Lawyer fees case before Miss. Supreme Court

Republican state Auditor Stacy Pickering has asked the Mississippi Supreme Court to declare funds the attorney general collects from lawsuits to be public money and to require the money to all be turned over the Legislature, including what private law firms collect for their work.

Attorney Arthur Jernigan Jr. told the court Wednesday that Pickering has no dispute with Attorney General Jim Hood's hiring of private lawyers to help with litigation. Jernigan said the dispute centers on the legal fees that the firms collect; he contends the money should go to the state.

The Supreme Court heard Pickering's challenge to a judge's decision last year upholding $10 million in fees paid to lawyers for handling a state lawsuit against computer software manufacturer Microsoft Corp.

Microsoft is not a party to Pickering's lawsuit.

Hinds County Chancellor Denise Owens last April ruled against Pickering.

Microsoft reached a $100 million settlement with the state of Mississippi in 2009. It agreed to pay $10 million to private lawyers hired by the attorney general's office to handle the case.

"The state of Mississippi should collect all the money and then disperse the money to the attorneys," Jernigan said. "The attorney general should request an appropriation from the Legislature for the fees.

"The money that was paid for all public money. We can't have Microsoft appropriating public money to anybody by the state. All of the recovered money is public money. It must all go to the state," Jernigan said.

Assistant Attorney General Harold Pizzetta told the justices that the trial judge, in approving the settlement, directed that the funds be paid to the attorneys.

"It was their money through a contract with the attorney general," Pizzetta said. "There was no question that the state got 100 percent of its settlement. The attorneys' fees were separate."

Justice Michael Randolph asked Jernigan why Pickering doesn't go to the Legislature and have the law changed.

"Why drag us into this?" Randolph said.

Jernigan said he had no answer, other than the auditor was appealing Owen's ruling.

Owens ruled that state law allows the attorney general to hire outside lawyers. Those lawyers received no funds from the state, Owens said, and the legal fees were separate from the settlement.

Hood has said he enters into such contracts with private attorneys when his office does not have the expertise, resources or manpower to pursue a case. He said he awards such contracts to the attorney who presents a case to him.

In June, the Supreme Court heard arguments in a similar case involving a group of lawyers awarded $14 million for their work to collect more than $100 million from telecommunications giant MCI. No decision has been issued in that case.

By Jack Elliott Jr.

Source: BusinessWeek