Modules
About Usauthors: David Axelrad and Lisa Perrochet
Syllabus
A contingent fee is “[a] fee charged for a lawyer’s services only if the lawsuit is successful or is favorably settled out of court... Contingent fees are usually calculated as a percentage of the client’s net recovery...”1 This module examines the use of contingency fee counsel by governmental entities in pursuing civil actions, with an emphasis on public nuisance actions. The inherent problems that arise when governments invest their powers in private contingency fee counsel are magnified in public nuisance litigation, where the remedy is abatement.
Index
- History of Contingent Fee Representation
- Contingent Fee Representation of a Governmental Entity
a. The Requirement of Neutrality
b. Conflicts of Interests and Other Issues - The "Control" Exception and Enforcement Issues
- Comparing the "Control" Exception Standards to Standards for Disqualification in Criminal Cases
- Conclusion
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1. History of Contingent Fee and Current Trends
While contingent fee arrangements were disfavored or even banned in early American jurisprudence,2 they have since gained acceptance. They are now recognized as an important tool of American justice, when used appropriately, “facilitat[ing] access to the judicial system for individuals who lack the means to pre-pay legal expenses.”3 Nonetheless, contingent fee agreements continue to generate skepticism. As one commentator noted:
One of the most serious dangers is that contingent fees tend to erode an attorney’s judgment …‘When the lawyer in effect invests in a cause of action by taking his fee as a percentage of the recovery, it is easy for him to lose his detachment from the client’s interests. He often becomes more of a businessman concerned with his own financial well-being than a proper advisor to the client.’ …[T]he contingent fee is now viewed as giving a lawyer an interest in the actual accident, disaster, or transaction that precipitated the lawsuit and a stake in its outcome.’ This …undermines public faith in the judicial system by seeming to encourage the filing of lawsuits that lack merit.4
Recently, however, states and other governmental entities have either sought or been persuaded to retain private contingency counsel to pursue public nuisance claims. This trend began in the 1980s, “when Massachusetts decided to hire private lawyers to pursue claims over asbestos removal.”5 Even after the California Supreme Court limited the use of contingent-fee attorneys in public nuisance cases,6 the use of these contingency fee schemes spread, leading to the “creation of a new model for state-sponsored litigation that combines the prosecutorial power of the government with private lawyers aggressively pursuing litigation that could generate hundreds of millions in contingent fees.”7 The increasing use of contingent fee counsel by public prosecutors has prompted extensive criticism. As one recently filed Apellate brief expalains
Editorials and op-eds . . . have been highly critical of the practice of paying private attorneys to prosecute civil enforcement claims on behalf of the State based on their success in bringing in the greatest monetary award. See, e.g., Editorial, The Pay-to-Sue Business, Wall St. J., Apr. 16, 2009 (examining Houston plaintiffs lawyer F. Kenneth Bailey’s contributions to several state attorneys general and Pennsylvania Governor Ed Rendell and his firm’s receipt of no-bid, contingency fee contracts to sue pharmaceutical companies on behalf of those states); Adam Liptak, A Deal for the Public: If You Win, You Lose, N.Y. Times, July 9, 2007, at A10 (stating that any recovery belongs to the state’s taxpayers and a large portion of it should not be diverted to private lawyers); Andrew Spiropoulos, New AG Model Harms State, The Oklahoman, July 8, 2007, at 17A (opining that the state’s hiring contingency fee lawyers ‘not only undermines the fair and impartial administration of justice[, but] . . . will economically harm, not benefit, the state’); Editorial, Prosecution for Profit, Wall St. J., July 5, 2007, at A14 (praising the Superior Court’s ruling in the case before this Court and urging against use of contingency fee agreements by governs as antithetical to prosecutorial neutrality)8.
Contingent fee arrangements have been employed by governmental entities without objection in some kinds of civil litigation in which the government is a party, such as when such as when the government acts in the traditional role of a plaintiff seeking damages to compensate for an injury.9However, when the government is seeking the enforcement of public rights, a contingent fee arrangement gives the attorney representing the government a financial stake in the outcome of litigation that creates an appearance of impropriety affecting the integrity and neutrality of the government’s prosecution. Moreover, this type of retention creates a myriad of actual conflicts of interest and other problems between and among the participants in the scheme.
Contingency fee contracts, by their very nature, impede an attorney’s ability to shift his focus from profit to justice because they tie the attorney’s compensation to the financial results of the litigation. They plant the seeds of their own abuse by potentially distracting private counsel from the singular goal of serving the public interest--an issue that is wholly absent when governmental employees pursue the same claims. They create an ‘appearance of impropriety,’ and the public is entitled to know that the agreements that secure their representation will not even tempt their counsel to stray.10
To comprehend the problematic nature of the situation brought on by government’s use of private contingent fee lawyers, one need only hypothesize a situation in which government prosecutors are given a financial arrangement in which they are to be paid when and only when they obtain a conviction. It is difficult to imagine an arrangement more rife with danger, cynicism and potential abuse than this one, and therefore wholly unacceptable to the electorate and where an implicit social contract controls the relationship between government and the individual.11
2.Contingent Fee Representation of a Governmental Entity
a. The Requirement of Neutrality
In 1935, the United States Supreme Court emphasized that an attorney representing the government in a criminal matter has a higher ethical duty than one who represents a private party. In this role, the attorney’s duty is not to win at any cost or to maximize the monetary recovery to the client, but, rather to do justice:
The United States Attorney is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done.12
The command to work for a just result requires neutrality of the government attorney; and in the criminal context, prosecutorial neutrality is a generally-accepted tenet of American jurisprudence.13
“Neutrality” encompasses the notion that prosecutors should be disinterested; thus, they must “recuse themselves . . . when they have personal stakes in the matters at issue.”14 The Supreme Court reaffirmed this principle in Young v. U.S. ex rel. Vuitton et Fils S.A.15 Petitioners were found guilty of criminal contempt and sentenced to jail terms. They claimed “the District Court erred in appointing respondent’s attorneys, rather than a disinterested attorney, to prosecute the contempt.”16 The U.S. Supreme Court held that “counsel for a party that is the beneficiary of a court order may not be appointed to undertake contempt prosecutions for alleged violations of that order.”17 he Court noted that while “courts possess inherent authority to . . . appoint a private attorney to prosecute [a] contempt,”18
[p]rivate attorneys appointed to prosecute a criminal contempt action represent the [government], not the party that is the beneficiary of the court order allegedly violated. . . . The prosecutor is appointed solely to pursue the public interest in vindication of the court’s authority. A private attorney appointed to prosecute a criminal contempt therefore certainly should be as disinterested as a public prosecutor who undertakes such a prosecution.19
In terms that demonstrate the corrosive effect of allowing an attorney to prosecute claims in which she is personally or financially interested, the Supreme Court stated that “[a] prosecutor may be tempted to bring a tenuously supported prosecution if such a course promises financial or legal rewards.”20 The Court warned that we must guard against situations with even the potential for such behavior, concluding that “[r]egardless of whether the appointment of private counsel in this case resulted in any prosecutorial impropriety . . . , that appointment illustrates the potential for private interest to influence the discharge of public duty.”21 “In short, as will generally be the case, the appointment of counsel for an interested party to bring the contempt prosecution in this case at a minimum created opportunities for conflicts to arise, and created at least the appearance of impropriety,”22 which “diminishes faith in the fairness of the criminal justice system in general.”23
Especially where a private attorney has been retained to prosecute a civil or criminal case on behalf of a public entity plaintiff the contingent-fee arrangement compromises the prosecutor’s neutrality and reduces public confidence in the government’s exercise of its prosecutorial discretion. Thus, for example, “‘the contingent fee is generally considered to be prohibited [in] the prosecution...of criminal cases...[T]he contingent element [is] against public policy because it tend[s] to bring about conviction regardless of the prosecutor’s primary duty to see that justice [is] done.’”24
The same is true when contingent fee counsel are retained on the defense side of criminal cases:
[I]n criminal defense cases, courts have concluded that contingency fee agreements based on a defendant’s acquittal would encourage counsel to act in his own interest and not necessarily in the interest of the accused. For example, the attorney may fail to consider seriously or fail to encourage the defendant to consider a plea agreement. He, instead, might encourage the defendant to go to trial, even when faced with the risk of a longer sentence, in order to have a chance at recovering fees. See United States ex rel. Simon v. Murphy (E.D. Pa. 1972) 349 F.Supp. 818, 823 (granting writ of habeas corpus because defense attorney, whose payment depended on a not-guilty finding, failed to present offer of plea bargain: ‘To put it bluntly, by advising the persistence in a not guilty plea, [the attorney] had nothing to lose but his client’s life.’); see also Peter Lushing, The Fall & Rise of the Criminal Contingent Fee, 82 J. Crim. L. & Criminology 498, 517 (1991) (explaining policies).25
This ideal of disinterestedness, however, is not limited to criminal prosecutions. A government lawyer, whether participating in a criminal trial or civil litigation, is still a “representative . . . of a sovereignty”26 with an obligation to govern impartially, and thus should meet the enhanced ethical duties demanded by the Supreme Court in Berger.27 As one commentator puts it:
The rationale for this distinctive professional role seems generally applicable to government lawyers in civil litigation as well. While the duty to “seek justice” will mean something different for civil government litigators because of the different context in which they work, it should nevertheless require a different approach from that of lawyers for private parties.28
In the seminal case People ex rel. Clancy v. Superior Court, the California Supreme Court recognized that the principle of neutrality applies to attorneys representing the government in certain civil cases. In this case, a city government hired a private attorney on a contingent fee basis to bring public nuisance abatement actions. Cleaving to the principle that “[w]hen a government attorney has a personal interest in the litigation, the neutrality so essential to the system is violated”,29 the court rejected a formalistic reading of the attorney’s retainer agreement:
It is true that the retainer agreement [here] provides that [the private attorney] is to be an independent contractor and not an officer or employee of [the] City. However, a lawyer cannot escape the heightened ethical requirements of one who performs governmental functions merely by declaring he is not a public official. The responsibility follows the job: if [the private attorney] is performing tasks on behalf of and in the name of the government to which greater standards of neutrality apply, he must adhere to those standards.30
The court reasoned that “the abatement of a public nuisance involves a delicate weighing of values. Any financial arrangement that would tempt the government attorney to tip the scale cannot be tolerated.”31 Indeed,
Public nuisance abatement actions share the public interest aspect of eminent domain and criminal cases . . . A suit to abate a public nuisance can trigger a criminal prosecution of the owner of the property. This connection between the civil and criminal aspects of public nuisance law further supports the need for a neutral prosecuting attorney.”32 The court thus held “that the contingent fee arrangement between [the government and the private attorney] is antithetical to the standard of neutrality that an attorney representing the government must meet when prosecuting a public nuisance abatement action.”33
Those who favor the use of contingent-fee arrangements in prosecuting public nuisance actions argue that the standard of neutrality advocated by contingent fee opponents is unrealistic and unobtainable, pointing out that no advocate can be completely indifferent to success in a particular case.34 That argument is a straw man. The issue, however, is not whether an advocate can be perfectly disinterested.
All advocates have an interest in winning their cases.35 The neutrality demanded of an attorney enforcing public rights does not require complete indifference to the outcome of the case. However, when the same attorney has a financial stake in the outcome of that case, the potential for the attorney to act out of self-interest rather than the public interest creates an indelible appearance of impropriety that erodes public confidence in the integrity of the prosecution. As Justice Robert H. Jackson recognized in another context, “If we were to add motives of personal avarice to other prompters of official zeal the time might come when the scandals of law-enforcement would exceed the scandals of its violation.”36
Other areas of the law recognize the dangerous effect that a financial stake in the outcome of a transaction can have. For example, directors of a corporation who are “disinterested” (i.e. do not have a personal financial stake in a transaction) are presumed to have acted in the corporation’s best interests.37 However, that presumption disappears when it is shown that a director “will receive a direct financial interest from the transaction which is different from the benefit to shareholders generally.”38 Similarly, public officials are prohibited both at common law and by statute from ‘“having a financial interest in contracts created by them in their official capacities”’ in order to “prevent the conflict of interest between personal financial interest and official duties that arises when public officials have a personal economic interest in business they transact on behalf of the government.”39
b. Conflicts of Interest and Other Issues
A recently filed appellate brief summarized the ethical standards governing outside lawyers hired to represent the government:
Outside lawyers, when representing the People in a public nuisance action, are bound by the same heightened ethical standards and duties that are required of government officials. See Clancy, 39 Cal.3d at 748 (imposing ‘the rigorous ethical duties’ of a ‘criminal prosecutor’ to government lawyers, including private attorneys representing the government in public nuisance actions); see also City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 871 (“Occupying a position analogous to a public prosecutor, [a government lawyer in the civil arena] is possessed of important governmental powers that are pledged to the accomplishment of one objective only, that of impartial justice.” (internal quotation marks omitted)); People v. Superior Court of Contra Costa County ex. rel. Greer (1977) 19 Cal.3d 255. 267 (‘[The] advantage of public prosecution is lost if those exercising the discretionary duties of the [Attorney General] are subject to conflicting personal interests which might tend to compromise their impartiality.’). These rules are grounded in due process, sound judicial policy, and accepted principles of ethics for attorneys representing the government.
Public attorneys are strictly prohibited from having any extraneous financial interests in their litigation. See Gov. Code § 87100 (prohibiting public officials from “participating in making” decisions in which they have a financial interest); 28 U.S.C. § 528 (disqualifying “any officer or employee of the Department of Justice” from participating in litigation that “may result in a personal, financial, or political conflict of interest, or the appearance thereof’’); see also People v. Barboza (1981) 29 Cal.3d 375. 380-81 (finding that ‘inherent and irreconcilable conflicts’ required reversing defendants’ convictions where the public defender’s personal financial interests possibly opposed his clients’ interests).”40
Using contingent-fee counsel to represent the government in actions to enforce public rights is not destructive merely because it offends notions of neutrality. Hiring financially-interested private counsel in government-prosecuted civil actions creates a number of problems, including potential and actual conflicts of interest.
First, there can be serious conflicts between the objectives of an attorney who is paid a percentage of the recovery and the objectives of the public in abating a public nuisance. The public interest is served by abating the nuisance. However, a contingent-fee attorney who is self-interested cannot but attempt to maximize the fee for her services. A conflict with the client is unavoidable. “Contingent fees give incentives to the lawyer to minimize time and risk in order to maximize return, whereas the client would seek to maximize the lawyer’s time and risk in order to minimize risk and maximize return. It is he lawyer who steers the process, and the client is usually not able to judge whether or not the lawyer’s self-interest determines the extent of work and assistance for the client’s case. The timing and the amount of recovery seems to be a main conflict of interest if the lawyer is given a percentage of the recovery.”41
[C]ontingency fee lawyers’ pursuit of their own private interests may lead them to engage in one or more of three troublesome courses of conduct: (1) favoring monetary relief over nonmonetary relief, even when public interest considerations support the nonmonetary relief; (2) endeavoring to have the government plaintiffs grant the defendant nonmonetary benefits in return for monetary recovery for the plaintiffs, even when doing so is not supported by public interest considerations; and (3) colluding with defendants to structure a settlement that couples illusory nonmonetary relief with the defendants’ commitment to support the plaintiffs’ lawyers’ requests for large fees based on an overstated money equivalent valuation of the nonmonetary relief.42
Still another commentator observes that:
Sometimes public interest considerations dictate dropping litigation altogether or focusing on nonmonetary relief more than monetary relief. But contingency fee lawyers, perhaps unlike most government lawyers or even most outside hourly fee lawyers, arguably can be expected to pursue the maximum monetary relief for the state without adequately considering whether that relief advances the public interest and/or whether the public interest would be better served by foregoing monetary claims, or some faction of them, in return for nonmonetary concessions.43
One recently filed brief dramatizes this problem with a description of the situation in Rhode Island:
[I]n the Rhode Island lead paint public nuisance litigation, . . . prior to the Rhode Island Supreme Court reversal of the trial verdict, the same contingent fee private counsel retained by the Government Entities here dreamed up a $2.4 billion monetary remedy – a remedy some 4.5 times more expensive than the state’s largest existing public works project – to address a public health concern that was being successfully addressed without any yeacourt involvement whatsoever (from 1991 to 2006, the incidence of elevated BLLS in children under the age of 6 in Rhode Island had decreased from 29.6 percent to below 2 percent). Under the government’s damages theory, the $2.4 billion. would have been used to retain 10,000 workers (despite the fact that there are only 833 workers licensed in Rhode Island to do lead removal work and only 6,000 to 8,000 registered construction workers of any type in the entire state) and to remediate more than half the houses and apartments in the state (the vast majority of which did not have deteriorating lead paint and accordingly would pose no health risk unless the encapsulated paint was disturbed, e.g., through the proposed remediation), requiring the forced temporary relocation of the private residents from those homes. That is, of course, after private counsel took out their 16.7 percent share of over $400 million for themselves.44
A similar distortion of the prosecutor’s function occurred in New Mexico:
Under the damages theory propounded by the Attorney General and her outside counsel . . . the State of New Mexico . . . as parens patriae for and on behalf of the people of the State of New Mexico – proposed to stand idle and do nothing further to clean up toxic contamination beneath the South Valley Site that counsel insist will go untreated by the existing remedial actions. Instead, the State of New Mexico, by and through the Attorney General, sought to be paid billions of dollars in damages – not to clean up the deep groundwater contamination they insist can be found beneath the South Valley Site, but to leave that contaminated water exactly as they allege it is, untreated and unusable.45
Second, hiring contingent fee counsel circumvents the legislative process by enabling the executive branch to bypass the legislative body that normally would have to appropriate funds to prosecute the litigation46, and by shifting public policy making from the legislature to courtroom litigation guided by for-profit contingent fee attorneys.
In addition to the constitutional and ethical questions raised by such arrangements, contracting out of the state’s enforcement power to private contingency fee attorneys facilitates what has been called ‘regulation through litigation.’ See Robert B. Reich, Regulation is out, Litigation is in, USA Today, Feb. 11, 1999, at A15; see also John Fund & Martin Morse Wooster, The Dangers of Regulation Through Litigation: The Alliance of Plaintiffs’ Lawyers and State Governments (American Tort Reform Found. 2000). The strategy of the private contingency fee attorneys to select an industry and go after it through tort litigation – as opposed to through legislation – may result in an end-run around representative government. See Victor E. Schwartz, et al., Tort Reform Past, Present and Future: Solving Old Problems and Dealing With “New Style” Litigation, 27 Wm. Mitchell L. Rev. 237, 258-59 (2000).47
Third, insofar as the official hiring private contingent fee counsel is engaging in a “no-risk gamble: heads, we win and the state recovers its losses; tails, we lose, but we incur no out-of-pocket losses,”48 she is clouding her accountability, able to “trumpet . . . success as [her] own” but not having to take the blame for the cost of the litigation if it fails.49
Fourth, the process of selecting private counsel is easily corrupted. With “hundreds of millions in contingent fees”50 at stake, there is a real danger that contingent fee counsel will “pay to play” and that the government official in charge of hiring “will select the private counsel most willing to bribe him with either an under-the-table payment or a legally permissible political contribution.”51 Commentators Mark A. Behrens and Andrew W. Crouse offer these real-life examples of possible impropriety: In Kansas, the state’s Attorney General hired her former law partners, whose firm also contributed money to the Attorney General’s election campaign, to serve as local counsel in the state’s tobacco case; in Texas, four of the five firms the state’s Attorney General hired to represent the government in its tobacco litigation had, together, contributed over $150,000 to his campaigns; and in Washington state, a senior counsel of the state attorney general’s antitrust section left his job to join the firm that had prosecuted that state’s tobacco litigation, indicating that he had “a job waiting for him at the firm.”52
Finally, introducing a profit motive into the prosecution of public nuisance actions also raises constitutional due process concerns.53
Each of these problems raises ethical, public-policy, and even constitutional issues that clearly counsel against allowing the government to hire contingent-fee attorneys to prosecute actions enforcing public rights. As one commentator summarized the problem as follows:
Those members of the plaintiffs’ bar [who serve as retained, contingent fee lawyers for plaintiffs] are now hopelessly conflicted, serving as government contractors with financial incentives proportionate to their hoped-for conquest. The sword of the state is brandished by private counsel with a direct pecuniary interest in the litigation. On the one hand, they are driven by the contemplation of a huge payoff; on the other hand, they fill a quasi-prosecutorial role in which their overriding objective is supposedly to seek justice. How could such lawyers possibly evaluate with impartiality the prospect of a settlement, say, or the tradeoff between injunctive and monetary relief?54
Under these circumstances, it is not surprising that, as a matter of public policy, the federal government does not hire contingent fee attorneys. A recent appellate brief explained that:
[T]he federal government pursues litigation without hiring lawyers on a contingency fee basis. In May 2007, President George W. Bush formalized this policy by promulgating Executive Order 13433, ‘Protecting American Taxpayers From Payment of Contingency Fees,’ 72 Fed. Reg. 28,441 (daily ed., May 18, 2007). The President’s order states ‘the policy of the United States that organizations or individuals that provide such services to or on behalf of the United States shall be compensated in amounts that are reasonable, not contingent upon the outcome of litigation or other proceedings, and established according to criteria set in advance of performance of the services, except when otherwise required by law.’ Id. Hiring attorneys on a hourly or fixed fee basis, and not through a contingency fees arrangement, ‘help[s] ensure the integrity and effective supervision of the legal and expert witness services provided to or on behalf of the United States.’ Id.55
3. The “Control” Exception and Enforcement Issues
Some recent decisions attempt to sidestep Clancy’s admonition that public nuisance actions “demand[] the representative of the government to be absolutely neutral” and its consequent prohibition against contingency fee arrangements in such situations.56 In approving the use of contingent fee agreements, these opinions focus on the amount of control and supervision the government attorney exercises over the litigation. But even a contingent fee arrangement that reserves control over the suit for government attorneys does not adequately ensure neutrality in the prosecution of the case.
In County of Santa Clara v. Superior Court,57 a group of public entities initiated a public nuisance action against manufacturers of lead paint and pigment, seeking an order requiring the defendants to abate lead hazards in millions of residential and commercial structures throughout the state. All but one of the public entities retained private counsel on a contingent fee basis to prosecute the action. The trial court found the contingent fee agreements violated Clancy. explaining its ruling as follows:
Clancy is applicable to the instant case. Plaintiffs fail to persuasively distinguish Clancy, or otherwise persuasively articulate why their fee arrangements with outside counsel are proper. Plaintiffs’ main argument is that the government attorneys continue to retain and/or exercise decision-making authority and control over the litigation in this case. [Fn. omitted.] The fact remains, however, that outside counsel (i.e., Thornton & Naumes, Motley Rice LLC, and Mary Alexander and Associates for the City and County of San Francisco, and Cotchett, Pitre & McCarthy for most of the other public entities) are co-counsel in this case. They are performing work as attorneys for the plaintiff government entities, and consequently they are subject to the standard of neutrality articulated in Clancy. Oversight by the government attorneys does not eliminate the need for or requirement that outside counsel adhere to the standard of neutrality.
Moreover, as a practical matter, it would be difficult to determine (a) how much control the government attorneys must exercise in order for a contingent fee arrangement with outside counsel be permissible, (b) what types of decisions the government attorneys must retain control over, e.g., settlement or major strategy decisions, or also day-to-day decisions involving discovery and so forth, and (c) whether the government attorneys have been exercising such control throughout the litigation or whether they have passively or blindly accepted recommendations, decisions, or actions by outside counsel. Plaintiffs in their opposition characterize outside counsel as “collaborators.” (See Pls.’ Mem. Opp. Motion, at 8:21-22.) Given the inherent difficulties of determining whether or to what extent the prosecution of this nuisance action might or will be influenced by the presence of outside counsel operating under a contingent fee arrangement, outside counsel must be precluded from operating under a contingent fee agreement, regardless of the government attorneys’ and outside attorneys’ well-meaning intentions to have all decisions in this litigation made by the government attorneys.58
Plaintiffs make two additional arguments in their opposition. Plaintiffs contend public policy should preclude disqualification in this case, because the government entities and lawyers lack the resources and specific expertise necessary to prosecute this action. The standard of neutrality should apply, however, regardless of the wealth of either the government lawyer or the defendant. (See City & County of San Francisco v. Philip Morris, Inc. (N.D. Cal. 1997) 957 F. Supp. 1130, 1136 fn 3 [“The Court wishes to make clear that it does not base this ruling on plaintiffs’ argument that, as a matter of public policy, a contingent fee arrangement is necessary in this case to make it feasible for the financially strapped government entities to match resources with the wealthy tobacco defendants. The Court does not find this argument convincing in light of the concerns expressed in Clancy.”].)
Plaintiffs also contend Defendants’ motion is premature, unless and until Defendants are found liable, the Court determines the appropriate form and scope of the abatement remedy, and the Court determines the appropriate amount of fees in this case. . .If Defendants are entitled to neutral prosecution by government attorneys who are not operating under a contingent fee arrangement, then they are so entitled throughout the prosecution of this case.59
The California Court of Appeal reversed, holding that fee agreements ceding to government lawyers “final authority over all aspects”60 of the litigation of public nuisance claims against lead paint manufacturers did not offend Clancy’s prohibition. The court reasoned:
[W]here private counsel are merely assisting government attorneys in the litigation of a public nuisance abatement action and are explicitly serving in a subordinate role, in which private counsel lack any decision-making authority or control, private counsel are not themselves acting “in the name of the government” and have no role in the “balancing of interests” that triggers the absolute neutrality requirement. Private counsel serving in such a subordinate role do not supplant the public entities’ in-house attorneys, who must be absolutely neutral, and are not in a position where their interest in maximizing their contingent fee can influence the balancing of the interests or any of the other decisions that are made exclusively by the public entities’ in-house attorneys.61
In doing so, the Court of Appeal severely narrowed the effect of the California Supreme Court’s decision in Clancy, essentially limiting it to its facts.62
Following the “control exception” created by the California Court of Appeal in Santa Clara, the Rhode Island Supreme Court found Clancy no obstacle to approving a contingent fee arrangement in a public nuisance suit. In State v. Lead Industries Ass’n63 the state’s Attorney General brought a public nuisance abatement action against lead pigment manufacturers. After first deciding that the action should have been dismissed at the pleading stage because defendants' alleged actions as lead pigment manufacturers did not constitute public nuisance as a matter of law, the Rhode Island Supreme Court addressed the contingent fee issue. Although “reluctant to opine on an issue that has become moot,”64 and cautioning that the law in this area is unsettled and “still developing,”65 the Court addressed the validity of the contingent fee arrangement because “this particular subject is one of extreme public importance.”66 The Rhode Island court concluded that the state Attorney General, as a constitutional officer of the State, was “not precluded from engaging private counsel pursuant to a contingent fee agreement” so long as the Attorney General maintained absolute and total control over the decision making. However, the Rhode Island court noted that, given the controversial nature of contingent fee agreements, its decision was a tentative one, subject to reconsideration:
"We pause to note that the propriety vel non of contingent fee agreements in the public sector is a much controverted and still developing area of the law. [Citations omitted.]"
***
Given the continuing dialogue about the propriety of contingent fee agreements in the governmental context, we expressly indicate that our views concerning this issue could possibly change at some future point in time.67
Two federal trial courts, in unpublished opinions, have accepted the propriety of contingent fee arrangements in similar situations. In City of Grass Valley v. Newmont Mining Corp.,68 a city hired outside counsel on a contingent fee basis to litigate claims that included a request for abatement of a public nuisance. The federal court concluded that because the City Attorney acts “as co-counsel in this action and the City retains ‘ultimate decision-making authority in the case,’” the City’s retention of outside counsel on a contingent fee basis did not violate the government attorney’s duty of neutrality.69 And in Sherwin-Williams Co. v. City of Columbus, Ohio,70 three cities entered into contingent fee agreements with private counsel to prosecute public nuisance actions. The court initially concluded that “an agreement between a municipality and private counsel in a public nuisance action which purports to vest in private counsel authority to prevent a settlement or dismissal of a suit is unconstitutional.”71 However, the court found the contingent fee agreements are permissible if they provide that the cities retain control over the litigation, including authorization of settlement, with the private attorneys working under the direction and at the discretion of the city governments.
What these decisions ignore is that Clancy neither carved out nor anticipated such an exception. Clancy insists that any attorney who is “performing tasks on behalf of and in the name of the government” must adhere to heightened standards of neutrality.72 This responsibility “follows the job” of representing the government on behalf of the public.73 Nothing in Clancy exempts subordinate attorneys working on behalf of the government from this requirement. Rather, an attorney representing the government must, “[i]n all his activities, . . . [be] conditioned by the fact that he ‘is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as his obligation to govern at all . . . .’”74 That obligation persists no matter one’s position in the hierarchy of lawyers representing the government. For this reason, a rule that allows financially-interested attorneys to prosecute public nuisance cases as long as their employment contract provides that they will be subordinate to a government attorney cannot withstand Clancy. Otherwise, it would be acceptable for a subordinate attorney in a district attorney’s office to have a financial stake in the outcome of a prosecution she is working on, as long as the district attorney retained control over the case. This is not and should not be the law.
Moreover, although the Grass Valley and Sherwin-Williams decisions hold that private attorneys may represent the government in public nuisance cases on a contingent fee basis only if government attorneys exert significant control over the litigation, none bothers to explain how the relationships can be policed so that such control is guaranteed. Indeed, none seems to recognize the difficulty inherent in policing the relationship between public and private lawyers in cases such as these. As one commentator explains:
[A]s long as contingency fee lawyers lead the litigation, these lawyers will invariably control the development and presentation of the ‘facts’ to the [public authorities] and their staff. Thus, even when the [public authorities] are interested in securing the public interest, rather than focusing on an exclusive goal of obtaining the most amount of money, and when they devote resources to active supervision of the litigation, the [public authorities] and their staff may lack the necessary information to shape litigation outcomes.”75
The size and complexity of the cases, as well as the attorney-client and work-product privileges, insulate the relationships from proper oversight.
Government-sponsored public nuisance complaints have spawned enormous and complicated litigation. The Santa Clara case involves ten cities and counties and at least seven separate fee agreements with three different private firms.76 The court in Lead Industries expressly noted “the sheer number of parties and the complexity of issues involved” in the litigation.77 However, in-house civil service lawyers are not experts in specialized fields like complex public nuisance suits.78 Indeed, a contingent fee arrangement is attractive in part because it allows a public entity to hire specialists without the expense of training them or paying their salaries. Under the reasoning of cases like Santa Clara and Lead Industries, inexpert government lawyers are charged with retaining “complete control over the course and conduct of the case,”78 including all of the discretionary and strategic decisions that are daily made by specialized outside counsel–that is, by counsel who were hired specifically because of their greater expertise in directing the course and conduct of such cases. Thus, outside counsel has the opportunity (and, indeed, the motive and perhaps the obligation) to take advantage of this differential in expertise and steer the case in a way that may not serve the public interest. Even if the senior member of the government agency who is “personally involved in all stages of the litigation”79 has a modicum of expertise in the field of law involved, the sheer size of these litigations necessitates that many significant discretionary decisions will be made by contingent-fee attorneys without effective supervision. Although some might dismiss these everyday decisions as irrelevant,80 the United States Supreme Court has recognized their importance, noting (in the context of a criminal prosecution) that litigation “contains a myriad of occasions for the exercise of discretion, each of which goes to shape the record in a case, but few of which are part of the record.”81 These decisions, which incrementally determine the course of the case, therefore become unreviewable by a court, which can neither micromanage litigations of this size nor review aspects of the litigation that are not part of the record.82
As one recent appellate brief explains:
To determine the public entities’ level of control over their private counsel, the trial court—at a minimum—would have to examine how decisions were made, the reason for those decisions, who made them, what information was provided to make those decisions, who gathered that information, and whether the information was complete and sufficient to make fair decisions. These inquiries would involve specific subjects like private counsel’s solicitation of the government, who developed the legal theories and chose which defendants to sue, who decided that the relief requested best served the public interest, whether the governments have been advised of the risks of pursuing public nuisance litigation, and the number and types of meetings between private counsel and the government. Every discovery response, deposition, brief, and argument would have to be examined. The trial court, in effect, would be an ombudsman reviewing every decision to determine whether control has been satisfied. The Court of Appeal never addressed how trial courts are supposed to sift through these on-the-ground, real issues that would inevitably arise if its opinion were to become prevailing law.”83
Oddly, the Santa Clara court indicates that the defendant has a responsibility to police the relationship between the government and its contingent fee counsel. Asserting “[t]he record before us contains absolutely no evidence that private counsel have ever engaged in any conduct that invaded the sphere of control exercised by the public entities’ in-house counsel,”84 the Court of Appeal then states in a footnote that if the companies “acquire evidence that the private attorneys are improperly exercising control over th[e] action,” they will “no doubt . . . seek disqualification of the . . . private attorneys. . . .”85 Such evidence would be exceedingly difficult, if not impossible, to come by, however, because communication of any information indicating a lack of proper control would likely be protected by the attorney-client privilege and/or the work product privilege.
A further obstacle to implementing the “control” exception is the extent to which the information needed to determine the level of government control is privileged.
The attorney-client privilege “exempt[s] confidential discussions between lawyer and client from disclosure ‘to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.’”86 Although subject to some limitations,87 the privilege has generally been available to government clients, especially in the civil context.88 Insofar as a public entity (including its in-house lawyers) is the “client” of the contingent-fee attorney, the privilege would protect communications between them made for the purpose of procuring or providing legal advice.89 Thus, the privilege would necessarily shield from discovery communications illustrating or embodying the government attorney’s supervision, or lack thereof, over the private attorney’s decisions regarding litigation strategy.
Similarly, the work-product privilege would also protect many of the communications between contingency fee counsel and the public entity client. The work product privilege is a qualified immunity from the discovery of documents and tangible things prepared in anticipation of litigation by or for a party or that party’s representative.90 It can be overcome by a showing by the adverse party that it has substantial need for the materials and is unable without undue hardship to obtain equivalent materials by another means.91 This privilege, too, has been extended to lawyers representing public entities.92 Because public entities propose to hire contingent fee counsel specifically to conduct litigation on their behalf, the bulk of documents reflecting or embodying communications between and among the plaintiffs’ attorneys will be protected from discovery by the privilege. Even if the adverse party makes the requisite showing of substantial need and undue hardship, to the extent that these documents reflect the “mental impressions, conclusions, opinions, or legal theories” of the attorneys, they are still protected.93
4. Comparing the “Control” Exception to Standards For Disqualification in Criminal Cases
In California, proponents of the “control” theory have sought support for their position in the standards governing disqualification of prosecutors in criminal cases.
Under California Penal Code section 1424 “a mere appearance of impropriety [does] not itself suffice [to disqualify a prosecutor in a criminal case]; the statutory standard focuses instead on the actual likelihood of unfair treatment.”94 Government plaintiffs in the California lead paint litigation95 contend that the standard for determining the propriety of government hiring outside contingent fee counsel to prosecute public nuisance actions should be no more stringent, and that contingent fee contracts therefore should be reviewed on a case by case basis and approved where, as a factual matter, local government exercises adequate control over outside counsel.96 However, these plaintiffs’ reliance on the Penal Code standards is questionable. When not constrained by the requirements of a statutory directive97, the California Supreme Court has adopted broad prophylactic rules for disqualification in both civil and criminal cases that are not dependent on a showing of actual prejudice. Thus, prior to the enactment of Penal Code section 1424, the California Supreme Court held that a prosecuting attorney is properly disqualified where “the attorney suffers a conflict of interest which might prejudice him against the accused and thereby affect, or appear to affect, his ability to impartially perform his discretionary function.”98 And, in the seminal Clancy decision, the California Supreme Court barred the use of contingent fee counsel in a “class of civil actions that demands the representative of the government to be absolutely neutral.”99
Moreover, even under the case-by-case standard of Penal Code section 1424, the California Supreme Court has suggested that a prosecutor should always be disqualified where he or she has a direct, pecuniary interest in the outcome of litigation. In People v Vasquez100, the California court recognized that, with regard to judicial disqualification there is a distinction between ‘matters of kinship [and] personal bias,’ which ‘seem generally to be matters of legislative discretion,’ and a judge’s ‘direct, personal, substantial, pecuniary interest in reaching a conclusion against ‘a defendant, which deprives the defendant of due process.”101 The court went on to recognize more generally that “pecuniary conflicts of interest on a judge’s or a prosecutor’s part pose a constitutionally more significant threat to a fair trial than do personal conflicts of interest ....’102 On the facts of the case before it in Vasquez, the California Supreme Court concluded that a prosecutor was not disqualified in part because ‘[n]either the Deputy District Attorney nor her supervisors had a direct, substantial interest in the outcome or conduct of the case separate from their proper interest in seeing justice done.”103
5. Conclusion
Clancy demands the government’s absolute neutrality in prosecuting public nuisance cases. But because the relationship between public and private counsel is shielded from effective oversight, neither analysis of the operative fee agreement or “case-by-case review of the factual circumstances surrounding the claimed conflict of interest”104 can guarantee the impartiality and neutrality of private counsel hired to litigate these cases. Instead, the most effective way to ensure the even-handed enforcement of the law is to return to reject the reasoning of recent cases cabining Clancy’s prohibition on contingent fee agreements in government sponsored public nuisance cases and return to its prophylactic rule.
The association representing the public prosecutors of California summarized the issue this way:
Permitting contingent fee attorneys to represent public law enforcement interests will necessarily and inevitably inject improper personal financial interests into the balancing process required in civil law enforcement cases and will undermine public confidence in the civil law enforcement justice system. . . . The participation of the contingent fee attorneys who have direct, personal, substantial pecuniary interests in a successful outcome of this case creates an actual conflict because of the influence such attorneys possess to steer the course of this litigation in particular directions. Just as important, that participation also creates an appearance of impropriety due to the lack of transparency which jeopardizes not only the confidence of the defendants that the government attorneys will exercise their discretion in an impartial fashion, but also jeopardizes the confidence of the judiciary and the public at large in such neutrality . . . . Thus it is impossible to understate the importance . . . of maintaining public confidence in the fair and impartial enforcement of key civil law enforcement statutes . . . . [C]ourt approval of contingent fee agreements in civil law enforcement cases giving contingent fee outside counsel direct, personal, and substantial financial stakes in the outcome of commercial cases will greatly undermine public confidence in the fair and equitable use of those statutes with disastrous consequences.”105
When public enforcement actions are at issue, regardless of whether the government has the legal authority to retain outside counsel, the fundamental public interest in a neutral and dispassionate prosecutor requires that the financial motivation of a contingent fee counsel must not be allowed to taint the prosecution of public nuisance claims. “The focus must be on whether the arrangement ‘might lead’ the layman to conclude that the appearance of impropriety exists. The emphasis is on perception of citizens, not that of litigants, their counsel or elected officials, because it is the citizen’s confidence that is at stake and it is the citizen’s resources which are at risk.”106
Resources:
1. Black’s Law Dictionary (8th ed. 2004) p. 338.
2. See, e.g., Butler v. Legro, 62 N.H. 350, 352 (1882) (voiding contingent fee agreement as “contrary to public justice and professional duty”).
3. David A. Dana, Public Interest and Private Lawyers: Toward a Normative Evaluation of Parens Patriae Litigation by Contingency Fee, 51 DePaul L. Rev. 315, 317-18 (2001).
4. Ross, The Honest Hour (Carolina Academic Press 1996)p. 242
5. Richard O. Faulk & John S. Gray, Alchemy in the Courtroom? The Transmutation of Public Nuisance Litigation, 2007 Mich. St. L. rev. 941, 968 (2007).
6. See People ex rel. Clancy v. Superior Court, 705 P.2d 347, 39 Cal.3d 740 (1985), discussed infra Section I. Although Clancy is binding only on California courts, it is the leading case dealing with the use of contingent fee arrangements for attorneys representing the government. See, e.g., State v. Lead Indus. Ass’n, 951 A.2d 428, 475 n.50 (R.I. 2008); Philip Morris, Inc. v. Glendening, 709 A.2d 1230, 1242 (Md. 1998).
7. Faulk & Gray. supra note 5, at 968.
8. Brief of Chamber of Commerce of the United States of America and The American Tort Reform Association as Amici Curiae Supporting REspondents/Real Parties at Interest at 11-12, County of Santa Clara v. Superior Court No. S163681 (Cal. filed Apr. 29, 2009) [hereinafter Chamber Brief].
9. See City of San Francisco v. Philip Morris, Inc., 957 F. Supp. 1130 (N.D. Cal. 1997) ("This Lawsuite which is basically a fraud action, does not raise concerns analogous to those in the public nuisance or eminent domain contexts discussed in Clancy
10. Faulk & Gray, supra note5, at 972. See Lester Brickman. Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 39-42 (1989) (discussing cases barring contingency fee agreements).
11. Martin H. Redish, Private Contingent Fee Lawyers and Public Power: Constitutional and Political Implications, Northwestern Law Research Roundtable on Expansion of Liability Under Public Nuisance 4-5 (2008) , available at http://www.law.northwestern.edu/searlecenter/papers/Redish_revised.pdf (last visited May 26, 2009 ).
12. Berger v. United States, 295 U.S. 78, 88 (1935).
13. See Bruce A. Green, Must Government Lawyers “Seek Justice” in Civil Litigation?, 9 Widener J. Pub. L. 235, 279 (2000) (“It is well established that government lawyers must “seek justice” in criminal cases.”).
14. See, e.g., Bruce A. Green & Fred C. Zacharias, Prosecutorial Neutrality, 2004 Wisc. L. Rev. 837, 849 (2004) (discussing “well-accepted aspect[s]” of prosecutorial neutrality).
20. Id. at 805. See John D. Bessler, The Public Interest and the Unconstitutionality of Private Prosecutors, 47 Ark. L. Rev. 511, 590 (1994) ( “A private prosecutor, who is being paid handsomely to convict someone, cannot also, without at least some subtle bias, fairly represent the interests of that person and consider the ‘public interest’ in treating that person justly.”) .
24. Clancy, 705 P.2d at 352, 39 Cal.3d at 748 (citing F.B. MacKinnon, Contingent fees for legal services 52 (1964)).
25: Opening Brief on the Merits of the Sherwin-Williams Co. at 51-52, filed in County of Santa Clara v. Superior Court, No. S163681 (Cal. filed Oct. 6, 2008) [hereinafter Sherwin- Williams Opening Brief on the Merits].
27. See Freeport-McMoRan Oil & Gas Co. v. Fed. Energy Regulatory Comm’n, 962 F.2d 45, 47 (D.C. Cir. 1992).
28. Green, supra note 10, at 279.
29. Clancy, 705 P.2d at 351, 39 Cal. 3d at 746.
30. Id. at 351, 39 Cal. 3d. at 747.
31. Id. at 352, 39 Cal. 3d. at 749.
32. Id. at 352- 53, 39 Cal. 3d. at 749.
33. Id. at 353, 39 Cal. 3d. at 750.
34. See, e.g., Public Entity Plaintiffs’ Answering Brief at 19-22, County of Santa Clara v. Superior Court, No. S163681 (Cal. Jan. 21, 2009).
35. Hollywood v. Superior Court, 43 Cal. 4th 721, 734 (2008).
36. U.S. ex rel. Marcus v. Hess, 317 U.S. 537, 560 (1943) (Jackson, J., dissenting).
37. See, e.g., Gantler v. Stephens, 965 A.2d 695, 705-06 (Del. 2009); Tritek Telecom, Inc. v. Superior Court, 169 Cal. App. 4th 1385, 1390; Lippman v. Shaffer, 15 Misc. 3d 705, 710-11 (N.Y. Sup. Ct. 2006).
38. Marx v. Akers, 88 N.Y.2d 189, 202 (1996); see also Pfeffer v. Redstone, 965 A.2d 676, 690 (Del. 2009).
39. Klistoff v. Superior Court, 157 Cal. App. 4th 469, 480 (2007).
40. Sherwin-Williams Opening Brief on the Merits, supra note ___, at 29-30.
41. Peter Eggenberger, License to Bill = License to Kill? Ethical Considerations on Lawyers’ Fees (w ith a View to Switzerland) 20 Penn St. Int’l L. Rev. 505, 519-20 (2002) (emphasis added). Because of this conflict, contingent fee contracts have been banned in divorce cases. See, e.g., McCraw v. McCrary, 764 P.2d 522, 525 (Okla. 1988) ( “ Public policy encourages reconciliation between the parties. A contingency fee arrangement, based on the amount recovered in a divorce case, gives the attorney a personal interest in the litigation thus serving as an impediment to reconciliation.” ) .
42. Dana, supra note 3, at 325; see also Howard M. Erichson, Doing Good, Doing Well, 57 Vand. L. Rev. 2087, 2103 (2004) (“Whether by adjudication or settlement, there may be questions of whether to pursue injunctive relief, money damages, or both. A person committed to the cause may give greater weight to injunctive remedies. A person seeking to maximize monetary recovery may give less weight to injunctive remedies or, in a class action or other context requiring court approval, may even prefer to include illusory injunctive remedies combined with significant money damages.”)
43. Dana, supra note 3, at 323.
44. Brief of National Paint & Coatings Ass’n as Amicus Curiae Supporting Defendants/Real Party in Interest at 25-26 , County of Santa Clara v. Superior Court, No. S163681 (Cal. filed Apr. 28, 2009 ).
45. New Mexico v. Gen. Elec. Co., 322 F. Supp. 2d 1237, 1259 C.D. N.M. 2004), aff’d, 467 F.3d 1223 (10th Cir. 2006) (emphasis in original) ; see also id. at 1261 (indicating the state attorney general and its contingent fee counsel “sought to maximize the dollar amount of their damages award, largely unconstrained by practical considerations.”).
46. Dana, supra note 3, at 320 n.8.
47. Chamber Brief, supra note ___, at 30; see Donald G. Gifford, Impersonating the Legislature: State Attorneys General and Parens Patriae Product Litigation, 49 B. C. L. Rev. 913, 921 (2008) ( “[M]ost often, the power shift is not simply one between two elected branches of government . . . . Instead, public policy decisions regarding which public health and safety crise s to address and who should be held financially accountable for these matters have been functionally delegated to a small handful of mass products plaintiffs’ lawyers who specialize in litigation brought by states and municipalities against products manufacturers.”) .
48. John C. Coffee, Jr., “When Smoke Gets in Your Eyes”: Myth and Reality about the Synthesis of Private Counsel and Public Client, 51 DePaul L. Rev. 241, 251 (2001).
49. Dana, supra note 3, at 320 n.8. See also Howard M. Erichson, Coattail Class Actions: Reflections on Microsoft, Tobacco, and the Mixing of Public and Private Lawyering in Mass Litigation, 34 U.C. Davis L. Rev. 1, 39 (2000) ( “[G]overnment checks and balances depend largely on purse strings, and contingent fees make those purse-strings disappear or at least put the strings beyond the reach of the legislative branch. . . . Contingent fees allow the [public prosecutors] to pursue litigation without worrying about the budget, and thus without the immediacy of budget-based political accountability.”)
50. Faulk & Gray, supra note 5, at 968.
51. Coffee, Jr., supra note 31, at 243.
52. Mark A. Behrens & Andrew W. Crouse, The Evolving Civil Justice Reform Movement: Procedural Reforms Have Gained Steam, but Critics Still Focus on Arguments of the Past, 31 U. Dayton L. Rev. 173, 180-81 (2006).
53. See Tumey v. Ohio, 273 U.S. 510, 523 (1927) (“[I]t certainly violates the Fourteenth Amendment and deprives a defendant in a criminal case of due process of law to subject his liberty or property to the judgment of a court, the judge of which has a direct, personal, substantial pecuniary interest in reaching a conclusion against him in his case.”); Marshall v. Jerrico, Inc., 446 U.S. 238, 249 - 50 (1980) (“A scheme injecting a personal interest, financial or otherwise, into the enforcement process may bring irrelevant or impermissible factors into the prosecutorial decision and in some contexts raise serious constitutional questions.”); see also People v. Vasquez, 39 Cal. 4th 47, 64 (2006) (“[P]ecuniary conflicts of interest on a judge’ s or prosecutor’ s part pose a constitutionally more significant threat to a fair trial than do personal conflicts of interest . . . .” ).
54. David Edward Dahlquist, Inherent Conflict: A Case Against the Use of Contingency Fees by Special Assistants in Quasi-Governmental Prosecutorial Roles, 50 DePaul L. Rev. 743, 784 (2000). See Dana supra note 3, at 326 (“‘[I]t is hard to imagine contingency fee lawyers advocating to drop a case, as doing so would leave them without any compensation for their work.’” ); Faulk & Gray, supra note 5, at 973-74 (“It certainly makes sense that an attorney cannot guarantee neutrality in a case in which he will not be paid unless he wins.”).
55. Chamber Brief, supra note ___, at 29-30.
56. Clancy, 705 P.2d at 352, 39 Cal. 3d at 748.
57. 74 Cal. Rptr. 3d 842 (Cal. Ct. App. 2008) (review granted).
58. See John H. Sullivan, Ruling Ignores the Necessity of Impartiality in Government, S.F. Daily J., April 18, 2008 (“Pity a judge having to determine what’s really going on, as Justice Patricia Bamattre-Manoukian in her concurring opinion proposes be done. She would have the agreements plus ‘ the factual circumstances ’ and ‘ the conduct of the plaintiff’s counsel ’ be among the ‘ many important factors in each case ’ that courts should henceforth analyze when approval of contingency fee agreements come before them. And come before them they will- in droves, once the contingency fee bar seizes the financial opportunities that lay in a new block of government clients.” ).
59. Order Regarding Defendants’ Motion to Bar Payment Of Contingent Fees To Private Attorneys, April 14, 2007, County of Santa Clara v. Atlantic Richfield Company , Santa Clara County Superior Court Case No. 1-00-CV-788657.
60. Santa Clara, 74 Cal. Rptr. 3d a t 848.
61. Id. at 850. The Court of Appeal found a basis for this “control” exception in the Clancy court’s citation of Sedelbauer v. State, 455 N.E.2d 1159 (Ind. App. 1983), where the trial court allowed a private attorney from an anti-pornography citizens’ group to serve pro hac vice as counsel to appear with and aid the State’s attorney in prosecuting charges of distributing obscene matter. The Indiana court held that retention of the private attorney was within the inherent power of the prosecuting attorney to appoint attorneys to assist in the trial of criminal cases because the private attorney appeared with and not in place of the government attorney.
Because Sedelbauer is not a contingent fee case, it does not address the limits on government retention of private attorneys to prosecute public enforcement actions on a basis that gives the attorneys a financial interest in the outcome of the litigation. Sedelbauer therefore provides no support for the “control” exception announced in the Santa Clara decision.
62. Id. at 850 (“[T]he binding authority of Clancy is limited to the facts upon which the California Supreme Court rested its holding.”).
68. No. 2:04-cv-00149-GEB-DAD, 2007 WL 4166238 (E.D. Cal. Nov. 20, 2007).
70. No. C2-06-829, 2007 WL 2079774 (S.D. Ohio July 18, 2007).
72. Clancy, 705 P. 2d at 351, 39 Cal. 3d at 747.
74. People v. Superior Court (Greer), 19 Cal. 3d 255, 266 (1977) (quoting Berger, 295 U.S. at 88).
75. Dana supra note 3, at 329.
76. See Santa Clara, 74 Cal. Rptr.3d at 844 n.1, 849 nn.7 & 9.
77. Lead Indus., 951 A2.d at 435.
78. See Coffee, Jr., supra note 31, at 250 (stating that government agencies should not handle similar complex matters “on an in-house basis with civil service lawyers who lack the requisite prior experience in a specialized field”).
79. L ead In dus., 951 A.2d at 477.
81. See Santa Clara, 74 Cal. Rptr. 3d at 861 (Bamattre-Manoukian, J., concurring) (distinguishing “the consequences of discretionary decision making” from “the details of each decision”).
82. Young, supra note 12, at 813 ( plurality opinion).
83. Redish, supra note ___, at 5 (“Actual impropriety in a specific instance will generally be difficult to unearth. Indeed, it is quite conceivable that the government attorney herself would be unaware of the impact of the motivational twist on her behavior. It is for that reason we generally establish prophylactic rules to ensure adherence to the public interest by our government officers”), (emphasis in original).
84. Sherwin- Williams Opening Brief on the Merits, supra note ___, at 34-35.. Santa Clara, 74 Cal. Rptr. 3d at 853.
86. Adam M. Chud, Note, In Defense of the Government Attorney-Client Privilege, 84 Cornell L. Rev. 1682, 1688-89 (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)).
87. See, e.g., In re A Witness Before the Special Grand Jury 2000-2, 288 F.3d 289 (7th Cir. 2002) (holding attorney-client privilege cannot be used to shield communications between a state governmental lawyer and a state officeholder in the face of a grand jury subpoena); In re Lindsey, 158 F.3d 1263 (D.C. Cir. 1998) (holding attorney in Office of the President may not refuse based on the attorney-client privilege to answer questions before a grand jury about possible criminal conduct by government officials); In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910 (8th Cir. 1997) (holding the White House could not invoke any form of governmental attorney-client privilege to withhold potentially relevant information from a grand jury).95
88. See In re Witness, 288 F.3d at 291 (“[A]t least in the civil and regulatory context, the government is entitled to the same attorney-client privilege as any other client.”).
89. See 1 Paul R. Rice, Attorney-Client Privilege in the United States § 4:28 (“When government agencies consult with legal counsel for the purpose of obtaining legal advice or assistance (regardless of whether it be in-house agency counsel, attorneys from the Department of Justice, or outside counsel) the attorney-client privilege protects its communications to those attorneys.”).
90. See, e.g., Hickman v. Taylor, 329 U.S. 495, 510-11 (1947); 23 Am. Jur. 2d Depositions & Discovery § 45 (2002).
91. 23 Am. Jur. 2d Depositions & Discovery.
92. See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 154 (1975) (“[T]he case law clearly makes the attorney’s work-product rule of Hickman v. Taylor . . . applicable to Government attorneys in litigation.”).
93. 23 Am. Jur. 2d Depositions & Discovery.
94. People v Vasquez (2006) 39 Cal.4th 47, 69; see People v Eubanks (1996) 14 Cal.4th 580, 592-593 [California Penal Code section 1424 “does not allow disqualification merely because [the prosecutor’s] further participation . . . would be unseemly, would appear improper, or would tend to reduce public confidence in the impartiality and integrity of the criminal justice system . . . . Because the enactment of section 1424 eliminated the appearance of impropriety as an independent ground for prosecutorial disqualification, . . . review of [a] recusal order . . . must focus on whether [the prosecutor’s action] created . . . the actual likelihood of prejudice . . . rather than . . . whether [the prosecutor’s action] would . . . be ‘unseemly’ or create ‘the perception of improper influence’”].)
95. County of Santa Clara, et al. v. Superior Court of the State of California No. S163681.
96. See, e.g., Public Entity Plaintiffs’ Response to Amicus Briefs, pp. 20, 24.
97. See generally Hollywood v. Superior Court (2008) 43 Cal.4th 721, 735 [in Penal Code section 1424, “[t]he Legislature has closely defined the limits of judicial authority to recuse prosecutors, and we must observe them”].
98. People v. Superior Court (Greer) (1977) 19 Cal.3d 255, 269.
99. People ex rel. Clancy v Superior Court (1985) 39 Cal.3d 740, 748.
101. Id. at p. 63. See generally Caperton, et al. v. A. T. Massey Coal Co., Inc. ___U.S. ___ (June 8, 2009), slip op., p. 13 [“the Due Process Clause has been implemented by objective standards that do not require proof of actual bias”].
102. Id. at p. 64, emphasis added.
104. Santa Clara, 74 Cal. Rptr. 3d at 858 (Bamattre-Manoukian, J., concurring).
105. Brief of California District Attorneys Ass’n as Amicus Curiae at 3, 26, 36, County of Santa Clara v. Superior Court, No. S163681 (Cal. filed Apr. 27, 2009).
106. Brief of Public Nuisance Fairness Coalition et al., as Amici Curiae Supporting Respondent at 19, County of Santa Clara v. Superior Court of Santa Clara County, No. S163681 (Cal. filed Apr. 28, 2009) (emphasis in original).
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