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Fla. Attorney General Seeks to Cap Fees for Outside Counsel

  1. Jordana Mishory - 03-11-2009

It's rare for public officials to push legislation that would limit their own powers, but Florida Attorney General Bill McCollum has drafted companion bills that would do just that.

Senate Bill 1370 and House Bill 215 would limit the attorney general's authority to contract with private attorneys for litigation and impose a contingency fee cap of $50 million.

McCollum wants to maximize the amount of money that goes into state coffers instead of lawyers' pockets in big verdicts and settlements, and business groups have thrown their support behind the proposals.

Deputy Attorney General Joe Jacquot said the bill would codify procedures the office already follows before "something happens down the road." McCollum has not hired any attorneys on a contingency fee basis since he took office.

"It's just good government," Jacquot said.

But critics contend the proposals could handcuff the attorney general's office. Plaintiffs attorneys contend the state's top lawyer should assemble the most qualified team of attorneys to take on complex cases such as securities and mortgage fraud or claims against pharmaceutical companies. The plaintiffs lawyer group Florida Justice Association is lobbying against the measure.

Lawyers who would be bound by the fee caps say the business support is a red flag.

"It begs the question of who are we doing this for," said Debra Henley, the association's deputy executive director. "Are we doing this for the citizens of Florida? Or the industries that might find themselves in positions of harming the state of Florida who want to make sure the best and brightest aren't opposing them?"

William Large, head of the business group Florida Justice Reform Institute, said McCollum was elected to represent the state of Florida, and his office is "best suited" to file suits to protect its citizens.

"When the attorney general is going after a bad actor, there is seldom a conflict between his compensation and doing what is right," and the attorney general isn't driven by the need to get a big payday for himself, he said.

Jacquot noted the legislation binds only the attorney general's office. He said the governor's office and other state agencies are free to contract wit attorneys for larger contingency fees. He dismissed concerns the bill is bad just because it has the support of business.

"We drafted the legislation in the attorney general's office," Jacquot said. "Once we have a product out there, [the businesses are] welcome to support that, and we'll welcome support for the legislation."

This is the second year that the proposals have been filed. They stalled in the Senate last year.

In addition to the $50 million cap, the bills would require the attorney general to do a thorough assessment of his office's ability to handle cases. If the attorney general determined outside counsel were needed, he would have to explain why in writing and post that explanation and any contracts on his Web site. The bill also sets a sliding formula for contingency fees based on an award or settlement value.

The House sponsor, state Rep. Eric Eisnaugle, R-Orlando, said adopting policies with an eye on taxpayer dollars is especially important as the economy falters.

"It doesn't limit the state's ability to address grievances or serious problems in any way," he said. "It creates accountability and transparency when the attorney general [contracts with lawyers] and creates a very reasonable aggregate attorney fee."

The bill is sponsored in the Senate by Mike Fasano, R-New Port Richey. His chief legislative assistant, Gregory Giordano, said the bill would ensure transparency in spending by the attorney general's office.

"We're trying to make open to the public every possible area so they know the Legislature is trying to be as responsible as it can with every public dollar," Giordano said.

The phrase causing consternation with plaintiffs lawyers is the cap of $50 million "irrespective of the number of lawsuits filed or the number of private attorneys retained." Henley said you don't know how many firms you'll have to work with or how long the litigation could take.

Jacquot noted attorneys general around the nation are looking at the issue, and the cap amount was set after surveying law firms.

"We couldn't think of a case that would justify something more," he said. Giordano said the argument that the $50 million cap is too low is not valid

"It would allow the attorney general to hire four law firms with two lawyer per firm being paid $600 per hour for 40 hours per week for 52 weeks per year for five years," he said. "That's a lot of legal service for $50 million."

Constantly cited in the discussion is the civil case authorized by Gov. Lawton Chiles against tobacco companies in the 1990s to recoup smoking- related Medicaid expenses. The state settled the case for $13 billion, and the legal "dream team" hired by the governor's office won nearly $3 billion in legal fees through a separate arbitration with the tobacco companies.

The state contract with the lawyers authorized a 25 percent contingency fee, but payment was not part of the settlement, and several lawyers retained by the state filed liens against the settlement.

W.C. Gentry, a Jacksonville attorney who worked on the case, said if he and his colleagues faced a maximum recovery of $50 million, many attorneys wouldn't have taken on the case. He said the legislation seems "pretty silly."

"Why would you, as a supposedly trustworthy political servant, feel it necessary to limit your own ability to enter into appropriate contracts for the benefit of the public?" he asked.