The Civil Justice Association of California's (CJAC) Comments on the California Supreme Court's Decision in "Santa Clara"

The President of the Civil Justice Association of California, John Sullivan'a remarks on last Monday's Supreme Court of California decision on the Santa Clara Contingency Fee issue:

By disregarding the firm advice of California's district attorneys and not learning from ongoing lessons in other states, the California Supreme Court may have set our state’s civil justice system on path to a new brand of wasteful, confusing, and perhaps extortionate litigation.

For a worst-case scenario, one can recall how famous Southern plaintiffs' lawyer Dickie Scruggs, now in federal prison, early in his career helped get Mississippi law changed to allow him to partner with the state’s attorney general in contingency fee lawsuits. What eventually followed were campaign contributions that determined the outcome of judicial elections and then outright bribes to judges.

The California District Attorneys Association, in a powerful amicus brief filed last year in this case, virtually condemned the practice of prosecutors hiring contingency fee lawyers to do the public’s business. In their brief, district attorneys observed that:

It would be contrary to human nature to believe that the positions taken by the contingent fee attorneys ... are completely unaffected by the direct, personal, and substantial pecuniary interest they, and they alone on the plaintiffs’ team, have gambled on a successful outcome of this litigation. Their economic interests color everything they do in connection with this litigation.

And the district attorneys see conflict reaching public lawyers as well:

It would be illogical to suggest that the contingent fee outside counsel who have been hired because of the competence, experience, expertise, and their financial resources, have not placed themselves in positions where they are able to exercise substantial influence over the decisions made by the government.....It would be similarly be illogical and contrary to human nature to suggest that the government attorneys have not put themselves in a position where ... they have painted themselves into an ethical corner.

Also noteworthy is the District Attorney association brief’s comments on claims that economic necessity requires allowing public agency contingency fee hiring:

[The] rule prohibiting contingent fee attorneys...cannot be trumped by claims of public entity poverty. Fundamental prosecutorial ethical rules cannot be subordinated to mere fiscal considerations

We can only hope that our state's district attorneys and attorney general – even though losing the court's support – will maintain a principled tradition of independent integrity which has distinguished the vast majority of them over the years and caused them to avoid contingency fee hiring.

The Supreme Court's "specific guideline" for permissible contingent-fee agreements are sweet hypothetically but sour in the face of reality. How is any objective observer to know whether ‘oversight’ requirements such as "public entity lawyer control…veto power" either exist in a contingency fee agreement or are being met in practice?

For a reality check, one need look no farther than Orange County where a deal between the district attorney and contingency fee lawyers was making a mockery of this decision before its ink dried. Last March 12 District Attorney Tony Rackauckas announced a "contingency fee" agreement with an Orange County-based law firm to sue Toyota. Despite media and private citizen requests, that agreement has not been made public. A county attorney has opined that it is privileged as attorney-client communication.

Nationally, contingency fee attorney hiring by public prosecutors has earned the name "pay to play" because the lawyer hiring is often preceded by campaign contributions to the hiring attorney general. For example:

Noteworthy in the court's opinion is the court's distinguishing the Santa Clara defendants, large national manufacturers, from the small Corona bookstore involved in the 1985 People ex rel. Clancy v. Superior Court case in which a unanimous court drew a bright line against public agencies hiring private lawyers on a contingency fee basis.

The opinion states: "There is no indication that the contingent-fee arrangements in the present case have created a danger of governmental overreaching or economic coercion. Defendants are large corporations with access to abundant monetary and legal resources."

Flaunting this double-standard criteria for justice is unhelpful in a state already giving major job creating, tax revenue-providing corporations good reason to wonder why they should keep or locate any operations here.