers representing the state's interest in the Gulf of Mexico oil spill, is palatable in a Legislature where the business lobby has gotten the better of the plaintiffs bar in recent years.
Senate Bill 731 by Senate President Joel Chaisson II, D-Destrehan, cleared the Senate last week on a 21-16 vote that in previous years would not have been possible. But the idea, which Caldwell has pushed since taking office in 2008, got legs after the Deepwater Horizon oil rig exploded April 20.
Chaisson says Louisiana should join 48 other states that allow their attorneys general to hire lawyers on contingency, the most common way that plaintiffs attorneys are paid, as opposed to hourly wages more common for defense attorneys. But the business community casts the measure as a prelude to more lawsuits and a sop to trial lawyers.
House Speaker Jim Tucker, R-Algiers, said Friday that his Senate counterpart's bill is "dead on arrival in its current form." In a separate interview, House Civil Law and Procedure Chairman Tim Burns, R-Mandeville, used nearly identical language. "I doubt he could get two votes" on the 14-member panel, Burns said.
The chairman said Tucker met with most members of the committee Thursday, with Gov. Bobby Jindal's top aides also involved. Burns said he spent part of Friday afternoon reviewing amendments to the bill, from the idea of restricting contingency hires to oil spill litigation to reducing the fees that firms could charge. Jindal aides have indicated the governor, who usually aligns with business interests, would consider a limited version of the bill. Tucker said he hasn't settled on a position.
The Senate version would set a graduated fee scale giving the attorneys up to 25 percent of any judgment up to $50 million; 20 percent of any additional amount up to $100 million; 15 percent of the next $150 million; and 10 percent of the portion exceeding $250 million. That would come to $45 million for the first $250 million of a settlement and $22.5 million for each additional $250 million. The bill also would allow additional reimbursement for "reasonable" expenses that are documented.
"That won't be the schedule" in any House version, Burns said. "Any version that gets out of committee will be significantly different."
Chaisson said earlier this week that it would be foolish to limit the bill. If it's good policy in the wake of the oil spill, he said, then it's good policy regardless of the subject of any litigation that involves state interest.
The Senate president also emphasized provisions in the proposal intended to prevent abuse: The attorney general would have to certify in writing why his staff could not handle a matter internally. Then he must solicit proposals from multiple firms, with the contracts being subject to approval by legislative oversight committees. The attorney general would retain all control over the litigation.
Lawmakers have heard plenty from Caldwell's office and the business community, including the U.S. Chamber of Commerce, which is represented in Louisiana by former legislator Chuck McMains. Both sides are using the 1989 Exxon Valdez spill in Prince William Sound in their arguments.
After that spill, the state of Alaska joined the federal government in a joint civil and criminal suit against Exxon. Caldwell said Alaska spent about $1 million a week for three years on litigation that eventually yielded a $1 billion settlement for taxpayers, independent of the private class-action suits that lingered for two decades. Caldwell said the Gulf spill is more complicated, and that he needs both contingency fees and direct appropriations to hire the best experts and lawyers.
The business lobby notes that Alaska did not use contingency fee contracts. McMains also pointed out that Caldwell has already hired several law firms that are listed on a recent filing asking a state judge to order BP to comply with the state's requests for information. The firms include Marten Law PLLC of Seattle, which represented Alaska after the Valdez spill. Caldwell's office declined to release any contracts or payment arrangements it has with the firms. Burns said documents he has reviewed from Caldwell's office show that the outside counsel is being paid by the hour.
The U.S. Chamber also is reminding lawmakers that when then-Attorney General Charles Foti sued drug giant Eli Lilly, he hired private attorneys via an agreement that "no state funds" would be used to pay the firm. That effectively meant the lawyers negotiated their own $4 million payment with Eli Lilly as part of the settlement. During Senate debate, Chaisson cast that deal as contingency by another name. He called it "a conflict of interest" for a plaintiffs firms to negotiate a fee directly with a defendant.
The other lawyers and firms Caldwell has hired on the oil spill are Kanner & Whiteley of New Orleans; Henry Dart Attorneys at Law of Covington; Usry, Weeks & Matthews of New Orleans; and E. Wade Show of Baton Rouge.
Dart and Usry are among the contributors who gave the maximum $5,000 to Caldwell's campaign in 2007, a point that business lobbyists have raised. Caldwell answered in a written statement: "I don't think highly qualified attorneys should be disqualified from representing the state simply because they exercise their rights as citizens to participate in the election process."
Bill Barrow can be reached at bbarrow@timespicayune.com or 225.892.1716.