Atlantic Legal Opposes Allowing Contingent Fee Attorneys to Prosecute Government Claims

A number of states and localities have entered into contingent fee arrangements with private attorneys to prosecute public nuisance claims: the private attorneys stand to recover substantial fees if the cases are successful, but nothing if defendants prevail.

In Atlantic Richfield Company et al., v. Santa Clara County, et al. the California Supreme Court permitted private contingency fee counsel to prosecute claims involving abatement of lead paint. The California Court acknowledged that the contingency fee prosecutors have a conflict of interest that potentially places their personal interests at odds with the interests of the pubic and of defendants in ensuring that a public prosecution is pursued in a manner that serves the public, rather than serving a private interest.

Nevertheless, the California Court permitted contingent fees arrangements, provided that (1) the public-entity attorneys retain complete control over the course and conduct of the case; (2) government attorneys retain a veto power over any decisions made by outside counsel; and (3) a government attorney with supervisory authority must be personally involved in overseeing the litigation.

The defendants filed a petition for certiorari in the U.S. Supreme Court. Supporting the petition for certiorari, Atlantic Legal argued that the limits imposed by the California Court are ineffective in guaranteeing the defendants-petitioners’ due process rights. As a practical matter it is virtually impossible to implement that standard without intrusive and disruptive judicial inquiry and court supervision of the attorney-client relationship between the government entity and its outside counsel. Moreover, no amount of supervision of the private contingency fee lawyers by government attorneys and no amount of post hoc review of contingent fee counsel’s performance by a court can cure the appearance of impropriety.

Citing the Supreme Court’s opinion in Young v. United States, 481 U.S. 787 at 814 (1987), Atlantic Legal’s brief contends that Private contingent fee counsel’s direct and substantial financial stake in the outcome of this litigation necessarily prevents them from seeking the overriding objective of the exercise of sovereign power – protecting the health and safety of their citizens while attaining justice.

To view Atlantic Legal’s brief, click here.