Wednesday, April 7, 2010

Calif. High Court Contingency Spat Brings Amici Flood

The Civil Justice Association of California found itself in a dilemma last year: Who should it support in a major contingency fee case in the California Supreme Court?

Its government association members, like the League of California Cities, wanted to back Santa Clara County and other government entities that seek to hire private lawyers on contingency to handle costly and time-consuming public nuisance cases. But CJAC's industry members wanted to side with Atlantic Richfield Co. and other chemical manufacturers who argue that hiring such attorneys violates Supreme Court case law requiring government lawyers to remain neutral.

The Sacramento-based advocacy group opted to go with the latter members and filed an amicus curiae brief supporting manufacturers.

"It is inherently impossible," CJAC General Counsel Fred Hiestand wrote, "for an outside, private retained counsel, compensated on the basis of a contingency fee contract, to uphold the principles of impartiality and neutrality that represent the office of the public prosecutor."

The case has certainly stirred passions. The league and the California State Association of Counties filed their own opposing brief.

At least 17 other amici curiae briefs, representing the views of dozens of groups or individuals, have been filed with the high court in County of Santa Clara v. Superior Court (Atlantic Richfield Co.) , S163681. Oral argument is set for May 5 in San Francisco.

At issue is a suit filed by San Francisco, Oakland and Santa Clara County 10 years ago to force Atlantic Richfield and eight other chemical manufacturers to cover the costs of removing lead paint from public buildings. The government entities hired four local and national firms -- including Burlingame's Cotchett, Pitre & McCarthy -- on a contingency basis because of the expected high costs of the litigation.

The manufacturers contend that contradicts People ex rel. Clancy v. Superior Court , 39 Cal.3d 740, in which the California Supreme Court ruled in 1985 that contingency-fee agreements are "antithetical to the standard of neutrality" that attorneys representing the government must meet.

In the current case, however, San Jose's Sixth District Court of Appeal held that contingency fees are acceptable as long as the government lawyers retain ultimate control.

Amici ranging from the Washington, D.C.-based Alliance for Healthy Homes to the Oakland-based Worksafe Law Center stepped in to give their thoughts. And it made for some odd opponents and surprising stances.

A brief filed by 13 groups, including the San Francisco-based Healthy Children Organizing Project, favors contingency litigation as a way to stop lead poisoning because its harm is "particularly acute" to kids and using private lawyers might be the only way government entities can afford to fight for them.

But the Washington-based National Organization of African Americans in Housing -- which runs a program with defendant Sherwin-Williams called Home Work -- opposes litigation, saying the best way to eliminate poisoning is to provide resources so property owners can eliminate lead hazards on their own. In its brief, the group argued that litigation against manufacturers "diverts attention and resources and threatens to interfere with existing programs that have a meaningful impact."

And then there's the California District Attorneys Association, which opposes the use of private lawyers as stand-ins for public attorneys in nuisance cases.

"Permitting contingent fee attorneys to represent public law enforcement interests," CDAA Chief Executive Officer W. Scott Thorpe wrote, "will necessarily and inevitably inject improper personal financial interests into the balancing process required in civil law enforcement cases."

The organization argued that the Supreme Court "was correct in Clancy in creating an absolute bright-line test."

The state of Rhode Island, which won its own lead paint suit through contingency agreements, begged to differ, calling such agreements "not novel" if the governing agency retains control.

"Courts around the country," its lawyers wrote, "have affirmed the authority of an attorney general to enter into such arrangements."

Cary Silverman, of counsel with Shook, Hardy & Bacon, which filed an amicus brief for the Chamber of Commerce of the United States of America and the American Tort Reform Association, said eyes from around the country are on the California case because it has "become more prevalent in the past decade or so for state attorneys general to contract with private lawyers to pursue big-ticket cases."

By Mike McKee


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