Wednesday, June 16, 2010

House committee approves hiring lawyers for Gulf oil spill cases

he debate over whether to allow Attorney General Buddy Caldwell to hire private attorneys on contingency for Gulf oil spill lawsuits is far from resolved. But the idea, which has resurrected the rivalry between the plaintiffs bar and the business lobby, passed muster Monday in a House committee, which forwarded a significantly altered version of Senate Bill 731 to the full House.

Though more amendments are likely, the House is expected to approve the Civil Law and Procedure Committee's concept, which limits the contingency authority to cases stemming directly from the Deepwater Horizon oil leak and includes lower caps on attorneys fees than the Senate version approved last week. Perhaps even more financially significant, the House version excludes from any contingency calculations natural resource damage claims that could be covered under existing federal environmental laws.

Caldwell and Senate President Joel Chaisson II, meanwhile, prefer the Senate version, arguing that Louisiana should not limit its ability to attract top lawyers in the current or future disasters. Though details vary among states, Wisconsin is the only other state that does not allow its attorney general any latitude in hiring lawyers on contingency.

"It's like we've got a sling shot trying to take down a big ol' giant," Caldwell said.

Chaisson said settling natural resource claims -- the anchor of any harm the state would ascribe to BP and other corporate defendants -- under the federal Oil Pollution Act would mean "we are just going to trust BP and the federal government ... after what they've done to this state."

The divide between the two chambers virtually assures a showdown in a compromise committee of senators and representatives that will likely include Chaisson, D-Destrehan, and House Speaker Jim Tucker, R-Algiers, who has been involved behind the scenes in reshaping the bill as it moves through the lower chamber. Despite his opposition to the committee changes, Chaisson made it clear he wanted the bill to move forward, ensuring that he will get a conference committee before the session's June 21 end.

Stephen Waguespack, legal adviser to Gov. Bobby Jindal, said the his boss would not support "carte blanche authority to hire lawyers on contingency" but wants to allow Caldwell that power in Deepwater Horizon litigation. Waguespack indicated that the governor, who would typically align with the business lobby in any tort law discussion, will not wade into debate on the bill's finer provisions.

The significance of the debate was clear in the hearing's four-hour duration -- spread over a morning and evening session -- and in the procession of business lobbyists who opposed the bill, calling it a prelude to predatory lawsuits. "Contingency fee contracts send a cold chill up and down the spine of Louisiana businesses," said Chuck McMains, a former legislator representing the U.S. Chamber.

BP is a member of the U.S. Chamber of Commerce and the Louisiana Association of Business and Industry.

McMains and his colleagues argued the state should hire attorneys on an hourly basis, as do defendants in most civil cases.

Chaisson, a lawyer, mocked that assertion given the impending state budget cuts and estimates that the government's oil spill litigation could run up a $100 million tab. Caldwell has already hired a handful of firms on an hourly basis for an initial discovery request, but said he cannot afford to sustain those agreements long-term.

Chaisson and other lawyer-legislators who represent plaintiffs in civil cases added passionate defenses of their roles in the marketplace and the tort system.

Rep. John Bel Edwards, D-Amite, noted that most of his clients are suing businesses or individuals "in a vastly superior financial position," meaning they cannot afford the up-front costs of expensive court cases. Edwards said, "I see no difference in (those cases and) the state's relationship to BP."

McMains angered some lawmakers when he alluded to "pay-to-play schemes" in other states and distributed copies of campaign finance documents that show Caldwell has received tens of thousands of dollars in contributions and loans from lawyers and firms he has hired on an hourly basis to represent the state. McMains argued unsuccessfully for an amendment that would bar contingency fee contract winners from donating to an attorney general.

Edwards called it "offensive" for McMains to suggest "that plaintiffs attorneys are more susceptible to corruption" than any other state contractors who give to political campaigns.

Chaisson said, "It's ridiculous that we have to sit here and beg because of some amorphous claims of corruption."

By Bill Barrow,


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