Attorneys general do not operate in a vacuum and are very often not the only parties on their side of a case. With the realities of state budget reductions and the increased scope of the matters that attorneys general address, it is not surprising that attorneys general are often offered assistance by private litigants and their lawyers sometimes on a contingency basis.
This Chapter explores the legal and ethical issues that arise from this practice.
The readings are grouped into two categories, e.g. retention of plaintiff counsel and retention of defense counsel.
With the certification of private class action cases becoming more and more difficult, private class counsel often seek to be retained by attorneys general to pursue consumer, antitrust and qui tam matters.
This practice is strongly opposed by business organizations such as the U.S. Chamber of Commerce and there has been substantial litigation on whether attorneys general are legally allowed to retain contingent counsel.
Supreme Court of Rhode Island.
Neil Kelly, John McConnell, Fidelma Fitzpatrick, Genevieve Allaire-Johnson, James Lee, Providence, for Plaintiff.7
John A. MacFadyen, III, Donald Scott, Pro Hac Vice, Joseph Cavanagh, Laura Ellsworth, Pro Hac Vice, Paul M. Pohl, Pro Hac Vice, Thomas Bender, William Kayatta, Pro Hac Vice, John Tarantino, for Defendants.8
Present: WILLIAMS, C.J., FLAHERTY, SUTTELL, and ROBINSON, JJ.10
Addressing the issues seriatim for a unanimous Court, Chief Justice Williams authored Tracks I and II and Associate Justices Suttell, Flaherty, and Robinson authored Tracks III, IV, and V, respectively. In this landmark lawsuit, filed in 1999, the then Attorney General, on behalf of the State of Rhode Island (the state), filed suit against various former lead pigment manufacturers and the Lead Industries Association (LIA), a national trade association of lead producers formed in 1928.12
After the first trial resulted in a mistrial, a second trial commenced; that second trial, spanning four months, became the longest civil jury trial in the state's history. This monumental lawsuit marked the first time in the United States that a trial resulted in a verdict that imposed liability on lead pigment manufacturers for creating a public nuisance.13
After a four-month trial, which concluded on February 22, 2006, a jury found defendant manufacturers, NL Industries, Inc. (formerly National Lead Co.) (NL), The Sherwin-Williams Co. (Sherwin-Williams), and Millennium Holdings LLC (Millennium) (collectively defendants), liable under a public nuisance theory. Both before and after the jury returned its verdict, the trial justice issued nineteen written decisions, ruling on a variety of pretrial, trial, and post-trial motions that both the state and defendants had filed. The defendants filed an appeal from the judgment entered against them. The state, for its part, appealed the judgment in favor of defendant Atlantic Richfield Co. (ARCO) and two contempt orders that had been entered against the Attorney General. In addition, in 2004, defendants had petitioned this Court for a writ of certiorari to review the issue of contingency fees. We issued the writ, but thereafter concluded that the matter was not then justiciable. See State v. Lead Industries Association, Inc., 898 A.2d 1234, 1235 (R.I.2006). The defendants have asked this Court to entertain that petition again. Finally, the state cross-appealed on the issue of compensatory damages.14
Because of the sheer number of parties and the complexity of issues involved in these appellate proceedings, this Court consolidated all the appeals filed with this Court and established a five-track procedure for the briefing of all pending appeals and cross-appeals. The five tracks are: (1) the individual liability appeals of defendants, Millennium, NL, and Sherwin-Williams, from the judgment of abatement in favor of the state; (2) the state's cross-appeal on the issue of compensatory damages; (3) the state's appeal from the judgment in favor of ARCO and ARCO's conditional cross-appeal; (4) the state and the Attorney General's appeal of contempt orders entered in December 2005 and June 2006 against the state Attorney General; and (5) the issue of the propriety of the state's entering into a contingency fee agreement with private counsel to prosecute the public nuisance action, which issue is before us pursuant to our issuance of a writ of certiorari. This Court heard oral arguments on each appeal on May 15, 2008. This opinion addresses the issues seriatim.16
Chief Justice WILLIAMS, for the Court.20
On appeal from, inter alia, the trial justice's denial of their motion to dismiss, their renewed motion for judgment as a matter of law, and their alternative motion for a new trial, defendants, Millennium, NL, and Sherwin-Williams, argue that the trial justice erred by: (1) misapplying the law of public nuisance; (2) finding a causal connection between defendants' actions and lead poisoning in Rhode Island; and (3) failing to hold that this action is barred by the constitutional provision concerning separation of powers. In addition, defendants direct this Court's attention to a variety of alleged errors occurring at trial, some of which they contend amount to violations of both the United States and Rhode Island constitutions. For the reasons set forth herein, we reverse the judgment of the Superior Court as to the liability of defendants, Millennium, NL, and Sherwin-Williams, because we conclude that the trial justice erred by denying defendants' motion to dismiss. More specifically, we conclude that the state has not and cannot allege any set of facts to support its public nuisance claim that would establish that defendants interfered with a public right or that defendants were in control of the lead pigment they, or their predecessors, manufactured at the time it caused harm to Rhode Island children.21
In reaching this conclusion, we do not mean to minimize the severity of the harm that thousands of children in RhodeIsland have suffered as a result of lead poisoning. Our hearts go out to those children whose lives forever have been changed by the poisonous presence of lead. But, however grave the problem of lead poisoning is in Rhode Island, public nuisance law simply does not provide a remedy for this harm. The state has not and cannot allege facts that would fall within the parameters of what would constitute public nuisance under Rhode Island law. As set forth more thoroughly herein, defendants were not in control of any lead pigment at the time the lead caused harm to children in Rhode Island, making defendants unable to abate the alleged nuisance, the standard remedy in a public nuisance action. Furthermore, the General Assembly has recognized defendants' lack of control and inability to abate the alleged nuisance because it has placed the burden on landlords and property owners to make their properties lead-safe.22
This Court is bound by the law and can provide justice only to the extent that the law allows. Law consists for the most part of enactments that the General Assembly provides to us, whereas justice extends farther. Justice is based on the relationship among people, but it must be based upon the rule of law. This Court is powerless to fashion independently a cause of action that would achieve the justice that these children deserve. United States Supreme Court Justice Benjamin N. Cardozo, a rightly revered student of the law, once summarized as follows the inherent limitations of the judicial role:23
"The judge, even when he is free, is still not wholly free. He is not to innovate at pleasure. He is not a knight-errant roaming at will in pursuit of his own ideal of beauty or of goodness. He is to draw his inspiration from consecrated principles. He is not to yield to spasmodic sentiment, to vague and unregulated benevolence. He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to `the primordial necessity of order in the social life.'" Benjamin N. Cardozo, The Nature of the Judicial Process 141 (1921) (quoting François Gény, Méthode d'Interprétation et Sources en droit privé positif, vol. II, p. 303, sec. 200, ed. 1919; transl. Modern Legal Philosophy Series).24
Likewise, in the words of United States Supreme Court Chief Justice John G. Roberts, Jr., "judges must be constantly aware that their role, while important, is limited. They do not have a commission to solve society's problems, as they see them, but simply to decide cases before them according to the rule of law." John G. Roberts, Jr., United States Senate Committee on the Judiciary Questionnaire 66, http:// www.nytimes.com/packages/pdf/politics/ 20050802roberts2.pdf) (August 2, 2005). In recognition of this philosophy, we consistently have adhered to "principles of judicial restraint [that] prevent [courts] from creating a cause of action for damages in all but the most extreme circumstances." Bandoni v. State, 715 A.2d 580, 595 (R.I.1998). Indeed, we long have held "that the creation of new causes of action is a legislative function." Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1226 (R.I.1996). After all, the judiciary's "duty [is] to determine the law, not to make the law." City of Pawtucket v. Sundlun, 662 A.2d 40, 57 (R.I.1995). "To do otherwise, even if based on sound policy and the best of intentions, would be to substitute our will for that of a body democratically elected by the citizens of this state and to overplay our proper role in the theater of Rhode Island government." DeSantis v. Prelle, 891 A.2d 873, 881 (R.I.2006).26
It is undisputed that lead poisoning constitutes a public health crisis that has plagued and continues to plague this country, particularly its children. The General Assembly has declared that although "[c]hildhood lead poisoning is completely preventable," G.L. 1956 § 23-24.6-2(3), it is "the most severe environmental health problem in Rhode Island." Section 23-24.6-3. Indeed, Providence has received the unfavorable nickname "the lead paint capital" because of its disproportionately large number of children with elevated blood-lead levels. Lead Industries Association, Inc., 898 A.2d at 1235 (quoting Peter B. Lord, Are lead-paint firms liable for damages?, The Providence Journal, June 18, 1999, at A-1).31
Lead is a toxic chemical that contributes to the "most common environmental disease of young children." Office of Lead-Based Paint Abatement and Poisoning Prevention, 61 Fed. Reg. 29170 (June 7, 1996) (quoting Strategic Plan for the Elimination of Lead Poisoning, Centers for Disease Control (CDC), U.S. Department of Health and Human Services, Atlanta, Georgia (1991)). There seems to be little public debate that exposure to lead can have a wide range of effects on a child's development and behavior. Contact with low levels of lead may lead to "permanent learning disabilities, reduced concentration and attentiveness and behavior problems, problems which may persist and adversely affect the child's chances for success in school and life." Section 23-24.6-2(1). The consequences are more injurious when children are exposed to higher lead levels. Office of Lead-Based Paint Abatement and Poisoning Prevention, 61 Fed. Reg. at 29170. Children exposed to elevated levels of lead can suffer from comas, convulsions, and even death. Id.35
Lead was widely used in residential paints in the United States until the mid-1970s. Id. at 29171. There is no doubt that lead-based paint is the primary source of childhood lead exposure. Id. (citing Preventing Lead Poisoning in Young Children, CDC, U.S. Department of Health and Human Services, Atlanta, Georgia (1991) and Rabinowitz, M. et al., Environmental Correlates of Infant Blood Lead Levels in Boston, Environmental Research 38: 96-107 (1985). In the United States, children most often are lead-poisoned by ingesting lead paint chips from deteriorating walls or inhaling lead-contaminated surface dust. Id.36
Children under six years of age are the most susceptible to lead poisoning for two primary reasons. First, children are more likely to encounter lead; young children spend a significant portion of their time on the floor, among the dust and chips of lead paint. Second, because they are young, children's growing bodies have a tendency to absorb more lead, and their brains and nervous systems are more sensitive to the lead.37
Most lead pigment manufacturers belonged to the LIA as early as 1928, but the length of each company's membership varied considerably. Sherwin-Williams discontinued its membership in 1947, whereas Millennium remained a member until 1960, and NL remained a member until 1982. At trial, the state offered the minutes of a December 12, 1930, LIA board of directors meeting, containing a section titled "Lead Poisoning." The minutes refer to a discussion of recent news articles concerning the dangers of lead-based paint, including an article in the November 20, 1930, edition of The United States Daily, which reported: "Lead poisoning as a result of chewing paint from toys, cradles and woodwork is now regarded as a more frequent occurrence among children than formerly." Lead-free paint on furniture and toys to protect children, The United States Daily, Nov. 20, 1930. The minutes implied doubt about the extent of the problem, but demonstrated emerging knowledge of the problem within the industry.39
Patricia A. Nolan, M.D., former director of the Rhode Island Department of Health (RIDOH), testified that from January 1993 to December 2004 at least 37,363 children in Rhode Island were poisoned by lead in paint. In 2004, a total of 1,685 children in Rhode Island were affected. Rhode Island Department of Health, Childhood Lead Poisoning in Rhode Island: The Numbers 2005 Edition 4, 19 (hereinafter The Numbers 2005). Of this number, almost 70 percent of the children (1,167) were newly poisoned in 2004. Id. Fortunately, the prevalence of lead poisoning in children under the age of six recently has declined. Id. In 2005, RIDOH reported a 76 percent decline in the number of lead-poisoned children — from 20.5 percent in 1995 to 5 percent in 2004. Id. However, despite this significant decrease in childhood lead poisonings, the 5 percent prevalence rate is more than double the national average of 2.2 percent. Id.44
In 1971, Congress recognized the prevalence of childhood lead poisonings and enacted chapter 63 of title 42 of the United States Code, the Lead-Based Paint Poisoning Prevention Act (LPPPA), a law aimed at studying the effects of childhood lead exposure and eliminating lead-based paint from federally owned or federally financed housing. Finally, in 1978, the Consumer Product Safety Commission banned the sale of residential paint containing more than 0.06 percent lead. See Ban of Lead-Containing Paint and Certain Consumer Products Bearing Lead-Containing Paints, 16 C.F.R. § 1303.1 (2008); see also Office of Lead-Based Paint Abatement and Poisoning Prevention, 61 Fed. Reg. at 29171.48
Rhode Island, with a housing stock of older homes, also has recognized the depth of this problem. In the early 1990s, the General Assembly began an investigation into childhood lead poisoning in Rhode Island. The General Assembly found that the "[e]nviromental exposure to even low levels of lead increase[s] a child's [health] risk," and that "[t]he most significant sources of environmental lead are lead-based paint in older housing and house dust and soil contaminated by this paint." Section 23-24.6-2(1), (2). It also found that "tens of thousands of Rhode Island's children are poisoned by lead at levels believed to be harmful," and that "[c]hildhood lead poisoning is dangerous to the public health, safety, and general welfare of the people and necessitates excessive and disproportionate expenditure of public funds for health care and special education, causing a drain upon public revenue." Section 23-24.6-2(4), (5).49
In response to these findings, in 1991 (P.L. 1991, ch. 355, § 1), the General Assembly enacted the Lead Poisoning Prevention Act (LPPA), chapter 24.6 of title 23, which required RIDOH to implement various programs, including statewide blood-screening programs, lead-poisoning prevention programs, and educational programs. Section 23-24.6-5(a). The LPPA's stated purpose was to establish "a comprehensive program to reduce exposure to environmental lead and prevent childhood lead poisoning, the most severe environmental health problem in Rhode Island." Section 22-24.6-3.50
To supplement this initiative, in 2002, the General Assembly later enacted the Lead Hazard Mitigation Act (LHMA) (P.L. 2002, ch. 187, § 3), G.L. 1956 chapter 128.1 of title 42, to help identify and correct lead hazards in this state. See Mackie v. State, 936 A.2d 588, 590 (R.I.2007). The LHMA imposed, inter alia, several duties on the owners of rental dwellings that were constructed prior to 1978, which included correcting lead hazards on their premises. Id. (citing § 42-128.1-8(a)). This Court upheld challenged provisions of the LHMA in 2007. Id. at 597 (concluding that provisions of the LHMA were constitutional because "the General Assembly rationally could have concluded that the legislation was one step toward resolving the problem of lead poisoning of children in Rhode Island").51
The General Assembly's programs for curtailing the incidence of lead poisoning in Rhode Island have been successful. Since the LPPA and LHMA have been in effect, Rhode Island has experienced a substantial decline in the number of lead-poisoned children. In 2004, Dr. Nolan acknowledged that since 1994, there has been a dramatic decrease in the incidence of lead poisoning among Rhode Island children. Rhode Island Department of Health, Childhood Lead Poisoning in Rhode Island: The Numbers 2004 Edition 1 (hereinafter The Numbers 2004). In fact, at trial, Dr. Nolan agreed that the progress has proven to be a "public health success story."52
RIDOH reported, in 2004, a number of accomplishments, highlighting five programs in particular. RIDOH implemented the Lead Elimination Surveillance System database, which increased the efficiency of collecting and analyzing data. The Numbers 2004 at 4. The Keep Your Baby Lead Safe program, an undertaking designed to reach pregnant women and facilitate access to a lead-safe home was enhanced, providing mothers-to-be with lead education as well as referrals to numerous community resources. Id. RIDOH also provided information and education to pregnant women, parents, physicians, and other professionals, enhanced case management through certified lead centers, and implemented the initial steps required by the LHMA. Id. at 4-5.53
The General Assembly's approach to Rhode Island's lead paint problem and RIDOH's promulgation of regulations aimed at reducing lead hazards have proven effective and, as a result, the entire state — including its "core cities"—has experienced substantial declines in lead poisoning. The Numbers 2005 at 15.55
On October 12, 1999, the Attorney General, on behalf of the state filed a ten-count complaint against eight former lead pigment manufacturers, John Doe corporations, and the LIA. The manufacturers were: NL, Sherwin-Williams, ARCO, The Glidden Company, The O'Brien Corporation, SCM Chemicals (SCM), American Cyanamid Company, and E.I. Du Pont de Nemours and Company. The state later amended its complaint to include the ConAgra Grocery Products Company. A second-amended complaint added Cytec Industries, Inc. and substituted Millennium Inorganic Chemicals, Inc. for SCM.59
The state alleged that the manufacturers or their predecessors-in-interest had manufactured, promoted, distributed, and sold lead pigment for use in residential paint, despite that they knew or should have known, since the early 1900s, that lead is hazardous to human health. The state also contended that the LIA was, in essence, a coconspirator or aider and abettor of one or more of the manufacturers from at least 1928 to the present. The state asserted that defendants failed to warn Rhode Islanders of the hazardous nature of lead and failed to adequately test lead pigment. In addition, the state maintained that defendants concealed these hazards from the public or misrepresented that they were safe. The state further alleged that defendants' actions caused it to incur substantial damages. As such, the state asserted, defendants were liable for public nuisance, violations of Rhode Island's Unfair Trade Practices and Consumer Protection Act, strict liability, negligence, negligent misrepresentation, fraudulent misrepresentation, civil conspiracy, unjust enrichment, and indemnity. The state also requested equitable relief to protect children in Rhode Island. The state sought compensatory and punitive damages, in addition to an order requiring defendants to (1) abate lead pigment in all Rhode Island buildings accessible to children and (2) fund educational and lead-poisoning prevention programs.60
In January 2000, defendants moved to dismiss all counts of the state's complaint pursuant to Rule 12(b)(6) of the Superior Court Rules of Civil Procedure. With respect to the public nuisance claim, defendants asserted that they did not control the lead pigment at the time it caused harm to Rhode Island children and that, therefore, they cannot be held liable for public nuisance. The defendants also argued that there was no interference with a public right, as that term has been recognized under public nuisance law. For its part, however, the state countered that the public nuisance claim was proper because defendants could be held liable regardless of whether they currently control the lead-poisoned properties. The state urged that defendants' participation in the creation of the nuisance should subject them to liability. The trial justice, agreeing with the state, denied defendants' motion.61
The trial justice dismissed several other counts and ordered that the case be tried in three phases. Eventually, only the state's public nuisance claim proceeded to trial. After a seven-week trial, however, the jury was deadlocked and the trial justice declared a mistrial.62
Before a second trial commenced, the state moved to strike defendants' demand for a jury trial, contending that its public nuisance claim was equitable in nature and that defendants had no right to a jury trial on that issue. At that time, the state voluntarily dismissed with prejudice all other non-equitable claims remaining in the case, including the following counts: strict liability, negligence, negligent misrepresentation, and fraudulent misrepresentation. The trial justice, however, denied the state's motion to strike the jury demand, concluding that the existence of a nuisance was a factual issue to be resolved by a jury and, further, that the state's demand for compensatory and punitive damages entitled defendants to a jury trial.63
Before trial, the state moved in limine to exclude all evidence and testimony with respect to the presence or absence of lead paint in any individual Rhode Island property; the trial justice granted this motion. In so ruling, the trial justice noted that "property specific evidence is irrelevant in connection with the issue of whether the cumulative effect of such pigment in all such buildings * * * was a public nuisance * * *."64
The defendants then moved for summary judgment with respect to the civil conspiracy count of the state's complaint. The trial justice granted defendants' motion, concluding that "civil conspiracy cannot stand in isolation," but rather, must be accompanied by an "underlying intentional tort theory." Because all the intentional tort theories had been dismissed, the trial justice concluded that it was proper to dismiss the civil conspiracy count as well.65
The defendants also moved for summary judgment on the basis that the state could not identify any specific defendant whose lead pigment is present in any Rhode Island property. To support their motion, defendants relied primarily on this Court's decision in Gorman v. Abbott Laboratories, 599 A.2d 1364, 1364 (R.I.1991) (mem.), in which this Court rejected the market-share theory of products liability that the California Supreme Court had adopted. The trial justice denied defendants' motion, stating that product identification is not a necessary element in a public nuisance suit. Rather, the trial justice ruled that the state "need only show that each defendant (or such defendants as it seeks to hold liable for the public nuisance here claimed) has engaged in activities which were a substantial factor in bringing about the alleged public nuisance and the injuries and harm found to have been proximately caused thereby."66
After these and other motions were dealt with, the second trial proceeded, this time against only four manufacturers — Millennium, NL, Sherwin-Williams, and ARCO.67
At trial, the state presented witnesses who offered historical evidence about the use of lead pigment in paint, the impact of childhood lead poisoning on Rhode Island, and defendants' conduct concerning lead pigment in paint.68
After the state rested, defendants moved immediately for judgment as a matter of law pursuant to Rule 50 of the Superior Court Rules of Civil Procedure. Their primary contention was that the state had failed to prove a sufficient nexus between defendants' activities and the presence of lead pigment in Rhode Island. After hearing the arguments of counsel, the trial justice granted defendants' motion with respect to the state's indemnification and unjust enrichment claims and its request for compensatory damages. The court reserved judgment, however, on whether the state had proven a sufficient nexus between defendants' activities and the presence of lead pigment in Rhode Island.69
The trial justice provided the jury with the law applicable to the case and instructed the jury to apply that law to the facts as it found them based on the evidence presented. First, the trial justice explained that the jury was being asked to determine "whether the cumulative presence of lead pigment in paints and coatings in or on buildings throughout the state of Rhode Island constitutes a public nuisance." He defined public nuisance as "something that unreasonably interferes with a right common to the general public. It is something that unreasonably interferes with the health, safety, peace, comfort or convenience of the general community." He further explained that the right common to the general public is collective in nature and belongs to the community at large. The trial justice then clarified that "an interference is an injury, invasion, disruption, or obstruction of a right held by the general public." He added that an interference "is unreasonable when persons have suffered harm or are threatened with injuries that they ought not have to bear."70
After providing the jury with a definition of public nuisance and detailing the elements, the trial justice also told the jury that if it found that a public nuisance exists, it then must determine whether defendants' actions were the proximate cause of the nuisance. He defined proximate cause as "a cause that in a natural, continuous, and unbroken sequence produces an event or injury and without which the event or injury would not have occurred."71
Lastly, the trial justice instructed the jury that if it concluded that the cumulative presence of lead pigment in paint is a public nuisance and that defendants are liable, it then must decide whether any defendants should abate the public nuisance. The trial justice provided the jury with written copies of the instructions.72
The jury began deliberations on February 14, 2006, and returned its verdict on February 22, 2006; it found that the "cumulative presence of lead pigment in paints and coatings on buildings throughout the State of Rhode Island" constituted a public nuisance. The jury further found that defendants, Millennium, NL, and Sherwin-Williams, were liable for causing or substantially contributing to the creation of the public nuisance. Lastly, the jury concluded that those three defendants "should be ordered to abate the public nuisance." The jury found that a fourth defendant, ARCO, was not liable.73
After the verdict, defendants renewed their motions for judgment as a matter of law pursuant to Rule 50 and moved alternatively for a new trial pursuant to Rule 59 of the Superior Court Rules of Civil Procedure. The trial justice denied both these motions. While these motions were pending, defendant Sherwin-Williams filed with the Superior Court supplemental motions pursuant to Rules 26(e), 59, 60(b)(2), and 60(b)(3) of the Superior Court Rules of Civil Procedure; defendants Millennium and NL joined in these motions. Again, the trial justice denied all of these motions.74
On March 16, 2007, the court entered a judgment of abatement in favor of the state against defendants, Millennium, NL, and Sherwin-Williams, from which they appeal.75
Additional facts will be provided as necessary.77
When reviewing a trial justice's decision on a Rule 12(b)(6) motion to dismiss, this Court applies the same standards as the trial justice and, accordingly, "must assume that the allegations contained in the complaint are true, and examine the facts in the light most favorable to the nonmoving party." A.F. Lusi Construction, Inc. v. Rhode Island Convention Center Authority, 934 A.2d 791, 795 (R.I. 2007) (internal quotation marks omitted). Like the trial justice, we will "examine the complaint to determine if plaintiffs are entitled to relief under any conceivable set of facts." Id.86
The defendants first argue that the trial justice erred in refusing to dismiss the public nuisance count set forth in the state's complaint. They also argue that the trial justice erred in denying their motion for judgment as a matter of law. The defendants contend that the public nuisance claim should have been dismissed at the outset—or, at the very least, that judgment as a matter of law should have been entered in their favor because suppliers of lead pigment cannot be held liable under a public nuisance theory for harm resulting from lead-based paint in Rhode Island. In addition, defendants argue that the trial justice erred when he instructed the jury on the law of public nuisance. We agree with defendants that the public nuisance claim should have been dismissed at the outset because the state has not and cannot allege that defendants' conduct interfered with a public right or that defendants were in control of lead pigment at the time it caused harm to children in Rhode Island. We reach this conclusion with a keen realization of how limited the judicial system often is. We believe that the following recent observation by this Court in another case is equally applicable to this case:90
"The American judicial system as it exists today is admirable: it is the product of many decades of fine-tuning of an already excellent substantive and procedural construct which this country took with it when it parted ways with England. Nevertheless, our judicial system is not a panacea that can satisfy everyone who has recourse to it. Some wrongs and injuries do not lend themselves to full redressment by the judicial system." Ryan v. Roman Catholic Bishop of Providence, 941 A.2d 174, 188 (R.I.2008).92
The definition of public nuisance and the description of the elements comprising this cause of action have been developed and refined by this Court over the years. Mindful of the admonition of United States Supreme Court Justice Oliver Wendell Holmes, Jr. that "[i]n order to know what [the law] is, we must know what it has been, and what it tends to become" as that is "necessary to the knowledge of what the law is," we begin our analysis by retracing the history of public nuisance at common law. Oliver Wendell Holmes, Jr., The Common Law 1, 37 (Dover ed., General Publishing Co., Ltd., 1991) (1881).96
Today, public nuisance and private nuisance are separate and distinct causes of action, but both torts are inextricably linked by their joint origin as a common writ, dating to twelfth-century English common law. See Richard O. Faulk and John S. Gray, Alchemy in the Courtroom? The Transmutation of Public Nuisance Litigation, 2007 Mich. St. L. Rev. 941, 951 (2007) (citing C.H.S. Fifoot, History and Sources of the Common Law: Tort and Contract 3-5 (1949)); Donald G. Gifford, Public Nuisance as a Mass Products Liability Tort, 71 U. Cin. L. Rev. 741, 790-91, 794 (2003)). In its earliest form, nuisance was a criminal writ used to prosecute individuals or require abatement of activities considered to "be `nocumentum iniuriousum propter communem et publicam utiliatem' — a nuisance by reason of the common and public welfare." Gifford, 71 U. Cin. L. Rev. at 793-94 (citing Henry de Bracton, 3 Bracton on the Laws and Customs of England 191, f. 232b (Samuel E. Thorne ed., 1977)). Public nuisance, or common nuisance as it originally was called, was "an infringement of the rights of the Crown." 4 Restatement (Second) Torts § 821B, cmt. a at 87 (1979). Although the earliest cases involved encroachments on the royal domain, public nuisance law evolved to include "the invasion of the rights of the public." Id.97
By the fourteenth century, courts began to apply public nuisance principles to protect rights common to the public, including "roadway safety, air and water pollution, disorderly conduct, and public health * * *." Faulk & Gray, 2007 Mich. St. L. Rev. at 951. Nuisance became a "flexible judicial remedy" that allowed courts to address conflicts between land use and social welfare at a time when government regulations had not yet made their debut. Id.98
It was not until the sixteenth century that the crime of public nuisance largely was transformed into the tort that is familiar in our courts today. Faulk & Gray, 2007 Mich. St. L. Rev. at 952. However, additional parameters were necessary to limit the reach of the new tort. A private party seeking to bring a public nuisance claim was required to demonstrate that he or she had "suffered a `particular' or `special' injury that was not common to the public." Id.; see also 4 Restatement (Second) Torts § 821B, cmt. a at 87-88 (explaining that public nuisance had remained a crime until the sixteenth century, when it first was determined that a private individual, suffering a particularized harm different in kind from that suffered by the public, had the right, in tort, to recover damages for his injury).99
Ultimately, "[a]t common law public nuisance came to cover a large, miscellaneous and diversified group of minor offenses * * *." 4 Restatement (Second) Torts § 821B, cmt. b at 40. Notably, all these offenses involved an "interference with the interests of the community at large—interests that were recognized as rights of the general public entitled to protection." Id.100
Public nuisance as it existed in English common law made its way to Colonial America without change. Faulk & Gray, 2007 Mich. St. L. Rev. at 953. In time, public nuisance became better known as a tort, and its criminal counterpart began to fade away in American jurisprudence. As state legislatures started enacting statutes prohibiting particular conduct and setting forth criminal penalties there was little need for the broad, vague, and anachronistic crime of nuisance. 4 Restatement (Second) Torts § 821B, cmt. c at 88.101
The criminal origins of public nuisance in Rhode Island still can be found in statutes designating certain criminal activities and the places in which they are conducted as "common nuisances." See, e.g., G.L. 1956 § 11-30-2 (defining the unlicensed manufacture or distribution of intoxicating liquor as a common nuisance); § 11-30-12 (defining slaughterhouses, rendering plants, garbage plants, and brick kilns as common nuisances if located within 300 feet of any public park or public hospital); § 11-30-13 (defining the burning of decaying and waste substances as a nuisance); G.L. 1956 § 21-28-4.06 (defining certain facilities used in the distribution of illegal drugs as common nuisances); G.L. 1956 § 41-5-20 (defining unauthorized boxing matches as common nuisances).103
As the law of public nuisance began to take hold in Rhode Island, it reflected the principle "so long ago laid down by Lord Holt, that `in every case where a statute enacts or prohibits a thing for the benefit of a person, he shall have a remedy upon the same statute for the thing enacted for his advantage, or for the recompense of the wrong done to him contrary to the said law.'" Aldrich v. Howard, 7 R.I. 199, 213 (1862) (quoting Couch v. Steel, 3 Ellis and Blackburn, (77 Eng. C.L.R.) 411). Some of Rhode Island's earliest cases involved activities designated as "common nuisances" by the General Assembly. Those cases recognized that "`a public nuisance becomes a private one to him who is specially and in some particular way inconvenienced thereby * * *.'" State v. Keeran, 5 R.I. 497, 511 (1858). See also State v. Paul, 5 R.I. 185, 194 (1858) (an action for abatement of a public nuisance may be brought "by those who are specially injured or obstructed").107
In Rhode Island, actions to abate public nuisances originally were brought in the form of an indictment. Keeran, 5 R.I. at 511; Paul, 5 R.I. at 194. Today, the state Attorney General is empowered to bring actions to abate public nuisances. See G.L. 1956 § 42-9-2 (vesting the Attorney General with the power to commence a public nuisance suit) and G.L. 1956 § 10-1-1 (providing that "[w]henever a nuisance is alleged to exist, the attorney general * * * may bring an action in the name of the state * * * to abate the nuisance").108
Public nuisance long has been recognized as a legally viable cause of action in Rhode Island. See J.S. Thornton & Co. v. Smith Grant & Co., 10 R.I. 477, 483 (1873) ("The law [of public nuisance] as declared in the English cases has been recognized by the courts of this country * * *."). Over centuries, this Court has taken careful steps to refine the common law definition of public nuisance to reflect societal changes. We are cognizant of the fact that the common law is a knowable judicial corpus and, as such, serves the important social value of stability; although the common law does evolve, that evolution takes place gradually and incrementally and usually in a direction that can be predicted. See Wheaton v. Peters, 33 U.S. (8 Peters) 591, 671, 8 L.Ed. 1055 (1834) ("[a] great proportion of the rules and maxims which constitute the immense code of the common law, grew into use by gradual adoption"); see also John T. Loughran, Some Reflections on the Role of Judicial Precedent, 22 Fordham L. Rev. 1, 3 (1953) (noting that "[t]he common law has been able to maintain its preeminent place over the centuries because of its stability and its inherent capacity for keeping pace with the demands of an ever-changing and ever-growing civilization"). In so evolving, the law reflects, inter alia, the "felt necessities of the time, the prevalent moral and political theories, [and the] intuitions of public policy * * *." Holmes, The Common Law at 1. Although we recognize the need for such incremental changes, like most courts, we are "particularly loath to indulge in the abrupt abandonment of settled principles and distinctions that have been carefully developed over the years." Loughran, 22 Fordham L. Rev. at 8.109
This Court has defined public nuisance as "an unreasonable interference with a right common to the general public." Citizens for Preservation of Waterman Lake v. Davis, 420 A.2d 53, 59 (R.I. 1980). See also Hydro-Manufacturing, Inc. v. Kayser-Roth Corp., 640 A.2d 950, 957 (R.I.1994). "[I]t is behavior that unreasonably interferes with the health, safety, peace, comfort or convenience of the general community." Citizens for Preservation of Waterman Lake, 420 A.2d at 59 (citing Copart Industries, Inc. v. Consolidated Edison Company of New York, 41 N.Y.2d 564, 394 N.Y.S.2d 169, 362 N.E.2d 968, 971 (1977)). Put another way, "public nuisance is an act or omission which obstructs or causes inconvenience or damage to the public in the exercise of rights common to all." Iafrate v. Ramsden, 96 R.I. 216, 222, 190 A.2d 473, 476 (1963) (citing Prosser, Torts, ch. 14, § 71 at 401 (2d ed. 1955)).110
Although this Court previously has not had the opportunity to address all the elements of public nuisance, to the extent that we have addressed this common law cause of action, our definition largely is consistent with that of many other jurisdictions, the Restatement (Second) of Torts, and several scholarly commentators.111
The Restatement (Second) defines public nuisance, in relevant part, as follows:112
"(1) A public nuisance is an unreasonable interference with a right common to the general public.113
"(2) Circumstances that may sustain a holding that an interference with a public right is unreasonable include the following:114
"(a) Whether the conduct involves a significant interference with the public health, the public safety, the public peace, the public comfort or the public convenience * * *." 4 Restatement (Second) Torts § 821B at 87.115
The Supreme Court of New Jersey, considering facts that were virtually identical to those in this case, elaborated on the necessary elements to maintain a public nuisance action. In that case, the New Jersey court held:116
"First, a public nuisance, by definition, is related to conduct, performed in a location within the actor's control, which has an adverse effect on a common right. Second, a private party who has suffered special injury may seek to recover damages to the extent of the special injury and, by extension, may also seek to abate. Third, a public entity which proceeds against the one in control of the nuisance may only seek to abate, at the expense of the one in control of the nuisance. These time-honored elements of the tort of public nuisance must be our guide in our consideration of whether these complaints have stated such a claim." In re Lead Paint Litigation, 191 N.J. 405, 924 A.2d 484, 499 (2007).117
This Court recognizes three principal elements that are essential to establish public nuisance: (1) an unreasonable interference; (2) with a right common to the general public; (3) by a person or people with control over the instrumentality alleged to have created the nuisance when the damage occurred. After establishing the presence of the three elements of public nuisance, one must then determine whether the defendant caused the public nuisance. We will address each element in turn.119
Whether an interference with a public right is unreasonable will depend upon the activity in question and the magnitude of the interference it creates. Activities carried out in violation of state laws or local ordinances generally have been considered unreasonable if they interfere with a public right. See, e.g., Pucci v. Algiere, 106 R.I. 411, 426-27, 261 A.2d 1, 10 (1970) (dilapidated structure in violation of local ordinance); Aldrich, 7 R.I. at 213-14 (wooden building in violation of state statute). Activities that do not violate the law but that nonetheless create a substantial and continuing interference with a public right also generally have been considered unreasonable. See, e.g., Wood v. Picillo, 443 A.2d 1244, 1245-48 (R.I.1982) (chemical dump that emitted noxious odors and eventually caught fire, causing multiple explosions and groundwater contamination); Lapre v. Kane, 69 R.I. 504, 507-09, 36 A.2d 92, 94-95 (1944) (swine operation that emitted noxious odors and required that large quantities of "swill" be transported and dumped onto property); Braun v. Iannotti, 54 R.I. 469, 469-70, 175 A. 656, 657 (1934) (greenhouse that continually emitted smoke); Blomen v. N. Barstow Co., 35 R.I. 198, 199-200, 211, 85 A. 924, 924-25 (1913) ("drop or hammer" that caused noise and vibration that could be felt at some distance). The plaintiff bears the burden of showing that a legal activity is unreasonable. Citizens for Preservation of Waterman Lake, 420 A.2d at 59.123
In public nuisance law, as in other areas of the law, what is reasonable vel non is not determined by a simple formula. Cf., e.g., State v. Thomas, 936 A.2d 1278, 1284 (R.I.2007) (in the Fourth Amendment context reasonableness is determined "in light of the facts and circumstances confronting [the officer]") (quoting Graham v. Connor, 490 U.S. 386, 397, 109 S.Ct. 1865, 104 L.Ed.2d 443 (1989)); State v. Quinlan, 921 A.2d 96, 108 (R.I.2007) (in the search and seizure context "[t]he question of reasonableness is fact specific"); In re Diamond Y., 915 A.2d 1283, 1287 (R.I.2007) (in the parental rights context "[the] reasonableness determination is made on a case-by-case basis").125
A respected legal authority has identified "[t]he interference with a public right [as] the sine qua non of a cause of action for public nuisance." 58 Am.Jur.2d Nuisances § 39 at 598-99 (2002) (emphasis added). This Court also has emphasized the requirement that "the nuisance must affect an interest common to the general public, rather than peculiar to one individual, or several." Iafrate, 96 R.I. at 222, 190 A.2d at 476 (quoting Prosser, Torts, ch. 14, § 72 at 402). See also Hydro-Manufacturing, Inc., 640 A.2d at 957 ("public nuisance is an `unreasonable interference with a right common to the general public'"); Citizens for Preservation of Waterman Lake, 420 A.2d at 59 ("A public nuisance is an unreasonable interference with a right common to the general public * * *."); Lapre, 69 R.I. at 509, 36 A.2d at 95 (an "injury to the public generally" may constitute a public nuisance); Narragansett Real Estate Co. v. Mackenzie, 34 R.I. 103, 123, 82 A. 804, 810-11 (1912) (explaining that a public nuisance would require interference with the public's right to navigate public waterways). This is not to say that public nuisance only is actionable if it occurs on public property. Rather, public nuisance is actionable even when the nuisance itself is present on private property, so long as the alleged nuisance affects the rights of the general public. See, e.g., Braun, 54 R.I. at 469-70, 175 A. at 657 (greenhouse on private property could constitute a public nuisance). See also City of Chicago v. American Cyanamid Co., 355 Ill.App.3d 209, 291 Ill.Dec. 116, 823 N.E.2d 126, 132 (2005) ("A public nuisance is actionable even where the nuisance is present on private property.").129
The Restatement (Second) provides further assistance in defining a public right.130
"A public right is one common to all members of the general public. It is collective in nature and not like the individual right that everyone has not to be assaulted or defamed or defrauded or negligently injured. Thus the pollution of a stream that merely deprives fifty or a hundred lower riparian owners of the use of the water for purposes connected with their land does not for that reason alone become a public nuisance. If, however, the pollution prevents the use of a public bathing beach or kills the fish in a navigable stream and so deprives all members of the community of the right to fish, it becomes a public nuisance." 4 Restatement (Second) Torts § 821B, cmt. g at 92 (emphasis added).131
Indeed, the Connecticut Supreme Court has explained that "[t]he test is not the number of persons annoyed, but the possibility of annoyance to the public by the invasion of its rights. A public nuisance is one that injures the citizens generally who may be so circumstanced as to come within its influence." Higgins v. Connecticut Light & Power Co., 129 Conn. 606, 30 A.2d 388, 391 (1943) (quoting Nolan v. New Britain, 69 Conn. 668, 38 A. 703, 706 (1897)). As the Restatement (Second) makes clear, a public right is more than an aggregate of private rights by a large number of injured people. See Restatement (Second) Torts § 821B, cmt. g at 92; see also American Cyanamid Co., 291 Ill.Dec. 116, 823 N.E.2d at 131 (a public right is not "an assortment of claimed private individual rights"). Rather, a public right is the right to a public good, such as "an indivisible resource shared by the public at large, like air, water, or public rights of way." American Cyanamid Co., 291 Ill.Dec. 116, 823 N.E.2d at 131. Unlike an interference with a public resource,132
"[t]he manufacture and distribution of products rarely, if ever, causes a violation of a public right as that term has been understood in the law of public nuisance. Products generally are purchased and used by individual consumers, and any harm they cause—even if the use of the product is widespread and the manufacturer's or distributor's conduct is unreasonable—is not an actionable violation of a public right. * * * The sheer number of violations does not transform the harm from individual injury to communal injury." Gifford, 71 U. Cin. L. Rev. at 817.133
Professor Donald G. Gifford of the University of Maryland School of Law explained the essential nature of a public right by contrasting it with a public interest:134
"That which might benefit (or harm) `the public interest' is a far broader category than that which actually violates `a public right.' For example, while promoting the economy may be in the public interest, there is no public right to a certain standard of living (or even a private right to hold a job). Similarly, while it is in the public interest to promote the health and well-being of citizens generally, there is no common law public right to a certain standard of medical care or housing." Gifford, 71 U. Cin. L. Rev. at 815.136138
As an additional prerequisite to the imposition of liability for public nuisance, a defendant must have control over the instrumentality causing the alleged nuisance at the time the damage occurs. Put simply, "[o]ne who controls a nuisance is liable for damages caused by that nuisance." Friends of the Sakonnet v. Dutra, 749 F.Supp. 381, 395 (D.R.I.1990) (Dutra II) (applying Rhode Island law); see also Citizens for Preservation of Waterman Lake, 420 A.2d at 59 (declining to impose liability for public nuisance when plaintiff "failed to produce any evidence directly bearing on the amount of noise created by trucks under [defendant's] control") (emphasis added).140
Thus, liability in a public nuisance action "turns on whether the defendants were in control over the instrumentality alleged to constitute the nuisance, either through ownership or otherwise." City of Manchester v. National Gypsum Co., 637 F.Supp. 646, 656 (D.R.I.1986) (applying New Hampshire law). Importantly, the defendant must have had control over the nuisance-causing instrumentality at the time that the damage occurred. Friends of the Sakonnet v. Dutra, 738 F.Supp. 623, 633-34 (D.R.I.1990) (Dutra I) (citing National Gypsum Co., 637 F.Supp. at 656).141
Indeed, control at the time the damage occurs is critical in public nuisance cases, especially because the principal remedy for the harm caused by the nuisance is abatement. See § 10-1-1 (authorizing the Attorney General to bring an action to abate a public nuisance); State ex rel. Dresser Industries, Inc. v. Ruddy, 592 S.W.2d 789, 793 (Mo.1980) ("Injunctions or abatements have been the traditional remedies where the state brings suit for a public nuisance * * *."); see also National Gypsum Co., 637 F.Supp. at 656 ("The defendants, after the time of manufacture and sale, no longer had the power to abate the nuisance. Therefore, a basic element of the tort of nuisance is absent, and the plaintiff cannot succeed on this theory of relief."); Town of Hooksett School District v. W.R. Grace & Co., 617 F.Supp. 126, 133 (D.N.H.1984) (recognizing that the defendant manufacturer was unable to "abate or relieve the complaint of nuisance, a hallmark of the cases listed in New Hampshire," and, therefore, lacked the element of control necessary to be held liable for public nuisance).142
The party in control of the instrumentality causing the alleged nuisance is best positioned to abate it and, therefore, is legally responsible. Gifford, 71 U. Cin. L. Rev. at 820 ("[L]iability for nuisance—both public and private—is premised not on the creation of a nuisance but rather on the defendant's current control of the instrumentality causing the nuisance."); Mark P. Gagliardi, Note, Stirring up the Debate in Rhode Island: Should Lead Paint Manufacturers Be Held Liable for the Harm Caused by Lead Paint?, 7 Roger Williams U.L. Rev. 341, 376 (2002) ("[T]he [s]tate fails to take into account that there must be some control over the instrumentality alleged to have created the nuisance.").143
Recently, the New Jersey Supreme Court similarly held that control at the time the damage occurs is a time-honored element of public nuisance. In re Lead Paint Litigation, 924 A.2d at 499. In ruling that the manufacturers of lead pigment could not be held liable for nuisance under New Jersey law, the high court of that state emphasized that "a public nuisance, by definition, is related to conduct, performed in a location within the actor's control * * *." Id.144
The New Jersey decision was not without dissent, however. The Chief Justice concluded that control over the nuisance is not a necessary element at common law. In re Lead Paint Litigation, 924 A.2d at 510 (Zazzali, C.J., dissenting). He agreed with other courts that have said it is enough that the defendants contributed to the creation of the unreasonable interference and it is immaterial whether the defendants continued to exercise control over the nuisance. Id.145
As support, the Chief Justice cited the decision of the United States District Court for the District of Rhode Island in Dutra I, 738 F.Supp. at 633, for the proposition that Rhode Island has not yet barred recovery of nuisance damages if the defendant no longer controls the nuisance. In re Lead Paint Litigation, 924 A.2d at 510. However, apparently the Chief Justice did not read far enough; the fact is that the federal District Court continued as follows: "The paramount question is whether the defendant was in control of the instrumentality alleged to have created the nuisance when the damage occurred." Dutra I, 738 F.Supp. at 633-34. (Emphasis added.) In other words, although defendants need not control the nuisance at all times, they must have, minimally, controlled the nuisance at the time of the damage.146
Lending further credence to this principle, the federal District Court clarified its Dutra I holding later that same year. See Dutra II, 749 F.Supp. at 395. The court, again applying Rhode Island law, stated that "liability * * * under the law of nuisance depends primarily on the question of control and duty * * *." Id. "One who controls a nuisance is liable for damages caused by that nuisance." Id.147
Other courts and commentators likewise have emphasized the element of control. A leading treatise concerning products liability law states that "a product which has caused injury cannot be classified as a nuisance to hold liable the manufacturer or seller for the product's injurious effects * * *." 2 American Law of Products Liability § 27:6 at 11 (3d 2006). Indeed, "a product manufacturer who builds and sells the product and does not control the enterprise in which the product is used is not in the situation of one who creates a nuisance * * *." Id.; see also City of Bloomington, Indiana v. Westinghouse Electric Corp., 891 F.2d 611, 614 (7th Cir.1989) (noting the absence of cases "holding manufacturers liable for public or private nuisance claims arising from the use of their product subsequent to the point of sale"); Gifford, 71 U. Cin. L. Rev. at 820 ("The essence of public nuisance law * * * is ending the harmful conduct. This is impossible for the manufacturer or distributor who has relinquished possession by selling or otherwise distributing the product."); Victor E. Schwartz & Phil Goldberg, The Law of Public Nuisance: Maintaining Rational Boundaries on a Rational Tort, 45 Washburn L.J. 541, 568 (2006) ("[F]urnishing a product or instrumentality—whether it be chemicals, asbestos, guns, lead paint, or other products—is not the same as having control over that instrumentality.").149
The party alleging the existence of a public nuisance not only must demonstrate the existence of the nuisance, but also must demonstrate "that injury has been caused by the nuisance complained of." Citizens for Preservation of Waterman Lake, 420 A.2d at 59 (citing McClellan v. Thompson, 114 R.I. 334, 344, 333 A.2d 424, 429 (1975)). Causation is a basic requirement in any public nuisance action; such a requirement is consistent with the law of torts generally. See Contois v. Town of West Warwick, 865 A.2d 1019, 1023 (R.I.2004) (discussing the causation requirement in negligence actions); Clift v. Vose Hardware, Inc., 848 A.2d 1130, 1132 (R.I.2004) (discussing the causation requirement in the products liability context); Salk v. Alpine Ski Shop, Inc., 115 R.I. 309, 314-15, 342 A.2d 622, 626 (1975) (concluding that, even under strict liability, a plaintiff must show "a causal connection between the defect and the injury").153
A defendant will be held liable in public nuisance only if the conduct complained of actually caused an interference with a public right. See Wood, 443 A.2d at 1248 ("The testimony * * * clearly establishes that [the] defendants' dumping operations have already caused substantial injury * * *."); Rose v. Standard Oil Company of New York, Inc., 56 R.I. 272, 279, 185 A. 251, 254 (1936) (discussing "the chain of causation"); Sweet v. Conley, 20 R.I. 381, 385, 39 A. 326, 328 (1898) (liability for a public nuisance is appropriate when defendant "wrongfully and illegally cause[d] the surface water of a street to collect and remain in front of one's premises"). Although it is true that public nuisance is characterized by an unreasonable interference with a public right, basic fairness dictates that a defendant must have caused the interference to be held liable for its abatement. See Citizens for Preservation of Waterman Lake, 420 A.2d at 60 (holding that the defendant was not liable when "there [was] virtually no evidence establishing that such odors were caused by any actions on the part of [the] defendant").154
In addition to proving that a defendant is the cause-in-fact of an injury, a plaintiff must demonstrate proximate causation. See DiPetrillo v. The Dow Chemical Co., 729 A.2d 677, 692-93 (R.I. 1999) (affirming that the jury be instructed on both "but for" and proximate causation in the products liability context); Moretti v. C.S. Realty Co., 78 R.I. 341, 353, 82 A.2d 608, 615 (1951) (instructing on proximate cause in nuisance case). Proximate cause is a more exacting standard than simple "but for" causation. Tavares v. Aramark Corp., 841 A.2d 1124, 1128 (R.I.2004). A leading treatise speaks as follows about proximate cause:155
"As a practical matter, legal responsibility must be limited to those causes which are so closely connected with the result and of such significance that the law is justified in imposing liability. Some boundary must be set to liability for the consequences of any act, upon the basis of some social idea of justice or policy." W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 41 at 264 (5th ed. 1984).156
We agree with the Illinois Supreme Court that "[t]he proper inquiry regarding legal cause involves an assessment of foreseeability, in which we ask whether the injury is of a type that a reasonable person would see as a likely result of his conduct." City of Chicago v. Beretta U.S.A. Corp., 213 Ill.2d 351, 290 Ill.Dec. 525, 821 N.E.2d 1099, 1127 (2004) (citing Lee v. Chicago Transit Authority, 152 Ill.2d 432, 178 Ill. Dec. 699, 605 N.E.2d 493, 503 (1992)).157
Accordingly, "[l]iability cannot be predicated on a prior and remote cause which merely furnishes the condition or occasion for an injury resulting from an intervening unrelated and efficient cause, even though the injury would not have resulted but for such a condition or occasion * * *." Clements v. Tashjoin, 92 R.I. 308, 314, 168 A.2d 472, 475 (1961) (citing 65 C.J.S. Negligence § 111d at 693). A plaintiff "need not exclude every other possible cause," but a plaintiff must demonstrate proximate cause by "reasonable inferences drawn from the facts in evidence." Skaling v. Aetna Insurance Co., 742 A.2d 282, 288 (R.I.1999) (quoting Cartier v. State, 420 A.2d 843, 848 (R.I.1980)).159161
In concluding this discussion of the elements necessary to establish a public nuisance, we also believe that it is advisable to mention the following.163
A common feature of public nuisance is the occurrence of a dangerous condition at a specific location. This Court has recognized that the existence of a nuisance depends in large part on its location, and, to date, the actions for nuisance in this jurisdiction have been related to land. See, e.g., Wood, 443 A.2d at 1245-46 (dump site on the defendant's property). In fact, in O'Reilly v. Perkins, this Court sustained the trial court's dismissal of the plaintiffs' complaint in which they had failed to identify the location of their property in relation to the defendant's proposed brewery. O'Reilly v. Perkins, 22 R.I. 364, 364-65, 48 A. 6, 6 (1901). See also State v. Beardsley, 108 Iowa 396, 79 N.W. 138, 141 (Iowa 1899) ("[A] nuisance is the unlawful use of one's own property, working an injury to a right of another or of the public, and producing such inconvenience, discomfort, or hurt that the law will presume a consequent damage."); In re Lead Paint Litigation, 924 A.2d at 495 ("[P]ublic nuisance has historically been tied to conduct on one's own land or property as it affects the rights of the general public.").164
The United States Supreme Court has remarked that "the question [of] whether * * * a particular thing is a nuisance, is to be determined, not by an abstract consideration of the building or of the thing considered apart, but by considering it in connection with the circumstances and the locality." Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 388, 47 S.Ct. 114, 71 L.Ed. 303 (1926) (citing Sturgis v. Bridgeman, L.R. 11 Ch. 852, 865). Professor William L. Prosser, the highly respected authority on the law of torts, remarked that "[i]f `nuisance' is to have any meaning at all, it is necessary to dismiss a considerable number of cases which have applied the term to matters not connected either with land or with any public right, as mere aberration * * *." Prosser and Keeton on the Law of Torts, § 86 at 618; see also City of San Diego v. U.S. Gypsum, 30 Cal.App.4th 575, 35 Cal.Rptr.2d 876, 883 (1995).165
Unlike private nuisance, public nuisance does not necessarily involve an interference with a particular individual's use and enjoyment of his or her land. In re Lead Paint Litigation, 924 A.2d at 495-96 (citing 4 Restatement (Second) Torts § 821B, cmt. h at 93). Rather, public nuisance typically arises on a defendant's land and interferes with a public right. Id. at 496 (citing 4 Restatement (Second) Torts § 821B, cmt. g at 92). For example, a nuisance may originate on a defendant's land as in the case of a mosquito pond, or an activity conducted on a defendant's land may interfere with a right of the general public, as in a stream-polluting business. Id. at 495.167
After thoroughly reviewing the complaint filed by the state in this case, we are of the opinion that the trial justice erred in denying defendants' motion to dismiss under Rule 12(b)(6) of the Superior Court Rules of Civil Procedure.171
As the foregoing analysis demonstrates, under Rhode Island law, a complaint for public nuisance minimally must allege: (1) an unreasonable interference; (2) with a right common to the general public; (3) by a person or people with control over the instrumentality alleged to have created the nuisance when the damage occurred; and (4) causation.172
Even considering the allegations of fact as set forth in the complaint, we cannot ascertain allegations in the complaint that support each of these elements. The state's complaint alleges simply that "[d]efendants created an environmental hazard that continues and will continue to unreasonably interfere with the health, safety, peace, comfort or convenience of the residents of the [s]tate, thereby constituting a public nuisance." Absent from the state's complaint is any allegation that defendants have interfered with a public right as that term long has been understood in the law of public nuisance. Equally problematic is the absence of any allegation that defendants had control over the lead pigment at the time it caused harm to children.173
At the motion to dismiss stage, defendants argued that "the [s]tate has not asserted a public nuisance claim because a public right has not been infringed and because the defendants' lead did not cause the alleged harm while within their control as product manufacturers or promoters." The defendants also argued that the state's complaint did not seek to enjoin those people who were responsible for maintaining the public nuisance. For its part, the state argued that the public's right to be free from the hazards of unabated lead had been infringed and that defendants were responsible for the presence of lead in public and private properties throughout Rhode Island. After considering both these arguments, the trial justice denied defendants' motion to dismiss, concluding that the state had sufficiently averred that defendants' conduct "unreasonably interfered with the health, safety, peace, comfort or convenience of the general community." We disagree.174
A necessary element of public nuisance is an interference with a public right — those indivisible resources shared by the public at large, such as air, water, or public rights of way. The interference must deprive all members of the community of a right to some resource to which they otherwise are entitled. See 4 Restatement (Second) Torts § 821B, cmt. g at 92. The Restatement (Second) provides much guidance in ascertaining the fine distinction between a public right and an aggregation of private rights. "Conduct does not become a public nuisance merely because it interferes with the use and enjoyment of land by a large number of persons." Id. See also City of St. Louis v. Benjamin Moore & Co., 226 S.W.3d 110, 116 (Mo. 2007) (quoting State ex inf. Ashcroft v. Kansas City Firefighters Local No. 42, 672 S.W.2d 99, 114-15 (Mo.Ct.App.1984)); In re Lead Paint Litigation, 924 A.2d at 501.175
Although the state asserts that the public's right to be free from the hazards of unabated lead had been infringed, this contention falls far short of alleging an interference with a public right as that term traditionally has been understood in the law of public nuisance. The state's allegation that defendants have interfered with the "health, safety, peace, comfort or convenience of the residents of the [s]tate" standing alone does not constitute an allegation of interference with a public right. See Beretta U.S.A. Corp., 290 Ill.Dec. 525, 821 N.E.2d at 1114. The term public right is reserved more appropriately for those indivisible resources shared by the public at large, such as air, water, or public rights of way. See American Cyanamid Co., 291 Ill.Dec. 116, 823 N.E.2d at 131, 139 (persuaded by the defendants' argument to this effect). Expanding the definition of public right based on the allegations in the complaint would be antithetical to the common law and would lead to a widespread expansion of public nuisance law that never was intended, as we discuss infra. In declining to adopt such a widespread expansion of the law, we are mindful of the words of Edmund Burke that "bad laws are the worst sort of tyranny." 1 Edmund Burke, The Works of Edmund Burke: With a Memoir 318 (1860).176
The right of an individual child not to be poisoned by lead paint is strikingly similar to other examples of nonpublic rights cited by courts, the Restatement (Second), and several leading commentators. See Beretta U.S.A. Corp., 290 Ill.Dec. 525, 821 N.E.2d at 1114 (concluding that there is no public right to be "free from unreasonable jeopardy to health, welfare, and safety, and from unreasonable threats of danger to person and property, caused by the presence of illegal weapons in the city of Chicago"); 4 Restatement (Second) Torts § 821B, cmt. g at 92 (the individual right that everyone has not to be assaulted or defamed or defrauded or negligently injured is not a public right); Gifford, 71 U. Cin. L. Rev. at 815 (there is no common law public right to a certain standard of living, to a certain standard of medical care, or to a certain standard of housing).177
In the words of one commentator: "Despite the tragic nature of the child's illness, the exposure to lead-based paint usually occurs within the most private and intimate of surroundings, his or her own home. Injuries occurring in this context do not resemble the rights traditionally understood as public rights for public nuisance purposes — obstruction of highways and waterways, or pollution of air or navigable streams." Gifford, 71 U. Cin. L. Rev. at 818.178
The enormous leap that the state urges us to take is wholly inconsistent with the widely recognized principle that the evolution of the common law should occur gradually, predictably, and incrementally. Were we to hold otherwise, we would change the meaning of public right to encompass all behavior that causes a widespread interference with the private rights of numerous individuals.179
The Illinois Supreme Court recently hypothesized on the effect of a broader recognition of public right. In Beretta, the Illinois Supreme Court considered whether there was a public right to be "free from unreasonable jeopardy to health, welfare, and safety, and from unreasonable threats of danger to person and property, caused by the presence of illegal weapons in the city of Chicago." Beretta U.S.A. Corp., 290 Ill.Dec. 525, 821 N.E.2d at 1114. In concluding that there was not, the court acknowledged the far-reaching effects of a decision otherwise. Id. 290 Ill.Dec. 525, 821 N.E.2d at 1116. The court speculated that180
"[i]f there is public right to be free from the threat that others may use a lawful product to break the law, that right would include the right to drive upon the highways, free from the risk of injury posed by drunk drivers. This public right to safe passage on the highways would provide the basis for public nuisance claims against brewers and distillers, distributing companies, and proprietors of bars, taverns, liquor stores, and restaurants with liquor licenses, all of whom could be said to contribute to an interference with the public right." Id.181
In taking the analogy a step further, the court considered the effect of other product misuse, stating:182
"Similarly, cell phones, DVD players, and other lawful products may be misused by drivers, creating a risk of harm to others. In an increasing number of jurisdictions, state legislatures have acted to ban the use of these otherwise legal products while driving. A public right to be free from the threat that other drivers may defy these laws would permit nuisance liability to be imposed on an endless list of manufacturers, distributors, and retailers of manufactured products that are intended to be, or are likely to be, used by drivers, distracting them and causing injury to others." Id.183
Like the Beretta court, we see no reason to depart from the long-standing principle that a public right is a right of the public to shared resources such as air, water, or public rights of way.184
Even had the state adequately alleged an interference with a right common to the general public, which we conclude it did not, the state's complaint also fails to allege any facts that would support a conclusion that defendants were in control of the lead pigment at the time it harmed Rhode Island's children.185
The state filed suit against defendants in their capacity "either as the manufacturer of * * * lead pigment * * * or as the successors in interest to such manufacturers" for "the cumulative presence of lead pigment in paints and coatings in or on buildings throughout the [s]tate of Rhode Island." For the alleged public nuisance to be actionable, the state would have had to assert that defendants not only manufactured the lead pigment but also controlled that pigment at the time it caused injury to children in Rhode Island — and there is no allegation of such control.186
The New Jersey Supreme Court applied these same elements to the lead paint litigation in that jurisdiction and likewise held that public nuisance was an improper cause of action. The court emphasized that were it "to permit these complaints to proceed, [it] would stretch the concept of public nuisance far beyond recognition and would create a new and entirely unbounded tort antithetical to the meaning and inherent theoretical limitations of the tort of public nuisance." In re Lead Paint Litigation, 924 A.2d at 494. We agree.187
We conclude, therefore, that there was no set of facts alleged in the state's complaint that, even if proven, could have demonstrated that defendants' conduct, however unreasonable, interfered with a public right or that defendants had control over the product causing the alleged nuisance at the time children were injured. Accordingly, we need not decide whether defendants' conduct was unreasonable or whether defendants caused an injury to children in Rhode Island.188
In denying defendants' motion to dismiss, the highly respected trial justice, however well intentioned, departed from the traditional requirements of common law public nuisance. The Restatement (Second) warns against any such departure from the common law, noting that "[i]f a defendant's conduct in interfering with a public right does not come within one of the traditional categories of the common law crime of public nuisance or is not prohibited by a legislative act, the court is acting without an established and recognized standard." 4 Restatement (Second) Torts, § 821B, cmt. e at 90. We pause, however, to acknowledge the complexity of the issues presented in this case and to note that, in reversing the judgment of the Superior Court, we mean no disrespect to the distinguished trial justice, the jury, the members of our judiciary, the trial lawyers, or the Office of the Attorney General — all of whom labored for years over this formidable and problematic case.189
Finally, our decision that defendants' conduct does not constitute a public nuisance as that term has for centuries been understood in Anglo-American law does not leave Rhode Islanders without a remedy. For example, an injunction requiring abatement may be sought against landlords who allow lead paint on their property to decay. See, e.g., Pine v. Kalian, 723 A.2d 804, 804-05 (R.I.1998) (mem.) (upholding the Superior Court's grant of an injunction requiring that two landlords abate the lead hazard in their property). In addition, the LPPA provides for penalties and fines against those property owners who violate its rules or procedures. Sections 23-24.6-23 and 23-24.6-27. The LHMA further authorizes a private cause of action to be brought on behalf of households with at-risk occupants to seek injunctive relief to compel property owners to comply with the act. G.L. 1956 § 42-128.1-10.190
Apart from these actions, the proper means of commencing a lawsuit against a manufacturer of lead pigments for the sale of an unsafe product is a products liability action. The law of public nuisance never before has been applied to products, however harmful. Courts in other states consistently have rejected product-based public nuisance suits against lead pigment manufacturers, expressing a concern that allowing such a lawsuit would circumvent the basic requirements of products liability law. See American Cyanamid Co., 291 Ill.Dec. 116, 823 N.E.2d at 134; Benjamin Moore & Co., 226 S.W.3d at 116; In re Lead Paint Litigation, 924 A.2d at 503-05.191
Public nuisance focuses on the abatement of annoying or bothersome activities. Products liability law, on the other hand, has its own well-defined structure, which is designed specifically to hold manufacturers liable for harmful products that the manufacturers have caused to enter the stream of commerce.192
Undoubtedly, public nuisance and products liability are two distinct causes of action, each with rational boundaries that are not intended to overlap. In 1971, this Court adopted the doctrine of strict liability for products as set forth in the Restatement (Second) Torts. See Ritter v. Narragansett Electric Co., 109 R.I. 176, 192, 283 A.2d 255, 263 (1971) ("It is our conclusion, then, that the rule stated in § 402A of the Restatement (Second) of Torts may be invoked in cases of products liability in appropriate cases."). We require two elements: "(1) `the seller is engaged in the business of selling such a product,' and (2) the product `is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.'" Olshansky v. Rehrig International, 872 A.2d 282, 287 (R.I.2005) (quoting Ritter, 109 R.I. at 188, 283 A.2d at 261). These two elements are crucial for the imposition of liability in a products liability suit, yet neither element is a requirement of public nuisance.193
A product-based public nuisance cause of action bears a close resemblance to a products liability action, yet it is not limited by the strict requirements that surround a products liability action. Courts presented with product-based public nuisance claims have expressed their concern over the ease with which a plaintiff could bring what properly would be characterized as a products liability suit under the guise of product-based public nuisance. The New Jersey Supreme Court, in rejecting the public nuisance claims against lead pigment manufacturers wrote that "[w]e cannot help but agree with the observation that, were we to find a cause of action here, `nuisance law would become a monster that would devour in one gulp the entire law of tort.'" In re Lead Paint Litigation, 924 A.2d at 505 (quoting Camden County Board of Chosen Freeholders v. Beretta, U.S.A. Corp., 273 F.3d 536, 540 (3d Cir.2001)); see also U.S. Gypsum, 35 Cal.Rptr.2d at 883 ("[N]uisance cases `universally' concern the use or condition of property, not products.") (quoting Detroit Board of Education v. Celotex Corp., 196 Mich.App. 694, 493 N.W.2d 513, 521 (1992)).194
Other courts have rendered similar rulings. In Benjamin Moore & Co., the Missouri Supreme Court held that the city's public nuisance claim with respect to lead paint in buildings must be dismissed because the city could not identify the specific products used in the buildings. Benjamin Moore & Co., 226 S.W.3d at 113, 116. Likewise, the Illinois Appellate Court rejected Chicago's assertion that public nuisance claims do not require identification of the product as being that of the defendant. American Cyanamid Co., 291 Ill.Dec. 116, 823 N.E.2d at 139-40. These cases demonstrate that even if a lawsuit is characterized as a public nuisance cause of action, the suit nonetheless sounds in products liability if it is against a manufacturer based on harm caused by its products. Regardless of the label placed on the cause of action, the elements of products liability still must be met to properly maintain such a product-based proceeding.195
It is essential that these two causes of action remain just that — two separate and distinct causes of action. Addressing this distinction and the danger of a product-based public nuisance suit against gun manufacturers, wholesalers, and retailers, a New York appellate court explained that196
"giving a green light to a common-law public nuisance cause of action today will * * * likely open the courthouse doors to a flood of limitless, similar theories of public nuisance, not only against these defendants, but also against a wide and varied array of other commercial and manufacturing enterprises and activities." People v. Sturm, Ruger & Co., Inc., 309 A.D.2d 91, 761 N.Y.S.2d 192, 196 (N.Y.App.Div.2003).197
"All a creative mind would need to do is construct a scenario describing a known or perceived harm of a sort that can somehow be said to relate back to the way a company or an industry makes, markets and/or sells its non-defective, lawful product or service, and a public nuisance claim would be conceived and a lawsuit born." Id.198
The Rhode Island General Assembly has recognized that lead paint has created a public health hazard and, pursuant to its power to legislate, has adopted several statutory schemes to address this problem. Collectively, the LPPA and the LHMA reflect the General Assembly's chosen means of responding to the state's childhood lead poisoning problem. The legislative body made clear policy decisions about how to reduce lead hazards in Rhode Island homes, buildings, and other dwellings and who should be responsible. Importantly, the General Assembly has recognized that landlords, who are in control of the lead pigment at the time it becomes hazardous, are responsible for maintaining their premises and ensuring that the premises are lead-safe. Quite tellingly, the General Assembly's chosen means of remedying childhood lead poisoning in Rhode Island did not include an authorization of an action for public nuisance against the manufacturers of lead pigments, despite the fact that this action seeking to impose liability on various lead pigment manufacturers was well under way at the time the LHMA was enacted. Indeed, even the trial justice recognized the absence of legislation governing defendants' actions. He found the LPPA inapplicable because it does not "address in any fashion the actions of these defendants" and because "[t]he statutes and regulations do not authorize the existence of the claimed public nuisance." By focusing on the party in control of the instrumentality at the time the harm occurs, the General Assembly's enactments are wholly consistent with the law of public nuisance in this state and all other jurisdictions.200
For the foregoing reasons, we conclude that the trial justice erred in denying defendants' motion to dismiss.203
Also before this Court is the state's cross-appeal on the issue of compensatory damages. The state argues that it was improper for the trial justice to dismiss the state's claim for damages in excess of $26 million. The state also contends that it was improper for the trial justice to foreclose it from presenting evidence to the jury on the amount of money expended on publicly financed programs, which, the state alleges, was directly caused by the public nuisance from lead in paint. Because we conclude that the tort of public nuisance was not the proper cause of action to proceed against defendant lead pigment manufacturers, we need not address the state's argument with respect to compensatory damages.208
Justice Suttell, for the Court.212
The state has appealed from the trial justice's grant of a judgment as a matter of law under Super.R.Civ.P. 50 in favor of ARCO on the ground that ARCO was not the legal successor to the Anaconda Lead Products Company (ALPC), a manufacturer of white lead carbonate between 1920 and 1936. ARCO also has filed a conditional cross-appeal if this Court reverses the trial justice's decision.213
In its complaint, the state alleged that ARCO was "the successor-in-interest to International Smelting and Refining Company [IS & R] and [ALPC]." At trial, the state and ARCO stipulated that ALPC produced lead pigment at an East Chicago, Indiana, plant from 1920 to 1936, when the company was dissolved and its assets and properties were transferred to its parent, IS & R. IS & R produced lead pigment at the same East Chicago plant from 1936 until 1946. In 1973, IS & R merged into its parent company, The Anaconda Company, and in 1977 ARCO acquired all shares of stock in The Anaconda Company. On December 31, 1981, The Anaconda Company was merged into ARCO.214
After granting ARCO's Rule 50 motion, the trial justice instructed the jury that ARCO was not liable for the acts or omissions of ALPC. The jury thus considered ARCO's potential liability only with respect to its successorship to IS & R for the manufacturing and promotion of lead pigment from 1936 to 1946. The jury eventually returned a verdict in favor of ARCO, finding that ARCO had not "caused or substantially contributed to the creation of the public nuisance."215
The state now seeks a new trial against ARCO, asserting that the trial justice misapplied the applicable Rhode Island law on successor liability, as set forth in the seminal case of H.J. Baker & Bro., Inc. v. Orgonics, Inc., 554 A.2d 196 (R.I.1989). In addition, the state urges us to adopt the "de facto merger" exception to the general rule that "a company that purchases the assets of another is not liable for the debts of the transferor company." Id. at 205 (citing Cranston Dressed Meat Co. v. Packers Outlet Co., 57 R.I. 345, 348, 190 A. 29, 31 (1937)). Because we conclude in Track I of this opinion that the trial justice erred in denying defendants' motion to dismiss under Super.R.Civ.P. 12(b)(6), we need not address either the state's arguments about ARCO's liability or ARCO's conditional cross-appeal.217
Justice Flaherty, for the Court.225
In this heated and contentious legal dispute, the trial justice continually was challenged to bring order inside and outside of the courtroom in an effort to maintain a setting that would ensure a fair trial to both sides. An example of the tense litigation atmosphere emerged shortly before jury selection, when the trial justice granted defendant Millennium's motion to compel discovery about a settlement agreement negotiated with a former defendant, DuPont, pursuant to which DuPont was dismissed from the case with prejudice. Reporting on this agreement, The Providence Journal quoted Patrick Lynch, the Rhode Island Attorney General, as saying, "Du Pont stepped up to the plate. It was willing to do something about the children." Then, referring to counsel for the other defendants, the Attorney General was reported to have said: "This discovery is just part of the despicable legal moves the company lawyers are willing to make to slow down justice."226
Understandably concerned about this type of extrajudicial trial publicity, the trial justice conducted an in camera hearing on October 21, 2005. At that hearing, defendants Millennium and Sherwin-Williams asked the trial justice to direct the Attorney General to refrain from making public statements that attacked the credibility of defendants or their counsel, citing Article V, Rule 3.6 of the Supreme Court Rules of Professional Conduct. During the hearing, counsel for the state reported to the trial justice that he had spoken with the Attorney General and that the Attorney General "clearly understood the importance of not getting into subjective comments" as the case moved forward. The trial justice then issued a sealed oral order that required that the Attorney General conform his public statements to Rule 3.6. This was followed by a sealed written order on November 3, 2005, which provided in relevant part:227
"1. The Court directs the Attorney General to fully comply with Rule 3.6 of the Rhode Island Rules of Professional Conduct with respect to any and all statements the Attorney General may make, release or cause to be released to the public, individually or through his office, which pertain in whole or in part to this case, any of the parties to this case, or the subject-matter of this case."228
The Attorney General did not object to the validity of this order at that time nor did he seek any clarification with respect to its language.230
The trial progressed, but unfortunately that did nothing to cool the heated emotions surrounding the case. On November 16, 2005, the Attorney General left the courtroom after a day of trial, and he responded to a variety of questions from the press. A Providence Journal article later characterized the Attorney General's statements:234
"Following the ruling, Campbell [a spokesperson for defendants] had no comment. But a beaming Lynch stepped outside the courtroom and praised [trial justice Michael A.] Silverstein for the way he has guided the case during the last six years. He also lambasted the defense.235
"`We want to continue our search for justice before this jury and not give in to those who would spin and twist the facts,' Lynch said."236
Alarmed by these reported comments, the trial justice called a sua sponte hearing the next day to address the Attorney General's remark, and he asked the parties to file any papers that they thought were appropriate. Millennium then moved for an order to declare the Attorney General in civil contempt of the order of November 3, 2005, and it also asked the court to dismiss the action as a sanction; defendants ARCO, NL, and Sherwin-Williams joined Millennium's motion. The defendants argued that the Attorney General's public comments were part of a pattern of public attacks upon the character and credibility of defendants. The Attorney General countered that his statements were justified and that they did not violate the Supreme Court Rules of Professional Conduct.237
At a contempt hearing conducted on November 18, 2005, the Attorney General personally addressed the court and he explained his comments. It is noteworthy that at this time, the Attorney General again raised no objection to the November order; rather, he conceded its propriety: "So, that your order in response to the issuance of me commenting or excusing that word [`despicable'] is more than appropriate, and I recognize that fully." Explaining his comments, the Attorney General said that reporters asked him: "What do you have to say about [defendants'] claims that your counsel have flagrantly disregarded the law, have violated ethical rules intentionally?" The Attorney General told the court that he declined to respond to these statements. However, the reporters pressed, asking him, "Well, what do you have to say about them saying that your team has continuously and intentionally * * * flagrantly disregarded the rules, particularly the ethical rules of conduct?" The Attorney General said that he finally responded by saying simply: "What is printed in the paper that I will not respond to is the spinning and twisting of evidence and comments like that you just attached to those people."238
On November 28, 2005, after considering the written arguments submitted by the parties and the Attorney General's comments, the trial justice issued a bench decision, finding the Attorney General in civil contempt of the court's order of November 3, 2005. Although he did not elaborate on his findings, the trial justice noted that the Attorney General had been goaded by reporters and that he did not willfully violate the court's order. The trial justice's contempt finding was memorialized in an order on December 6, 2005, which directed the Attorney General to pay the clerk of the Providence County Superior Court $5,000 as a sanction.240
In his December 6, 2005 order, the trial justice did more than find the Attorney General in contempt — he amended his original November order by adding paragraph 1.1, which said: "The Court directs the Attorney General to cease and desist from making any subjective characterizations of the defendants or any of them or of their agents, servants or attorneys." Soon after, on February 22, 2006, the trial justice again cautioned the parties: "I don't want any discussion with this jury by anyone with respect to what motivated them to reach the decision that they did or anything else about the case."244
Nonetheless, further problems arose on February 22, 2006. Apparently flushed with victory, just after the jury returned a verdict on liability in favor of the state, the Attorney General posted a statement on his official website that thanked the jurors "for their service, their attention to the facts and evidence that led them to this moment, and their courage in rendering a historic verdict that, ultimately, will help make Rhode Island a safer and better place to live." Matters were complicated further when, on the following day, The Boston Globe published this quote from the Attorney General: "The companies failed to step up and clean up the problem they created * * *. The legal process has held them accountable and said you can't duck and run.245
Because of the Attorney General's "duck and run" comment and the website posting, defendants Millennium, Sherwin-Williams, and NL asked the trial justice again to find the Attorney General in civil contempt. Specifically, defendants asserted that labeling them as "duck and run" defendants violated the November order, as amended on December 6, 2005. They also argued that the Attorney General's praise of the jurors, who had not been discharged and had yet to deliberate on the punitive damage and remediation-plan issues, was an improper attempt to influence the panel. This, they alleged, violated Article V, Rule 3.5 of the Supreme Court Rules of Professional Conduct, as well as the trial court's bench order of February 22, 2006. The defendants asserted that a second monetary sanction would be no more effective than the first, and that the appropriate sanction was dismissal of the punitive-damage claim. In response, the Attorney General continued to deny any impropriety; he asserted that his "duck and run" comment did not violate Rule 3.6 and that his comments to the jurors "were not designed to say anything" to them.246
At a hearing on May 1, 2006, the trial justice again held the Attorney General in civil contempt for violating the Rules of Professional Conduct and the Superior Court's prior orders, noting that "[t]his Court has no hesitancy in holding as I now do that the Attorney General is in further contempt." The trial justice scheduled another hearing to determine the resulting sanctions. At this hearing, defendants asserted that the Attorney General's continued misconduct warranted dismissal of the equitable abatement remedy sought by the state. The Attorney General, in turn, urged against the imposition of sanctions, arguing that the December order was constitutionally infirm because it was too vague to inform the parties as to what expression actually was prohibited.247
The trial justice memorialized his bench decision of May 1, 2006 in a written order on June 2, 2006, specifically finding the Attorney General in civil contempt of the November order, as amended on December 6, 2005, and, apparently, the court's directive of February 22, 2006. The trial justice denied defendants' request for sanctions and he also denied the Attorney General's request to defer imposing a sanction until an appeal had been heard. Instead, the trial justice ordered that the Attorney General personally pay the clerk of the Providence County Superior Court $10,000, in addition to the previously imposed $5,000 sanction.249
On June 5, 2006, the state and the Attorney General appealed the trial justice's findings of contempt and his imposition of sanctions. They then asked this Court to stay paragraph 1.1 of the Superior Court's December order. We agreed to do so on June 15, 2006, although we emphasized that the trial court's order directing the Attorney General to comply with Rule 3.6 remained in full effect.253
In its appeal, the state refutes the trial justice's findings of contempt, asserting that the Attorney General had a common-law privilege and a duty as a constitutional officer to comment on this case because it was a matter of public importance. Further, the state argues that the trial justice's application of Rule 3.6 to the Attorney General was unconstitutional because it violated his First Amendment rights and that, in any event, the "spin and twist" comment did not violate the rule because no reasonable attorney would have believed that there was a substantial likelihood that the statement would prejudice the pending trial. The state also contends that paragraph 1.1 of the December order was unconstitutionally vague and overbroad, and that the Attorney General's website posting did not violate any of the Superior Court's prohibitions. Finally, the state argues that the penalties imposed by the trial justice were excessive.254
The defendants counter that (1) the trial justice's orders were necessary to protect their right to a fair trial, (2) the state waived its rights, under the collateral-bar doctrine, to challenge the enforceability of the Superior Court's orders, (3) the Attorney General was not exempt from Rule 3.6, which strikes an appropriate balance between his First Amendment rights and defendants' right to a fair trial, (4) the trial justice's findings of contempt were neither clearly wrong nor arbitrary, (5) the monetary sanctions imposed were within the broad discretion of the trial court, and (6) the Attorney General's comments were not "core political speech" protected by the First Amendment.255
After considering the record, the briefs submitted by the parties, and the oral arguments of counsel, we respectfully disagree with the trial justice's findings of contempt. With regard to the first contempt finding, irrespective of whether the November order meets constitutional muster and was enforceable, we nonetheless do not believe the Attorney General's "spin and twist" comment violated that order. We also disagree with the second finding of contempt because (1) we do not believe the December order was enforceable against the Attorney General and (2) we do not think the Attorney General's official website posting violated any directive from the trial court. For these reasons, we reverse the Superior Court's findings of contempt and we vacate all related sanctions.257
"A finding of contempt is within the sound discretion of the trial justice." Durfee v. Ocean State Steel, Inc., 636 A.2d 698, 704 (R.I.1994) (citing Brierly v. Brierly, 431 A.2d 410, 412 (R.I.1981)). Factual findings at a contempt hearing "will not be disturbed unless they are clearly wrong or the trial justice abused his or her discretion." Id. "A complaining party can establish civil contempt on behalf of his opponent when there is clear and convincing evidence that a lawful decree has been violated." Nardone v. Ritacco, 936 A.2d 200, 204 (R.I.2007) (quoting Direct Action for Rights and Equality v. Gannon, 819 A.2d 651, 661 (R.I.2003)).265
We apply a de novo standard of review, however, to questions of law, as well as to mixed questions of fact and law that purportedly implicate a constitutional right. See Foley v. Osborne Court Condominium, 724 A.2d 436, 439 (R.I.1999) (citing State v. Campbell, 691 A.2d 564, 569 (R.I.1997)). Thus, in cases raising First Amendment challenges, we "`make an independent examination of the whole record' in order to make sure that `the judgment does not constitute a forbidden intrusion on the field of free expression.'" Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485, 499, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984) (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 285, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964)).267
Based on the "spin and twist" comment he made to the media on November 16, 2005, the trial justice found the Attorney General in contempt of the court's November order, which required that the Attorney General abide by Rule 3.6. After careful review, we hold that irrespective of the validity and enforceability of that order, the Attorney General's "spin and twist" comment did not violate its provisions. Therefore, we reverse the trial justice's first finding of contempt and vacate the sanction imposed.272274
To be enforceable, a court order such as the one at issue here must pass constitutional muster, as it implicates the Attorney General's First Amendment rights, and it also must be sufficiently clear to put the effected parties on notice of the order's proscriptions. A prior restraint is "a predetermined judicial prohibition restraining specified expression." Chicago Council of Lawyers v. Bauer, 522 F.2d 242, 248 (7th Cir.1975). "Although the `guarantees of freedom of expression are not an absolute prohibition under all circumstances, * * * the barriers to prior restraint remain high and the presumption against its use continues intact.'" In re Court Order Dated October 22, 2003, 886 A.2d 342, 350 (R.I.2005) (quoting Nebraska Press Association v. Stuart, 427 U.S. 539, 570, 96 S.Ct. 2791, 49 L.Ed.2d 683 (1976)). "[P]rior restraint on speech and publication are the most serious and the least tolerable infringement on First Amendment rights." Id. at 350-51.276
Although not unconstitutional per se, any prior restraint on expression bears a heavy presumption against its validity. See Organization for a Better Austin v. Keefe, 402 U.S. 415, 419, 91 S.Ct. 1575, 29 L.Ed.2d 1 (1971); Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 70, 83 S.Ct. 631, 9 L.Ed.2d 584 (1963). To withstand constitutional scrutiny, a court's restrictive order "must fit within one of the narrowly defined exceptions to the prohibition against prior restraints." Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 559, 95 S.Ct. 1239, 43 L.Ed.2d 448 (1975) (citing Bantam Books, Inc., 372 U.S. at 71, 83 S.Ct. 631). Courts have permitted some restrictions on speech when disclosure of information concerning pending litigation by the parties or their counsel would threaten a litigant's right to a fair trial. See, e.g., Bauer, 522 F.2d at 248. The United States Supreme Court specifically has held that a lawyer's free expression may be limited to the extent that the speech presents a "substantial likelihood of materially prejudic[ing]" a fair trial. See Gentile v. State Bar of Nevada, 501 U.S. 1030, 1063, 111 S.Ct. 2720, 115 L.Ed.2d 888 (1991) (Rehnquist, C.J., joined by White, Scalia, and Souter, JJ.); see id. at 1082, 111 S.Ct. 2720 (O'Connor, J., concurring) ("I agree with [the Chief Justice] that the `substantial likelihood of material prejudice' standard * * * passes constitutional muster.").277
To be the basis of a contempt finding, the court's November order also must be sufficiently clear. "A civil contempt proceeding is an appropriate vehicle to enforce compliance with court orders and decrees when attempting to preserve and enforce the rights of [the parties]." Trahan v. Trahan, 455 A.2d 1307, 1311 (R.I.1983). It is well settled that for a restraining order to be enforceable by contempt proceedings, it "should be clear and certain and its terms should be sufficient to enable one reading the writ or order to learn therefrom what he may or may not do thereunder." Ventures Management Co. v. Geruso, 434 A.2d 252, 254 (R.I.1981) (quoting Sunbeam Corp. v. Ross-Simons, Inc., 86 R.I. 189, 194, 134 A.2d 160, 162 (1957)). Furthermore, "[t]he terms of the order should be specific, clear and precise so that one need not resort to inference or implications to ascertain his duty or obligation thereunder." Id. "[T]he clarity of an order must be evaluated by a reasonableness standard, considering both the context in which it was entered and the audience to which it was addressed." United States v. Cutler, 58 F.3d 825, 835 (2d Cir.1995).278
In this case, however, even assuming without deciding that the order of November 3, 2005, meets all constitutional requirements and is sufficiently clear, we hold that the contempt finding must be reversed because the Attorney General did not violate the court's order.280
To establish civil contempt, there must be a showing by clear and convincing evidence that a specific order of the court has been violated. Direct Action for Rights and Equality, 819 A.2d at 661 (citing Trahan, 455 A.2d at 1311). "A finding of civil contempt must be based on a party's lack of substantial compliance with a court order, which is demonstrated by the failure of a party to `employ[ ] the utmost diligence in discharging [its] * * * responsibilities.'" Gardiner v. Gardiner, 821 A.2d 229, 232 (R.I.2003) (quoting Durfee, 636 A.2d at 704). Determining whether there has been substantial compliance with an order of the court, so as to avoid a finding of civil contempt, "depend[s] on the circumstances of each case, including the nature of the interest at stake and the degree to which noncompliance affects that interest." Durfee, 636 A.2d at 704 (quoting Fortin v. Commissioner of Massachusetts Department of Public Welfare, 692 F.2d 790, 795 (1st Cir.1982)).284
Because the trial justice did not make any findings of fact with respect to why he found the Attorney General in contempt, it is difficult to evaluate whether his contempt finding was clearly wrong or an abuse of discretion. See Durfee, 636 A.2d at 704. Nevertheless, we are of the opinion that the Attorney General's "spin and twist" comment did not violate the November order because the record does not support the conclusion that the Attorney General knew or reasonably should have known that his remarks could create a substantial likelihood of material prejudice.285
The Attorney General's comment was a brief statement, uttered in response to reporters' persistent and pointed questioning. Given the nature of the case — a highly contentious matter laden with public commentary from both sides and a high degree of public and media interest — we do not think the Attorney General knew or reasonably should have known that his remarks would prejudice defendants.286
Furthermore, defendants have not alleged or shown that any jurors saw or were influenced by the comments. Rather, the jury specifically and repeatedly was ordered not to read any media coverage of the trial. Although we recognize that actual prejudice need not be shown, see Gentile, 501 U.S. at 1081, 111 S.Ct. 2720 (O'Connor, J., concurring), we are not persuaded that the comment would cause any prejudice, let alone material prejudice, to defendants.287
Because we believe the Attorney General did not violate the November order, we reverse the trial justice's finding of contempt for the "spin and twist" comment and vacate the imposition of sanctions.289291
The trial justice also found the Attorney General in contempt after he determined that the Attorney General's "duck and run" comment violated the court's December order. We conclude that the December order was unenforceable because it was not sufficiently clear to be the basis of a contempt finding. Therefore, we reverse that finding of contempt as well and vacate the subsequent imposition of sanctions.293
As previously discussed, an order upon which a contempt finding is based must be sufficiently "specific, clear and precise" to put individuals on notice about what conduct is prohibited or required. Ventures Management Co., 434 A.2d at 254 (quoting Sunbeam Corp., 86 R.I. at 194, 134 A.2d at 162). The court's order on December 6, 2005, directed the Attorney General "to cease and desist from making any subjective characterizations of the defendants or any of them or of their agents, servants or attorneys." In our opinion, the term "subjective" was too vague and imprecise to allow for a subsequent finding of contempt.294
Black's Law Dictionary defines "subjective" as "[b]ased on an individual's perceptions, feelings, or intentions, as opposed to externally verifiable phenomena." Black's Law Dictionary 1465 (8th ed. 2004). The phrase "subjective characterizations" did not adequately advise the Attorney General as to what speech was allowed and what speech was prohibited, given, it seems to us, that a vast number of statements could be characterized as both objective and subjective. Given this vague wording, we do not believe that the Attorney General was put on adequate notice about what types of speech actually were prohibited. Thus, we reverse the trial justice's finding of contempt based on the "duck and run" comment and vacate the related sanctions.296
It appears that in his written order of June 2, 2006, the trial justice also found the Attorney General in contempt of his February 22, 2006 bench order, which prohibited any "discussion" with jurors regarding the case. Because we do not believe the Attorney General's website posting qualified as a "discussion," we reverse the finding of contempt and vacate the imposition of sanctions.300
Because of the severe consequences of a civil-contempt finding, courts have "read court decrees to mean rather precisely what they say." NBA Properties, Inc. v. Gold, 895 F.2d 30, 32 (1st Cir.1990). Any ambiguities or uncertainties in court orders are read in the light most favorable to the person charged with contempt. Id. at 32. Addressing this method of interpretation, Justice Frankfurter of the United States Supreme Court said in a colorful dissent:301
"Obedience must of course be secured for the command of a court. To secure such obedience is the function of a proceeding for contempt. But courts should be explicit and precise in their commands and should only then be strict in exacting compliance. To be both strict and indefinite is a kind of judicial tyranny." McComb v. Jacksonville Paper Co., 336 U.S. 187, 195, 69 S.Ct. 497, 93 L.Ed. 599 (1949) (Frankfurter, J., dissenting).302
We adopted this standard in Sunbeam Corp., 86 R.I. at 195, 134 A.2d at 163, in which the respondent was enjoined from selling certain products "in its place of business." Reading this prohibition narrowly, we accepted the respondent's literal interpretation that a sale on the sidewalk outside its place of business did not violate the order. Id. at 195-96, 134 A.2d at 163. We said that "[t]his may be a narrow construction of the injunction in [respondent's] favor, but under the law as we understand it the respondent is entitled to rely on such a construction." Id. at 196, 134 A.2d at 163.303
Similarly, in United States v. Charmer Industries, Inc., 722 F.2d 1073, 1076 (2d Cir.1983), the Arizona Attorney General was enjoined "from making any publication or other use of any portion of the [defendant's Presentence] Report." When the Attorney General's office gave a newspaper reporter a memorandum with references to that report, a contempt motion was filed. Id. The trial justice, however, refused to find the attorney involved in contempt because the actual report was not provided to reporters. Id. at 1077. The Second Circuit affirmed this holding: "Although we consider [the attorney's] conduct reprehensible, we feel compelled to accept [the trial justice's] findings as not clearly erroneous and to deny the contempt motion principally because there was not a clear directive from this Court which barred the actions undertaken by [the attorney]." Id.304
Here, the parties were enjoined from having "any discussion with this jury." Interpreting this language narrowly, as we must, we cannot conclude that a website posting qualifies as a "discussion," which typically involves an exchange of information or ideas between more than one person. Constrained by the actual words in the bench order, we reverse the trial justice's finding of contempt and vacate the imposition of sanctions.305
Finally, and although we reverse each finding of contempt, we would be remiss if we did not acknowledge the enormous burden that the trial justice carried as he presided over litigation that must have seemed interminable and that always was accompanied by a significant amount of local and national media glare, public posturing, and a high level of general interest. Our reversal should in no way be interpreted as a criticism of the prodigious effort of the trial justice to control this litigation and keep all parties and counsel focused on the legal issues. Despite our vacating of the contempt orders, we continue to have enormous respect for this conscientious and scholarly trial justice.307
For the foregoing reasons, we reverse the contempt findings of the Superior Court.310
Justice ROBINSON for the Court.314
Although this Court has today held that the legal construct known as public nuisance does not constitute an appropriate cause of action in a case involving facts such as those presented by this case, thus technically rendering moot the issue of whether or not the execution of a contingent fee agreement between the Attorney General and certain private law firms was appropriate, we have nevertheless decided to address the legal issues surrounding the permissibility vel non of such an arrangement.316
The public health issues surrounding the use of lead paint in Rhode Island prompted the immediately previous Attorney General to commence a civil action against defendants in the Superior Court on October 12, 1999. See State v. Lead Industries Association, Inc., 898 A.2d 1234, 1235 (R.I. 2006). Prior to commencing that civil action, cognizant of the fact that there were not adequate resources to finance such a demanding and substantial civil case, that same Attorney General had executed a contingent fee agreement with the law firms of Ness, Motley, Loadholt, Richardson & Poole (now known as Motley Rice LLP) and Decof & Grimm (now known as Decof & Decof). Id. That agreement provided that, in return for their legal representation on behalf of the state in the lead paint litigation, Contingent Fee Counsel would be entitled to a fee reflecting 16 2/3 percent of any monies recovered. Id.320
During the course of this litigation, defendants sought a ruling by the Superior Court that the contingent fee agreement was unenforceable and void because, in defendants' view, said agreement (1) constituted an unlawful delegation of the Attorney General's authority and (2) was violative of public policy. Lead Industries Association, Inc., 898 A.2d at 1235-36. Following a series of events that are set forth in greater detail in our earlier opinion with respect to this issue, the Superior Court declined to make such a ruling and upheld the contingent fee agreement as a lawful contract. Id.321
Thereafter, defendants petitioned this Court for a writ of certiorari to review the narrow question of whether or not the contingent fee agreement between the Attorney General and Contingent Fee Counsel was lawful. Lead Industries Association, Inc., 898 A.2d at 1237. After hearing oral argument with respect to that issue on April 3, 2006, this Court ultimately declined to address the issue at that time because, upon reflection, we determined that it was not then properly justiciable. Id. at 1237-40.322
On May 15, 2008, when oral argument was held with respect to the merits (and associated issues), we also entertained further oral argument with respect to the contingent fee issue. The oral arguments of counsel in both April of 2006 and May of 2008, as well as the briefs of the parties and of amici, have been helpful to us in grappling with what is an issue of first impression for this Court.324
On many occasions we have stated that we are reluctant to opine on an issue that has become moot; as a general rule, courts should restrict themselves to the resolution of live controversies. See, e.g., Pelland v. State, 919 A.2d 373, 378 (R.I.2007); Sullivan v. Chafee, 703 A.2d 748, 752 (R.I.1997). Like so many other rules, however, this prudential rule is accompanied by an exception; pursuant to that exception, we will on occasion opine on moot questions that are "of extreme public importance [and] are capable of repetition but * * * evade review." Morris v. D'Amario, 416 A.2d 137, 139 (R.I.1980); see also Unistrut Corp. v. Department of Labor and Training, 922 A.2d 93, 99 (R.I. 2007); Krivitsky v. Town of Westerly, 823 A.2d 1144, 1146-47 (R.I.2003).328
In our view, the instant contingent fee issue falls into the latter category; we have concluded that this particular subject is one of extreme public importance and is also one that is "capable of repetition, yet evades review." State v. Cosores, 891 A.2d 893, 894 (R.I.2006) (mem.); see also State v. Perry, 944 A.2d 177, 178 (R.I.2008) (mem.) ("This Court will review moot cases when the subject matter is of `extreme public importance' and the issues are capable of repetition but evade review.") (quoting Pelland, 919 A.2d at 378); Arnold v. Lebel, 941 A.2d 813, 818-19 (R.I. 2007); see generally Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515, 31 S.Ct. 279, 55 L.Ed. 310 (1911) (employing for the first time, at least at the United States Supreme Court level, the "capable of repetition, yet evading review" formulation).329
Although we generally refrain from addressing issues that the case at hand does not require us to address, there are occasions when we deem it jurisprudentially sound to provide guidance with respect to an issue that "is bound to resurface" at some future point in time. Splendorio v. Bilray Demolition Co., 682 A.2d 461, 464 (R.I.1996); see Mello v. Superior Court, 117 R.I. 578, 581, 370 A.2d 1262, 1263 (1977) ("[I]n certain situations we will depart from the ordinary to better deal with the extraordinary."); see also State v. Delaurier, 488 A.2d 688, 691 n. 1 (R.I. 1985). This is just such an occasion. In our judgment, it would be a disservice to our fellow judicial officers and to the Attorney General and to the public at large if we were to decline to address the contingent fee issue that has been the subject of so much discussion both locally and in other jurisdictions. See note 50, infra.331
We begin our analysis by directing attention to the special nature of the constitutional office of Attorney General in this state. See R.I. Const. art. 9, sec. 12. In Suitor v. Nugent, 98 R.I. 56, 58, 199 A.2d 722, 723 (1964), we quoted with approval the following historical observation by the Supreme Court of Pennsylvania in the case of Commonwealth ex rel. Minerd v. Margiotti, 325 Pa. 17, 188 A. 524 (1936):339
"The office of Attorney General is an ancient one. It came into being as a necessary adjunct in the administration of the common law of England and was transported to America in the early days of the establishment of government in the colonies as part of their English derived common law." Id. at 526.340
In Rhode Island, the attorney general is vested with all the powers that that office possessed at common law. See Suitor, 98 R.I. at 58-59, 199 A.2d at 723; see also 7 Am.Jur.2d Attorney General § 6 (2007). Indeed, the Rhode Island constitution recognizes the Office of the Attorney General and provides for its continued existence with all the powers inherent at common law; it also provides that the General Assembly may imbue the Attorney General with powers in addition to those common law powers. See Suitor, 98 R.I. at 58, 199 A.2d at 723 ("The constitution did not purport to create such an office but recognized it as existing and provided for continuance of the powers and duties exercised by its occupant prior to the adoption of the constitution."); see also R.I. Const. art. 9, sec. 12.342
Although all attorneys have numerous important duties and responsibilities by virtue of their role as members of the bar, attorneys general have additional special duties which, because of the nature of that ancient and powerful governmental office, differ from those of the usual advocate. Unlike other attorneys who are engaged in the practice of law, the Attorney General "has a common law duty to represent the public interest." Newport Realty, Inc. v. Lynch, 878 A.2d 1021, 1032 (R.I.2005) (internal quotation marks omitted). As we have previously stated, "[t]he Attorney General of the State of Rhode Island holds a constitutional office with specific and significant responsibilities to the people of Rhode Island." Mottola v. Cirello, 789 A.2d 421, 424 (R.I.2002); see also State v. Briggs, 886 A.2d 735, 756 n. 9 (R.I.2005); State v. Peters, 82 R.I. 292, 297, 107 A.2d 428, 431 (1954) ("[The Attorney General] is in effect the representative of the people and not an advocate in the ordinary meaning of that term. * * * He represents all the people of the [state], including the defendant * * *.") (internal citations and quotation marks omitted).346
In view of the grave responsibilities of attorneys general vis-à-vis the public, the holder of that high office, as distinguished from the usual advocate, has a special and enduring duty to "seek justice." See, e.g., Bruce A. Green, Why Should Prosecutors "Seek Justice"?, 26 Fordham Urban L.J. 607, 612 (1999) ("The literature of the legal profession refers to the prosecutor's duty to `seek justice' or `do justice,' a professional ideal that analogizes prosecutors to judges and distinguishes prosecutors from other lawyers."). In other words, the Attorney General "has the responsibility of a minister of justice and not simply that of an advocate." Commentary to Article V, Rule 3.8 of the Supreme Court Rules of Professional Conduct; see also Newport Realty, Inc., 878 A.2d at 1032; State v. Ciulla, 115 R.I. 558, 568, 351 A.2d 580, 586 (1976); Orabona v. Linscott, 49 R.I. 443, 445, 144 A. 52, 53 (1928). We are acutely aware of and are in full accord with the principle that the United States Supreme Court so cogently expressed with respect to the prosecutorial role in the frequently quoted case of Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79 L.Ed. 1314 (1935):347
"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, * * * is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense the servant of the law * * *. He may prosecute with earnestness and vigor — indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one." Id. at 88, 55 S.Ct. 629 (emphasis added).348
While the just-quoted passage from the Supreme Court's unanimous opinion in the Berger case related to a federal criminal prosecution, it is our conviction that the same philosophy should guide each and every undertaking of the Attorney General of this state. It is the duty of the Attorney General to see to it "that justice shall be done" not only in the context of criminal prosecutions, but also while he or she carries out all the functions of that high office-including engagement in litigation in the civil arena. Id.; see generally Freeport-McMoRan Oil & Gas Co. v. Federal Energy Regulatory Commission, 962 F.2d 45, 47 (D.C.Cir.1992) (Mikva, C.J.) (stating that the solemn duty to do justice applies "with equal force to the government's civil lawyers").349
The principle that it is a government lawyer's duty to seek justice is as widely recognized as it is venerable. See, e.g., Brady v. Maryland, 373 U.S. 83, 88, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); Freeport-McMoRan Oil & Gas Co., 962 F.2d at 47; Hurd v. People, 25 Mich. 404, 416 (1872) ("The prosecuting officer represents the public interest * * *. His object like that of the court, should be simply justice; and he has no right to sacrifice this to any pride of professional success."); Foute v. State, 4 Tenn. (3 Hayw.) 98, 99 (1816) ("[The prosecutor] is * * * to * * * combine the public welfare and the [safety] of the citizens, preserving both, and not impairing either; he is to decline the use of individual passions, and individual malevolence, when he can not use them for the advantage of the public; he is to lay hold of them where public justice * * * requires it."). It is a principle that must at all times be carefully adhered to by every person who serves in that capacity, and the courts must be ever vigilant in this regard.350
Pursuant to article 9, section 12, of the present Rhode Island Constitution, the duties and powers of the Attorney General remain the same under the Constitution as they had existed at the time the Constitution was adopted "or as from time to time may be prescribed by law." Accordingly, the Attorney General in Rhode Island has broad powers and responsibilities pursuant to the Rhode Island Constitution, several Rhode Island statutes, and the common law. In the course of exercising those powers, the Attorney General is vested with broad discretion. 474*474 In view of the Attorney General's position as a constitutional officer and in view of his or her considerable discretionary powers, this Court has historically tended, whenever appropriate, to give deference to the strategic and tactical decisions made by those who hold that high office. See, e.g., Mottola, 789 A.2d at 425 ("It is not the province of this Court, or the Superior Court, to dictate how the Attorney General elects to carry out the * * * functions of his office.").351
It is our view that the Attorney General is entitled to act with a significant degree of autonomy, particularly since the Attorney General is a constitutional officer and is an independent official elected by the people of Rhode Island. We are impressed by the following language that appears in the opinion of the United States Court of Appeals for the Fifth Circuit in the case of State ex rel. Shevin v. Exxon Corp., 526 F.2d 266 (5th Cir.1976):352
"The Attorney General is elected by the people; he is entrusted by them with the common law power to legally represent them or some of them in matters deemed by him to affect the public interest. * * * Regardless of the effectiveness of his efforts in particular public legal situations, at least the people have the continuing satisfaction of knowing that their elected Attorney General has the right to exercise his conscientious official discretion to enter into those legal matters deemed by him to involve the public interest, even though not expressly authorized by statute." Id. at 268 n. 6 (internal quotation marks omitted).353
Bearing in mind the foregoing considerations relative to the Attorney General's powers and responsibilities, we now turn to the concrete issue before us — viz., whether or not it is appropriate for the holder of that office to enter into a contingent fee agreement in a civil case such as this one.355
Although we are keenly aware of the gravity of the issue and of the fact 475*475 that thoughtful and potent policy-based arguments have been made on both sides of the issue, in the end we have concluded that, in principle, there is nothing unconstitutional or illegal or inappropriate in a contractual relationship whereby the Attorney General hires outside attorneys on a contingent fee basis to assist in the litigation of certain non-criminal matters. Indeed, it is our view that the ability of the Attorney General to enter into such contractual relationships may well, in some circumstances, lead to results that will be beneficial to society — results which otherwise might not have been attainable. However, due to the special duty of attorneys general to "seek justice" and their wide discretion with respect to same, such contractual relationships must be accompanied by exacting limitations. In short, it is our view that the Attorney General is not precluded from engaging private counsel pursuant to a contingent fee agreement in order to assist in certain civil litigation, so long as the Office of Attorney General retains absolute and total control over all critical decision-making in any case in which such agreements have been entered into. See, e.g., County of Santa Clara v. 476*476 Superior Court, 161 Cal.App.4th 1140, 74 Cal.Rptr.3d 842, 850 (2008). In our view, it is imperative that the case-management authority of the Attorney General, where a contingent fee agreement is involved, be "final, sole and unreviewable." Philip Morris Inc. v. Glendening, 349 Md. 660, 709 A.2d 1230, 1243 (1998).359
As we have sought to explain in some detail earlier in this opinion, attorneys general are charged with the special duty to seek justice — a duty which is quite different from the responsibilities of the usual advocate. In accordance with that principle, we wholeheartedly agree with Chief Judge Mikva of the United States Court of Appeals for the District of Columbia when he wrote in almost perfervid language:360
"Government lawyers * * * should also refrain from continuing litigation that is obviously pointless, that could easily be resolved, and that wastes Court time and taxpayer money. * * * [A] government lawyer has obligations that might sometimes trump the desire to pound an opponent into submission." Freeport-McMoRan Oil & Gas Co., 962 F.2d at 47, 48.361
The usual advocate, on the other hand, is not held to quite such an abnegatory and demanding standard. Accordingly, in order to ensure that a contingent fee agreement is not adverse to the standards that an attorney representing the government must meet, it is vital that the Office of the Attorney General have absolute control over the course of any litigation originating in that office.362
At the risk of being repetitive, we would emphasize that the Attorney General's discretionary decision-making must not be delegated to the control of outside counsel; rather, it is the outside counsel who must serve in a subordinate role. See United States v. Cox, 342 F.2d 167, 192 (5th Cir.1965) ("[The Attorney General] is the representative of the public in whom is lodged a discretion which is not to be controlled by * * * an interested individual, or by a group of interested individuals * * *."); People v. Superior Court of Contra Costa County, 19 Cal.3d 255, 137 Cal. Rptr. 476, 561 P.2d 1164, 1172 (1977) ("[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."); see also County of Santa Clara, 74 Cal.Rptr.3d at 850 (holding that the duty 477*477 of government attorneys to seek justice is not contravened when private counsel, retained on a contingent fee basis, "are merely assisting * * * in the litigation * * * and are explicitly serving in a subordinate role * * *.").363
In order to ensure that meaningful decision-making power remains in the hands of the Attorney General, it is our view that, at a bare minimum, the following limitations should be expressly set forth in any contingent fee agreement between that office and private counsel: (1) that the Office of the Attorney General will retain complete control over the course and conduct of the case; (2) that, in a similar vein, the Office of the Attorney General retains a veto power over any decisions made by outside counsel; and (3) that a senior member of the Attorney General's staff must be personally involved in all stages of the litigation.364
Moreover, not only must the Attorney General have absolute control over all stages of the litigation, but he or she must also appear to the citizenry of Rhode Island and to the world at large to be exercising such control. See Offutt v. United States, 348 U.S. 11, 14, 75 S.Ct. 11, 99 L.Ed. 11 (1954) ("[J]ustice must satisfy the appearance of justice."); see also Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787, 806, 107 S.Ct. 2124, 95 L.Ed.2d 740 (1987); Marshall v. Jerrico, 446 U.S. 238, 242, 243, 100 S.Ct. 1610, 64 L.Ed.2d 182 (1980); Superior Court of Contra Costa County, 137 Cal.Rptr. 476, 561 P.2d at 1172 ("[I]t is precisely because the prosecutor enjoys such broad discretion that the public he serves and those he accuses may justifiably demand that he perform his functions with the highest degree of integrity and impartiality, and with the appearance thereof.")(emphasis added).366
We now turn to address defendants' contention that contingent fee agreements between the Attorney General and private counsel are violative of Rhode Island law because (in defendants' view) such agreements are tantamount to an unlawful appropriation of state funds. The defendants contend that, when the Office of the Attorney General finds itself in receipt of money that rightly is the state's, it must pay all of that money into the General Treasury. The defendants maintain that 478*478 contingent fee agreements would permit the Attorney General to circumvent the statutory requirement of payment to the General Treasury because such agreements would provide that a percentage of any damages would have to be paid to outside counsel before the balance would be passed on to the General Treasury. As defendants phrase their argument, officers of the state, including the Attorney General, "are not permitted to decide for themselves to divert the State's receipts * * *."375
We have given due consideration to defendants' argument that payment of a contingent fee would represent an illegal diversion of the state's receipts, but we have concluded that defendants' position is overly myopic.379
In our judgment, a successful contingent fee attorney has an equitable lien on any recovered damages in accordance with the term of the fee agreement. See Button's Estate v. Anderson, 112 Vt. 531, 28 A.2d 404, 406 (1942) ("Where the parties have contracted that the attorney shall receive a specified amount of the recovered fund, such agreement will create an equitable lien on the fund in favor of the attorney * * *.") (emphasis added); see also Barnes v. Alexander, 232 U.S. 117, 120, 34 S.Ct. 276, 58 L.Ed. 530 (1914) (Holmes, J.); Wylie v. Coxe, 56 U.S. (15 How.) 415, 419-20, 14 L.Ed. 753 (1853); 7 Am.Jur.2d Attorneys at Law § 319 at 354 (2007) ("Where the parties contract that the attorney will receive his or her fee from the amount recovered, the agreement creates an equitable lien in favor of the attorney * * *."). After the appropriate fee has been paid to contingent fee counsel, the net amount would constitute what defendants characterize as "the State's receipts" — and that amount would indeed be payable to the General Treasury.380
The amount properly to be paid to contingent fee counsel pursuant to a contingent fee agreement falls within the realm of equity; as such, it is inherently within a court's discretion to oversee the payment of such amounts to contingent fee counsel. Although the state would hold the legal title to any damages that might be awarded to the state in a civil trial, outside counsel who are retained on a contingent fee basis would have an equitable right to the portion of such damages that represents 479*479 their fee (subject to the significant caveat referenced in the next subsection of this opinion). See State v. Hagerty, 580 N.W.2d 139, 144-45 (N.D.1998); Button's Estate, 28 A.2d at 406-07, 409-10; City of Montpelier v. Gates, 106 Vt. 116, 170 A. 473, 475-76 (1934). We unreservedly agree with the Supreme Court of Vermont when it made the following helpful distinction between legal title and equitable rights in the context with which we are presently confronted:381
"Although the legal title to the whole fund no doubt is in the State, the [contingent fee attorneys] have equitable rights to that portion of the same which represents their fee. This part in all equity and good conscience belongs to them. They have earned it and should receive it. This portion of the fund never legally and equitably belonged to the State as part of its public funds for, at the latest, when received, the lien attached to it and remains upon it so that it is held by the State subject to the same." Button's Estate, 28 A.2d at 410 (emphasis added).382
As that same court stated in an earlier case: "It is all a matter of bookkeeping, and an honest creditor is not to be denied, simply because the payment of his claim may somewhat upset the treasurer's books." City of Montpelier, 170 A. at 475; see also Button's Estate, 28 A.2d at 410.384
It is our view that, in cases such as the one at bar, the contingent fee payable to outside counsel should be subject to oversight and scrutiny by the courts before payment is made to said counsel and before any net amount would be payable to the state. Courts have the inherent authority to review attorney contingent fee contracts in order to prevent unreasonableness. See, e.g., In re Boston and Maine Corp. v. Sheehan, Phinney, Bass & Green, P.A., 778 F.2d 890, 896 (1st Cir. 1985) ("Contingent fees are, of course, of special concern to courts and are subject to strict judicial supervision."); see also United States ex rel. Taxpayers Against Fraud v. General Electric Co., 41 F.3d 1032, 1047 (6th Cir.1994) ("[A]n attorney's right to contract for a contingent fee is not completely beyond judicial control. A lawyer is first an officer of the court, and as such his commercial contractual rights must yield to his duty. [A] judge has broad equity power to supervise the collection of attorney's fees under contingency fee contracts.") (internal quotation marks omitted); In re "Agent Orange" Product Liability Litigation, 818 F.2d 226, 240 (2d Cir.1987) (holding that, pursuant to a well established principle, courts may review contingent fee agreements); International Travel Arrangers, Inc. v. Western Airlines, Inc., 623 F.2d 1255, 1277 (8th Cir. 1980) ("The court has the power and the responsibility to monitor contingency fee agreements for reasonableness."); Farmington Dowel Products Co. v. Forster Mfg. Co., 421 F.2d 61, 90-91 (1st Cir.1969); 7 Am.Jur.2d Attorneys at Law § 239 at 288 (2007) ("Courts possess traditional authority to supervise the charging of fees for legal services pursuant to their inherent and statutory power to regulate the practice of law."). Moreover, a court may examine an attorney's fee for reasonableness even when the parties themselves have not 480*480 challenged the validity of the fee arrangement. See Rosquist v. Soo Line Railroad, 692 F.2d 1107, 1111 (7th Cir.1982); see also 7 Am.Jur.2d § 239 at 288 ("A court may inquire into the reasonableness of attorney fees as part of its inherent authority to regulate the practice of law.").388
After a court has performed the function of reviewing and approving such a fee, thus allowing the requisite fee to be paid to the contingent fee counsel, the resulting balance would then be turned over to the General Treasury. See Hagerty, 580 N.W.2d at 143, 143-45 (holding that a contingent fee agreement between the Attorney General and outside counsel did not violate the provision in the constitution of that state to the effect that all state "moneys * * * be paid into the treasury and disbursed only pursuant to legislative appropriation" because the contingent fee counsel had an equitable right to a certain portion of any damages).389
Accordingly, it is our view that contingent fee agreements between the Attorney General and outside counsel would not be violative of the statutory provisions that require that all money due to or belonging to the state be paid to the General Treasurer.391
We conclude our discussion of the contingent fee issue by emphasizing our awareness that this issue involves competing values — each of which deserves respect. Attorneys who choose to litigate under contingent fee agreements understandably often have motives that, in whole or in part, are monetary in nature. Such motivation is qualitatively different from the more pristine considerations that should guide the Attorney General's decision-making. While we do not look upon contingent fee agreements with a jaundiced eye due to the fact that they inherently implicate personal profit-making as a motivation, it is precisely because of the possibility of that motivating factor having an influence on decisions made by contingent fee counsel that it is utterly imperative that absolute primacy be accorded at all times to the decision-making role of the Attorney General when he or she has entered into an agreement with contingent fee counsel. Such absolute primacy is necessary in order to ensure that the profit-making motivation is always subordinated to the Attorney General's "common law duty to represent the public interest." Newport Realty, Inc., 878 A.2d at 1032 (internal quotation marks omitted).394
For the forgoing reasons, we (1) reverse the judgment of abatement with respect to defendants, Millennium, NL, and Sherwin-Williams; (2) affirm the judgment with respect to defendant ARCO; (3) reverse the contempt findings of the Superior Court; and (4) recognize the validity of certain contingency fee agreements between the Attorney General and outside counsel.396
The following observation contained in an opinion authored by Judge Bruce Selya of the United States Court of Appeals for the First Circuit expresses this Court's sentiments:397
"This is a hard case — hard not in the sense that it is legally difficult or tough to crack, but in the sense that it requires us * * * to deny relief to a plaintiff for whom we have considerable sympathy. We do what we must, `for it is the duty of all courts of justice to take care, for the general good of the community, that 481*481 hard cases do not make bad law.'" Burnham v. Guardian Life Insurance Company of America, 873 F.2d 486, 487 (1st Cir.1989).398
Justice Goldberg did not participate.400
 See State of Rhode Island v. Lead Industries Association, Inc., No. PC 99-5226, 2007 WL 711824, 2007 R.I.Super. LEXIS 32 (Feb. 26, 2007); see also Peter B. Lord, Jurors in lead-paint trial say they're proud of verdict, The Providence Journal, Mar. 12, 2006, at B1 (noting that "court officials believe [the lead paint trial] was the longest civil trial in state history").402
 Lisa A. Perillo, Note: Scraping Beneath the Surface: Finally Holding Lead-Based Paint Manufacturers Liable by Applying Public Nuisance and Market-Share Liability Theories?, 32 Hofstra L.Rev. 1039, 1041 (2004).404
 The members of this Court extend their sincere gratitude and appreciation to Justice Michael A. Silverstein and his staff, especially court reporter Rosemary Patalano and clerk Jean Maggiacomo, for their diligent work through two trials, nineteen written rulings, and thousands of transcript pages of testimony and hearings. We also thank counsel for the respective-parties for their cooperation in participating at numerous scheduling conferences and in providing the Court with electronic appendices, thereby helping us effectively to tackle this difficult and problematic case. Finally, we would be remiss if we did not recognize that the briefs of the parties and of the amici curiae and the oral arguments by counsel were particularly helpful to us.406
 Law consists not only of legislative enactments, but also of certain principles, norms, and causes of action that have evolved over centuries as "the common law."408
 Patricia A. Nolan, M.D., estimated that at the time of trial, between 240,000 and 250,000 Rhode Island homes contained lead-based paint.410
 The municipalities described as "core cities" are Central Falls, Newport, Pawtucket, Providence, (the town of) West Warwick, and Woonsocket. Rhode Island Department of Health, Childhood Lead Poisoning in Rhode Island: The Numbers 2005 Edition 4, 15.412
 The Lead Industries Association (LIA) declared bankruptcy before the second trial of this case.414
 Millennium Inorganic Chemicals, Inc. later was added to the complaint as the successor to The Glidden Company's lead pigment business. See also infra note 14 for the status of Millennium Inorganic Chemicals, Inc.416
 The O'Brien Corporation ultimately was dropped from this lawsuit.418
 The trial justice later granted American Cyanamid Company's motion to sever the state's claims against it from the primary trial. The trial justice explained that American Cyanamid, which had limited involvement with the LIA for a short period in the 1970s, might be prejudiced by proceeding to trial with other defendants that had experienced much greater involvement with the LIA.420
 E.I. Du Pont de Nemours and Company settled with the state before the second trial.422
 The trial court later dismissed the state's claim against ConAgra Grocery Products Company (ConAgra), finding that paint manufactured by the W.P. Fuller Paint Company, ConAgra's predecessor, or ConAgra was not present in Rhode Island.424
 Cytec Industries, Inc. ultimately was dropped from this lawsuit.426
 By stipulation of the state and Millennium Inorganic Chemicals, Inc. (Millennium Inorganic), on August 13, 2004, Millennium Holdings LLC was substituted for Millennium Inorganic as if Millennium Holdings LLC had been named as the defendant at the outset of this litigation. Millennium Inorganic was thereby dismissed without prejudice.428
 The state eliminated that count of its original complaint seeking equitable relief to protect children when it filed its second-amended complaint.430
 See In re Lead Paint Litigation, 191 N.J. 405, 924 A.2d 484, 506 (2007) (Zazzali, C.J., dissenting) (positing that courts have "a duty to reconcile outdated formulations of the common law with the complexities of contemporary society. * * * [As such,] [t]he common law must `stand ready to adapt as appropriate, to shape, redress, and remedy so as to answer measure for measure the particular evil it pursues.'") (quoting Tachiona v. Mugabe, 169 F.Supp.2d 259, 318 (S.D.N.Y.2001), rev'd on other grounds, 386 F.3d 205 (2d Cir. 2004)).432
 The tort of public nuisance has been described as "at least contested, and perhaps confused beyond repair," Louise A. Halper, Untangling the Nuisance Knot, 26 B.C. Envtl. Aff. L. Rev. 89, 96 (1998) and as an "impenetrable jungle," W. Page Keeton et al., Handbook of the Law of Torts, ch. 15, § 86 at 616 (5th ed. 1984). It has been said that "[nuisance] has meant all things to all people, and has been applied indiscriminately to everything from an alarming advertisement to a cockroach baked in a pie. There is general agreement that it is incapable of any exact or comprehensive definition." W. Page Keeton et al., ch. 15, § 86 at 616.434
 Soon after, Millennium also filed a motion for both severance and a continuance. Millennium argued that the Attorney General's comments in the above-cited Providence Journal article prevented it from receiving a fair trial. Sherwin-Williams also filed a similar motion, citing various articles and arguing that the Attorney General's statements undermined its right to an impartial jury. The trial justice denied both motions.436
 At the time, Article V, Rule 3.6 of the Supreme Court Rules of Professional Conduct said in full:437
"(a) A lawyer shall not make an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the lawyer knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding.438
"(b) A statement referred to in paragraph (a) ordinarily is likely to have such an effect when it refers to a civil matter triable to a jury, a criminal matter, or any other proceeding that could result in incarceration, and the statement relates to:439
"(1) the character, credibility, reputation or criminal record of a party, suspect in a criminal investigation or witness, or the identity of a witness, or the expected testimony of a party or witness;440
"(2) in a criminal case or proceeding that could result in incarceration, the possibility of a plea of guilty to the offense or the existence or contents of any confession, admission, or statement given by a defendant or suspect or that person's refusal or failure to make a statement;441
"(3) the performance or results of any examination or test or the refusal or failure to a person to submit to an examination or test, or the identity or nature of physical evidence expected to be presented;442
"(4) any opinion as to the guilt or innocence of a defendant or suspect in a criminal case or proceeding that could result in incarceration;443
"(5) information the lawyer knows or reasonably should know is likely to be inadmissible as evidence in a trial and would if disclosed create a substantial risk of prejudicing an impartial trial; or444
"(6) the fact that a defendant has been charged with a crime, unless there is included therein a statement explaining that the charge is merely an accusation and that the defendant is presumed innocent until and unless proven guilty.445
"(c) Notwithstanding paragraphs (a) and (b)(1-5), a lawyer involved in the investigation or litigation of a matter may state without elaboration:446
"(1) the general nature of the claim or defense;447
"(2) the information contained in a public record;448
"(3) that an investigation of the matter is in progress, including the general scope of the investigation, the offense or claim or defense involved and, except when prohibited by law, the identity of the persons involved;449
"(4) the scheduling or result of any step in litigation;450
"(5) a request for assistance in obtaining evidence and information necessary thereto;451
"(6) a warning of danger concerning the behavior of a person involved, when there is reason to believe that there exists the likelihood of substantial harm to an individual or to the public interests; and452
"(7) in a criminal case:453
"(i) the identity, residence, occupation and family status of the accused;454
"(ii) if the accused has not been apprehended, information necessary to aid in apprehension of that person;455
"(iii) the fact, time and place of arrest; and456
"(iv) the identity of investigating and arresting officers or agencies and the length of the investigation."458
 The Attorney General immediately moved for a stay of the court's imposition of sanctions so he could appeal the contempt finding, which the trial justice agreed to do. The Attorney General then filed a notice of appeal and he asked this Court to seal the notice, the relevant docket sheet, and all pleadings and submissions filed in connection with the contempt appeal. The Attorney General, however, apparently later abandoned the appeal.460
 The trial justice sealed this order as well as the contempt-hearing transcript.462
 At this time, the jury had returned a verdict in favor of the state, but had not determined punitive damages.464
 Because Article V, Rule 3.5 of the Supreme Court Rules of Professional Conduct never was incorporated into an order, the trial justice did not and could not have found the Attorney General in contempt for violating that rule.466
 Although neither the bench decision nor the subsequent written order referred to the trial justice's February 22, 2006 warning to the parties to avoid "discussion" with the jury, the trial justice's contempt finding based on the Attorney General's website posting undeniably rested in part on that directive.468
 The trial justice again granted a stay of the sanctions to permit the Attorney General to seek appellate review.470
 For ease of reference, we will refer to plaintiffs, who appealed the contempt findings and sanctions, as either the Attorney General or state.472
 In jurisdictions in which it is recognized, the collateral-bar doctrine prohibits a party from questioning the validity of an underlying order for the first time in a contempt hearing. Because we reverse the trial justice's findings of contempt and vacate the imposition of sanctions, however, we do not need to address this argument. We express no view on whether the collateral-bar doctrine should be recognized in this jurisdiction.474
 Again, because we vacate the imposition of sanctions, we do not address the propriety of the amount of those sanctions.476
 The state argues on appeal that the November order was unenforceable, asserting that the order was an unconstitutional prior restraint on expression and was not sufficiently clear. Because this Court will not decide a case on constitutional grounds when it otherwise can be decided, see Caron v. Town of North Smithfield, 885 A.2d 1163, 1165 (R.I. 2005) (mem.); In re Court Order Dated October 22, 2003, 886 A.2d 342, 350 n. 7 (R.I. 2005); Amico's Inc. v. Mattos, 789 A.2d 899, 909 (R.I.2002), and because we find that there was no violation of the November order, we need not address these arguments.478
 It should be noted, however, that a majority of the Gentile Court said that the disputed Nevada rule was void for vagueness based on a safe-harbor provision. Gentile v. State Bar of Nevada, 501 U.S. 1030, 1048, 111 S.Ct. 2720, 115 L.Ed.2d 888 (1991) (Kennedy, J., joined by Marshall, Blackmun, Stevens, and O'Connor, JJ.) Although a similar safe-harbor provision is present in Rule 3.6(c), this subsection is not at issue in this case; the Attorney General has not cited or relied upon Rule 3.6(c), and he does not argue on appeal that any of his challenged public statements are protected by that provision.480
 Again, we decline to base our decision on constitutional grounds given the previously discussed precedent. We note, however, that in an order issued on June 15, 2006, we indicated our grave reservations concerning the constitutionality of paragraph 1.1: "being acutely mindful of our legal tradition of opting in favor of permitting the exercise of free speech rights except in truly unusual circumstances, we have concluded that the Order in question should be stayed pending final resolution by this Court."482
 Our reasons for reaching the contingent fee issue in spite of the presence of mootness are set forth in section "II" of this opinion, infra.484
 We shall refer to the two law firms collectively as "Contingent Fee Counsel."486
 Pertinent portions of the contingent fee agreement between the Attorney General and Contingent Fee Counsel are set forth extensively in this Court's earlier opinion concerning the contingent fee issue. State v. Lead Industries Association, Inc., 898 A.2d 1234, 1235-36 n. 4 (R.I.2006).488
 The defendants' public policy argument was largely predicated on the reasoning of the Supreme Court of California in People ex rel. Clancy v. Superior Court, 39 Cal.3d 740, 218 Cal.Rptr. 24, 705 P.2d 347 (1985).490
 Article 9, section 12, of the Rhode Island Constitution reads in its entirety as follows:491
"The duties and powers of the secretary, attorney-general and general treasurer shall be the same under this Constitution as are now established, or as from time to time may be prescribed by law."493
 The office of Attorney General is of ancient vintage. It was known to Shakespeare (see Richard II, act 2, sc. 1), and it appears to have existed long before that era. See Hugh H.L. Bellot, The Origin of the Attorney-General, 25 L.Q. Rev. 400, 404 (1909).495
 In this opinion's discussion concerning the special duties of attorneys general, we shall frequently employ the term "the usual advocate" to refer to the broad class of all attorney advocates as distinguished from the much narrower class of those lawyers who are attorneys general or employees of same. The term "the usual advocate" is used in this manner in the American Bar Association Model Code of Professional Responsibility. See note 40, infra. Our use of said term implies absolutely no disrespect.497
 We wish to indicate in the strongest terms that we should not be understood as implying that lawyers in general should be indifferent to the need for justice in our society. Indeed, members of the legal profession should be especially sensitive to that noble concept and should be proactive in efforts to bring about an ever more just society. See generally Preamble to the Supreme Court Rules of Professional Conduct.498
At the same time, however, given the nature of the adversary system, it is requisite that, when engaged in litigation, "the usual advocate" (as contrasted with the Attorney General) must single-mindedly represent the client to the best of his or her ability, and opposing counsel must do likewise for the other party. The adversary system is based upon the assumption that truth and justice will be the end product of this dialectical process. See, e.g., Gannett Co. v. DePasquale, 443 U.S. 368, 384, 99 S.Ct. 2898, 61 L.Ed.2d 608 (1979) ("[O]ur adversary system * * * is premised upon the proposition that the public interest is fully protected by the participants in the litigation."). Although there undoubtedly are occasions when the adversary system does not yield such an end product, it is nonetheless the system that Anglo-American jurisprudence has for centuries deemed to be the best for arriving at truth and justice.500
 See also American Bar Association Model Code of Professional Responsibility EC 7-14 ("A government lawyer in a civil action or administrative proceeding has the responsibility to seek justice * * *.") (emphasis added) (hereinafter ABA Model Code); ABA Model Code EC 7-13 ("The responsibility of a public prosecutor differs from that of the usual advocate; his duty is to seek justice, not merely to convict."). (Emphasis added.)501
The ABA Model Code further elaborates on the duty of attorneys general to seek justice in the following words:502
"This special duty exists because: (1) the prosecutor represents the sovereign and therefore should use restraint in the discretionary exercise of governmental powers; * * * [and] (2) during trial the prosecutor is not only an advocate but he also may make decisions normally made by an individual client, and those affecting the public interest should be fair to all * * *." EC 7-13.504
 See also Brady v. Maryland, 373 U.S. 83, 87 n. 2, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963) ("[T]he Government wins its point when justice is done in its courts.") (quoting Solicitor General Frederick W. Lehmann as attributed to him by Solicitor General (later Judge) Simon E. Sobeloff in an address before the Judicial Conference of the Fourth Circuit (June 29, 1954)); United States v. Bartelho, 129 F.3d 663, 671 (1st Cir.1997) (also quoting Solicitor General Sobeloff's address); Trout v. Garrett, 780 F.Supp. 1396, 1421 n. 60 (D.D.C. 1991) (noting that the following variant of Solicitor General Lehmann's statement is carved as an inscription above the entrance to the Office of the Attorney General of the United States: "The United States wins its point whenever justice is done its citizens in the courts.").506
 The ABA Model Code expressly states that a "government lawyer in a civil action or administrative proceeding has the responsibility to seek justice" and "should refrain from instituting or continuing litigation that is obviously unfair." EC 7-14; see also City of Los Angeles v. Decker, 18 Cal.3d 860, 135 Cal. Rptr. 647, 558 P.2d 545, 551 (1977) ("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).508
 For a more complete exposition of the origins of the concept that it is the duty of attorneys general to seek justice, see Bruce A. Green, Why Should Prosecutors "Seek Justice"?, 26 Fordham Urban L.J. 607 (1999).510
 See, e.g., G.L. 1956 chapter 9 of title 42 (establishing the department of the attorney general and setting forth its powers and duties); G.L. 1956 § 12-1-4 (creating a division of criminal identification in the department of the attorney general); § 12-1-7 (providing that the attorney general shall procure and file certain criminal identification records); § 12-1-8.1 (concerning a method of identification).512
 See Suitor v. Nugent, 98 R.I. 56, 58, 199 A.2d 722, 723 (1964) ("The constitution did not purport to create such an office but recognized it as existing and provided for continuance of the powers and duties exercised by its occupant prior to the adoption of the constitution."); see also Orabona v. Linscott, 49 R.I. 443, 445, 144 A. 52, 53 (1928) ("Under the Constitution and by long-established practice great power and responsibility for the enforcement of the criminal laws are lodged in the Attorney General.").513
Those attorneys general who are vested with authority pursuant to the common law (as is the case in Rhode Island) possess a wide variety of powers. See 7 Am.Jur.2d Attorney General § 6 at 11 (2007) ("Under the common law, the attorney general has the power to bring any action which he or she thinks necessary to protect the public interest, a broad grant of authority which includes the power to act to enforce the state's statutes. In the exercise of these common-law powers, an attorney general may not only control and manage all litigation on behalf of the state, but may also intervene in all suits or proceedings which are of concern to the general public."); see also State of Florida ex rel. Shevin v. Exxon Corp., 526 F.2d 266, 268-69 (5th Cir.1976) ("[The duties and powers of attorneys general] are not exhaustively defined by either constitution or statute but include all those exercised at common law. * * * [Accordingly, the attorney general] typically may exercise all such authority as the public interest requires. And the attorney general has wide discretion in making the determination as to the public interest.").515
 See, e.g., In re House of Representatives (Special Prosecutor), 575 A.2d 176, 179 (R.I. 1990) ("A key aspect of the Attorney General's role as public prosecutor is the element of discretion. It is well settled in this state that the Attorney General is the only state official vested with prosecutorial discretion.") (internal quotation marks omitted); Suitor, 98 R.I. at 60, 199 A.2d at 724 ("[T]his court recognizes that the attorney general, in acting to enforce the * * * law, performs acts which require an exercise of judgment or discretion * * *."); see also State v. Rollins, 116 R.I. 528, 533, 359 A.2d 315, 318 (1976).517
 Although the Fifth Circuit in the cited case was discussing the role of the Attorney General in another state, we consider its descriptive words to be equally applicable to the Attorney General of Rhode Island.519
 We emphasize that this opinion's exposition of our present view concerning contingent fee agreements should be understood as being strictly limited to the context of civil litigation. We explicitly refrain from extending such views to the criminal context. Indeed, we are unable to envision a criminal case where contingent fees would ever be appropriate — even if they were not explicitly barred, as is the case in this jurisdiction. See Article V, Rule 1.5(d)(2) of the Supreme Court Rules of Professional Conduct ("A lawyer shall not enter into an arrangement for, charge, or collect * * * a contingent fee for representing a defendant in a criminal case."); see also ABA Model Code DR 2-106(C) (same); Peter Lushing, The Fall and Rise of the Criminal Contingent Fee, 82 J. Crim. L. & Criminology 498, 500 (1991) ("Contingent fees for criminal defense attorneys * * * are almost uniformly considered unethical and illegal."); F.B. MacKinnon, Contingent Fees for Legal Services: A Study of Professional Economics and Responsibilities 52 (1964) ("The third area of practice [in addition to domestic relations and government lobbying] in which the use of the contingent fee is generally considered to be prohibited is the prosecution and defense of criminal cases.").520
We are cognizant of the fact that the legal construct known as public nuisance has some historical relationship with the criminal law and may, even today, sometimes be the basis for a criminal prosecution. See, e.g., People ex rel. Clancy, 218 Cal.Rptr. 24, 705 P.2d at 353. Significantly, however, the case presently before us is completely civil in nature.522
 See Peter Karsten, Enabling the Poor to Have Their Day in Court: The Sanctioning of Contingency Fee Contracts, A History to 1940, 47 DePaul L. Rev. 231 (1998) (discussing, in a particularly scholarly manner, the early history of contingent fee agreements).524
 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. See, e.g., People ex rel. Clancy, 218 Cal.Rptr. 24, 705 P.2d at 351-52 (holding that the contingent fee arrangement between the city government and outside counsel was improper); County of Santa Clara v. Superior Court, 161 Cal.App.4th 1140, 74 Cal.Rptr.3d 842, 853 (2008) (stating that the just-cited decision of the Supreme Court of California in Clancy "does not bar the public entities from engaging private counsel under a contingent fee arrangement to assist in [public nuisance] litigation, so long as the public entities' in-house counsel retain control over all decision-making"); State v. Hagerty, 580 N.W.2d 139, 147-48 (N.D.1998) (holding that the attorney general of that state possessed the authority to employ special assistant attorneys general on a contingent fee basis); Exec. Order No. 13433, 72 Fed. Reg. 28441 (May 16, 2007) (barring federal agencies from employing lawyers on a contingent fee basis in all instances); 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, 182-83 (2006) (noting that, as of that time, seven states (Colorado, Connecticut, Kansas, Minnesota, North Dakota, Texas, and Virginia) had adopted legislation that regulates the manner in which their respective attorneys general may enter into contingent fee agreements); Valerie Jablow, Governments and Tort `Reformers' Clash Over the Hiring of Private Lawyers, 43 Trial 12 (Aug. 2007).525
We have concluded that the reasoning of the Supreme Court of California in Clancy is distinguishable from the case at bar for the reasons set forth in City and County of San Francisco v. Philip Morris, Inc., 957 F.Supp. 1130, 1135 (N.D.Cal.1997) and in County of Santa Clara, 74 Cal.Rptr.3d at 848-53.526
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.528
 There is wisdom in the ancient maxim: "De minimis non curat lex." (The law does not concern itself with trifles.) In that vein, we recognize that, in the course of litigation in which contingent fee counsel is involved, certain decisions of the "de minimis" or ministerial variety will from time to time have to be made. As to who should make such relatively petty decisions, pragmatism rather than rigidity should be the watchword. See Peak v. United States, 353 U.S. 43, 46, 77 S.Ct. 613, 1 L.Ed.2d 631 (1957) ("[C]ommon sense often makes good law."). Nevertheless, when there is doubt as to who should make a particular decision, the "close calls" should be made in favor of the decisional authority of the Attorney General.530
 We would caution that the above-enumerated limitations are not exhaustive; the presence of such limitations in a particular contingent fee arrangement is not a guarantee that that agreement will pass muster. The issue of the Attorney General's entering into contingent fee agreements is at this point in time very much terra incognita, and careful review on a case-by-case basis will be required.532
 In support of their argument, defendants have pointed to G.L.1956 § 35-6-7, which provides in pertinent part as follows:533
"Every clerk, officer, or other person who * * * shall neglect or refuse to pay into the state treasury any money belonging to the state, at the time when the money ought to be paid, shall forfeit thrice the amount of the money so withheld or not paid, to be recovered in an action of debt, in the name of the general treasurer, for the use of the state."534
The defendants have also directed this Court's attention to G.L.1956 § 35-4-2 and § 35-4-4.535
The relevant portion of § 35-4-2 provides:536
"All revenue of the state of whatever character shall be paid into the hands of the general treasurer and credited to the general funds of the state * * *."537
Section 35-4-4 provides:538
"All moneys due to the state shall be paid to the general treasurer, who shall be responsible for the safekeeping and proper disbursement thereof according to law."540
 As we emphasize below, there is nothing automatic about such an equitable lien. Judicial oversight concerning attorneys' fees continues to be a matter of importance, as it historically has been.542
 Although it is of no real relevance to the legal principles that the Vermont opinion so well articulates, it is fascinating to note the historical context of Button's Estate v. Anderson, 112 Vt. 531, 28 A.2d 404 (1942). It appears that in 1932, the Governor of Vermont retained two nongovernmental attorneys "to take charge of, prosecute and endeavor to collect and recover from the government of the United States the claim of the State of Vermont for expenditures for military purposes in the war of 1812-1815 with Great Britain." Id. at 405 (emphasis added). One cannot help but recall the famous remark by one of William Faulkner's characters: "The past is never dead. It's not even past."544
 The fact that, in Rhode Island, the Attorney General is a constitutional officer militates against any suggestion that, in a contingent fee situation, the gross amount of damages recovered must be deposited in the General Treasury with the proper contingent fee to be paid only thereafter upon a vote of appropriation in the General Assembly. Such a regime would accord insufficient respect to the Attorney General's status as a constitutional officer.546
 Pursuant to Rule 1.5 of the Rules of Professional Conduct, an attorney's fee must be reasonable; any fee, including a contingent fee, is subject to oversight by the courts to ensure that a particular fee or fee agreement is, in fact, reasonable. That Rule sets forth a non-exclusive list of factors that a court must consider when determining whether or not an attorney's fee is reasonable.548
 We note once again that the Supreme Court Rules of Professional Conduct look with approval upon contingent fee agreements in some contexts. See Rule 1.5.
Supreme Court of California.
Ann Miller Ravel and Miguel Marquez, County Counsel (Santa Clara), Cheryl A. Stevens, Aryn P. Harris, Winifred Botha, Orry Korb, Tamara Lange and Anne O. Decker, Deputy County Counsel; Dennis J. Herrera, City Attorney (San Francisco), Owen J. Clements, Chief of Special Litigation, Danny Chou and Erin Bernstein, Deputy City Attorneys; Michael J. Aguirre and Jan Goldsmith, City Attorneys (San Diego), Sim von Kalinowski, Chief Deputy City Attorney, Daniel F. Bamberg, Deputy City Attorney; Richard E. Winnie, County Counsel (Alameda), Raymond L. MacKay and Andrea L. Weddle, Deputy County Counsel; Dennis Bunting, County Counsel (Solano); Thomas F. Casey III and Michael P. Murphy, County Counsel (San Mateo), Brenda Carlson, Chief Deputy County Counsel, Rebecca M. Archer, Deputy County Counsel; Raymond G. Fortner, Jr., and Andrea Sheridan Ordin, County Counsel (Los Angeles), Donovan M. Main, Richard K. Mason and Robert E. Ragland, Deputy County Counsel; Rockard J. Delgadillo, City Attorney (Los Angeles), Jeffrey B. Isaacs, Chief of Criminal and Special Litigation, Patricia Bilgin and Elise Ruden, Deputy City Attorneys; John A. Russo, City Attorney (Oakland), Christopher Kee, Deputy City Attorney; Charles J. McKee, County Counsel (Monterey), William M. Litt, Deputy County Counsel; Cotchett, Pitre & McCarthy, Frank M. Pitre, Nancy L. Fineman, Ara Jabagchourian, Douglas Y. Park; Thornton & Naumes, Michael P. Thornton, Neil T. Leifer; Motley Rice, Fidelma Fitzpatrick, Aileen Sprague; Mary Alexander & Associates, Mary Alexander and Jennifer L. Fiore for Petitioners.
Arthur H. Bryant and Victoria W. Ni for Public Justice, P.C., as Amicus Curiae on behalf of Petitioners.
Genevieve M. Allaire Johnson, Special Assistant Attorney General; Hagens Berman Sobol Shapiro and Jeff D. Friedman for State of Rhode Island as Amicus Curiae on behalf of Petitioners.
Jennifer B. Henning for California State Association of Counties and League of California Cities as Amici Curiae on behalf of Petitioners.
Waters Kraus & Paul, Ingrid M. Evans, David L. Cheng; Waters Kraus, Charles S. Siegel and Loren Jacobson for Healthy Children Organizing Project, Western Center on Law and Poverty, The Inner City Law Center, Public Advocates, Inc., Public Health Institute, Law Foundation of Silicon Valley, California Conference of Local Health Officers, Prevention Institute, Alliance for Healthy Homes, American Academy of Pediatrics, California Center for Public Health Advocacy, Equal Justice Society and Worksafe Law Center as Amici Curiae on behalf of Petitioners.
Rosen, Bien & Galvan, Sanford Jay Rosen, Kenneth M. Walczak, Elizabeth H. Eng; Law Offices of Richard M. Pearl and Richard M. Pearl for Legal Ethics Professors Erwin Chemerinsky, Stephen Gillers, Nathaniel E. Gozansky, Matthew I. Hall, Carol M. Langford, Deborah L. Rhode, Mark L. Tuft and W. Bradley Wendel as Amici Curiae on behalf of Petitioners.
Gardere Wynne Sewell, Richard O. Faulk, John S. Gray; Steptoe & Johnson and Jay E. Smith for Public Nuisance Fairness Coalition, American Chemistry Council, Property Casualty Insurers Association of America and National Association of Manufacturers as Amici Curiae on behalf of Petitioners.
Sher Leff and Victor M. Sher for Association of California Water Agencies as Amicus Curiae on behalf of Petitioners.
No appearance for Respondent.
Arnold & Porter, Ronald C. Redcay, Sean Morris, Eric May, Shane W. Tseng, John R. Lawless, Kristen L. Roberts, Philip H. Curtis and William H. Voth for Real Party in Interest Atlantic Richfield Company.
Horvitz & Levy, David M. Axelrad and Lisa Perrochet for Real Party in Interest Millennium Inorganic Chemicals Inc.
Orrick, Herrington & Sutcliffe, Richard W. Mark, Elyse D. Echtman; Filice Brown Eassa & McLeod, Peter A. Strotz, William E. Steimle and Daniel J. Nichols for Real Party in Interest American Cyanamid Company.
Greve, Clifford, Wengel & Paras, Lawrence A. Wengel, Bradley W. Kragel; Ruby & Schofield, Law Office of Allen Ruby, Allen J. Ruby, Glen W. Schofield; McGrath, North, Mullin & Kratz, James P. Fitzgerald and James J. Frost for Real Party in Interest ConAgra Grocery Products Company.
McGuire Woods, Steven R. Williams, Collin J. Hite; Glynn & Finley, Clement L. Glynn and Patricia L. Bonheyo for Real Party in Interest E.I. du Pont de Nemours and Company.
Halleland, Lewis, Nilan & Johnson, Michael T. Nilan; Ropers, Majeski, Kohn & Bentley and James C. Hyde for Real Party in Interest Millennium Holdings LLP.
Crowley, Barrett & Karaba, Paul F. Markoff; Robinson & Wood and Archie S. Robinson for Real Party in Interest The O'Brien Corporation.
Timothy Hardy; McManis, Faulkner & Morgan, McManis Faulkner, James H. McManis, William W. Faulkner, Matthew Schechter; Bartlit, Beck, Herman, Palenchar & Scott and Donald T. Scott for Real Party in Interest NL Industries, Inc.
Jones Day, John W. Edwards II, Elwood Lui, Brian J. O'Neill, Frederick D. Friedman, Paul M. Pohl, Charles H. Moellenberg, Jr., and Leon F. DeJulius, Jr., for Real Party in Interest The Sherwin-Williams Company.
Elizabeth Milito; Carlton DiSante & Freudenberger and Nancy G. Berner for National Federation of Independent Business Small Business Legal Center as Amicus Curiae on behalf of Real Party in Interest Atlantic Richfield Company.
Shook, Hardy & Bacon, Kevin Underhill, Victor E. Schwartz, Cary Silverman; National Chamber Litigation Center, Inc., Robin S. Conrad, Amar Sarwal; and Sherman Joyce for Chamber of Commerce of the United States of America and the American Tort Reform Association as Amici Curiae on behalf of Real Party in Interest Atlantic Richfield Company.
Latham & Watkins and Paul N. Singarella for Orange County Business Council as Amicus Curiae on behalf of Real Party in Interest Atlantic Richfield Company.
Thomas J. Graves; Spriggs & Hollingsworth, Eric G. Lasker and Marc S. Mayerson for National Paint & Coatings Association, Inc., as Amicus Curiae on behalf of Real Parties in Interest.
Fred J. Hiestand for The Civil Justice Association of California as Amicus Curiae on behalf of Real Parties in Interest.
Ronald D. Rotunda; Akin Gump Strauss Hauer & Feld, Rex S. Heinke and Jessica M. Weisel for National Organization of African Americans in Housing as Amicus Curiae on behalf of Real Parties in Interest.
Maureen Martin for The Heartland Institute as Amicus Curiae on behalf of Real Parties in Interest.
Hugh F. Young, Jr.; Dechert, James M. Beck; Drinker Biddle & Reath and Alan J. Lazarus for The Product Liability Advisory Council, Inc., as Amicus Curiae on behalf of Real Parties in Interest.
W. Scott Thorpe for California District Attorneys Association as Amicus Curiae.
Coughlin Stoia Geller Rudman & Robbins, Timothy G. Blood, Pamela M. Parker; Eugene G. Iredale; Law Offices of Arthur F. Tait III & Associates, Arthur F. Tait III; Sullivan, Hill, Lewin, Rez & Engel, Brian L. Burchett; Wingert Grebing Brubaker & Goodwin, Charles R. Grebing, Eric R. Deitz; Michael Fremont Law Office and Michael J. Fremont for C.L. Trustees, Patricia Yates, Christine Stankus, Jerrold Cook, Richard Yells, Mark L. Glickman, Heather Buys and Christine Ballon as Amici Curiae.
GEORGE, C. J.—
A group of public entities composed of various California counties and cities (collectively referred to as the public entities) are prosecuting a public-nuisance action against numerous businesses that manufactured lead paint (collectively referred to as defendants). The public entities are represented both by their own government attorneys and by several private law firms. The private law firms are retained by the public entities on a contingent-fee basis. After summary judgment was granted in favor of defendants on various tort causes of action initially advanced by the public entities, the complaint eventually was amended to leave the public-nuisance action as the sole claim, and abatement as the sole remedy.
Defendants moved to bar the public entities from compensating their privately retained counsel by means of contingent fees. The superior court, relying upon this court's decision in People ex rel. Clancy v. Superior Court (1985) 39 Cal.3d 740 [218 Cal.Rptr. 24, 705 P.2d 347] (Clancy), ordered the public entities barred from compensating their private counsel by means of any contingent-fee agreement, reasoning that under Clancy, all attorneys prosecuting public-nuisance actions must be "absolutely neutral." The superior court concluded that Clancy therefore precluded any arrangement in which private counsel has a financial stake in the outcome of a case brought on behalf of the public. On petition of the public entities seeking a writ of mandate, the Court of Appeal held that Clancy does not bar all contingent-fee agreements with private counsel in public-nuisance-abatement actions, but only those in which private attorneys appear in place of, rather than with and under the supervision of, government attorneys.
We must decide whether the Court of Appeal correctly construed our opinion in Clancy, or if that case instead broadly prohibits all contingent-fee agreements between public entities and private counsel in any public-nuisance action prosecuted on behalf of the public. Clancy arguably supports defendants' position favoring a bright-line rule barring any attorney with a financial interest in the outcome of a case from representing the interests of the public in a public-nuisance-abatement action. As set forth below, however, a reexamination of our opinion in Clancy suggests that our decision in that case should be narrowed, in recognition of both (1) the wide array of public-nuisance actions (and the corresponding diversity in the types of interests implicated by various prosecutions), and (2) the different means by which prosecutorial duties may be delegated to private attorneys without compromising either the integrity of the prosecution or the public's faith in the judicial process.
The procedural history of this case is not in dispute. The public entities' claims against defendants originally included causes of action for fraud, strict liability, negligence, unfair business practices, and public nuisance. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 300 [40 Cal.Rptr.3d 313] (Santa Clara).) The superior court granted defendants' motion for summary judgment on all causes of action. The Court of Appeal reversed the superior court's judgment of dismissal and ordered the lower court to reinstate the public-nuisance, negligence, strict liability, and fraud causes of action. (Id. at p. 333.) Thereafter, the public entities filed a fourth amended complaint that alleged a single cause of action, for public nuisance, and sought only abatement. Throughout this litigation, the public entities have been represented both by their government counsel and by private counsel.
Upon remand following Santa Clara, supra, 137 Cal.App.4th 292, defendants filed a "motion to bar payment of contingent fees to private attorneys," asserting that "the government cannot retain a private attorney on a contingent fee basis to litigate a public nuisance claim." Defendants sought "an order that precludes plaintiffs from retaining outside counsel under any agreement in which payment of fees and costs is contingent on the outcome of the litigation."
Defendants attached to their motion a number of fee agreements between the public entities and their private counsel, and the public entities filed opposition to which they attached their fee agreements and declarations of their government attorneys and private counsel. The fee agreements and declarations disclose that the public entities and private counsel agreed that, other than $150,000 that would be forwarded by Santa Clara to cover initial costs, private counsel would incur all further costs and would not receive any legal fees unless the action were successful. If the action succeeded, private counsel would be entitled to recover any unreimbursed costs from the "recovery" and a fee of 17 percent of the "net recovery."
Some of the contingent-fee agreements in the present case specify the respective authority of both private counsel and public counsel to control the conduct of the pending litigation. The fee agreements between private counsel and San Francisco, Santa Clara, Alameda, Monterey, and San Diego explicitly provide that the public entities' government counsel "retain final authority over all aspects of the Litigation." Private counsel for those five public entities submitted declarations confirming that their clients' government counsel retain "complete control" over the litigation. The two remaining fee agreements contained in the record—those involving Solano and Oakland—purport to grant private counsel "absolute discretion in the decision of who to sue and who not to sue, if anyone, and what theories to plead and what evidence to present." During proceedings in the trial court, Oakland disclaimed this fee agreement and asserted that its government counsel had retained "complete control" of the litigation and intended to revise the agreement to reflect this circumstance. Solano's private counsel asserts that its public counsel have "maintained and continue to maintain complete control over all aspects of the litigation" and "all decision making authority and responsibility." The record before us does not contain the fee agreements between the three other public-entity petitioners and their respective private counsel.
The various fee agreements provide different definitions of "recovery." Some of the agreements define the term "recovery" as "moneys other than civil penalties," whereas others define this term as the "amount recovered, by way of judgment, settlement, or other resolution." Some of the agreements include the phrase "both monetary and non-monetary" in their definitions of "recovery." The San Diego agreement defines "net recovery" as "the payment of money, stock, and/or ... the value of the abatement remedy after the deduction of the costs paid or to be paid." The Santa Clara fee agreement provides that, "[i]n the event that the Litigation is resolved by settlement under terms involving the provision of goods, services or any other `in-kind' payment, the Santa Clara County Counsel agrees to seek, as part of any such settlement, a mutually agreeable monetary settlement of attorneys' fees and expenses."
In April 2007, the superior court heard defendants' motion "to bar payment" as well as the public entities' motion for leave to file a fourth amended complaint. The court granted the public entities' motion and ordered that the pleading be filed within 30 days.
Although some preliminary issues were raised concerning the ripeness of defendants' motion, the superior court resolved the motion on its merits. The court rejected the public entities' claim that Clancy, supra, 39 Cal.3d 740, was distinguishable, concluding instead that under Clancy, "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." The court granted defendants' motion and entered an order "preclud[ing] Plaintiffs from retaining outside counsel under any agreement in which the payment of fees and costs is contingent on the outcome of the litigation ...." But the court allowed the public entities "30 days to file with the court new fee agreements" or "declarations detailing the fee arrangements with outside counsel."
The public entities sought a writ of mandate in the Court of Appeal. After issuing an order to show cause, the appellate court ultimately set aside the superior court's ruling and issued a writ commanding the lower court to (1) set aside its order granting defendants' motion, and (2) enter a new order denying defendants' motion. Although acknowledging that Clancy purported to bar the participation of private counsel on a contingent-fee basis in public-nuisance-abatement lawsuits brought in the name of a public entity, the Court of Appeal held that the rule set forth in Clancy is not categorical and does not bar the fee agreements made in the present case, because those agreements specified that the government attorneys would maintain full control over the litigation. The appellate court, briefly noting that the suit being prosecuted did not seek to impose criminal liability or infringe upon fundamental constitutional rights, reasoned that the circumstance that the private attorneys are being supervised by public lawyers vitiates any concern regarding the neutrality of outside counsel. We granted defendants' petition for review.
We begin our inquiry with this court's decision in Clancy. In that case, the City of Corona (Corona) hired James Clancy, a private attorney, to bring nuisance abatement actions against a business (the Book Store), which sold adult materials. (Clancy, supra, 39 Cal.3d at p. 743.) The hiring of Clancy followed several attempts by Corona to terminate the operations of this establishment. Specifically, several months after the Book Store opened, Corona adopted two ordinances that purported to regulate adult bookstores, one defining "sex oriented material" and the other restricting the sale of such material to certain zones in Corona. (Ibid.) After the owner of the Book Store, Helen Ebel, filed an action in federal court, the United States Court of Appeals for the Ninth Circuit ultimately held both ordinances to be unconstitutional. (Ebel v. City of Corona (9th Cir. 1985) 767 F.2d 635.)
Corona subsequently retained the services of Clancy to abate nuisances under the authority of a new ordinance, proposed on the same day Clancy was hired and seemingly targeted specifically at the Book Store. (Clancy, supra, 39 Cal.3d at p. 743.) The ordinance defined a public nuisance as "`[a]ny and every place of business in the City ... in which obscene publications constitute all of the stock in trade, or a principal part thereof ....'" (Ibid.) The employment contract between Corona and Clancy, who was an independent contractor rather than an employee (id. at p. 747), provided that he was to be paid $60 per hour for his work in bringing public-nuisance actions, except that he would be paid only $30 per hour for his work in any public-nuisance action in which Corona did not prevail or in which Corona prevailed but did not recover attorney fees. (Id. at p. 745.)
Two weeks after the public-nuisance ordinance was enacted, Corona passed a resolution declaring the Book Store to be a public nuisance and revoking its business license. Thereafter, Corona and Clancy (as the city's "`special attorney'") filed a complaint against Ebel, her son Thomas Ebel, another individual, and the Book Store, seeking abatement of a public nuisance, declaratory judgment, and an injunction. (Clancy, supra, 39 Cal.3d at p. 744.) The Ebels unsuccessfully attempted to disqualify Clancy as the attorney for Corona. (Clancy, at p. 744.) The Ebels then sought writ relief, contending it was "improper for an attorney representing the government to have a financial stake in the outcome of an action to abate a public nuisance," and asserting that "a government attorney prosecuting such actions must be neutral, as must an attorney prosecuting a criminal case." (Id. at p. 745.) This court generally agreed, finding the arrangement between Corona and Clancy "inappropriate under the circumstances." (Id. at p. 743.)
We observe as a threshold matter that our decision to disqualify Clancy from representing Corona in the public-nuisance action was founded not upon any specific statutory provision or rule governing the conduct of attorneys, but rather upon the courts' general authority "to disqualify counsel when necessary in the furtherance of justice." (Clancy, supra, 39 Cal.3d at p. 745.) Invoking that authority, this court stated that it "may order that Clancy be dismissed from the case if we find the contingent fee arrangement prejudices the Ebels." (Ibid.)
We concluded that for purposes of evaluating the propriety of a contingent-fee agreement between a public entity and a private attorney, the neutrality rules applicable to criminal prosecutors were equally applicable to government attorneys prosecuting certain civil cases. (Clancy, supra, 39 Cal.3d at pp. 746-747.) Accordingly, our decision set forth the responsibilities associated with the prosecution of a criminal case, noting that a prosecutor does not represent merely an ordinary party to a controversy, but instead is the representative 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."'" (Clancy, supra, 39 Cal.3d at p. 746; see People v. Superior Court (Greer) (1977) 19 Cal.3d 255, 266 [137 Cal.Rptr. 476, 561 P.2d 1164] (Greer).) We noted that a prosecutor's duty of neutrality stems from two fundamental aspects of his or her employment. As a representative of the government, a prosecutor must act with the impartiality required of those who govern. Moreover, because a prosecutor has as a resource the vast power of the government, he or she must refrain from abusing that power by failing to act evenhandedly. (Clancy, supra, 39 Cal.3d at p. 746.) With these principles in mind, we declared that not only is a government lawyer's neutrality "essential to a fair outcome for the litigants in the case in which he is involved, it is essential to the proper function of the judicial process as a whole." (Ibid.)
Recognizing that a city attorney is a public official, we noted that "the rigorous ethical duties imposed on a criminal prosecutor also apply to government lawyers generally." (Clancy, supra, 39 Cal.3d at p. 748.) Thus, pursuant to the American Bar Association's then Model Code of Professional Responsibility, a lawyer who is a public officer "`should not engage in activities in which his personal or professional interests are or foreseeably may be in conflict with his official duties.'" (Clancy, supra, 39 Cal.3d at p. 747, quoting former ABA Model Code Prof. Responsibility, EC 8-8.)" `[An] attorney holding public office should avoid all conduct which might lead the layman to conclude that the attorney is utilizing his public position to further his professional success or personal interests.'" (Clancy, supra, 30 Cal.3d at p. 747, quoting ABA Com. on Prof. Ethics, opn. No. 192 (1939).) Notably, we held that because public lawyers handling noncriminal matters are subject to the same ethical conflict-of-interest rules applicable to public prosecutors, "there is a class of civil actions that demands the representative of the government to be absolutely neutral. This requirement precludes the use in such cases of a contingent fee arrangement." (Clancy, supra, 39 Cal.3d at p. 748.)
We further held that public-nuisance-abatement actions belong to the class of civil cases in which counsel representing the government must be absolutely neutral. (Clancy, supra, 39 Cal.3d at p. 749.) We came to this conclusion by analogizing a public-nuisance-abatement action to an eminent domain action—a type of proceeding in which we already had concluded that government attorneys must be unaffected by personal interest. (Id. at p. 748, citing City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 871 [135 Cal.Rptr. 647, 558 P.2d 545].)
We explained: "[T]he abatement of a public nuisance involves a balancing of interests. On the one hand is the interest of the people in ridding their city of an obnoxious or dangerous condition; on the other hand is the interest of the landowner in using his property as he wishes. And when an establishment such as an adult bookstore is the subject of the abatement action, something more is added to the balance: not only does the landowner have a First Amendment interest in selling protected material, but the public has a First Amendment interest in having such material available for purchase. Thus, as with an eminent domain action, 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." (Clancy, supra, 39 Cal.3d at p. 749.) Moreover, "[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." (Ibid.)
We concluded that James Clancy—although he was an independent contractor and not an employee of the City of Corona—nonetheless was subject to the same neutrality guidelines applicable to Corona's public lawyers, because "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 Clancy 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." (Clancy, supra, 39 Cal.3d at p. 747.)
Finally, we held that because Clancy's hourly rate would double in the event Corona were successful in the litigation against the Ebels and the Book Store, it was evident that Clancy had an interest extraneous to his official function in the actions he was prosecuting on behalf of Corona. Accordingly, "the contingent fee arrangement between the City and Clancy is antithetical to the standard of neutrality that an attorney representing the government must meet when prosecuting a public nuisance abatement action. In the interests of justice, therefore, we must order Clancy disqualified from representing the City in the pending abatement action." (Clancy, supra, 39 Cal.3d at p. 750.) We expressly noted that Corona was not precluded from rehiring Clancy to represent it on other terms. (Id. at p. 750, fn. 5.)
Importantly, we also noted that "[n]othing we say herein should be construed as preventing the government, under appropriate circumstances, from engaging private counsel. Certainly there are cases in which a government may hire an attorney on a contingent fee to try a civil case." (Clancy, supra, 39 Cal.3d at p. 748.) As an example of such a permissible instance of representation, we cited Denio v. City of Huntington Beach (1943) 22 Cal.2d 580 [140 P.2d 392], a case in which we had approved a contingent-fee arrangement between the City of Huntington Beach and a law firm hired to represent it in all matters relating to protection of the city's oil rights. Thus, we recognized that contingent-fee arrangements in ordinary civil cases generally are permitted. (Clancy, supra, 39 Cal.3d at p. 748.)
As is evident from the preceding discussion, our decision in Clancy, supra, 39 Cal.3d 740, was guided, in large part, by the circumstance that the public-nuisance action pursued by Corona implicated interests akin to those inherent in a criminal prosecution. In light of this similarity, we found it appropriate to invoke directly the disqualification rules applicable to criminal prosecutors—rules that categorically bar contingent-fee agreements in all instances. As we observed in Clancy, contingent-fee "contracts for criminal prosecutors have been recognized to be unethical and potentially unconstitutional, but there is virtually no law on the subject." (Clancy, supra, 39 Cal.3d at p. 748.) Nonetheless, we noted it is generally accepted that any type of arrangement conditioning a public prosecutor's remuneration upon the outcome of a case is widely condemned. (Ibid., citing ABA Stds. for Crim. Justice, Prosecution Function, com. to former Std. 2.3(e) ["`[i]t is clear that [case-by-case] fee systems of remuneration for prosecuting attorneys raise serious ethical and perhaps constitutional problems, are totally unacceptable under modern conditions, and should be abolished promptly'"].)
Accordingly, although there are virtually no cases considering the propriety of compensation of public prosecutors pursuant to a contingent-fee arrangement, it would appear that under most, if not all, circumstances, such a method of compensation would be categorically barred. This is so because giving a public prosecutor a direct pecuniary interest in the outcome of a case that he or she is prosecuting "would render it unlikely that the defendant would receive a fair trial." (Pen. Code, § 1424, subd. (a)(1); see Greer, supra, 19 Cal.3d at p. 266 [explaining that disqualification was required in order to protect the defendant's fundamental due process right not to be deprived of liberty without a fair trial, and to enforce the prosecutor's obligation "to respect this mandate"].)
Our opinion in Clancy recognized that the interests invoked in that case were akin to the vital interests implicated in a criminal prosecution, and thus invocation of the disqualification rules applicable to criminal prosecutors was justified. And if those rules are found to be equally applicable in the case now before us, disqualification of the private attorneys hired to assist the public entities similarly would be required.
(1) As explained below, however, to the extent our decision in Clancy suggested that public-nuisance prosecutions always invoke the same constitutional and institutional interests present in a criminal case, our analysis was unnecessarily broad and failed to take into account the wide spectrum of cases that fall within the public-nuisance rubric. In the present case, both the types of remedies sought and the types of interests implicated differ significantly from those involved in Clancy and, accordingly, invocation of the strict rules requiring the automatic disqualification of criminal prosecutors is unwarranted.
The broad spectrum of public-nuisance law may implicate both civil and criminal liability. Indeed, public-nuisance actions vary widely, as evidenced by Penal Code section 370, which broadly defines a public nuisance as "[a]nything which is injurious to health, or is indecent, or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property by an entire community or neighborhood, or by any considerable number of persons, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway ...."
Although in Clancy we spoke generally of a "balancing of interests" and a "delicate weighing of values" (Clancy, supra, 39 Cal.3d at p. 749), our concerns regarding neutrality, fairness, and a possible abuse of the judicial process by an interested party appear to have been highly influenced by the circumstances of the case then before us—a long-running attempt by the City of Corona to shut down a single adult bookstore. As set forth above, when Corona's first attempts at legislating the bookstore out of business were ruled unconstitutional, it hired a private attorney with a personal and pecuniary interest in the case to file a nuisance action against the bookstore pursuant to a newly enacted ordinance that clearly was intended to specifically target that business.
The history of Corona's efforts to shut down the bookstore revealed a profound imbalance between the institutional power and resources of the government and the limited means and influence of the defendants—whose vital property rights were threatened. Under California law, the continued operation of an established, lawful business is subject to heightened protections. (See Goat Hill Tavern v. City of Costa Mesa (1992) 6 Cal.App.4th 1519, 1529 [8 Cal.Rptr.2d 385] [continued operation of 35-year business that was making recent substantial improvements was recognized as a vested right]; Livingston Rock etc. Co. v. County of L. A. (1954) 43 Cal.2d 121, 127 [272 P.2d 4] [noting that businesses generally cannot be immediately terminated due to nonconformance with rezoning ordinances, because of the "hardship and doubtful constitutionality" of such discontinuance].) It was in this factual setting that we noted that the abatement of a public nuisance involves a "balancing of interests. On the one hand is the interest of the people in ridding their city of an obnoxious or dangerous condition; on the other hand is the interest of the landowner in using his property as he wishes." (Clancy, supra, 39 Cal.3d at p. 749.)
The case also implicated both the defendants' and the public's constitutional free-speech rights. As we recognized in Clancy, the operation of the adult bookstore involved speech that arguably was protected in part, and thus curtailment of the right to disseminate the books in question could significantly infringe upon the Ebels' liberty interest in free speech. Again, our focus upon the critical "balancing of interests" was guided by the circumstance that Corona was attempting to abate a public nuisance created by an adult bookstore—thus adding something more "to the balance: not only does the landowner have a First Amendment interest in selling protected material, but the public has a First Amendment interest in having such material available for purchase." (Clancy, supra, 39 Cal.3d at p. 749.)
It is evident that the nature of the particular nuisance action involved in Clancy was an important factor in leading us to conclude the rules governing the disqualification of criminal prosecutors properly should be invoked to disqualify James Clancy. The direct application of those rules was warranted because the public-nuisance-abatement action at issue implicated important constitutional concerns, threatened ongoing business activity, and carried the threat of criminal liability. In light of these interests, the case required the same "balancing of interests" and "delicate weighing of values" on the part of the government's attorney prosecuting the case as would be required in a criminal prosecution. Because of this strong correlation, the disqualification of a private attorney with a pecuniary interest in the outcome of the case was mandated.
The public-nuisance action in the present case, by contrast, involves a qualitatively different set of interests—interests that are not substantially similar to the fundamental rights at stake in a criminal prosecution. We find this distinguishing circumstance to be dispositive. As set forth above, neutrality is a critical concern in criminal prosecutions because of the important constitutional liberty interests at stake. On the other hand, in ordinary civil cases, we do not require neutrality when the government acts as an ordinary party to a controversy, simply enforcing its own contract and property rights against individuals and entities that allegedly have infringed upon those interests. Indeed, as discussed above, we specifically observed in Clancy that the government was not precluded from engaging private counsel on a contingent-fee basis in an ordinary civil case. Thus, for example, public entities may employ private counsel on such a basis to litigate a tort action involving damage to government property, or to prosecute other actions in which the governmental entity's interests in the litigation are those of an ordinary party, rather than those of the public. (Clancy, supra, 39 Cal.3d at p. 748.)
The present case falls between these two extremes on the spectrum of neutrality required of a government attorney. The present matter is not an "ordinary" civil case in that the public entities' attorneys are appearing as representatives of the public and not as counsel for the government acting as an ordinary party in a civil controversy. A public-nuisance-abatement action must be prosecuted by a governmental entity and may not be initiated by a private party unless the nuisance is personally injurious to that private party. (Civ. Code, § 3493 ["A private person may maintain an action for a public nuisance, if it is specially injurious to himself, but not otherwise."]; id., § 3494 ["[a] public nuisance may be abated by any public body or officer authorized thereto by law"].) There can be no question, therefore, that the present case is being prosecuted on behalf of the public, and that accordingly the concerns we identified in Clancy as being inherent in a public prosecution are, indeed, implicated in the case now before us.
Yet, neither are the interests affected in this case similar in character to those invoked by a criminal prosecution or the nuisance action in Clancy. Although the remedy for the successful prosecution of the present case is unclear, we can confidently deduce what the remedy will not be. This case will not result in an injunction that prevents defendants from continuing their current business operations. The challenged conduct (the production and distribution of lead paint) has been illegal since 1978. Accordingly, whatever the outcome of the litigation, no ongoing business activity will be enjoined. Nor will the case prevent defendants from exercising any First Amendment right or any other liberty interest. Although liability may be based in part on prior commercial speech, the remedy will not involve enjoining current or future speech. Finally, because the challenged conduct has long since ceased, the statute of limitations on any criminal prosecution has run and there is neither a threat nor a possibility of criminal liability being imposed upon defendants.
The adjudication of this action will involve at least some balancing of interests, such as the social utility of defendants' product against the harm it has caused, and may implicate the free-speech rights exercised by defendants when they marketed their products and petitioned the government to oppose regulations. Nevertheless, that balancing process and those constitutional rights involve only past acts—not ongoing marketing, petitioning, or property/business interests. Instead, the trial court will be asked to determine whether defendants should be held liable for creating a nuisance and, if so, how the nuisance should be abated. This case will result, at most, in defendants' having to expend resources to abate the lead-paint nuisance they allegedly created, either by paying into a fund dedicated to that abatement purpose or by undertaking the abatement themselves. The expenditure of resources to abate a hazardous substance affecting the environment is the type of remedy one might find in an ordinary civil case and does not threaten the continued operation of an existing business.
Of course, because this is a public-nuisance action, and the public entities are not merely pursuing abatement on government property but on private property located within their jurisdictions, defendants' potential exposure may be very substantial. The possibility of such a substantial judgment, however, does not affect the type of fundamental rights implicated in criminal prosecutions or in Clancy, supra, 39 Cal.3d 740. 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. Accordingly, the concern we expressed in Clancy about the misuse of governmental resources against an outmatched individual defendant is not implicated in the present case.
Thus, because—in contrast to the situation in Clancy—neither a liberty interest nor the right of an existing business to continued operation is threatened by the present prosecution, this case is closer on the spectrum to an ordinary civil case than it is to a criminal prosecution. The role played in the current setting both by the government attorneys and by the private attorneys differs significantly from that played by the private attorney in Clancy. Accordingly, the absolute prohibition on contingent-fee arrangements imported in Clancy from the context of criminal proceedings is unwarranted in the circumstances of the present civil public-nuisance action.
Nevertheless, as set forth above, because the public-nuisance-abatement action is being prosecuted on behalf of the public, the attorneys prosecuting this action, although not subject to the same stringent conflict-of-interest rules governing the conduct of criminal prosecutors or adjudicators, are subject to a heightened standard of ethical conduct applicable to public officials acting in the name of the public—standards that would not be invoked in an ordinary civil case.
(2) The underlying principle that guided our decision in Clancy was that a civil attorney acting on behalf of a public entity, in prosecuting a civil case such as a public-nuisance-abatement action, is entrusted with the unique power of the government and therefore must refrain from abusing that power by failing to act in an evenhanded manner. (Clancy, supra, 39 Cal.3d at p. 749; see also Greer, supra, 19 Cal.3d at p. 267 [a prosecuting attorney" `"is the representative of the public in whom is lodged a discretion which is not to be controlled by the courts, or by an interested individual"'" (italics omitted)]; City of Los Angeles v. Decker, supra, 18 Cal.3d at p. 871 [a" `government lawyer in a civil action ... should not use his position or the economic power of the government to harass parties or to bring about unjust settlements or results'"].) Indeed, it is a bedrock principle that a government attorney prosecuting a public action on behalf of the government must not be motivated solely by a desire to win a case, but instead owes a duty to the public to ensure that justice will be done. (Greer, supra, 19 Cal.3d at p. 267.)
These principles of heightened neutrality remain valid and necessary in the context of the situation presented by the case before us. A fair prosecution and outcome in a proceeding brought in the name of the public is a matter of vital concern both for defendants and for the public, whose interests are represented by the government and to whom a duty is owed to ensure that the judicial process remains fair and untainted by an improper motivation on the part of attorneys representing the government. Accordingly, to ensure that an attorney representing the government acts evenhandedly and does not abuse the unique power entrusted in him or her in that capacity—and that public confidence in the integrity of the judicial system is not thereby undermined—a heighxtened standard of neutrality is required for attorneys prosecuting public-nuisance cases on behalf of the government.
(3) We must determine whether this heightened standard of neutrality is compromised by the hiring of contingent-fee counsel to assist government attorneys in the prosecution of a public-nuisance-abatement action of the type involved in the present proceedings. For the reasons that follow, we conclude that this standard is not compromised. Because private counsel who are remunerated on a contingent-fee basis have a direct pecuniary interest in the outcome of the case, they have a conflict of interest that potentially places their personal interests at odds with the interests of the public and of defendants in ensuring that a public prosecution is pursued in a manner that serves the public, rather than serving a private interest. This conflict, however, does not necessarily mandate disqualification in public-nuisance cases when fundamental constitutional rights and the right to continue operation of an existing business are not implicated. Instead, retention of private counsel on a contingent-fee basis is permissible in such cases if neutral, conflict-free government attorneys retain the power to control and supervise the litigation. As explained below, because public counsel are themselves neutral, and because these neutral attorneys retain control over critical discretionary decisions involved in the litigation, the heightened standard of neutrality is maintained and the integrity of the government's position is safeguarded. Thus, in a case where the government's action poses no threat to fundamental constitutional interests and does not threaten the continued operation of an ongoing business, concerns about neutrality are assuaged if the litigation is controlled by neutral attorneys, even if some of the attorneys involved in the case in a subsidiary role have a conflict of interest that might—if present in a public attorney—mandate disqualification.
This reasoning recently was embraced by the Supreme Court of Rhode Island, which approved the state attorney general's employment of private counsel on a contingent-fee basis to prosecute public-nuisance-abatement actions against lead paint manufacturers—a case identical in all material respects to the underlying action here. (State of Rhode Island, supra, 951 A.2d 428.) That court considered the propriety of the contingent-fee agreements in light of the state attorney general's status as a public servant, and his attendant responsibility to seek justice rather than prevail at all costs. (Id. at p. 472.) The state high court noted that the attorney general was bound by the ethical standards governing the conduct of public prosecutors. (Ibid.) Ultimately, citing the underlying decision of the Court of Appeal in the present case, the court in State of Rhode Island concluded that "there is nothing unconstitutional or illegal or inappropriate in a contractual relationship whereby the Attorney General hires outside attorneys on a contingent fee basis to assist in the litigation of certain non-criminal matters. Indeed, it is our view that the ability of the Attorney General to enter into such contractual relationships may well, in some circumstances, lead to results that will be beneficial to society—results which otherwise might not have been attainable. However, due to the special duty of attorneys general to `seek justice' and their wide discretion with respect to same, such contractual relationships must be accompanied by exacting limitations.... [I]t is our view that the Attorney General is not precluded from engaging private counsel pursuant to a contingent fee agreement in order to assist in certain civil litigation, so long as the Office of Attorney General retains absolute and total control over all critical decision-making in any case in which such agreements have been entered into." (State of Rhode Island, at p. 475, original italics, boldface & fns. omitted.)
(4) We generally agree with the Supreme Court of Rhode Island and the Court of Appeal in the present case that there is a critical distinction between an employment arrangement that fully delegates governmental authority to a private party possessing a personal interest in the case, and an arrangement specifying that private counsel remain subject to the supervision and control of government attorneys. Private counsel serving in a subordinate role do not supplant a public entity's government attorneys, who have no personal or pecuniary interest in a case and therefore remain free of a conflict of interest that might require disqualification. Accordingly, in a case in which private counsel are subject to the supervision and control of government attorneys, the discretionary decisions vital to an impartial prosecution are made by neutral attorneys and the prosecution may proceed with the assistance of private counsel, even though the latter have a pecuniary interest in the case.
It is true that the public attorneys' decisionmaking conceivably could be influenced by their professional reliance upon the private attorneys' expertise and a concomitant sense of obligation to those attorneys to ensure that they receive payment for their many hours of work on the case. This circumstance may fairly be viewed as being somewhat akin to having a personal interest in the case. Nevertheless, this is not the type of personal conflict of interest that requires disqualification of the public attorneys. As this court has stated: "`"[A]lmost any fee arrangement between attorney and client may give rise to a `conflict.' ... The contingent fee contract so common in civil litigation creates a `conflict' when either the attorney or the client needs a quick settlement while the other's interest would be better served by pressing on in the hope of a greater recovery. The variants of this kind of `conflict' are infinite. Fortunately most attorneys serve their clients honorably despite the opportunity to profit by neglecting or betraying the client's interest."' "(People v. Doolin (2009) 45 Cal.4th 390, 416 [87 Cal.Rptr.3d 209, 198 P.3d 11].)
(5) As recognized by the American Bar Association, attorneys are expected to resolve conflicts between their personal interests and their ethical and professional responsibilities "through the exercise of sensitive professional and moral judgment." (ABA Model Rules Prof. Conduct, preamble, par. 9.) In other words, attorneys are presumed to comport themselves with ethical integrity and to abide by all rules of professional conduct. In light of the supervisory role played by government counsel in the litigation—and their inherent duty to serve the public's interest in any type of prosecution pursued on behalf of the public—we presume that government attorneys will honor their obligation to place the interests of their client above the personal, pecuniary interest of the subordinate private counsel they have hired.
As we have explained above, in the type of public-nuisance-abatement action being prosecuted in the present case, disqualification of counsel need not be governed by the stringent disqualification rules applicable to criminal prosecutors. Nevertheless, the role of the prosecutor provides useful guidance concerning the type of discretionary decisions that must remain with neutral government attorneys to ensure that the litigation is conducted in a conflictfree manner. A public prosecutor "has broad discretion over the entire course of the criminal proceedings, from the investigation and gathering of evidence, through the decisions of whom to charge and what charges to bring, to the numerous choices at trial to accept, oppose, or challenge judicial rulings." (Hambarian, supra, 27 Cal.4th at p. 840.) In Greer, we emphasized that it is "because the prosecutor enjoys such broad discretion that the public he serves and those he accuses may justifiably demand that he perform his functions with the highest degree of integrity and impartiality, and with the appearance thereof." (Greer, supra, 19 Cal.3d at pp. 266-267.) Accordingly, the "advantage of public prosecution is lost if those exercising the discretionary duties of the district attorney are subject to conflicting personal interests which might tend to compromise their impartiality." (Id. at p. 267; see also Hambarian, supra, 27 Cal.4th at p. 841 [holding that proper test for a disqualifying conflict of interest under Pen. Code, § 1424 is whether "the prosecutor's discretionary decisionmaking has been placed within the influence or control of an interested party"].)
(6) A prosecutor's authority to make critical discretionary decisions in criminal cases is vital to ensuring the neutrality we require of attorneys entrusted with that position. This is so because such discretionary decisions provide the greatest opportunity to abuse the judicial process by placing personal gain above the interests of the public in a fair and just prosecution and outcome. For the same reason, in the context of public-nuisance-abatement proceedings, critical discretionary decisions similarly may not be delegated to private counsel possessing an interest in the case, but instead must be made by neutral government attorneys.
Accordingly, although the principles of heightened neutrality do not categorically bar the retention of contingent-fee counsel to assist public entities in the prosecution of public-nuisance-abatement actions, those principles do mandate that all critical discretionary decisions ultimately must be made by the public entities' government attorneys rather than by private counsel—in other words, neutral government attorneys must retain and exercise the requisite control and supervision over both the conduct of private attorneys and the overall prosecution of the case. Such control of the litigation by neutral attorneys provides a safeguard against the possibility that private attorneys unilaterally will engage in inappropriate prosecutorial strategy and tactics geared to maximize their monetary reward. Accordingly, when public entities have retained the requisite authority in appropriate civil actions to control the litigation and to make all critical discretionary decisions, the impartiality required of government attorneys prosecuting the case on behalf of the public has been maintained.
Defendants assert that even if the control of private counsel by government attorneys is viable in theory, it fails in application because private counsel in such cases are hired based upon their expertise and experience, and therefore always will assume a primary and controlling role in guiding the course of the litigation, rendering illusory the notion of government "control." To the extent defendants assert that no contractual provision delegating the division of responsibility will or can be adhered to, we decline to assume that private counsel intentionally or negligently will violate the terms of their retention agreements by acting independently and without consultation with the public-entity attorneys or that public attorneys will delegate their fundamental obligations.
Defendants also contend that the concept of "control" is unworkable as a standard to govern future cases, because it will be difficult (if not impossible) for a trial court to monitor whether government counsel for a public entity is adequately fulfilling his or her supervisory role and controlling all important aspects of the litigation, including procedural tactics, the gathering and presentation of evidence, the consideration and resolution of settlement negotiations, and other discretionary matters. Defendants assert that short of egregious actions on the part of private counsel or the supervising government attorney, violations of the "control" exception would be difficult to detect.
(7) These practical concerns do not require the barring of contingent-fee arrangements in all public prosecutions. Instead, to ensure that public attorneys exercise real rather than illusory control over contingent-fee counsel, retainer agreements providing for contingent-fee retention should encompass more than boilerplate language regarding "control" or "supervision," by identifying certain critical matters regarding the litigation that contingent-fee counsel must present to government attorneys for decision. The requisite specific provisions, described below, are not comprehensive panaceas and may not all operate perfectly in the context of every contingent-fee situation, but each of them will assist parties and the court in assessing whether private counsel are abusing their prosecutorial office. Moreover, adherence to these provisions is subject to objective verification both by defendants and by the court without the need for engaging in discovery that might intrude upon the attorney-client privilege or attorney work product protections.
In a case such as the present one, in which any remedy will be primarily monetary in nature, the authority to settle the case involves a paramount discretionary decision and is an important factor in ensuring that defendants' constitutional right to a fair trial is not compromised by overzealous actions of an attorney with a pecuniary stake in the outcome. Accordingly, retention agreements between public entities and private counsel must specifically provide that decisions regarding settlement of the case are reserved exclusively to the discretion of the public entity's own attorneys. Similarly, such agreements must specify that any defendant that is the subject of such litigation may contact the lead government attorneys directly, without having to confer with contingent-fee counsel. (Cf. ABA Recent Formal Ethics Opns., formal opn. No. 06-443 (Aug. 5, 2006) p. 179 ["Model Rule of Professional Conduct 4.2 generally does not prohibit a lawyer who represents a client in a matter involving an organization from communicating with the organization's inside counsel about the subject of the representation without obtaining the prior consent of the entity's outside counsel." (italics omitted)].)
Additionally, we adopt, in slightly modified form, the specific guidelines set forth by the Supreme Court of Rhode Island in State of Rhode Island, supra, 951 A.2d at page 477, footnote 52. Specifically, contingent-fee agreements between public entities and private counsel must provide: (1) that the public-entity attorneys will retain complete control over the course and conduct of the case; (2) that government attorneys retain a veto power over any decisions made by outside counsel; and (3) that a government attorney with supervisory authority must be personally involved in overseeing the litigation.
These specific provisions are not exhaustive. The unique circumstances of each prosecution may require a different set of guidelines for effective supervision and control of the case, and public entities may find it useful to specify other discretionary decisions that will remain vested in government attorneys. Nevertheless, the aforementioned provisions comprise the minimum requirements for a retention agreement between a public entity and private counsel adequate to ensure that critical governmental authority is not improperly delegated to an attorney possessing a personal pecuniary interest in the case.
In the present case, five of the seven contingent-fee agreements between the public entities and private counsel contained in the record provide that the public entities' government counsel "retain final authority over all aspects of the Litigation." Declarations of public counsel for these five public entities confirm that these individuals "retained and continue to retain complete control of the litigation," have been "actively involved in and direct all decisions related to the litigation," and have "direct oversight over the work of outside counsel." Private counsel submitted declarations confirming that the government counsel for the five public entities retain "complete control" over the litigation. The references in these agreements to "final authority over all aspects of the Litigation" fairly can be read to mandate that the government attorneys will supervise the work of the private attorneys, and will retain authority to control all critical decisionmaking in the case. The declarations establish that such general control and supervision have been exercised and are, in fact, being exercised.
Nevertheless, although five of the 10 fee agreements between the respective public entities and private counsel contain language specifying that control and supervision will be retained by the government attorneys, none of the 10 fee agreements in the present case contain the other specific provisions regarding retention of control and division of responsibility that we conclude are required to safeguard against abuse of the judicial process. Accordingly, because the seven agreements that are in the record are deficient under the standard we set forth above, and because we cannot assess the sufficiency of the three remaining agreements that are not contained in the record, we reverse the judgment rendered by the Court of Appeal and remand the matter for further proceedings consistent with this opinion. Assuming the public entities contemplate pursuing this litigation assisted by private counsel on a contingent-fee basis, we conclude they may do so after revising the respective retention agreements to conform with the requirements set forth in this opinion.
Kennard, J., Chin, J., Moreno, J., and Richman., J.,[*] concurred.
WERDEGAR, J., Concurring.—
I concur in the judgment insofar as it vacates the superior court's order barring the plaintiff public entities from paying their private counsel under contingent fee agreements.
Although I do not agree with every aspect of the majority's reasoning, I do agree this court spoke too broadly in 1985 when it prohibited contingent fee agreements in all public nuisance cases. (See People ex rel. Clancy v. Superior Court (1985) 39 Cal.3d 740, 748-750 [218 Cal.Rptr. 24, 705 P.2d 347] (Clancy).) As the majority explains, public nuisance cases comprise a wide range of factual situations, some of which do not necessarily entail a conflict of interest between public-entity plaintiffs and private attorneys retained under contingent fee agreements. To limit Clancy is thus appropriate, as the majority concludes.
In this case, however, at least a possible conflict of interest arises from the combination of two circumstances: The public entities assert they cannot afford to pay private counsel other than a contingent fee, and some of the fee agreements at issue give private counsel a share of the value of any abatement ordered by the court. Given the hypothetical choice between an abatement order of great public value and a less valuable cash settlement, both the public and the private attorneys have an incentive to advocate the less valuable cash settlement, as it provides funds from which private counsel can be paid without an appropriation of public money representing the private attorneys' share of the value of abatement. Certainly this incentive does not amount to a personal conflict of interest requiring the public attorneys' recusal, as the majority explains (maj. opn., ante, at p. 59), but it does lead me to question whether public attorneys under all foreseeable circumstances will be able to exercise the independent supervisory judgment the majority concludes is essential if private counsel are to be retained under contingent fee agreements. Here, however, the parties' briefing on the subject of possible remedies is so vague, any such conflict is merely speculative.
In concurring in the judgment, I am also influenced by the concern that to grant defendants' motion might encourage parties in future cases to bring belated motions seeking to interfere with their opposing parties' attorney-client relationships for tactical reasons. Although plaintiffs commenced this action in 2000, and although defendants do not assert they learned of the contingent fee agreements only recently, defendants did not challenge those agreements until 2007, after losing pretrial dispositive motions on appeal. (See County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292 [40 Cal.Rptr.3d 313].) In ruling on a motion to disqualify counsel, the court may properly consider the possibility that the motion is a tactical device (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems (1999) 20 Cal.4th 1135, 1145 [86 Cal.Rptr.2d 816, 980 P.2d 371]; Comden v. Superior Court (1978) 20 Cal.3d 906, 915 [145 Cal.Rptr. 9, 576 P.2d 971]) and deny the motion when unreasonable delay has caused great prejudice (In re Complex Asbestos Litigation (1991) 232 Cal.App.3d 572, 599-600 [283 Cal.Rptr. 732]; River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, 1313 [234 Cal.Rptr. 33]). To grant defendants' motion in this case could as a practical matter force plaintiffs to abandon their lawsuit after nearly a decade of pretrial litigation and discovery. While defendants have asked the court not to disqualify plaintiffs' counsel but instead simply to bar plaintiffs from compensating counsel on a contingent basis, the only authority for defendants' motion is the body of law concerning disqualification. Because there is evidence indicating that an order prohibiting contingent fees would as a practical matter preclude private counsel's participation—in effect disqualifying them—the rule requiring timely presentation of the motion would logically apply.
Rivera, J.,[*] concurred.
 The plaintiffs in this case are County of Santa Clara (Santa Clara), County of San Mateo (San Mateo), County of Monterey (Monterey), County of Solano (Solano), County of Los Angeles, County of Alameda (Alameda), City and County of San Francisco (San Francisco), City of Oakland (Oakland), City of Los Angeles, and City of San Diego (San Diego)
As a result of corporate acquisition and merger, the names of the defendants in the action below are Atlantic Richfield Company, Millennium Inorganic Chemicals, Inc., Millennium Holdings LLC, American Cyanamid Company, ConAgra Grocery Products Company, E. I. du Pont de Nemours and Company, NL Industries, Inc., Sherwin-Williams Company, The O'Brien Corporation, and Does Nos. 1 to 50, inclusive.
 Four of these five public entities submitted declarations of government counsel stating that they had "retained and continue[d] to retain complete control of the litigation," were "actively involved in and direct[ed] all decisions related to the litigation," and have "direct oversight over the work of outside counsel." San Francisco's submission declared that "[t]he San Francisco City Attorney's Office has in fact retained control over all significant decisions" in this case.
 Private counsel Cotchett, Pitre & McCarthy submitted a declaration in which it stated it had been retained by Santa Clara, Solano, Alameda, Oakland, Monterey, San Mateo, and San Diego. This law firm asserted that these public entities' government counsel "have maintained and continue to maintain complete control over all aspects of the litigation" and "all decision making authority and responsibility." Private counsel Thornton & Naumes, private counsel Motley Rice, and private counsel Mary E. Alexander submitted declarations asserting that they had been retained by San Francisco to assist in this litigation, and that San Francisco's city attorney "has retained complete control over this litigation" and has "exercised full decision-making authority and responsibility."
 Oakland submitted a declaration by one of its deputy city attorneys stating that "Notwithstanding any documents suggesting the contrary, the Office of the City Attorney has retained complete control over the prosecution of the public nuisance cause of action in this case as it relates to the interests of the People of the City of Oakland." Oakland asserted it was "in the process of revising" its fee agreement "so that it reflects the reality of the relationship" between Oakland and its private counsel.
 Seven separate fee agreements between the various public entities and their private counsel were before the lower courts and are part of the record before this court. These fee agreements are between private counsel and Santa Clara, Monterey, San Francisco, Solano, Oakland, Alameda, and San Diego. The record does not contain the fee agreements between private counsel and San Mateo, County of Los Angeles, and City of Los Angeles, respectively, although these three entities are and remain plaintiffs in the underlying case and petitioners here.
 During proceedings instituted to quash a subpoena issued after the filing of the lawsuit, the court allowed Corona to amend its complaint to substitute the term "City Attorney of Corona" as Clancy's title. (Clancy, supra, 39 Cal.3d at p. 744.) Clancy appeared in the action in place of, and with no supervision by, Corona's city attorney.
 It also seems beyond dispute that due process would not allow for a criminal prosecutor to employ private cocounsel pursuant to a contingent-fee arrangement that conditioned the private attorney's compensation on the outcome of the criminal prosecution. (See State of Rhode Island v. Lead Industries Assn., Inc. (R.I. 2008) 951 A.2d 428, 475, fn. 48 (State of Rhode Island) [explicitly refraining from allowing contingent-fee arrangement in the criminal context, because the court was "unable to envision a criminal case where contingent fees would ever be appropriate—even if they were not explicitly barred, as is the case in this jurisdiction"]; cf. People v. Eubanks (1996) 14 Cal.4th 580, 596, 598 [59 Cal.Rptr.2d 200, 927 P.2d 310] [finding cognizable conflict of interest because of the circumstance that the corporate crime victim paid the "`substantial'" debts and expenses incurred by the district attorney investigating the case, and that such payment evidenced a "`reasonable possibility' the prosecutor might not exercise his discretionary functions in an evenhanded manner"].)
 As explained by the authors of a recent law review article, public-nuisance law over the course of its development has become increasingly more civil in nature than criminal. The precepts of public-nuisance law migrated to colonial America from the English common law virtually unchanged, and at that time were primarily criminal. (Faulk & Gray, Alchemy in the Courtroom? The Transmutation of Public Nuisance Litigation (2007) 2007 Mich.St. L.Rev. 941, 951 (Faulk and Gray).) Eventually, however, violation of public-nuisance law came to be considered as a tort, and its criminal enforcement was invoked much less frequently. As state legislators began to enact statutes prohibiting particular conduct and setting specific criminal penalties for such conduct, there was little need for the broad and somewhat vague crime of nuisance. (Ibid.; Rest.2d Torts, § 821B, com. c, p. 88.)
 From its earliest incarnation in the common law, public-nuisance law proscribed an "interference with the interests of the community at large—interests that were recognized as rights of the general public entitled to protection." (Rest.2d Torts § 821B, com. b, p. 88; see also Faulk & Gray, supra, 2007 Mich.St. L.Rev. at p. 951; Gifford, Public Nuisance as a Mass Products Liability Tort (2003) 71 U.Cin. L.Rev. 741, 790-791, 794.)
 Moreover, we also found it significant that "[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." (Clancy, supra, 39 Cal.3d at p. 749.)
As we explained, public-nuisance "actions are brought in the name of the People by the district attorney or city attorney. (Code Civ. Proc., § 731.) A person who maintains or commits a public nuisance is guilty of a misdemeanor. (Pen. Code, § 372.) `A public or common nuisance ... is a species of catch-all criminal offense, consisting of an interference with the rights of the community at large .... As in the case of other crimes, the normal remedy is in the hands of the state.'" (Clancy, supra, 39 Cal.3d at p. 749, fn. omitted, quoting Prosser & Keeton, The Law of Torts (5th ed. 1984) p. 618.)
 The disqualification of public prosecutors is governed by Penal Code section 1424, which provides that a motion to recuse a prosecutor "may not be granted unless the evidence shows that a conflict of interest exists that would render it unlikely that the defendant would receive a fair trial." (Pen. Code, § 1424, subd. (a)(1); see Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711 [76 Cal.Rptr.3d 250, 182 P.3d 579] (Haraguchi) [noting that Pen. Code, § 1424" `articulates a two-part test: "(i) is there a conflict of interest?; and (ii) is the conflict so severe as to disqualify the district attorney from acting?"'"].)
Although Penal Code section 1424 does not, by its terms, govern the conduct of civil government attorneys, we held in Clancy that certain government attorneys—because of the nature of the action they are prosecuting—must, like a criminal prosecutor, be free of any conflict of interest that might compromise a fair trial for the defendant. Although we did not invoke section 1424 in Clancy and instead analyzed the case under principles of neutrality—by considering whether an attorney's extraneous interest in a case would prejudice a defendant— the rule we applied unquestionably was derived from, and was substantially similar to, the conflict-of-interest rule applicable to criminal prosecutors. (See Haraguchi, supra, 43 Cal.4th at p. 711.)
 Nor is the applicable standard that which governs the disqualification of judges and other adjudicators. It is well established that the disqualification rules applicable to adjudicators are more stringent than those that govern the conduct of prosecutors and other government attorneys. (People v. Freeman (2010) 47 Cal.4th 993, 996 [103 Cal.Rptr.3d 723, 222 P.3d 177] [holding that for purposes of judicial disqualification, the constitutional standard is whether "`"the probability of actual bias on the part of the judge or decisionmaker ... is too high to be constitutionally tolerable"'"], quoting Caperton v. A. T. Massey Coal Co., (2009) 556 U.S. ___ [173 L.Ed.2d 1208, 129 S.Ct. 2252]; Code Civ. Proc. § 170.1 [setting forth statutory grounds for disqualification of judges]; Marshall v. Jerrico, Inc. (1980) 446 U.S. 238, 243 [64 L.Ed.2d 182, 100 S.Ct. 1610] [noting that "the strict requirements of Tumey [v. Ohio (1927) 273 U.S. 510 [47 S.Ct. 437, 71 L.Ed. 749]] and Ward [v. Village of Monroeville (1972) 409 U.S. 57 [34 L.Ed.2d 267, 93 S.Ct. 80]] are not applicable to the determinations of the assistant regional administrator, whose functions resemble those of a prosecutor more closely than those of a judge"].)
 In furtherance of their contention that the retention of private counsel on a contingent-fee basis is impermissible in public-nuisance-abatement actions because such financial arrangements create a sense of obligation toward private counsel on the part of public counsel, defendants and their amici curiae cite to our discussion of the obligation incurred by a criminal prosecutor toward the victim who provided substantial financial assistance to the district attorney's office in People v. Eubanks, supra, 14 Cal.4th 580, in which we held that the financial arrangement resulted in a disqualifying conflict of interest on behalf of the public prosecutor. (Id. at p. 596.) This reliance upon Eubanks is misplaced.
As a threshold matter, as we explained above, public-nuisance-abatement actions that do not implicate fundamental constitutional rights or threaten the operation of an existing business do not invoke the same concerns regarding neutrality as those present in a criminal prosecution, and therefore attorneys pursuing such claims are not subject to the strict disqualification rules applicable to criminal prosecutors that we invoked to disqualify the public attorneys in Eubanks. Moreover, even under the disqualification standard applied in Eubanks, the retention of private counsel on a contingent-fee basis in public-nuisance actions is distinguishable from the financial arrangement we found impermissible in that case. In Eubanks, we reasoned that because criminal defendants have "`no right to expect that crimes should go unpunished for lack of public funds,'" the mere fact that the victim's financial assistance enables the prosecutor to proceed further or more quickly "would not, by itself, constitute unfair treatment." (Eubanks, supra, 14 Cal.4th at p. 599.) Instead, a disabling conflict is established "in this factual context ... only by a showing that the private financial contributions are of a nature and magnitude likely to put the prosecutor's discretionary decisionmaking within the influence or control of an interested party." (Ibid.; see also Hambarian v. Superior Court (2002) 27 Cal.4th 826, 836 [118 Cal.Rptr.2d 725, 44 P.3d 102] [recusal is not required simply because victim pays for expense the district attorney's office otherwise would have incurred].) Applying that reasoning to the retention of contingent-fee counsel by public entities pursuing public-nuisance-abatement actions, it is evident that individuals and business entities that create public nuisances similarly have no right to expect that abatement actions will not be brought "for lack of public funds." Thus, the mere circumstance that contingent-fee counsel enable public attorneys to prosecute the case does not, by itself, constitute unfair treatment.
Nor are the financial contributions of private counsel of a nature or magnitude likely to put the public attorneys' discretionary decisionmaking within the influence or control of an interested party. Unlike the financial assistance provided by the victim in Eubanks—a party with a strong personal interest in the outcome of the case and an expectation that the provision of financial assistance would incentivize the public attorneys to pursue the victim's desired outcome even if justice demanded a contrary course of action—the financial assistance in a public-nuisance case pursued with the assistance of contingent-fee counsel is provided by a group of sophisticated legal experts who have calculated the financial risk against the possible reward, and who are charged with the knowledge that public counsel's obligation to place justice above their desire to win a case may result in governmental decisions that do not maximize monetary recovery for the private attorneys.
This factual distinction is especially important in light of the specific contractual provisions we discuss post. As we explain below, to ensure that the heightened standard of neutrality is maintained in the prosecution of a public-nuisance-abatement action, contingent-fee agreements between public entities and private counsel must contain specific provisions delineating the proper division of responsibility between the public and private attorneys. Specifically, those contractual provisions must provide explicitly that all critical discretionary decisions will be made by public attorneys—most notably, any decision regarding the ultimate disposition of the case. These contractual provisions reinforce the principle that the financial assistance provided by contingent-fee counsel is conditioned on the understanding that public counsel will retain full control over the litigation and, in exercising that control, must and will place their duty to serve the public interest in ensuring a fair and just proceeding above their sense of any obligation to maximize a monetary recovery for the private attorneys.
 We also decline the suggestion of defendants and their amici curiae to view all contingent-fee agreements as inherently suspect because of an alleged "appearance of impropriety" created by such arrangements. Contingent-fee arrangements are deeply entrenched as a legitimate and sometimes prudent method of delegating risk in the context of civil litigation, and in the absence of evidence of wrongdoing or unethical conduct we decline to impugn this means of compensating counsel in the context of civil litigation.
 In the present case, the evidence of the public entities' control consists of the fee arrangements as well as the declarations submitted by the public entities and their private attorneys. (See, ante, at pp. 44-47 & fns. 2, 3 & 4.) Defendants assert in their briefing that they further attempted to obtain discovery regarding the actual control being exercised by the public entities, but that those entities refused to disclose any such additional documents, citing the attorney-client privilege.
 The primacy of the discretionary authority to settle a case recently was invoked by a federal court in Ohio that considered Sherwin-Williams Company's challenge, on unspecified constitutional grounds, to the contingent-fee agreements between three Ohio cities and private counsel in a lead paint public-nuisance-abatement action very similar to the underlying action in the present case. (Sherwin-Williams Co. v. City of Columbus (S.D. Ohio, July 18, 2007, No. C2-06-829) 2007 U.S.Dist. Lexis 51945 [2007 WL 2079774].) The court originally had barred the private attorneys from providing legal representation, because "the contingency fee agreements between private counsel and the three cities were unconstitutional insofar as the agreements reposed an impermissible degree of public authority upon retained counsel, who have a financial incentive not necessarily consistent with the interests of the public body." (2007 U.S.Dist. Lexis 51945 at pp. *3-*4.) In a subsequent ruling, the court approved the two contingent-fee agreements that had been amended to expressly vest in the city attorney "control over the litigation and the sole authority to authorize any settlement of any claim or complaint." (Id. at p. *6.) The third agreement, however, still was deficient, because it provided that neither private counsel nor the city could settle or dismiss the case without the consent of the other. (Id. at p. *10.) The court stated that it had made it "abundantly clear" in its previous ruling that a contingent-fee 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." (Ibid.)
 These five agreements are those of San Francisco, Santa Clara, Alameda, Monterey, and San Diego.
 As noted above, Oakland and Solano have submitted declarations of their public counsel asserting that government attorneys retain full "control" over all aspects of the litigation. Nonetheless, those two entities' fee agreements in the record do not reflect this arrangement, make no provision for the retention of "final authority over all aspects" of the litigation, and do not otherwise specify that the private attorneys are subject to the supervision of public counsel. As noted above, the fee agreements for the County of Los Angeles, the City of Los Angeles, and San Mateo are not contained in the record before us.
[*] Associate Justice, Court of Appeal, First Appellate District, Division Two, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
 The government cannot recover damages in public nuisance cases. (People ex rel. Van de Kamp v. American Art Enterprises, Inc. (1983) 33 Cal.3d 328, 333, fn. 11 [188 Cal.Rptr. 740, 656 P.2d 1170].)
 Plaintiff City and County of San Francisco's contingent fee agreement, for example, has been public knowledge since 2001, when the board of supervisors authorized the city attorney to enter into it. (S.F. Res. No. 190-01, as amended Feb. 13, 2001.)
 I recognize that until 2007 the complaint included additional causes of action that did not implicate contingent fee concerns, but this would not have precluded an earlier motion to prohibit contingent fee arrangements with respect to the public nuisance cause of action.
[*] Associate Justice, Court of Appeal, First Appellate District, Division Four, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
State Attorneys General and Contingency Fee Arrangements: An Affront to the Neutrality Doctrine?
The American legal system has traditionally permitted individuals to hire attorneys on a contingency fee basis. The contingency fee arrangement has long been regarded as the means by which individuals who lack the economic resources to hire private attorneys may be granted access to the legal system and a legal advocate. Under such an arrangement, the attorney is not paid unless his client “wins”; if the client does not prevail, the attorney charges no fee. If the client wins, the attorney collects a percentage of the amount awarded.
The use of contingency fee arrangements has spread to government, with state attorneys general hiring private counsel on a contingency fee basis to manage and try certain cases on behalf of the state. State attorneys general justify their use of private attorneys on the grounds that they are able to bring suits on behalf of the citizens of their states that would otherwise be impossible due to a lack of personnel resources, expertise, and money. Proponents of the system also point out that while some attorneys
general employ contingency fee arrangements in a wide array of cases and contexts, most of the attorneys general who use them do so sparingly.
The use of private attorneys on a contingency fee basis by state attorneys general is often associated with the tobacco litigation of the 1990s. Following the Master Settlement Agreement (“MSA”) of 1998, trial attorneys across the nation received $14 billion in attorney fees under the $246 billion tobacco settlement. In the years following the MSA, private attorneys have continued to represent government interests through contingency fee contracts. In Rhode Island, for example, Attorney General Patrick
C. Lynch and former Attorney General Sheldon Whitehouse used private attorneys to represent the state in a fight against lead paint manufacturers from 2003–2008. In 2007, Oklahoma Attorney General W.A. Drew Edmondson retained three plaintiffs’ attorney firms to take on poultry companies he claimed had polluted the state’s waterways with chicken manure. In California, several counties have hired private attorneys on a contingency fee basis to file a class action lawsuit based on a public nuisance claim against former lead paint and pigment manufacturers.
The practice is not without opposition. Many contingency fee arrangements are criticized on the basis of the personal and political connections between state attorneys general and the private firms retained to represent the state. The arrangements are also lamented by some critics for enabling “regulation by legislation.” Most common, however, are two particular allegations: 1) that the contingency fee agreements violate state separation of powers doctrines; and 2) that the standard of neutrality required of government attorneys is violated when private attorneys, with their own agendas, strategies, and goals, represent state interests.
Most reviewing courts have concluded that contingency fee arrangements between state attorneys general and outside counsel are permissible if certain criteria are met. In fact, it seems that explicit contractual language coupled with assurances of continued government control may be enough to satisfy the judiciary. But the fact that state attorneys general are public officials, most often elected by the people to represent the public interest, necessitates a stronger reform effort from each office that utilizes such contracts. The requisite standard of neutrality for state attorneys general demands that each time private attorneys are afforded the opportunity to represent state interests, steps are taken to ensure actual, as opposed to theoretical, government control. Because reviewing courts are generally reluctant to outline particular mechanisms for achieving and maintaining such control, innovation and a desire to “do better” must come from within the state attorneys general offices themselves. Without an effective response to the problems presented by these contingency fee arrangements, the integrity of each state’s justice system is compromised.Because contingency fee agreements that comport with the doctrine of neutrality are likely to be upheld, a set of best practices designed to ensure that relationships between state attorneys general and outside counsel meet the requisite standard of neutrality is the focus of this Note. In formulating
best practices for state attorneys general, the relationship between corporate counsel and outside legal counsel in the private sector is a helpful starting point because of analogous concerns regarding continued control and oversight.
Part II of this Note explores the context of a contingency fee agreement, explaining the factual background and legal arguments surrounding a contingency fee contract entered into by the Oklahoma Attorney General and outside counsel for the purpose of bringing suit against members of the poultry industry. This particular case study illuminates the arguments most commonly made by those on both sides of the contingency fee debate. Part
III discusses three cases in which the Supreme Courts of Louisiana and Rhode Island and a California Court of Appeal struck down or questioned the validity of contingency fee arrangements between government entities and outside counsel. Part IV describes three models for improving the current system that have been proposed in the past and explains why they represent an inadequate response to the problems posed by contingency fee arrangements, given the importance of the neutrality doctrine for government officials. Part V presents a novel set of state attorneys general best practices, informed by the analogous relationship between in-house corporate counsel and outside legal providers, which focuses on maintaining the standard of neutrality required of those in public office when entering into a contingency fee agreement.
II. OKLAHOMA SUES THE POULTRY INDUSTRY: TWO DIFFERENT TAKES ON THE CONTINGENCY FEE ARRANGEMENT
In order to better understand the nature of contingency fee agreements between state attorneys general and outside counsel, a detailed examination of the context surrounding one particular arrangement helps bring to light many of the arguments, legal and otherwise, utilized by those on both sides of the contingency fee debate. This particular case study is not included to provide insight into the judiciary’s response to contingency fee agreements, as the reviewing court’s reasoning is unavailable. Rather, it offers the reader unique insight into the reasons a state attorney general might choose to utilize such a fee structure, along with the arguments most commonly made by those who both defend and disparage such arrangements. It is only with a thorough understanding of both a state attorney general’s reasoning for entering into a contingency fee relationship and the reasoning of those who support and criticize the agreements that a realistic and responsive set of best practices may be constructed. Part II.A explores the background and reasoning behind the decision of fourth term Oklahoma Attorney General, Drew Edmondson, to pursue a suit on behalf of the state against members of the poultry industry. Part II.B examines the defendants’ legal challenge to the Attorney General’s use of contingency fee attorneys to represent state interests. Part II.C details the Attorney General’s response to the defendants’ assertions that the underlying contingency fee arrangement violates both due process and separation of powers.
A. OKLAHOMA’S CLAIM AGAINST THE POULTRY INDUSTRY
On June 13, 2005, Oklahoma Attorney General W. A. Drew
Edmondson announced that he was filing suit in United States
District Court against members of the poultry industry for polluting Oklahoma waters. The complaint alleged violations of the Federal Comprehensive Environmental Response Compensation and Liability Acts, state and federal nuisance laws, trespass, and Oklahoma Environmental Quality and Agricultural Codes. Specifically, the Attorney General alleged that runoff resulting from improper dumping and storage of poultry waste has polluted Oklahoma streams and lakes. According to Attorney General Edmondson, the amount of phosphorous dumped on the ground
every year in the Illinois River watershed is equivalent to the waste of 10.7 million people — more than the populations of Arkansas, Kansas and Oklahoma combined. The Attorney General felt that the consequences of the pollution had devastating effects on the region. His stated goal was to hold the poultry industry accountable for the conditions it had created.
Edmondson explained that by filing the lawsuit the state is “asking the court to force these companies to stop polluting and repair the damage they have already done” because “clean water is our most important natural resource, not only for public water supply and recreation, but also for the future of agriculture, industry and tourism.” He did, however, qualify the goals of the litigation with the acknowledgment that “many hardworking Oklahomans are employed by this industry and . . . a viable industry is important to their future.” Accordingly, he assured the citizens of Oklahoma that the poultry companies can conduct their business in compliance with the law and remain viable if they choose to do so. Edmondson went on to retain three private law firms to represent the interests of the state in the pending litigation on a contingency fee basis.
B. A CHALLENGE TO THE USE OF CONTINGENCY FEE COUNSEL
On February 18, 2007, before the case advanced to trial, the defendants filed a motion for judgment as a matter of law, alleging that the Attorney General’s use of outside counsel on a contingency fee basis violated federal and state due process law and the separation of powers provision of the Oklahoma Constitution.
First, the defendants alleged that such an agreement was at odds with the requirements of due process and the neutrality required of government officials, because,
the Contract provide[d] a monetary incentive to the Contingency Fee Lawyers to maximize damages at the expense of any equitable remedies or other non-monetary resolution. . . . The Contingency Fee Contract is at war with the public interest and the rules and standards governing how public officials prosecute litigation in the name of the People.
The defendants argued that “[i]t is well established that constitutional due process forbids judges . . . from having any financial interest in the outcome of the cases on which they labor,” and argued that this rationale for disqualification should extend to government attorneys as well. They asserted that a government attorney is required to pursue and protect the public interest, which at times may mean refusing to bring a case, dismissing
allegations, and seeking settlements or damages which do not maximize the state’s monetary gains. The defendants also noted that the contract entitles outside counsel to “first priority” in recovering expenses and places them “second in priority” for recovery of attorneys’ fees, leaving the state’s interests to be fulfilled last. Finally, they pointed to recent public examination and criticism of such agreements as further evidence of a due process violation.
An amici curiae brief the Chamber of Commerce filed jointly with the American Tort Reform Association (“ATRA”) focused on similar neutrality concerns. The organizations expressed dismay with contingency fee arrangements, arguing that they validate “private attorneys who are clothed in the mantle of state authority, but who are unrestrained by the constitutional checks and ethics obligations on the exercise of that authority.”38 To the Chamber of Commerce, the interests of private attorneys and attorneys for the state are inherently divergent and irreconcilable, as contingency fee attorneys are motivated by financial incentives to maximize recovery for their clients, while attorneys general may successfully represent the interests of the state with no monetary gains.
Many justify contingency fee arrangements by pointing out that because the state lacks the requisite resources to file suit, the interests of the people would go unrepresented without such arrangements. The amici curiae brief, however, quoted Eleventh Circuit Judge William H. Pryor in a statement he made when he was Attorney General of Alabama, arguing that,
[g]overnments are wealthy, because they have the power to tax and condemn. Governments also control access to the legal system. The use of contingency fee contracts allows governments to avoid the appropriation process and create the illusion that these lawsuits are being pursued at no cost to the taxpayers. These contracts also create the potential for outrageous windfalls or even outright corruption for political supporters of the officials who negotiated the Contracts.
Thus, the Chamber of Commerce argued that if the lawsuit against the poultry industry is meritorious and worthwhile, the state has the power to raise the requisite funds and bring suit itself without the intervention of private attorneys.
Second, the defendants alleged that the contract violates Oklahoma’s separation of powers doctrine. By entering into a contingency fee arrangement, they argued, the Attorney General appropriates state resources, a role reserved for the legislature. Their brief asserted that Edmondson had “deliberately and knowingly entered into the Contingency Fee Contract in direct contravention of the Oklahoma Constitution in order to line the pockets of his favorite private attorneys and campaign contributors.” Citing Meredith v. Ieyoub47 as support, the defendants argued that “it is irrefutable that any monies the state may recover in this case are state revenues that must be deposited into the state treasury.” Failing to do so, and instead prioritizing the payment of outside counsel, therefore constitutes a violation of the state’s system of checks and balances.
C. OKLAHOMA’S ARGUMENT IN SUPPORT OF THE ARRANGEMENT
In its response brief, Oklahoma argued that, because it lacked the personnel and financial resources to bring suit itself, retention of outside counsel on a contingency fee basis was necessary to ensure that the interests of the state were protected. Oklahoma also emphasized the common law powers of the attorney general and directed the court to an Oklahoma statute granting
the attorney general the authority to contract with private attorneys when the attorney general’s office lacks the personnel or resources to provide the representation required. Specifically, the Attorney General disputed the allegation that the contract violated Oklahoma’s separation of powers doctrine with the assertion that no state money was at issue, rendering a legislative appropriation unnecessary. The brief characterized the decision to enter into a contingency fee contract as an “executive function, properly within the authority of the Attorney General and aimed at recovering money for the State, not spending it.” Thus, although Article V, § 55 of the Oklahoma Constitution requires that the legislature appropriate all state resources, the recovery from the case would not be paid into the treasury until the costs and fees were deducted from the state’s share of the money.
Addressing the neutrality concern and due process allegation, Oklahoma first posited that the defendants’ application of the due process disqualification principle to government attorneys was dubious, noting that the defendants had extended the reach of the principle “to government attorneys with almost no citation.” Nevertheless, Oklahoma continued on to assume the validity of the due process contention, but argued that they were not in violation by pointing to the Tenth Circuit case, Erikson v. Pawnee County Board of County Commissioners, in which the court held that “the participation of a privately retained attorney in a state criminal prosecution does not violate the defendant’s right to due process under federal law unless the private attorney effectively controlled critical prosecutorial decisions.” Therefore, Oklahoma argued, application of the principle articulated in Erikson to their case leads to the conclusion that due process is maintained so long as the attorney general participates in the ensuing litigation and retains control over critical decisions. Because Edmondson’s office was an active participant in the litigation and the language of the contract made it abundantly clear that the Attorney General retained complete control over the litigation, Oklahoma asserted that there was no violation.
In June of 2007, Judge Gregory Frizzell ruled against the poultry producers that had challenged the use of contingency fee attorneys, finding a violation of neither the state separation of powers doctrine nor the neutrality standard. For the most part, reviewing courts have tended to align with Judge Frizzell and uphold such arrangements. Judicial support for the practice, however, is not unanimous, and even reviewing courts that ultimately decide to permit contingency fee agreements have expressed a certain level of discomfort with them. Three cases in which the validity of contingency fee arrangements has been questioned are explored in Part III below.
III. THE JUDICIARY’S STRUGGLE WITH CONTINGENCY FEE ARRANGEMENTS
Contingency fee arrangements between state attorneys general and outside counsel are unlikely to disappear any time soon and challenges to their legitimacy will likely continue to surface. Understanding the nature of the jurisprudence that both voids and validates such arrangements will prove to be of particular importance to state attorneys general as they decide whether and how to implement best practices in individual offices. In order to more accurately assess the implications of both the separation of powers doctrine and the neutrality standard for contingency fee agreements, a detailed examination of the case law in three states is helpful. Part III.A explores the use of a contingency fee arrangement in Louisiana and the Supreme Court of Louisiana’s holding that the contract constituted a violation of the state separation of powers doctrine. Part III.B tracks a challenge to the use of contingency fees in California and a California Court of Appeal’s conclusion that the fee structures are permissible despite neutrality concerns. Part III.C follows five years of challenges to a contingency fee agreement in Rhode Island and explores the reasoning behind the Supreme Court of Rhode Island’s ultimate decision to permit such a relationship between the attorney general and outside counsel.
A contingency fee arrangement between the Louisiana Attorney General and private law firms for the purpose of investigating and prosecuting environmental damage claims was struck down in 1997 by the Supreme Court of Louisiana in light of the state court’s concern for the integrity of the state’s separation of powers doctrine. The fee contract was between the Louisiana Attorney General, Richard P. Ieyoub, and two private law firms. It designated the private attorneys as Special Assistant Attorneys General, and specified that they were to investigate and prosecute environmental damage claims in Louisiana on a contingency fee basis. The fee arrangement stipulated that the private firms would be awarded twenty-five percent of the gross recovery, subject to a cap of $10 million per claim (total claims were not to exceed 1,000), in addition to reimbursement of all “Qualifying Expenses.” The Louisiana Independent Oil and Gas Association (“LIOGA”) brought suit seeking a declaration that the agreement was invalid along with an injunction preventing its implementation and enforcement.
The Louisiana Supreme Court began its opinion with a reference to the state’s separation of powers doctrine, located in Article II, § 2 of the Louisiana Constitution — “[e]xcept as otherwise provided by this constitution, no one of these branches, nor any person holding office on one of them, shall exercise power belonging to the others.” In light of the separation of powers doctrine and the fundamental understanding that all matters pertaining to state funds are the domain of the state legislature, the court rejected the Attorney General’s argument that in the absence of a law prohibiting the attorney general from entering into such contingency fee contracts, the arrangements are permissible. Instead, the court emphasized that “under the separation of powers doctrine, unless the attorney general has been expressly granted the power in the constitution to pay outside counsel contingency fees from state funds, or the legislature has enacted such a statute, then he has no such power.” The court found the state
constitution lacked the requisite grant of power, disputing the Attorney General’s claim that his power to institute suit on behalf of the state implies the power to enter into contingency fee arrangements.
The court then noted that the legislature provided the attorney general with an express grant of power to enter into contingency fee agreements with outside counsel in particular circumstances, e.g., labor and worker’s compensation cases and public land actions. The court, however, not only found that the legislature had failed to provide the attorney general with a similar statutory grant of power for environmental damage cases, but
that the legislature had constructed a statutory provision indicating its intent to the contrary. La.R.S. § 30:2205 provides that,
[a]ll sums recovered through judgments, settlements, assessments of civil or criminal penalties, funds recovered by suit or settlement from potentially responsible parties for active or abandoned site remediation or cleanup . . . shall be paid into the statute treasury and shall be credited to the Bond Security and Redemption Fund.
To the court, the statute was a “clear and unambiguous” mandate that all funds recovered from cases pertaining to environmental legislation were to be paid into the state treasury, leaving no room for the notion that the attorney general was permitted to first deduct the fees of contingency fee attorneys from judgments or settlements. Thus, the court held that the contingency fee contract was invalid under Article II, § 2 of the state’s constitution, unless or until the state legislature chooses to enact a statute expressly authorizing such an arrangement.
The Louisiana Court of Appeals later reinforced the holding. In Ieyoub v. W.R. Grace & Co.-Conn., the court struck down a contingency fee arrangement between Attorney General Ieyoub and a private law firm for the purpose of pursuing civil claims on behalf of the state against asbestos manufacturers and their insurers. The decision was based on the separation of powers concern articulated in Meredith. The court concluded that neither the Louisiana constitution nor the legislature expressly authorized the attorney general to enter into such a contract.
In 2007, the Superior Court of California considered whether a county attorney may hire a contingency fee attorney to represent the county in litigation. Although the case involved representation of a county rather than the state, the relationship and underlying case law is instructive — a private attorney was retained on a contingency fee basis to do work intended for government attorneys, that of representing the interests of the people. Rather than rest his decision on the separation of powers doctrine, Judge Komar relied on Clancy v. Superior Court, a 1985 decision in which the Supreme Court of California articulated a standard of neutrality for government attorneys. In Clancy, a private attorney was hired by the city of Corona to bring public abatement actions on behalf of the city on a contingency fee basis. The Clancy court pointed out the private attorney’s economic interest in the outcome of the case83 and concluded that the contract’s specific designation of the private attorney as an independent contractor was insufficient to overcome the court’s concern regarding the requisite standard of neutrality.
Judge Komar ultimately concluded that the county had failed
to persuasively distinguish Clancy. Although the county insisted that government attorneys retained and continued to exercise authority and control over the case, Judge Komar explained that “[o]versight by the government attorneys does not eliminate the need for or requirement that outside counsel adhere to the standard of neutrality.” He also articulated his concern that 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.
Given these difficulties, Judge Komar held that outside counsel must be precluded from operating under a contingency fee arrangement on behalf of the government. He emphasized that the government’s claim of insufficient resources was an irrelevant factor in determining the validity of the arrangement.
Judge Komar’s ruling was overturned in 2008, when California’s Sixth District Court of Appeal held that Clancy does not bar the use of private counsel under a contingency fee arrangement if the government retains control over all decision-making. The Court of Appeal distinguished Clancy, pointing out that the private counsel at issue did not have decision-making authority or the power to control the litigation.
The court announced an exacting standard, explaining that “where private counsel are merely assisting government attorneys in the litigation . . . 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 government.’” Thus, when private counsel do not
supplant the role of the government attorneys, their interest in maximizing contingent fees cannot upset the balance of interests that government attorneys are bound to uphold and protect.
Applying this standard, the court analyzed the facts surrounding the contingency fee arrangements and concluded that the requisite “limited, subordinate” role of private counsel was evidenced in the fee agreements themselves. The court noted that in five of the seven agreements at issue, the language explicitly provided that the government attorneys “retain final authority over all aspects of the [l]itigation,” and that the private counsel had submitted declarations supporting the notion that the public entities’ in-house counsel retained “complete control.” While the two remaining fee agreements initially seemed to grant “absolute discretion” to private counsel, the court found that their shortcomings had been rectified by the two cities in question. Concluding that the language of the fee agreements and accompanying assurances from private counsel adequately established that the private counsel served in a sufficiently subordinate role, the Court of Appeal set aside Judge Komar’s order and upheld the fee arrangements.
C. RHODE ISLAND
Concern for maintaining the integrity of the neutrality standard also surfaced when a similar contingency fee arrangement was challenged in Rhode Island. Because Rhode Island, unlike Louisiana and California, vests the office of the attorney general with common law powers (as do the clear majority of states), the Rhode Island Supreme Court’s opinion is arguably the most influential precedent available and is likely to have an impact that decisions focusing more on individual state rules and statutes are unable to have.
The defendants in State v. Lead Industry Association argued that the decision of former Attorney General Sheldon Whitehouse to hire private attorneys to represent the state in litigation against lead paint manufacturers on a contingency fee basis violated public policy. The Attorney General had hired outside counsel because the state lacked adequate resources to finance a demanding suit to confront its perceived public health crisis. The original agreement gave private counsel sixteen and twothirds percent of any monies received from the litigation. The paint manufacturers directed the court’s attention to the Retainer Agreement, which they claimed had delegated “complete control” of the litigation to contingency fee counsel, effectively rendering the attorney general powerless over prosecution of the instant action. The court readily concluded that the Attorney General had, through the language of the Retainer Agreement, ceded all of the powers of his office to private attorneys. Rather than invalidate the contract, however, the court gave the Attorney General the opportunity to amend the contract to eliminate the problem.
Approximately one and a half years later, in January of 2005, the parties returned to the Superior Court to again address the validity of the fee arrangement. The court acknowledged that the “requirement of neutrality in adjudicative proceedings safeguards the two central concerns of procedural due process, the prevention of unjustified or mistaken deprivations and the promotion of participation and dialogue by affected individuals in the decisionmaking process.” The court noted, however, that while the United States Supreme Court has acknowledged the potential for a conflict of interest when the government is represented by counsel who holds a financial interest in the outcome of the litigation, it has also refrained from establishing a bright line rule on the issue. Ultimately, the Rhode Island court denied the paint manufacturers their motion for a stay.
In June of 2006, the Supreme Court of Rhode Island granted certiorari to review the issue once more. The court noted that the original Retainer Agreement had been edited in response to the Superior Court’s 2003 ruling to include a provision stipulating that the attorney general would at all times retain “full control” of the litigation, but ultimately ruled that the issue was non-justiciable under the constitutional rule of strict necessity. The court stated that while the defendant’s argument that the arrangement violated both Fourteenth Amendment Due Process rights and Rhode Island’s separation of powers doctrine “include[d] novel questions of constitutional law,” it would postpone review because immediate review was not unavoidable.
The long and winding road of the Rhode Island contingency fee debate came to an end in July of 2008, when the Rhode Island Supreme Court upheld the general validity of contingency fee agreements between the attorney general and outside counsel. The lengthy and well-reasoned opinion articulated clear standards for contingency fee contracts and a mechanism for review. Interestingly, the court did not need to reach the issue of contingency fee arrangements because it held that a public nuisance claim was not an appropriate cause of action for the plaintiffs, ending the underlying lead paint litigation. Nevertheless, the court issued an opinion on the issue of first impression, noting that the particular subject is “one of extreme public importance”that is “capable of repetition, yet evades review.”
The court’s analysis emphasized the special nature of the Office of the Attorney General in Rhode Island, which is vested with all of the powers inherent at common law. Accordingly, the ancient and powerful office is instilled with broad discretion and duties beyond those of private attorneys: the attorney general has a “special and enduring duty to ‘seek justice,’” a duty that entails more than serving as an advocate for the state. It is the duty of the attorney general to ensure “that justice shall be done.”
In light of the broad discretion granted to the attorney general, and the fact that the duties of and standards for private attorneys are different than those of government attorneys, the court explained that in order for a contingency fee to be valid, the outside counsel must serve a subordinate role: “it is vital that the Office of the Attorney General have absolute control over the course of any litigation originating in that office.” Moreover, in addition to having control over the litigation, “he or she must appear to the citizenry of Rhode Island and to the world at large to be exercising such control.”
The court set forth three particular limitations that should be expressly included in any contingency fee agreement between the attorney general and private counsel: (1) that the attorney general retain complete control over the course and conduct of the case; (2) that the attorney general retain a veto power over any decisions made by outside counsel; and (3) that a senior member of the attorney general’s staff be personally involved in all stages of litigation. In offering these “exacting limitations,” the court took care to note that the limitations are not exhaustive, and that the inclusion of such precautions would not necessarily guarantee that a contingent fee contract will survive judicial review. Ultimately, however, the court ended five years of litigation on the
issue with its broad holding that the,
Attorney General is not precluded from engaging private counsel pursuant to a contingent fee agreement in order to assist in certain civil litigation, so long as the Office of the Attorney General retains absolute and total control over all critical decision-making in any case in which such agreements have been entered into.
Meredith, Santa Clara, and the Rhode Island litigation illustrate that contingency fee relationships between state attorneys general and private attorneys may be accompanied by vexing legal and ethical implications. A desire to avoid potential violations of state separation of powers doctrines and the possible degradation of neutrality standards for government attorneys has resulted in both declarations that such arrangements are invalid and a sense that even those fee arrangements that are upheld must be strictly monitored. In an effort to make contingency fee arrangements more palatable, three organizations have formulated suggestions for systemic reform. These proposals, along with their shortcomings, are discussed in Part IV below.
IV. PROPOSED REFORMS TO THE CONTINGENCY FEE SYSTEM
Three formal means of reforming the current relationship between state attorneys general and private counsel have been proposed by organizations who agree that the current system is broken. These proposed reforms, however, are an inadequate response to the complex standard of neutrality government attorneys are expected to meet. Upon examination, it becomes clear that a promising best practices proposal must be more responsive to the issues raised by the neutrality doctrine. Part IV.A surveys the methods and priorities of the previously proposed reforms. Part IV.B examines why the three reform proposals are an insufficient response to the problems posed by the use of contingency fee arrangements and explains why this Note centers reform on the concerns raised by the neutrality doctrine.
A. PREVIOUSLY PROPOSED REFORMS
The ATRA, a national organization dedicated exclusively to tort and liability reform, has formulated a “transparency code.” This proposal emphasizes transparency throughout the contracting process and ensuing relationship, outlining five principles for state attorneys general. The first is disclosure: the idea that contracts and their details should be posted on the Internet for public inspection. Second is value: “[u]nless an extraordinary situation requires assistance from a specific legal expert . . . every effort should be made to competitively bid contracts for outside counsel.” Third, the ATRA calls for oversight: contingency fee contracts should be subject to review by the legislature. Fourth is a call for reporting: the ATRA would require each private attorney retained by an attorney general to “disclose detailed information on the hours worked, services performed, and fees received from the state, as long as this reporting does not undermine the attorney-client privilege.” Fifth and finally, the ATRA calls for accountability with regard to recovered funds.
The American Legislative Exchange Council (“ALEC”) has proposed a second means of reform embodied in legislation known as the Private Attorney Retention Sunshine Act. The Sunshine legislation requires an open and competitive bidding process prior to the awarding of any state contract for legal services. If a contract is issued in an amount over $1 million, the Act calls for at least one legislative public hearing on the contract. It also requires documentation of all attorneys’ hours, expenses, and fees, while capping the hourly rate of outside counsel at $1,000. To date, the legislation has been adopted in seven states: Colorado, Connecticut, Kansas, Minnesota, North Dakota, Texas, and Virginia.
Third, the Institute for Legal Reform (“ILR”), an affiliate of the United States Chamber of Commerce, has joined the call for reform with its own “best practices” recommendation for state attorneys general. The organization suggests that “taken together, the [best practices] constitute a guide to the conduct of attorney general investigations and litigation that will enhance transparency, consistency, predictability and ultimately, fairness.”
First, the ILR advocates for written retention agreements and public disclosure of such agreements on the Internet. Second, the ILR suggests banning contingency fee-based agreements altogether in situations involving the exercise of the state’s sovereign police power. Instead, contingency fee agreements should be used by the attorney general only to recover losses by the state in its proprietary capacity, such as debt collection. Third, an open and competitive bidding process should be used for any contract for legal services exceeding $1 million or any contract in which at least 1,000 hours of attorney time is anticipated. Fourth, the ILR emphasizes limitations and reporting requirements. In instances where a contingency fee arrangement is appropriate, compensation for outside counsel should be capped at $1,000 an hour. Further, outside counsel should maintain a thorough record of hours worked, expenses incurred, the total fee, a breakdown of the fee, and all other relevant information. Finally, the ILR maintains that attorneys general must “retain ultimate control and substantive decision-making authority in any matter in which private counsel is retained.”
B. THE PREEMINENCE OF THE NEUTRALITY DOCTRINE DEMANDS A SHIFT IN REFORM EFFORTS
A synthesis of the case law and underlying justifications for, and criticism of, contingency fee arrangements is difficult because a legal analysis begins with state constitutions and statutes. As each of the fifty states has its own unique constitution and statutory scheme, the analysis that emerges in each state will have its own particular nuances and concerns. The case law, however, indicates that the constitutional doctrine of separation of powers and a standard of neutrality grounded in due process concerns are the two likely means by which an attorney general’s use of contingency fee attorneys may be challenged.
The value of contingency fee arrangements between state attorneys general and outside counsel cannot be denied, and is highlighted by the Oklahoma case against members of the poultry industry. Without the fee arrangement, the unprecedented pollution of Oklahoma waters would likely continue unabated, and the interests and health of Oklahomans would be left unprotected. Nevertheless, a re-evaluation of the contingency fee process is necessary in light of the legal implications of the arrangements. Because the neutrality standard is likely to prove a more formidable obstacle for state attorneys general than the separation of powers doctrine, its consideration should be at the center of any systemic reforms. Although the Supreme Court of Louisiana found the separation of powers objection persuasive in Meredith, there are inherent weaknesses in the argument.
First, numerous courts have heard challenges to contingency fee arrangements based on the separation of powers doctrine, but the Supreme Court of Louisiana is the sole court that found it persuasive enough to overturn a contract. The doctrine has failed to gain any significant traction. Although courts have noted the strength of the argument they have found it ultimately insufficient to warrant the invalidation of an agreement.
Second, the separation of powers argument relies on the doctrine as embodied in state constitutions, an arguably less formidable obstacle than the federal principle. Of the United States Constitution’s “three most distinctive features — federalism, judicial protection of individual rights and separation of powers — only the last has been held inapplicable to the states.” Although an individual state is, of course, free to choose a governmental structure which incorporates separation of powers, the United States Supreme Court has concluded that the principle does not necessarily apply to the states. Thus, while the separation of powers doctrine is certainly valid within a state, its implications may be weaker than at the federal level.
Third, as Professor Michael Dorf has pointed out, the fact that contingency fee arrangements vest executive power in private parties is a weak objection. Professor Dorf explains that the practice is anything but a novel phenomenon: in a tradition that pre-dates the Founders, private parties known as “relators” have long been able to bring qui tam actions on behalf of the government, and the practice continues today. Further, Dorf explains that “private attorney general” actions in which private parties sue in their own name to enforce public obligations are exceedingly common in contemporary society and sanctioned by law. For Dorf, “[t]here is no constitutional difference between, on the one hand, qui tam and private attorney general suits, and on the other hand, private attorney contingent fee cases, at least so far as derogations from executive power are concerned.”
Fourth, the separation of powers argument allows a reviewing court significant leeway regarding constitutional and statutory interpretation. As discussed above, in Meredith, the Supreme Court of Louisiana reviewed a state statute that stated “[a]ll sums recovered through judgments, settlements, assessment of civil or criminal penalties [and] funds recovered by suit or settlement . . . shall be paid into the state treasury.” The Meredith court interpreted the provision to require any monetary recovery from a state environmental suit to be deposited into the state treasury rather than first used to pay outside counsel on a contingency fee basis. To the majority, it was “clear and unambiguous.” The “clear and unambiguous” nature of the provision, however, was openly questioned by the dissenting opinion in Meredith, in which Chief Justice Calogero argued for a broad understanding of the attorney general’s powers and a different interpretation of the statute at issue. One year later, Maryland’s highest court tracked Justice Calogero’s reading of the statute and method of interpretation, when it decided to uphold a contingency fee arrangement against a separation of powers challenge. Thus, it seems that the exercise in constitutional and statutory interpretation demanded by a separation of powers challenge leaves each particular court, and even judge, free to apply their own method of interpretation, along with their respective understanding of state attorneys general power. In this sense, a challenge to contingency fee arrangements based on the separation of powers doctrine would be dependent on the particular composition of the reviewing court rather than a formal legal principle.
An emphasis on the neutrality doctrine in formulating best practices is not necessary simply because of the inherent weaknesses in the separation of powers criticism. The neutrality principle, grounded in due process concerns, is a formidable obstacle to contingency fee arrangements in itself. Defenders of the agreements have worked to assuage neutrality concerns by promising control and authority over outside counsel. Rather than attempt to precisely measure the nuanced relationship between state attorneys general and private counsel, courts have relied on an examination of the contractual language behind the agreements. The judiciary likely places such emphasis on the language of the agreements because a precise determination of whether and to what extent the attorney general is exercising oversight is likely to be complicated. As pointed out by Judge Komar in Santa Clara, it is extremely difficult to compare from the bench the decision-making authority of outside counsel to the authority retained by the attorney general. Thus, attorneys general would be well advised to carefully enter into contracts that make it explicitly clear that the presiding attorney general retains complete control over the litigation at issue. But the mere inclusion of particular words in a retainer agreement is a questionable check on the influence and power of outside counsel. Although the courts of Rhode Island and California have accepted altered language as sufficient proof of a changed relationship, the notion seems highly suspect.
It is easy for the requisite contractual language stating that the attorney general retains control and authority over the litigation to slide into mere abstractions. When Attorney General Edmondson filed suit against members of the poultry industry in
Oklahoma, he noted the importance of the industry to the state’s economy and job market and assured the citizens of Oklahoma that he would support a strong, formidable, and compliant poultry industry. Although Judge Frizzell decided otherwise, the clash between this promise and the reality that contingency fee attorneys are motivated by financial incentives rather than intangibles, is not sufficiently overcome by Oklahoma’s assurances that Edmondson “actively participates” in the action, is “an attorney of record,” and “the Contract makes it abundantly clear that [he] retains complete control over this litigation.” Such statements lack concrete value and provide no real evidence that clean water and a stable economy will be given priority over recovering monetary damages.
Similarly, the reform proposals of the ATRA, the ALEC, and the ILR each fail to create a system of reform that sufficiently provides state citizens with the assurance that their interests will be represented in accordance with the neutrality principle. The three reform proposals focus on ensuring outside counsel is not selected because of personal and/or political connections, public disclosure as to the existence and purpose of contingency fee contracts, and billing and recordkeeping strategies designed to ensure outside counsel are paid at a reasonable rate and only for approved services that are actually performed. All three proposals lack a mechanism for honoring the demands of the neutrality doctrine within the contingency fee relationship. Only the ILR’s best practices proposal takes the neutrality principle into consideration; as discussed above, its final recommendation is that attorneys general “retain ultimate control and substantive decision-making authority in any matter in which private counsel is retained.” Given the significant threat to the integrity of the neutrality doctrine, such an abstract suggestion falls far short of an adequate response. Indeed, the government must retain control and authority over any litigation in which private attorneys are involved. The harder question is how. The intention behind this Note is to provide state attorneys general with a novel set of best practices that includes specific methods for retaining and exercising control along with concrete changes to the current system. These best practices are described in Part V below.
V. RE-THINKING REFORM: BEST PRACTICES AS A MEANS OF ENSURING NEUTRALITY
A best practices model for state attorneys general that prioritizes a specific response to the concerns implicit in the neutrality doctrine is essential. In formulating the specific recommendations contained in this Note, the relationship between corporate in-house counsel and private law firms was helpful guidance. At times, corporate law departments make the decision to shift the responsibility for certain legal services to outside providers, effectively outsourcing certain types of legal work. Thus, in some ways, the relationship between the in-house legal departments of corporations and their chosen outside providers is analogous to the relationship between state attorneys general and outside counsel hired to represent the state on a contingency fee basis.
In August of 2004, the Association of Corporate Counsel (“ACC”) created a profile of leading practices for corporate counsel engaged in strategic outsourcing. Many of the ACC’s leading practices prove instructive when applied to the context of state attorneys general outsourcing work to private attorneys on a contingency fee basis. Similar concerns are a backdrop to both relationships; the establishment and maintenance of control and authority over the underlying litigation is an issue for both in-house corporate counsel and state attorneys general. Thus, a number of the best practices recommendations presented in this Note are inspired by the ACC’s leading practices and were adjusted to meet the needs of the unique relationship between state attorneys general and contingency fee counsel. Others were formulated out of a desire to find innovative ways to meet the demands of the neutrality doctrine while adhering to the reality that contingency fee contracts are often a crucial resource for state attorneys general. Contingency fee arrangements need not be eliminated entirely, but rather restructured around a theme of continued government control and authority. Parts V.A–V.H constitute novel best practices recommendations for state attorneys general entering into contingency fee contracts with outside counsel.
A. PRECISE CONTRACTUAL LANGUAGE
Any agreement between a state attorney general and outside counsel must contain an explicit assurance that the requisite standard of neutrality will be maintained by all members of the state attorney general’s office and all private counsel throughout the duration of the relationship. Upon judicial review, the lynchpin of a valid contingency fee arrangement may be an unqualified statement that the state attorney general retains complete control and authority over the litigation. It must be readily apparent to the parties to the contract, third parties, and to the broader public that the attorney general maintains absolute control over the litigation from beginning to end.
It cannot be over-emphasized, however, that words are not enough. Although a reviewing court may be appeased by precise contractual language assuring neutrality and control, each state attorney general who chooses to utilize contingency fee contracts must work to align the actions of his office with the contractual language in order to ensure that the standard of neutrality required of government officers remains uncompromised. Specific methods of attaining and maintaining such neutrality are discussed in Parts V.B–V.H below.
Transparency is certainly not a novel concept in the realm of best practices recommendations for state attorneys general. The proposals of the ATRA, the ALEC and the ILR each call for an open and competitive bidding process to award contracts to outside counsel under particular circumstances. The ATRA and the ILR models take transparency a step further by suggesting that contingency fee contracts be posted on the Internet for public inspection. But if state attorneys general are to adequately respond to the concerns prompted by contingency fee agreements, more significant steps must be taken.
The ACC’s leading practices reveal that one method of corporate outsourcing utilizes online auctions to receive, filter and select proposals from private law firms. For example, in 2003 the law department at Alcoa, Inc. decided to outsource its intellectual property work. The law department worked with the company’s procurement group to set up an online auction which was handled by a company called Free Markets. Before the actual auction, the law department invited all interested law firms to participate in a series of conference calls in which the proposals were discussed and questions were addressed. Applying online auctions to the context of state attorneys general contingency fees will drastically increase transparency, not only with regard to the parameters of an eventual fee agreement, but also with regard to the selection process behind the agreement itself.
An auction may not be an ideal transparency tool in all situations — as General Counsel for Golden West Financial explained, “[i]f you want someone to be a trusted partner, using . . . auctions to award service arrangements can be counter-productive.” Golden West Financial opted instead to rely on its own general knowledge of the legal market when it decided to outsource a percentage of its legal work and approached a law firm specializing in intellectual property. Thus, in cases where an attorney general may want to couple with a particular firm because of its acknowledged area of expertise or particular relationship with an attorney at the firm, an auction could interfere. Nevertheless, because accusations of attorneys general selecting outside counsel on the basis of campaign contributions made and favors owed run rampant, an auction has potential to vastly increase the transparency of the contingency fee process. Additionally, an online auction could presumably be designed in a manner that would pre-screen bidders for expertise, experience, and other pertinent qualifications. An online auction could also be open for public observation, further enhancing transparency and connecting the process to the fact that selected counsel will eventually be representing the public interest.
C. A MOVEMENT AWAY FROM CONTINGENCY FEES
It is not necessary, or even practical, to ban the use of contingency fee arrangements by state attorneys general in all cases where the state sovereign police power is used (as is advocated by the ILR best practices). But an effort to move away from such a strong reliance on that particular means of structuring the relationship is preferable if state attorneys general are to successfully respond to neutrality concerns. The ACC’s leading practices illustrate a preference for “fixed fee” arrangements over the more traditional method of billing on an hourly basis; “many companies have described a preference for implementing fixed or retainer fee arrangements, and commented on how this type of fee arrangement helps to promote better alignment with in-house law department economics.” When the legal department at American Express sent solicitation letters to law firms expressing an interest in entering into working relationships with a small number of firms to handle a significant portion of the corporation’s litigation matters, the letter emphasized that it wanted to receive proposals that were structured in non-traditional ways. As American Express’ Chief Litigation Counsel explained,
[t]he traditional economics of outside law firms is antithetical to the goals and economics of the in-house law department. Outside firms make their money based on hours billed and hourly rates . . . On the other hand, in-house goals focus on finding ways to control costs in terms of the ultimate bottom line, and to bring predictability and stability to litigation.
Unfortunately, an emphasis on fixed fee relationships is likely to prove difficult for attorneys general because their use would likely stretch most government offices well beyond their budget — contingency fee contracts are sometimes favored specifically for the reason that they eliminate up-front costs.
American Express’ strategy of non-traditional fee structures may still be successfully transferred to the realm of state attorneys general. One way of “bridging the gap” between the goals of outside counsel and attorneys general in a manner that directly responds to the concerns of the neutrality doctrine would be to broaden the definition of “contingent” to refer to not only monetary damages but also specific policy achievements. Under such a framework, outside counsel would not simply be awarded a percentage of the damages. While a pre-determined percentage of the recovered damages may still be an element of total compensation, outside counsel might also receive compensation for each public policy benchmark achieved through the ensuing litigation.
Applying this compensation structure to the Oklahoma case discussed above, the contract would be drawn such that the state would compensate outside counsel based on its ability to bring about not only damages, but also substantial environmental changes, while maintaining the economic stability of the industry. Thus, the contingency fee arrangement would designate a substantially smaller percentage of the damages as compensation for the private attorneys, but additional compensation would be linked to benchmarks such as whether the poultry industry has agreed to a specific, itemized plan to clean up the Illinois River or the creation of a fund, sponsored by members of the poultry industry, to provide for future beautification efforts along the watershed. Such a framework would align the otherwise divergent interests of the attorney general’s office and the private firm, moving the arrangement beyond monetary damages to incorporate public policy goals. Although the total compensation awarded to outside counsel might ultimately prove to be the same as the amount awarded under a traditional contingency fee arrangement after the contingency fee and benchmark awards are combined, the concerns of the neutrality doctrine are directly confronted by linking private counsel to public policy goals.
According to the ACC’s leading practices, many companies place an emphasis on training the firms they enter into outsourcing relationships with on the company’s business, culture, client contacts, and approaches. This strategy of conducting and prioritizing training should be extended to the attorney general context as an element of their relationships with private attorneys. While it may be cost-prohibitive in small cases, larger cases with high stakes and large sums of money involved will benefit by incorporating plans for training the private attorneys. Once hired on a contingency fee basis, state attorneys general should require private attorneys who anticipate billing substantial amounts of time to a case in which the firm is representing the state to attend a professional responsibility seminar for government attorneys. Professional responsibility standards and priorities may vary according to the specific field within the legal profession190 and a “crash course” on the obligations and duties of government attorneys would serve to further bridge the gap between attorneys general and outside counsel, helping the two align strategies, policies, and goals. An incentive to “do the right thing” rather than to recover the largest possible monetary award must be firmly instilled in private counsel.
Training need not be one-sided; members of the state attorney general’s office may receive training as well. Certain types of cases and issues will be likely to surface again within the state. Although a lack of nuanced knowledge or experience in a particular field may initially lead the attorney general to hire outside counsel, assistant attorneys general may receive valuable training, both formal and informal, from private counsel over the course of the underlying litigation. Over time and through continued exposure to particular methods and strategies, it may be possible for the attorney general’s office to handle subsequent cases without the need for outside counsel.
E. LOCATION OF OUTSIDE COUNSEL
It is generally assumed that outside counsel will remain geographically distinct from the state attorney general even after the two entities are linked by a contingency fee arrangement. The ACC leading practices indicate that some of the companies it surveyed have chosen to change their geographic relationship to their outside service providers. In one case, the service provider chose to open an additional office near company headquarters. In another outsourcing agreement, outside lawyers provided their services from a location physically co-located in company space. The service provider may even lease workspace from the company when working in company space on a large scale.
Although resources are an obvious concern for state attorneys general, for long term cases with substantial discovery it may be desirable to link outside counsel to the attorney general, not only with shared goals and motivations, but also physically. While renting nearby office space is likely too expensive for the limited budgets of attorneys general, private attorneys working on state matters could be required to work from the office of the attorney general, perhaps for a pre-determined number of days a week. The inconvenience would likely be minimal, as associates at private firms are often asked to work outside of the office when conducting due diligence or document review. Even attorneys general with few resources should be able to clear out enough space for a “war room” or convert low-use space into additional offices. Enhancing the physical connection between the two offices would further connect the objectives, strategies, and knowledge of the attorneys involved in the litigation.
F. DIRECT CLIENT CONTACT
Several corporations surveyed by the ACC have established a structure in which clients may contact the outside service provider directly. Transferring such an idea to the context of attorney general contingency fee arrangements, the public should be granted access to outside counsel on the same terms it would had the attorney general been representing the interests of the state himself. Many websites that represent offices of state attorneys general allow citizens to contact their attorney general with comments and concerns. This means of communication could be implemented to allow concerned citizens to contact the private attorneys representing their interests. For example, in the Oklahoma case discussed above, if outside counsel were accessible in some way by the citizens of Oklahoma, it may make it more likely that the private attorneys would better understand, and thereby prioritize, the needs and concerns of the people of Oklahoma (e.g., long term provisions for ensuring clean waters, as opposed to a sole focus on a large damages award).
G. RECORD KEEPING AND POINTS OF CONTACT
Both the ATRA and the ILR methods of reform emphasize reporting requirements for outside counsel engaged in a contingency fee relationship with state attorneys general, suggesting that outside counsel maintain a thorough record of hours, fees, services performed, and expenses incurred. A reporting requirement, however, is insufficient. It is also necessary to designate points of contact, both within the attorney general’s office and at the private firm, whose responsibility it is to manage the relationship and the underlying case. In order to ensure accountability, the point of contact within the attorney general’s office must be an integral member of the trial team, responsible for keeping track of all briefs filed by outside counsel and monetary disbursements. The point of contact must also ensure that the legal strategy of outside counsel is not accompanied by unwanted public policy implications or contradictions of current or past attorney general legal interpretations or legal strategy. The point of contact within the private law firm would be an active member of the trial team and should be able to supply this information as it requested or becomes relevant.
Furthermore, one of the ACC’s leading practices is the use of “shadow time” and monitoring by the corporations outsourcing work. This requires service providers to maintain and submit time reports in order to shed light on how much time is spent on particular issues and what type of work is prioritized, allowing the company to monitor the overall efficiency of the relationship. Management of shadow time reports could be incorporated as an additional responsibility for the respective points of contact within the contingency fee relationship.
Finally, it is necessary for a contingency fee relationship to exist alongside a pre-determined communications timetable. The respondents to the ACC’s leading practices survey described periodic meetings to discuss outsourced areas on a weekly, monthly, or quarterly basis. Additional communication devices described by the corporations include identifying outside service providers on company email systems, case management system links, and combined telephone contact lists. Such methods of communication could be implemented with relatively low cost in the context of attorney general relationships. Contracts between the attorney general’s office and outside counsel should include predetermined meetings at regular intervals, along with provisions for linking telephone and email communications, particularly in cases that are expected to be long term.
The obstacles facing state attorneys general are formidable. Each must find a way to ensure that the interests of the state and its citizens are represented while juggling limited legal resources and working within specific budget constraints. While entering into contingency fee relationships with outside counsel solves many of the attorneys general’s problems with regard to expertise, budget and personnel, it opens the government office to legal criticisms, particularly concerns raised by the neutrality doctrine. Although the actual number of cases where the arrangements have been struck down by reviewing courts may seem negligible, the surrounding controversy and ethical implications of the relationships necessitate an effort to reform the current system.
The proposed methods of reform suggested by the ATRA, the ALEC and the ILR fall short of a comprehensive response to the problems inherent in the current system, particularly with regard to concerns linked to the neutrality doctrine. A more promising means of reform directly responds to the neutrality standard and its notion that attorneys representing government interests act and serve from the perspective of government attorneys rather than private attorneys. Thus, reform must focus on the intricate relationships between the attorneys general and outside counsel, demarcating specific boundaries, standards, and policies that serve as the basis for each contingency fee contract with the ultimate goal of linking the interests and strategies of the public and private attorneys working on each particular case. As articulated in Part V, these best practices must include enhanced transparency, a movement away from the traditional contingency fee structure, training programs, changes in the geographic relationship of the parties, increased contact with state citizens, record keeping standards, and superior communication. The implementation of these best practices in the offices of state attorneys general nationwide may begin the process of reimagining the nature of the relationship between state attorneys general and private counsel. Rather than posing a threat to the integrity of the neutrality doctrine, the dynamics of contingency fee outsourcing may be refocused on aligning the interests of all involved attorneys, so as to better serve the interests of each state and its respective citizenry.
1 Kenneth A. Ewing, Quantum Meruit in Ohio: The Search for a Fair Standard in Contingent Fee Contracts, 18 U. DAYTON L. REV. 109, 109 (1992).
2 Robert S. Peck & John Vail, Blame it on the Bee Gees: The Attack on Trial Lawyers and Civil Justice, 51 N.Y.L. SCH. L. REV. 323, 328 (2006–2007) (“If it were not for contingent fees, indigent victims of tortious accidents would be subject to the unbridled, self-willed partisanship of their tortfeasors.” (quoting Pennsylvania Justice Michael A. Musmanno)).
3 MODEL RULES OF PROF’L CONDUCT R. 1.5 (2007).
5 Adam Liptak, A Deal for the Public: If You Win, You Lose, N.Y. TIMES, July 9, 2007, at 10.
6 Id. Critics of the agreements point out that “former New York Attorney General Eliot Spitzer was considered one of the most aggressive and activist state attorney generals. . . . Yet, General Spitzer did not enter into contingency fee agreements with private lawyers as a matter of principles and practice.” Brief of Chamber of Commerce of the United States of America & the American Tort Reform Ass’n as Amici Curiae in Support of Motion for Judgment as a Matter of Law in Light of Plaintiff’s Constitutional Violations
at 20–21; Oklahoma v. Tyson Food, Inc., No. 05-cv-00329-GKF-SAJ (N.D. Okla. June 12, 2007) [hereinafter Brief of Amici Curiae]. Similarly, in the multi-state tobacco suits, some attorneys general, such as that of Virginia, opted not to utilize private counsel and instead pursued the litigation with available resources. Id.
7 Interview with James Tierney, Dir., Nat’l State Att’ys Gen. Program at Columbia Law Sch., in New York, N.Y. (Jan. 20, 2008).
8 John O’Brien, Bush Bans Contingency Fee Arrangements, LEGAL NEWSLINE, May 17, 2007, http://legalnewsline.com/news/195296-bush-bans-contingency-fee-arrangements.
9 John O’Brien, Blumenthal Tops Group’s List of 10 Worst AGs, LEGAL NEWSLINE, Jan. 24, 2007, http://legalnewsline.com/news/189593-blumenthal-tops-groups-list-of-worstags.
10 See State v. Lead Indus. Ass’n, 951 A.2d 428 (R.I. 2008).
11 Rob Luke, Lawyers Get Finger-Lickin’ Ruling in Okalahoma AG’s Chicken Suit, LEGAL NEWSLINE, June 18, 2007, http://legalnewsline.com/news/196868-lawyers-getfinger-lickin-ruling-in-oklahoma-ags-chicken-suit.
12 See Santa Clara v. Superior Court, 74 Cal. Rptr. 3d 842 (Ct. App. 2008).
13 O’Brien, supra note 9.
14 To the Chamber of Commerce, contingency fee arrangements constitute an undesirable system of “regulation through litigation.” Brief of Amici Curiae, supra note 6, at 22. The organization argues that despite the claims of many state attorneys general during the tobacco litigation that it was a “unique” situation, “states and localities have hired contingency fee lawyers to attack a wide range of manufacturers and service providers.”
Id. Thus, there is a concern that there is no foreseeable end or limitation on such arrangements as “these ‘new style’ cases give the state executive branch a new revenue source without having to raise taxes.” Id.
15 In all activities of a prosecutor, “his duties are conditioned by the fact that he ‘is the representative not of any [sic] 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.’” Clancy v. Superior Court, 39 Cal. 3d 740, 746 (1985) (quoting Berger v. United States, 295 U.S. 78, 88 (1935)). The Clancy court continued on to explain that such duties are not limited to criminal prosecutors: “[a] government lawyer in a civil action or administrative proceeding has the responsibility to seek justice and to develop a full and fair record, and he should not use his position or the economic power of the government to harass parties or to bring about unjust settlements or results.” Clancy, 39 Cal. 3d at 746 (quoting MODEL CODE OF PROF’L RESPONSIBILITY EC 7-14 (2009)).
16 See generally Santa Clara, 74 Cal. Rptr. 3d at 842; Kinder v. Nixon, No. WD 56802, 2000 WL 684860 (Mo. Ct. App. May 30, 2000); State v. Hagerty, 580 N.W.2d 139 (N.D. 1998); State v. Lead Indus. Ass’n, 951 A.2d 428 (R.I. 2008).
17 Santa Clara, 74 Cal. Rptr. 3d at 848–49 nn.6–9; Lead Indus., 951 A.2d at 477; State v. Lead Indus. Ass’n, No. PB 99-5226, 2005 WL 374459, at *3 (R.I. Super. Ct. Jan. 6, 2005).
18 The National Association of Attorneys General (“NAAG”) has begun to formulate a response to the complicated issues that accompany the use of contingency fee agreements. At the NAAG Chief Deputy Seminar on May 15, 2008, a presentation dedicated to the management of relationships with outside counsel offered advice and tips to offices across the country. Although the presentation touched on issues of control, the majority of the presentation focused on ensuring cost effective representation. NAAG has yet to engage in an in-depth exploration of the intersection of the neutrality doctrine and contingency fee agreements. Managing Contracts with Outside Counsel, Address at the NAAG Chief Deputy Seminar (May 15, 2008) (on file with author).
19 “Not only is a government lawyer’s neutrality essential to a fair outcome for the litigants in the case in which he is involved, it is essential to the proper function of the judicial process as a whole. Our system relies for its validity on the confidence of society; without a belief by the people that the system is just and impartial, the concept of the rule of law cannot survive.” Clancy, 39 Cal. 3d at 746.
20 Minute Sheet, Oklahoma v. Tyson Food, Inc., No. 05-cv-329-GKF-SAJ (N.D. Okla. June 15, 2007). Judge Frizzell’s decision was not accompanied by a written order so his particular method of reasoning remains unknown.
21 Press Release, Okla. Office of the Att’y Gen., AG Sues Poultry Industry for Polluting Oklahoma Waters (June 13, 2007), http://www.oag.state.ok.us/oagweb.nsf/srch/7DB11B73010BFF99862572B4006F60FB.
25 Edmondson pointed out that the Illinois River watershed provides drinking water to twenty-two public water suppliers in eastern Oklahoma. He also claimed that as a result of the pollution, seventy percent of northeastern Oklahoma’s Lake Tenkiller is “oxygen dead,” which means fish and other life cannot survive the conditions. Another lake in eastern Oklahoma, Lake Francis, can no longer be used for recreational purposes
because it is no more than a marsh today. Id.; see also Tim Talley, Oklahoma Attorney General Stresses Water Quality at Conference, THE MORNING NEWS, Nov. 14, 2006, available at http://www.nwaonline.net/articles/2006/11/20/news/111506okwater.txt.
26 Edmonson pointed out that although Tyson Foods, one of the fourteen defendants, spends $75 million each year on advertising, the poultry industry as a whole gave only $1.2 million to the Scenic Rivers Commission to conduct restorative work along the Illinois River, a figure Edmondson states is nowhere near the total cost of damage. Press Release, Okla. Office of the Att’y Gen., supra note 21.
30 See Luke, supra note 11. The contract at issue guarantees at least thirty-three and one third percent of the total value of any monetary damages recovered to outside counsel but allows for a recovery of up to fifty percent. Motion of Tyson Foods, Inc. et al. for Judgment as a Matter of Law in Light of Plaintiff’s Constitutional Violations at 2, Oklahoma. v. Tyson Foods, Inc., No. 05-cv-00329-GKF-SAJ (N.D. Okla. Feb. 28, 2007)
[hereinafter Motion of Tyson Foods].
31 Motion of Tyson Foods, supra note 30.
32 Id. at 2–3.
33 Id. at 6.
34 Id. at 7. A government 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 . . . is not that it shall win a case, but that justice shall be done.” Id. (quoting Berger v. United States, 295 U.S. 78, 88 (1935)).
35 Motion of Tyson Foods, supra note 30, at 12.
36 Id. at 14.
37 Brief of Amici Curiae, supra note 6.
38 Id. at 1–2.
39 Id. at 2.
42 Id. at 4–5.
43 Id. at 5.
44 Id. at 16.
45 Id. at 18.
47 See infra Part III.A.
48 Brief of Amici Curiae, supra note 6, at 21.
50 State of Oklahoma’s Response to Motion of Tyson Foods, Inc. et al. at 1, Oklahoma v. Tyson Food, Inc., No. 05-cv-00329-GKF-SAJ (N.D. Okla. Mar. 19, 2007) [hereinafter State of Oklahoma’s Response].
51 The statute explains that agreements entered into pursuant to that authority must contain the basis for or method of calculating the fee, including, “when applicable,” the hourly rate of the attorneys. Id. at 11. The Attorney General argued that “[b]y requiring the contract to include ‘when applicable’ the hourly rate for each attorney, the legislature clearly contemplated that under certain circumstances an hourly rate would not be ‘applicable’ as the basis or method of calculating the fee.” Id. (emphasis in original). Thus, the state explained, such contingency fee arrangements are expressly sanctioned by the legislature. Id. at 10–11; see OKLA. STAT. tit. 74, § 20i(A)(3) (2002) (“An agency or official of the executive branch may obtain legal representation by one or more attorneys . . . [i]f the Attorney General is unable to represent the agency, or official due to a conflict of interest, or the Office of the Attorney General is unable or lacks the personnel or expertise to provide the specific representation required by such agency or official, contracting with a private attorney or attorneys pursuant to this section.”).
52 State of Oklahoma’s Response, supra note 50, at 21.
53 Id. at 23.
54 Id. at 22. “[T]he recovery in this case cannot be ‘paid out of the treasury of this State’ until it is first paid into the treasury. That will happen, pursuant to the Contract, after costs and fees are deducted and the state’s share of the money is available to the State.” Id. (emphasis in original).
55 Id. at 17.
56 263 F.3d 1151 (10th Cir. 2001).
57 State of Oklahoma’s Response, supra note 50, at 13 (emphasis in original omitted); see Erikson v. Pawnee County Board of County Commissioners, 263 F.3d 1151 (10th
58 State of Oklahoma’s Response, supra note 50, at 14 (emphasis added).
59 Id. at 14–16.
60 Minute Sheet, supra note 20.
61 Philip Morris v. Glendening, 709 A.2d 1230 (Md. 1998), is often touted as the archetypal court decision upholding a contingency fee agreement. There, the defendants in Maryland’s tobacco litigation had challenged a contingency fee contract between private counsel and the Maryland Attorney General for the purpose of representing Maryland’s interests in the tort litigation. Id. at 1231. The court’s opinion upheld the contingency fee contract, holding that there was neither a separation of powers violation, nor sufficient neutrality concerns to warrant voiding the contract. Id. at 1240–44. Interestingly, the court based its decision solely on the constitutional and statutory powers of the Attorney General; in Maryland, the office of attorney general is not accompanied by common law powers. Id. at 1237. As to the defendant’s separation of powers claim, the court agreed with the Attorney General’s conclusion that the situation was extraordinary and deemed his decision to hire contingent fee counsel non-reviewable; “[p]rinciples behind . . . constitutional separation of powers . . . place limits on a court’s power to review or interfere with the conclusions, acts or decisions of a coordinate branch of government made within its own sphere of authority.” Id. at 1239 (quoting Hamilton v. Verdow, 414 A.2d 914, 921 (Md. 1980)). In addressing the neutrality issue, the court acknowledged the power of the doctrine and explained that the “[i]nfluences which could affect the mind of one in a position of public trust are so subtle and difficult to appreciate, that in the end our decision must be guided by the general principle that no public officer who has a pecuniary interest, direct or indirect, in the outcome of the case should participate in that matter.” Glendening, 709 A.2d at 1242 (quoting Montgomery County Bd. of Appeals v. Walker, 180 A.2d 865, 868 (Md. 1962)). But the court went on to point out that whether or not a disqualifying interest actually exists is a factual inquiry, and eventually concluded that there was no violation based on the facts before the court. Id. at 1243–44. For other examples of courts rejecting challenges to contingency fee agreements, see Kinder v. Nixon, No. WD 56802, 2000 WL 684860 (Mo. App. W.D. 2000) and State v. Hagerty, 580 N.W.2d 139 (N.D.
62 See generally State v. Lead Indus. Ass’n, 951 A.2d 428 (R.I. 2008); Santa Clara v. Superior Court, 74 Cal. Rptr. 3d 842 (Ct. App. 2008); Kinder v. Nixon, No. WD 56802, 2000 WL 684860 (Mo. App. May 30, 2000); State v. Hagerty, 580 N.W. 2d 139 (N.D. 1998) Meredith v. Ieyoub, 700 So. 2d 478 (La. 1997).
63 Meredith, 700 So. 2d at 482 (La. 1997). It should be acknowledged that, because each state will have its own separation of powers doctrine in its state constitution, it may be hard to generalize across state lines. This is particularly true with regard to Louisiana since it is a civil law jurisdiction. 15 Am. Jur. 2d Common Law § 10 (2008).
64 Meredith, 700 So. 2d at 479.
68 Id. at 481.
70 Id. at 482.
75 Id. at 483.
76 Ieyoub ex rel. State v. W.R. Grace & Co.-Conn, 708 So. 2d 1227 (La. Ct. App. 1998).
77 Id. at 1230.
79 Santa Clara v. Atl. Richfield Co., No. 1-00-cv-788657, slip op. at 2 (Cal. Super. Ct. Apr. 4, 2007), available at http://pdfserver.amlaw.com/ca/april_4_ruling.pdf.
82 People ex rel Clancy v. Superior Court, 39 Cal. 3d 740, 745 (1985).
83 Id. at 746 (“When a government attorney has a personal interest in the litigation, the neutrality so essential to the system is violated. For this reason prosecutors and other government attorneys can be disqualified for having an interest in the case extraneous to their official function.”).
84 Id. at 747 (“[A] lawyer cannot escape the heightened ethical requirements of one who performs governmental functions merely by declaring he is not a public official.”).
85 Santa Clara, No. 1-00-cv-788657, at 3.
88 Id. at 4.
89 Id. “The standard of neutrality should apply, however, regardless of the wealth of either the government lawyer or defendant.” Id.
90 Santa Clara v. Superior Court, 74 Cal. Rptr. 3d 842, 853 (Ct. App. 2008), petition for review granted, 188 P.3d 579 (Cal. July 23, 2008). At the time of publication, the appeal was pending before the Supreme Court of California.
91 Id. at 853.
92 Id. at 850 (emphasis in original).
94 Id. at 848.
95 Id. at 849–50 (internal quotation marks omitted).
96 Id. at 849. Oakland asserted that it retained “complete control” over the litigation, and assured the court that it was revising its fee agreement to so reflect. Id. at 849 n.8. The private counsel retained by the city of Solano disavowed the language of the fee agreement and asserted that the government “maintained and continues to maintain complete control over all aspects of the litigation.” Id. at 849 n.7.
97 Id. at 853.
98 William C. Haflett, Jr., Tice v. Department of Transportation: A Declining Role for
the Attorney General?, 63 N.C. L. REV. 1051, 1053 (1985) (“The specific powers and duties vested in the office [of the attorney general] vary greatly among the states. Although some states restrict the attorney general’s common-law powers by express statutory or constitutional language, the large majority of states have chosen to recognize the existence of these powers.”).
99 State v. Lead Indus. Ass’n, No. PB 99-5226, 2003 WL 22048756, at *2 (R.I. Super. Aug. 29, 2003).
100 State v. Lead Indus. Ass’n, 898 A.2d 1234, 1235 (R.I. 2006).
102 Lead Indus., 2003 WL 22048756, at *1 (emphasis in original).
103 Id. at *2.
104 Id. at *3.
105 State v. Lead Indus. Ass’n, No. PB 99-5226, 2005 WL 374459 (R.I. Super. Ct. Jan. 6, 2005.).
106 Id. at *2 (quoting Marshall v. Jerrico, Inc., 446 U.S. 238, 240 (1980)).
107 Lead Indus., 2005 WL 374459, at *2.
108 Id. at *3. In reaching its decision, the court took note of both Philip Morris v.
Glendening, 709 A.2d 1230 (Md. 1998) and Clancy v. Superior Court, 39 Cal. 3d 740
109 State v. Lead Indus. Ass’n, 898 A.2d 1234, 1237 (R.I. 2006).
111 Id. at 1239. In articulating the rule of strict necessity, the Supreme Court of the
United States has explained, “[i]f there is one doctrine more deeply rooted than any other
in the process of constitutional adjudication, it is that we ought not to pass on questions of constitutionality . . . unless such adjudication is unavoidable.” Spector Motor Service v. McLaughlin, 323 U.S. 101, 105 (1944).
112 Lead Indus., 898 A.2d at 1239.
113 State v. Lead Indus. Ass’n, 951 A.2d 428 (R.I. 2008).
114 Id. at 476–77.
115 Id. at 468–69.
116 Id. at 470.
117 Id. at 470 (quoting State v. Cosores, 891 A.2d 893, 894 (R.I. 2006)).
118 Lead Indus., 951 A.2d at 470–71.
119 Id. at 471.
120 Id. at 472 (quoting Berger v. United States, 295 U.S. 78, 88 (1935)) (emphasis in original).
121 Lead Indus., 951 A.2d at 476. The court’s opinion referenced and adopted the holding from Philip Morris Inc. v. Glendening, 709 A.2d 1230 (Md. 1998) that where a contingency fee arrangement is involved, the case-management authority of the Attorney
General must be “final, sole and unreviewable.” Lead Indus., 951 A.2d at 476; see supra note 61.
122 Lead Indus., 951 A.2d at 477 (emphasis in original).
124 Id. at 471 n.52.
125 Id. at 475 (emphasis in original).
126 See generally Press Release, Am. Tort Reform Assoc., ATRA Proposes ‘Transparency Code’ for State AGs: As Contracting with Private Sector Attorneys Increases, Greater Public Accountability is Needed (Sept. 17, 2007), http://www.atra.org/newsroom/releases.php?id=8168; Brooke Jones Bacak, The Case for Regulation of Private Attorney Retention by the State of Alabama, 29 J. LEGAL PROF. 179, 188–89 (2004–05); U.S.CHAMBER INST. FOR LEGAL REFORM, STATE ATTORNEY GENERAL CODE OF CONDUCT:RECOMMENDED BEST PRACTICES FOR INITIATING AND CONDUCTING INVESTIGATIONS AND
LITIGATION (2007), http://www.instituteforlegalreform.com/images/stories/documents/pdf/AGCode.pdf.
127 The code starts with an acknowledgement that “litigation can be sufficiently complex, time consuming and expensive that at certain times, and on certain occasions, it may be necessary for state attorneys general to retain the services of outside legal counsel.” Press Release, supra note 126.
132 Specifically, the organization suggests that all recovered money in excess of
$250,000 should be deposited in the state treasury for appropriation by the legislature, and an attorney general should never be permitted to enter into a settlement agreement which allows the attorney general to disseminate funds at its discretion. Id.
133 Bacak, supra note 126, at 188–89.
137 See NAT’L ASSOC. OF MUT. INS. COS., ATTORNEY RETENTION (SUNSHINE ACT) REFORM, http://www.namic.org/reports/tortReform/AttorneyRetention.asp (last visited Apr. 1, 2009).
138 U.S. CHAMBER INST. FOR LEGAL REFORM, supra note 126. The ILR designed its suggested code of conduct from surveys distributed to state attorneys general to which there was a twenty-eight percent participation rate. Id.
139 Id. at 1. The ILR starts from the premise that a general code of conduct is necessary because state attorneys general are in the unique position of having to balance “the public’s right to know of law enforcement matters, a defendant’s right not to suffer undue prejudice, and the government’s obligation to administer justice.” Id.
140 Id. at 7.
143 Id. at 8.
146 Id. This requires attorneys general to determine when and whether to file suit, when and whether to abandon a claim, what legal theories to rely on, and what remedies to pursue. Id.
147 See generally State v. Lead Indus. Ass’n, 951 A.2d 428 (R.I. 2008); Santa Clara v.
Superior Court, 74 Cal. Rptr. 3d 842 (Ct. App. 2008); Kinder v. Nixon, No. WD 56802,
2000 WL 684860 (Mo. App. May 30, 2000); State v. Hagerty, 580 N.W. 2d 139 (N.D. 1998); Meredith v. Ieyoub, 700 So. 2d 478 (La. 1997).
148 See supra Part II.
149 See supra Part III.A.
150 Dorf on Law, http://michaeldorf.org/2007/07/contingent-fees-do-not-violate.html
(July 10, 2007, 09:35 EST).
151 When faced with an argument based on the separation of powers doctrine in an effort to strike down a contingency fee arrangement, the Supreme Court of North Dakota chose to emphasize the history of the attorney general’s office and his inherent common law powers to conclude that the attorney general’s powers are quite broad. Hagerty, 580 N.W. 2d at 139. It explained, “[n]ot every aspect of the powers of a constitutional officer like the Attorney General may be conveniently spelled out by statute. . . . Public officers have implied and incidental powers in addition to their explicit statutory powers.” Id. at 147. Similarly, the Missouri Court of Appeals found that a contract between the attorney general and a private attorney for the purposes of representing the state in tobacco litigation on a contingency fee basis did not violate the separation of powers doctrine of the state constitution. Kinder, 2000 WL 684860. The opinion emphasized the plenary nature of the attorney general’s powers; “the office of Attorney General is clothed, in addition to the duties expressly defined by statute, with all the powers pertaining thereto under the common law.” Id. at *10. Further, as illustrated by Glendening, supra note 61, even in a state where attorneys general lack common law powers, a broad interpretation of constitutional and statutory grants of power may be sufficient to overcome a separation of powers challenge.
152 Michael Dorf, The Relevance of Federal Norms for State Separation of Powers, 4
ROGER WILLIAMS U. L. REV. 51 (1998).
153 Id. at 51.
154 Id. at 52.
155 Dorf on Law, supra note 150.
156 Id.; see, e.g., Kashmira Makwana, Simon Says — False Claims Act and the Reliance Defense, 10 J. HEALTH CARE COMPLIANCE 47 (2008) (explaining that qui tam relators have used the False Claims Act extensively against providers and suppliers of health care services and items); Kara Nicole Schmidt, Note, Privatizing Environmental Enforcement: The Bounty Incentives of the False Claims Act, 9 GEO. INT’L ENVTL. L. REV. 663, 663–64 (1997) (in examining the use of qui tam actions in the enforcement of environmental laws, noting that “modern day ‘bounty-hunters’ (known as qui tam relators) have found that [the False Claims Act] can be used to combat fraud in healthcare and food stamp programs, and to prosecute false certification as a minority business enterprise.”).
157 Dorf on Law, supra note 150.
159 See supra Part III.A.
160 Meredith v. Ieyoub, 700 So. 2d 478 (La. 1997).
161 Id. at 482; see LA. REV. STAT. ANN. § 30:2205 (2009).
162 Meredith, 700 So. 2d at 482.
163 Id. at 485. Judge Calogero felt that “a reasonable interpretation of the sum ‘recovered’ by the client . . . is the amount of the judgment or settlement less the contingency fee.” Id.
164 See Philip Morris, Inc. v. Glendening, 709 A.2d 1230 (Md. 1998); see also supra note 61.
165 See, e.g., Santa Clara v. Superior Court, 74 Cal. Rptr. 3d 842, 853 (Ct. App. 2008), supra Part III.B
166 Santa Clara v. Atl. Richfield Co., No. 1-00-cv-788657, slip op. at 2 (Cal. Super. Ct. Apr. 4, 2007), available at http://pdfserver.amlaw.com/ca/april_4_ruling.pdf; see supraPart III.B.
167 See Santa Clara, 74 Cal. Rptr. 3d at 849; State v. Lead Indus. Ass’n, Inc., 898
A.2d 1234, 1237 (R.I. 2006).
168 Press Release, Okla. Office of the Att’y Gen., supra note 21.
169 See Minute Sheet, supra note 20.
170 State of Oklahoma’s Response, supra note 50, at 15.
171 See generally U.S. CHAMBER INST. FOR LEGAL REFORM, supra note 126; Bacak, supra note 126, at 188–89; Press Release, Am. Tort Reform Assoc., supra note 126.
172 See U.S. CHAMBER INST. FOR LEGAL REFORM, supra note 126, at 8.
173 ASSOC. OF CORPORATE COUNSEL, LEADING PRACTICES IN STRATEGIC OUTSOURCING AND ALTERNATIVE SERVICE MODELS: WHAT COMPANIES ARE DOING (2004), http://www.acc.com/resource/v5903.
174 Santa Clara v. Superior Court, 74 Cal. Rptr. 3d 842, 848–49 (Ct. App. 2008); State
v. Lead Indus. Ass’n, 951 A.2d 428, 477 (R.I. 2008); State v. Lead Indus. Ass’n, 898 A.2d at 1234, 1237 (R.I. 2006).
175 See generally U.S. CHAMBER INST. FOR LEGAL REFORM, supra note 126; Bacak, supra note 126, at 188–89; Press Release, Am. Tort Reform Assoc., supra note 126.
176 U.S. CHAMBER INST. FOR LEGAL REFORM, supra note 126; Press Release, Am. Tort Reform Assoc., supra note 126.
177 ASSOC. OF CORPORATE COUNSEL, supra note 173, at 3.
178 Id. at 7.
180 Id. at 7–8.
181 Id. at 14.
183 See generally Liptak, supra note 5; John O’Brien, Money, Lawyers and Politics:
State Farm Case Has it All, LEGAL NEWSLINE, June 12, 2007, http://legalnewsline.com/news/196634-money-lawyers-and-politics-state-farm-case-has-it-all; O’Brien, supra note 9.
184 U.S. CHAMBER INST. FOR LEGAL REFORM, supra note 126.
185 ASSOC. OF CORPORATE COUNSEL, supra note 173, at 4.
186 Id. at 9.
188 See supra Part II.
189 ASSOC. OF CORPORATE COUNSEL, supra note 173, at 3.
190 Andrew M. Perlman, A Career Choice Critique of Legal Ethics Theory, 31 SETON HALL L. REV. 829 (2001) (arguing that legal ethics and professional responsibility standards must take into account, and perhaps at times be guided by, specific career choices within the legal field. The ethical implications and obligations of attorneys vary based on whether an individual has decided to practice in a law firm, functions as in-house counsel, represents the government, or is a public interest attorney).
191 ASSOC. OF CORPORATE COUNSEL, supra note 173, at 4.
194 Id. One company using between sixty and eighty contract lawyers and paralegals had an arrangement with its preferred provider for the contract personnel to work in designated company space that the service provider leases from the company. Id.
196 See, e.g., Office of the Attorney General of the State of New York,
http://www.oag.state.ny.us/contact.html (last visited Apr. 1, 2009).
197 See supra Part II.
198 U.S. CHAMBER INST. FOR LEGAL REFORM, supra note 126; Press Release, Am. Tort Reform Assoc., supra note 126.
199 ASSOC. OF CORPORATE COUNSEL, supra note 173, at 4.
Rethinking the Public-Private Distinction in Legal Ethics: The Case of "Substitute" Attorneys General
David B. Wilkins
By any measure, Frank J. Kelley was an extraordinary Attorney General. In his thirty-seven years in office, Mr. Kelly redefined the role of the state's chief legal officer, creating a model that has now been widely copied around the country. Under his leadership, the size of the office tripled, from 84 lawyers in 1962 to 301 attorneys when he retired in 1998. Kelley put these new resources to good use, creating the country's first Consumer Protection and Environmental Divisions and vigorously prosecuting a wide range of unfair business practices and environmental harms.
Attorney General Kelley's most lasting contribution, however, may have been the lesson that he taught his fellow AGs about how to utilize the antitrust laws and other civil causes of action to seek restitution and other forms of relief against corporations for harms allegedly inflicted on state citizens. As President of the National Association of Attorneys General, Kelley was instrumental in mobilizing his counterparts around the country to band together to use these potent tools to hold powerful corporations accountable. During his last years in office, this strategy culminated in the massive class action law suits filed by Kelley and other Attorneys General against the tobacco companies—litigation that resulted in a $12 billion settlement for the state of Michigan, the largest in the state's history.
Given his extraordinary accomplishments, it is unlikely that Frank Kelley's career will ever be duplicated in Michigan, or indeed anywhere else. This is not simply because of the personal and professional qualities that made the man who was affectionately known by his constituents as the state's “Eternal General” such a beloved figure with Michigan voters. Nor is it simply because Michigan now has term limits that would preclude even someone as extraordinary as Mr. Kelley from serving ten terms in office. Instead, the very structure of twenty-first century legal careers makes it very unlikely that more than a tiny handful of those graduating law school today will spend thirty-seven years in the same job—whether that job is in the public or the private sector.
Indeed, today's young lawyers are increasingly likely to build careers that move between the public and the private sectors. Thus, in a ten-year nationwide study of lawyers who entered the bar in 2000, my colleagues and I determined that more than 50% of lawyers in our sample who changed jobs between 2003 and 2007 had also changed practice settings, for example moving from private practice to government or vice versa. The economic downturn in the private sector market that began in 2008 has only accelerated this trend, as many young lawyers are being offered financial and other incentives to begin their careers in the public sector before (hopefully) starting their private sector jobs as associates.
Moreover, mobility is only one way in which the traditional boundaries between public and private sector careers have been blurring in recent years. Even lawyers who spend the bulk of their careers in either public or private sector roles are likely to find themselves in positions in which their duties and responsibilities straddle this traditional divide. As we found out from painful experience over the last few years, lawyers who represent important private institutions, such as banks and other financial intermediaries, play a crucial role in our public regulatory system. Indeed, after the 2008 meltdown, many of these institutions are now at least partially owned by taxpayers— which, of course, is just a dramatic illustration of the fact that deposit insurance and other forms of regulatory guarantees have always given the public an important de facto stake in these entities. As globalization increasingly forces companies to confront complex issues such as child labor, environmental protection, and economic development, the general counsels and outside firms that represent these important global players are recognizing that they must understand and incorporate a broad set of public norms and values if they are to perform these roles effectively. At the same time, the government lawyers who oversee these institutions find themselves in the position of being charged both with both ensuring that the private lawyers take adequate account of these public norms, and furthering government competitiveness policies that give the state a significant role in promoting private innovation and market penetration by US companies both at home and abroad.
Finally, the growing use of “outsourcing” by all levels of government— including the express outsourcing of legal services—means that many ostensibly “private” lawyers now exercise de jure public authority in areas ranging from contracting to litigation to regulatory counseling. These private lawyers now work alongside public lawyers to conduct what Frank Kelley called “the people's business.” Similarly, private pro bono lawyers now provide more legal services to the poor than their state funded counterparts in the Legal Services Corporation.
These developments arguably have important implications for the field of legal ethics. Specifically, how should lawyers in private practice incorporate public norms in the various contexts in which their roles implicitly or explicitly call on them to do so? How should lawyers for public entities account for the interests of private parties in promoting public policies that implicate these concerns? And, how should law schools prepare students for careers that are increasingly likely to include time in both public and private sector roles?
Clearly, these are large and difficult questions, and I certainly do not pretend that I will answer them here. Instead, in the remainder of this Essay I will simply try to highlight how the changes we are observing in legal practice problematize the standard conception of the public-private distinction that underlies much of the way we think about legal ethics. I will do so by examining the legacy of Frank Kelley's most enduring innovation: Attorneys General bringing suit to recover monetary damages and other relief from private companies for injuries allegedly inflicted on state citizens. In the years since Kelley pioneered such actions, lawsuits of this kind have become an increasingly important part of the work of many AG offices. Moreover, in prosecuting these actions, many of Kelley's successors have also followed another of his innovations: bringing in private attorneys to either supplement or supplant government lawyers in handling some or all of the work being done on the matter. Thus, in the Tobacco Litigation, Kelley brought in two prominent plaintiff class action law firms—Scruggs, Millette, Lawson, Bozeman & Dent from Pascaloula Mississippi and Ness, Motley, Loadholt, Richardson & Poole from Charleston South Carolina—to be “Special Assistant Attorneys General” to work alongside three lawyers from Kelley's newly created Environmental Division in prosecuting the case. In recent years, arrangements of this kind have become increasingly common. In Louisiana, for example, Attorney General Buddy Caldwell is seeking permission to hire private attorneys to handle litigation against BP and other defendants arising out of the recent Deep Water Horizon disaster. Given both shrinking state budgets and the growing list of potential big-ticket claims involving alleged harms to consumers or the environment, the number of Attorneys General seeking to create arrangements of this kind will, in all likelihood, only increase.
So too, however, will the controversy surrounding this practice. When Frank Kelley hired Richard “Dickey” Scruggs and Ronald Motley to prosecute tobacco companies in Michigan in 1995, he was promptly greeted by a motion by the various defendants in the case to disqualify his new Special Attorneys General. Specifically, the tobacco defendants argued that Kelley did not have the statutory or constitutional authority to delegate his public duties to these private parties, particularly given that the lawyers were not being paid either a government salary or an hourly fee but rather an amount that would be determined by the court based largely on the recovery they obtained for the state. Kelley was able to defeat this effort, as have most—although not all—of the Attorneys General who have followed this path. But as a decision by the California Supreme Court in a similar case in July 2010 makes clear, the issue continues to be actively litigated and hotly contested. The fact that Scruggs was subsequently convicted of conspiracy to bribe a judge in Mississippi in an attempt to secure a larger share of a $26 million fee in a class action involving claims arising out of Hurricane Katrina has only fanned the flames.
In the pages that follow, I will not try to adjudicate the merits of this dispute between supporters and opponents of deputizing private lawyers to pursue public claims against private defendants. Instead, consistent with my overall theme, I will use the dispute over the hiring of what my colleague William Rubenstein has helpfully labeled as “substitute” private attorneys general to elaborate some of the issues raised by the increasing blurring of public and private lawyering roles and to suggest some ways that the profession and the public might respond to these challenges.
The rest of my argument proceeds in three parts. Part II charts the rise of the use of substitute attorneys general following Frank Kelley's pioneering efforts in the Tobacco Litigation. Part III then presents the objections that have been raised to this practice and suggests that while these objections appear unlikely to persuade either politicians or fair minded observers to abandon the use of private lawyers to augment state enforcement resources, the critics do underscore the need for policymakers and lawyers to address the growing complexity of the responsibilities of both public and private lawyers in this area. Part IV concludes with some brief observations about what it will take for the profession to create a set of institutional arrangements and ethical norms capable of defining and reinforcing a workable set of understandings for how lawyers should conceptualize and discharge their public and private responsibilities in particular lawyering contexts.
II. The Rise of “Substitute” Attorneys General
Frank Kelley certainly did not invent the idea of hiring private lawyers to represent the government's interest in specific proceedings. At least since Brown v. Board of Education, public lawyers have brought in legal heavy weights to argue important cases in the United States Supreme Court and in other high stakes proceedings. In 1997, for example, the United States Department of Justice hired famed litigator David Boies to try the government's antitrust case against Microsoft. In addition, state officials sometimes retain private counsel even when they are being sued in their official capacity. On other occasions, public lawyers bring in “special prosecutors” to investigate and prosecute public officials accused of wrongdoing in circumstances where the impartiality of a similar investigation by public lawyers might legitimately be called into question. Indeed, in many small towns it is not uncommon for many governmental lawyering functions to be performed by private attorneys acting on a part-time basis.
These typical practices, however, differ from what Kelley and his fellow Attorneys General did in the Tobacco Litigation in two related respects. First, unlike most of the instances where private attorneys have traditionally been used, the Tobacco cases sought to recover monetary damages from private companies on the basis of torts that the defendants allegedly committed against the state's citizens. Thus, in the Tobacco cases, the states argued that cigarette manufacturers should be held liable for all of the costs that state governments were forced to expend paying for the harms inflicted on their residents as a result of smoking. Although damages are certainly possible in antitrust actions such as the one at issue in the Microsoft litigation, as Professor Howard Erichson notes, “the role of collecting money damages for antitrust harm has more commonly fallen to private plaintiffs.” Second, unlike most of the attorneys in the cases described above, the lawyers engaged in the Tobacco Litigation were neither paid a government salary nor an hourly fee. Instead, to varying degrees the lawyers hired by Frank Kelley and other Attorneys General were paid a fee that was heavily contingent on the size of the recovery that they generated in the case.
In the years following the record-breaking Tobacco settlements, both of these aspects have become increasingly common in cases in which private lawyers have been brought in to conduct litigation against private parties. Just two years after Frank Kelley and his fellow Attorneys General settled the Tobacco Litigation, several states and municipalities filed law suits against gun manufacturers and other related parties alleging theories about the recoupment of medical and other expenses similar to those asserted in the Tobacco Litigation. Similar actions, involving similar theories, have been filed against the manufacturers of lead paint, HMOs and other health care providers, brewers and distillers, fast food chains, and in the years since the housing market crash, mortgage lenders. In many—although certainly not all—of these cases, private lawyers have played a key role. Indeed, many of these actions have been brought by the same lawyers who prosecuted the Tobacco cases, who were once again deputized as special attorneys general for this purpose. And, like the lawyers Frank Kelley retained in Tobacco, many of these lawyers are being paid on the basis of fees that are substantially contingent on the outcome of the case. As indicated above, the litigation that will inevitably follow the BP disaster may very well take a similar course.
A number of factors are driving these developments. First and foremost is money. Not surprisingly, most of the consumer, environmental, and regulatory actions brought by states in recent years involve large companies accused of causing widespread harm. As a result, the defendants in these cases have deep pockets and are capable of hiring the best legal talent money can buy to wear down their opponents, even when that opponent is the state. As Frank Kelley was quick to point out in the opening section of his brief in opposition to the Tobacco defendants' efforts to disqualify the private attorneys he brought in to prosecute the case, “[i]t is no secret that the Defendants have mustered an army of the nation's largest law firms, which include hundreds of attorneys, to fight a scorched-earth war.” As a result, Kelley “deemed it to be in the State's best interest to assign three Assistant Attorneys General to the case and then to retain Special Assistant Attorneys General with experience in tobacco litigation to assist in the prosecution of the lawsuit.”
The word “experienced” is important here. Governments clearly have their own lawyers—and as Frank Kelley himself amply demonstrates, often very good ones. Indeed, as the above quote indicates, Kelley had three full time assistants working on the Tobacco case. I will return to the role of these government lawyers below. But as the Microsoft case demonstrates, even in circumstances where the government unquestionably has significant resources, public lawyers may still believe that they need the assistance of private lawyers with unique skills or experience in order to take on companies that will inevitably marshal the best legal talent money can buy in their own defense.
Moreover, financial considerations have also pushed states to favor hiring these experienced lawyers on some form of a contingent fee. To be sure, some states and localities have decided to follow the Justice Department's lead in the Microsoft case and hire outside lawyers on a reduced hourly fee, or to enlist private lawyers to assist their case pro bono. Most, however, have opted in favor of arrangements where the outside lawyers will only be paid if the litigation is successful, and where the size of their fee (whether as a matter of contract or judicial determination—a distinction to which I will return below), will depend largely on the amount recovered in the litigation. Such arrangements obviously relieve states from the financial burden of paying the hourly rates of top lawyers—rates that have escalated significantly even since the Microsoft action. But even if a state or municipality were able to find lawyers with the requisite expertise and experience who were willing to work for an hourly rate that the government was willing or able to pay, officials would still have to fund the significant up-front costs and expenses that often are required to mount cases of this kind out of public coffers. Contingent fee contracts typically shift some or all of these expenses to the outside lawyers. In an age of dwindling state budgets, it is likely, as one commentator observed, that there will be “industries that will not be taken on, there are cases that will not be brought, unless we allow contingency fees.”
But money alone does not tell the entire story. Public lawyers also have political incentives for bringing in high profile private lawyers to assist them in high profile cases. At the state and municipal levels, top public lawyers almost always stand for election. Moreover, these offices often serve as a stepping-stone to higher office at the city, state, or federal level. Not surprisingly, in seeking to woo voters these lawyer/candidates are quick to tout their experience in helping to shape public policy by curbing corporate abuses through litigation against defendants like tobacco companies and mortgage lenders. Needless to say, this strategy is unlikely to be particularly successful—at least in the long run—unless the case itself is successfully concluded. To the extent that engaging the services of heavy weight private attorneys increases the odds that the government will be victorious, this political incentive is likely to lead to more such lawyers being hired.
Paradoxically, the political risks associated with losing one of these high-profile cases also increases the incentive to bring in special attorneys general. As much as public lawyers seeking higher office like being seen as champions for the people when they bring these kinds of cases, they rationally fear the consequences of losing them even more, since doing so calls into question both their decision to bring the case and their competence in prosecuting the litigation. Bringing in high powered outside talent provides a partial hedge against this latter risk. If the case is successful, the Attorney General can proudly take credit for the victory. But if the case is unsuccessful, the same public official can implicitly blame the setback on the outside lawyer's failure to present a persuasive case—a failure that the Attorney General could not reasonably have anticipated in light of the private lawyer's stellar reputation in litigating actions of this kind. As Jack Coffee argues, political considerations such as these also help to explain why state lawyers favor contingent fees and other similar arrangements since paying the lawyers only if the case is successful frees the Attorney General from the risk of having to later publicly explain to the legislature why significant state funds were “wasted” on a losing effort. But the fact that the general counsels of large private companies frequently rely on a similar strategy of bringing in high profile—and frequently high priced—outside legal talent as a means of protecting themselves against the downside risks of losing a big case (“But I hired Cravath!”) underscores that the politics of CYA (or more politely hedging one's bet) are not confined to the contingent fee context.
Collectively, these monetary and political incentives make it likely that cash-strapped states and municipalities will turn to hiring “substitute” attorneys general with increasing frequency. These same incentives also underscore why this practice has become increasingly controversial.
III. Should Private Contingent Fee Lawyers Exercise Public Power?
Critics raise several objections to state officials hiring “substitute” private attorneys general, particularly if these lawyers are paid on the basis of some form of contingent fee. As an initial matter, some critics argue this practice exceeds the Attorney General's statutory authority to appoint special attorneys general, or is otherwise prohibited by particular provisions of the state's constitution. These arguments turn primarily on the specific language of the statutes and state constitutional provisions in question and therefore have relatively little impact on the broader questions I am discussinghere. Moreover, enough state courts have ruled against such claims,—and enough state legislatures have specifically authorized hiring special attorneys general on a contingent fee basis (provided that these lawyers work under the supervision and control of public officials) that the underlying question of whether to allow private lawyers to exercise state power in this manner is unlikely to be resolved on the basis of a narrow reading of the Attorney General's statutory or constitutional authority in this area.
Nor is it likely that the matter will be resolved on the basis of the general fear that hiring lawyers in this fashion is an invitation to corruption. As the conviction of Dickey Scruggs described above underscores, there is sadly evidence that some public officials and the special attorneys general that they have retained have had the kind of “special” relationship where the latter has “paid to play” this particular role. Needless to say, these are serious charges. But as others have indicated, they are not unique to this context. The phrase “pay-to-play” comes from the widespread practice in the 1980s of law firms and investment banks lavishly supporting politicians who were in a position to give these firms a piece of the lucrative municipal bond business. With few exceptions, the banks and law firms that engaged in this practice had much more in common with the law firms that represent the parties who are objecting to hiring substitute attorneys general in these cases than the plaintiffs' lawyers who have typically been hired for this role. This is not to say, of course, that the possibility of such sweetheart deals should be ignored in this context just because it is present in others. Instead, my point is that the best ways to address “pay-to-play” in hiring substitute attorneys general are likely to be similar to those used in other contexts—a general point to which I shall return below. As a result, the existence of this danger does not provide a special reason for prohibiting the hiring of substitute counsel.
A similar argument applies to critics who object to hiring substitute attorneys general on a contingent fee basis for reasons that are equally applicable to the use of contingent fees in general. Not surprisingly, some of the most vociferous critics of the Tobacco Litigation and other similar cases are the same people who have been railing against the contingent fee in particular, and the litigation system in general, for years. Although it is possible that these critics will one day win their battle against contingent fees, these arguments have little relevance for the specific question of whether public policy should allow their use in this particular setting.
Recognizing that neither statutory interpretation nor allegations of corruption are likely to carry the day, those who object to the growth in substitute attorneys general raise two other interrelated reasons for condemning this trend. First, even critics who generally support the use of contingent fees in the context of private litigation nevertheless assert that lawyers who are paid on this basis will have an inherent and impermissible conflict of interest when they act as substitute attorneys general. Contingent fee lawyers, according to this argument, seek only to maximize their fees while those who exercise government power should work to maximize the public interest. For these critics, the analogy is to a public prosecutor whose compensation depends upon obtaining convictions. Second, many of these same critics assert that contingent fee and other related contracts in this setting undermine fundamental democratic values, either by reducing the legislatures' ability to check prosecutorial discretion or by violating the zone of freedom from state action to which individual defendants are entitled under our democratic form of government.
Once again, both of these arguments have merit. As Professor Steven Berenson has observed, “[i]t is an uncontroversial proposition in mainstream American legal thought that government lawyers have greater responsibilities to pursue the common good or the public interest than their counterparts in private practice, who represent non-governmental persons and entities.” As I will argue in the next part, a set of connected changes in both the public and private spheres, of which the practice of hiring substitute attorneys general on contingent fees is just one example, have made the meaning of Professor Berenson's “uncontroversial” assumption significantly more problematic and complex for both government lawyers and private practitioners in many situations. Nevertheless, it is hard to imagine a plausible regime in which public lawyers are not charged with special responsibility for making decisions in the public interest that go beyond those of private lawyers. Moreover, this is particularly true of public prosecutors, who are granted the authority and the duty to bring the full force of the state against those who transgress its laws. In such circumstances, it does indeed seem appropriately “uncontroversial”—and indeed essential—that the prosecutor's goal “in a criminal prosecution is not that it shall win a case, but that justice shall be done.” A system that paid prosecutors on the basis of the number of convictions they obtain would clearly undermine this objective.
The question remains, however, whether this uncontroversial—and incontrovertible—fact is sufficient to rule all contingent fee contracts for substitute attorneys general out of bounds. Although, as I said at the outset, I do not intend to adjudicate this claim definitively here, there are several reasons to suspect that the analogy to criminal prosecutors is not as persuasive as some critics have suggested—and that the distance between what is actually going on in most of these cases and practices that these same critics deem acceptable and even desirable is far less than they appear to believe. With respect to the former, it has long been recognized that the criminal context confers special duties on prosecutors—and special rights on defendants—that distinguish it from other kinds of litigation, even where the government is a party. Prosecutors in criminal cases have a constitutional duty to turn over potentially exculpatory evidence, ensure that defendants are made aware of their right against self-incrimination, and refrain from using evidence that was collected in violation of the defendant's right to unreasonable searches and seizures under the Fourth Amendment. To ensure the prosecutor's compliance with these mandates, defendants are in turn guaranteed the right to an attorney who must represent their interests “effectively” for a conviction to be upheld. None of these duties or rights applies in civil litigation. To be sure, these differences do not mean that outside of the criminal context, prosecutors have no obligation to “seek justice” instead of mere victory. It is just to note that this obligation is not the same as the duties that prosecutors have in criminal cases.
The California Supreme Court's recent decision in County of Santa Clara v. Superior Court underscores this distinction. In Santa Clara, a group of businesses being sued in a public nuisance action by a number of California counties and cities for manufacturing and distributing lead paint sought to bar the public entities from compensating their privately retained counsel by means of contingent fees. In making this claim, the defendants relied on People ex rel. Clancy v. Superior Court in which the same court in 1985 invoked the strict neutrality principle applicable to criminal prosecutions to bar a municipality from paying a private lawyer a partial contingent fee to prosecute a public nuisance action against the owner of a small adult bookstore. In Santa Clara, however, the court made clear that not every civil case in which the government is a litigant “invoke[s] the same constitutional and institutional interests present in a criminal case.” Thus, when the government is acting as an “ordinary” litigant enforcing its own contract and property rights,” the court observed, “we do not require neutrality.” Although the public nuisance actions at issue in Santa Clara are not simply private, the court acknowledged, neither do they invoke the same kind of liberty interests at stake in the typical criminal case, or even the threat of shutting down an ongoing business at issue in Clancy. Instead, “at most” defendants will have to “expend resources to abate the lead-paint nuisance they allegedly created,” which, the court underscored, is the “type of remedy one might find in an ordinary civil case.” As a result, the court concluded, actions of this kind do not “affect the type of fundamental rights implicated in criminal prosecutions or in Clancy,” and therefore, “the absolute prohibition on contingent-fee arrangements imported in Clancy from the context of criminal proceedings is unwarranted.”
Moreover, in deciding the conditions under which contingent fees should be allowed in public nuisance actions of this kind, the Santa Clara court highlighted several other features of this type of litigation that are plausibly relevant to a fair determination of whether hiring substitute attorneys general on this basis threatens important systemic values. In most criminal prosecutions, the court observed, there was a “profound imbalance between the institutional power and resources of the government and the limited means and influence of the defendants—whose vital property rights were threatened.” As the court correctly notes, however, in the case before it—and in virtually all of the recent cases where governments have sought to bring in substitute attorneys general—there is no such imbalance. Instead, these defendants tend to be “large corporations with access to abundant monetary and legal resources.” A quick perusal of the who's who of lawyers representing the defendants in Santa Clara makes abundantly clear that these powerful actors are making full use of the opportunity that their size and resources afford them to mount a vigorous defense. As a result, the risk that the government will abuse its authority by either overreaching or applying economic coercion, as the Santa Clara court correctly concluded, is significantly reduced.
Finally, the Santa Clara court stressed that the situation before it differed fundamentally from one where a criminal prosecutor—or any other decision-maker with ultimate authority—was being paid on the basis of the outcome of the case because “neutral, conflict-free government attorneys retain the power to control and supervise the litigation.” This control and supervision, the court emphasized, must go beyond “boilerplate language” to “specifically provide that decisions regarding settlement of the case are reserved exclusively to the discretion of the public entity's own attorneys” and “that any defendant that is the subject of such litigation may contact the lead government attorneys directly, without having to confer with contingent-fee counsel.” Citing the Rhode Island Supreme Court's recent approval of contingent fees in a similar public nuisance case against the manufacturers of lead paint, the Santa Clara court went on to endorse three guidelines for determining whether agreements between public attorneys general and the private lawyers they bring in on a contingent fee basis to assist them pass muster:
bq. Contingent-fee agreements between public entities and private counsel must provide: (1) that the public-entity attorneys will retain complete control over the course and conduct of the case; (2) that government attorneys retain a veto power over any decisions made by outside counsel; and (3) that a government attorney with supervisory authority must be personally involved in overseeing the litigation. Then and only then, the court concluded, is it permissible for government officials to bring in substitute attorneys general on this basis.
Not surprisingly, those who oppose this practice have questioned whether this kind of supervision can ever really be effective in practice. Lawyers with day-to-day responsibility for litigating cases, these critics argue, inevitably exercise significant discretion over which strategies to pursue and how to pursue them. Given their strong financial interest in maximizing the size of the monetary recovery from which their fees will be paid (whether directly or indirectly), contingent fee lawyers will invariably steer the litigation in ways that place their own financial interests over those of their putative public supervisors and the public interest these officials are supposed to represent. Moreover, the failure of state officials to check this natural tendency will be virtually impossible for either defendants or courts to see since most of the conversations upon which any such assessment would be based will be held in private, and will arguably be shielded by either the work product or the attorney-client privilege. The fact that government lawyers have been promising to constrain this “investment mentality” since the days that Frank Kelley and his fellow AGs first pioneered this form of litigation in the Tobacco cases is hardly likely to give those who are skeptical about the effectiveness of public oversight much comfort.
Once again, these are far from frivolous concerns. As Professor Erichson has documented, for example, one can see the potential impact of the incentives that private contingent fee lawyers bring to these kinds of cases by examining the differing litigation strategies in two actions that were filed against gun manufacturers within two weeks of each other: one by the City of New Orleans, which chose to retain the same plaintiffs' lawyers who litigated the Tobacco cases as substitute attorneys general, and the second filed by the City of Chicago, which relied on a combination of public lawyers and private attorneys working either on an hourly basis or pro bono to pursue their claims. In the former case, New Orleans pursued a strategy of characterizing firearms as “defective products” that was similar in many ways to the theories these same lawyers had successfully put forward in the Tobacco cases. In Chicago, on the other hand, the City pressed a theory that emphasized the threat that guns posed to public safety, particularly in inner city neighborhoods. As Erichson argues, the “tort law” approach taken by New Orleans was far more likely to lead to a big damage award than the “law enforcement” theory pursued by the lawyers in Chicago, which more naturally fit with obtaining injunctive or other forms of equitable relief. This “investment mentality” on the part of private tort lawyers in which they are motivated primarily by their desire to recoup the money and time that they have sunk into the case, Erichson concludes, will produce decisions that “do not always correspond to the decisions that government officials would make as a matter of policy or politics.” The fact that many of the gun cases where traditional mass-tort plaintiffs' lawyers were brought in to act as substitute attorneys general were quickly dropped when these lawyers realized that they would be far more difficult and costly to litigate than they first anticipated provides support for this conclusion.
Nevertheless, these concerns seem overblown—or at the very least, subject to workable amelioration, albeit not a complete solution. Although defendants cannot be privy to every conversation between public and private lawyers to ensure that the latter are appropriately supervised by the former, courts can and should require that the documents that grant private attorneys the right to act as substitute counsel be made available to opposing parties— and to the public at large. Such “Sunshine Act” procedures, particularly when accompanied by competitive bidding or other similarly open selection processes, will go a long way toward ensuring that public entities have at least formally instituted the kind of procedures set out by the court in Santa Clara, as well as providing an important bulwark against the pay-to-play corruption that has sometimes infected the decision to hire counsel in the first instance. As the Santa Clara court acknowledged, at present these safeguards have not been implemented in many cases. But the momentum is moving in this direction, fueled by decisions like Santa Clara and scandals like the one involving Dickey Scruggs.
Consider, for example, the contract between the state of Nevada and the law firm of Cohen, Milstein, Sellers & Toll authorizing the latter to act as special attorneys general in a law suit filed by the state against several mortgage lenders for engaging in various forms of deceptive and fraudulent lending practices that caused substantial harm to Nevada residents. The document, which was entered into before the court's decision in Santa Clara, expressly covers every area the court identified in that case and a great deal more. Thus, with respect to decision-making authority over the prosecution of the litigation, the contract provides that “[i]t is expressly understood that the Attorney General will have final and exclusive authority over all aspects of this case, including settlement decisions” and that she may “settle all or part of the related Litigation over the objection” of Cohen Milstein. Moreover, the law firm is required to discuss with the Attorney General “all major litigation decisions” such as which defendants to name and what claims to pursue, and to obtain her “written approval” before “taking any positions that could potentially impact policy concerns of the State” and to provide her “with drafts of any court filings sufficiently in advance of filing the documents in order for the Attorney General to review the filings and provide comments, unless the Attorney General affirmatively waives such review.”
To be sure, no contract provision is self executing—let alone self-enforcing. But the fact that both the Attorney General and Cohen Milstein have publicly and explicitly specified their respective rights and duties provides the well-funded defendants in this case a record on which to hold these parties accountable for whether they are living up to their commitments. Although the attorney-client and work product privileges may shield the substance of the conversations that the Attorney General has with her substitute counsel, it should not block inquiry into whether the procedural terms relating to notice and decision making authority specified in the agreement are being honored. Indeed, the contract specifically states that government attorneys “will be actively involved in all stages of this matter and deciding all major issues, including whether to file suit, when to file suit, who to file suit against, approval of the asserted claim or claims and whether and on what basis to settle or proceed to trial.” Moreover, as the Santa Clara court made clear, defendants must be afforded direct access to government lawyers, providing a potent weapon to ensure that public lawyers are actually in control of the case. The fact that defendants in this case have filed a motion to disqualify Cohen Milstein in the District Court for the District of Columbia indicates that they are certainly capable of trying to protect their rights in this manner.
Finally, any award of attorney's fees to Cohen Milstein must be approved by the court. Although this provision does not make the firm's fee agreement with the state any less “contingent,” it does provide an additional level of review for a defendant who believes that the firm—or the Attorney General's office—has abused its respective authority. Needless to say, court supervision of fee awards in other contexts suggests that simply requiring judicial approval is no guarantee against abuse. Nevertheless, defendants are given ample opportunities to raise any objections—and courts appear to be increasingly scrutinizing fee arrangements, presumably sensitive to a range of impermissible arrangements and abuse, including “sweetheart” deals for plaintiffs' attorneys.
Indeed, a more open process is likely to affect the kind of lawyers who are hired as substitute attorneys general in the first instance. As critics point out, the potential for conflicts of interest between the “investment mentality” of private lawyers and the public goals that ought to guide litigation on behalf of the state are likely to be most severe when the state engages the kind of mass-tort lawyers who brought the Tobacco cases and who are now searching for new causes of actions in which to invest their war chests. Even with respect to these lawyers, however, the story turns out to be more complicated than this simple caricature would suggest. As Howard Erichson documents in his excellent study of the litigation against the gun industry, even some of the traditional plaintiffs' lawyers who moved from tobacco to guns were motivated in part by a sincere belief that handguns “were dangerous products, causing widespread harm that imposed costs not only on individuals but also on society as a whole.” As a result, Erichson argues, these lawyers expended far more time, energy, and most importantly money on attempting to hold the industry responsible for these harms than would have been warranted by a simple economic calculus of the likely return on their investment. Moreover, precisely because of the high profile nature of the Gun Litigation, the traditional plaintiffs' lawyers who were deputized by state attorneys general to litigate these cases increasingly found themselves working alongside public interest lawyers whose primary interest was in reducing gun violence rather than in maximizing fees. These lawyers, Erichson concedes, provided a partial check on the extent to which the investment decisions of the traditional mass tort lawyers shaped the litigation.
In recent years, however, states and municipalities appear to be turning to a different kind of law firm to represent their interests in cases against corporate defendants. In Santa Clara and the Nevada mortgage lending cases, for example, traditional mass-tort law firms like Motley Rice and Thornton & Naumes (both of which were prominent in the Asbestos and Tobacco litigation) are being joined—or replaced—by law firms like Cohen Milstein and Cotchett, Pitre & McCarthy that expressly hold themselves out as embracing a strong social justice mission. Although all plaintiffs' law firms claim to “seek justice,” for the most part these claims are cast solely in terms of obtaining compensation for victims through personal injury and mass-tort litigation. Firms such as Cohen Milstein and Cotchett, Pitre & McCarthy, by contrast, are organized around a broader social justice mission that is reflected in the areas in which they practice, their significant commitment to pro bono, and in the backgrounds and commitments of their lawyers.
These differences are reflected in the manner in which the two kinds of firms organize their representation of state and local clients. Cohen Milstein has a dedicated “Public Clients” practice group headed by the former Attorney General for the District of Columbia. Although Motley Rice also has extensive experience in representing public clients as substitute attorneys general, such cases are not listed among the firms special “Case Types” on its home page and instead are handled by lawyers such as Joseph Rice who lists his representation of twenty-six Attorneys General in the Tobacco Litigation as part of his general expertise in handling complex class actions in a range of areas from asbestos to securities fraud.
Needless to say, these differences in structure, orientation, and personnel do not mean that firms like Cohen Milstein will necessarily discharge their role as substitute attorneys general in ways that are better aligned with the public responsibilities of their governmental clients than more traditional firms such as Motley Rice. As Derrick Bell reminded us long ago, ideological motivations can cloud a lawyer's judgment every bit as much as financial interests. But it does seem likely that firms that are attempting to operate “between profit and principle” will be less likely to approach these cases solely from the “investment mindset” that the critics of allowing contingent fees in this area fear, particularly when the lawyers who are handling the cases have a deep personal and professional identification with the public clients that they are representing. Indeed, to the extent that these firms are trying to build sustainable practices in this area, they now have an important reputational interest in making sure that the perceived gap between what public clients want and what these firms are perceived as providing in terms of strategy, direction, and investment does not become so great as to threaten their future retention. As hiring and contracting decisions become more public, both private defendants and ordinary citizens will have a greater ability to ensure that neither the substitute attorneys general nor the government officials who hire them are trading on this reputation for short-term gain.
This latter point suggests why the second group of objections grounded in democratic accountability and individual rights are also less persuasive than they might appear at first blush. There is certainly some truth in Jack Coffee's characterization of an attorney general's decision to hire substitute counsel on a contingent fee basis as a version of “heads, we win and the state recovers its losses; tails we lose, but we incur no out-of-pocket loses and we hired the best people available.” Whether this undermines the legislature's authority over spending, however, is far less certain. With respect to legislative control, the publicity surrounding both the initiation and prosecution of these kinds of cases seems likely to give legislatures and public officials plenty of notice and opportunity to express their views. The fact that so many state Attorneys General aspire to higher political office gives these officials strong incentives to ensure that cases of this kind receive maximum publicity. As even those who worry that hiring contingent fee lawyers may undermine legislative control over spending concede, “[i]n high-profile litigation, political incentives may drive litigation decisions notwithstanding the retention of contingent fee lawyers.”
Indeed, as Jack Coffee argues, such political considerations are likely to be dominant regardless of whether the Attorney General hires substitute counsel or how they are paid. Whether or not one believes that politicians are solely motivated by some combination of personal gain (whether measured by money or electoral success) and interest group pressure, no credible theory of politics claims that these considerations do not play a significant role in the decision-making of public officials. As a result, the primary considerations for both Attorneys General and legislatures in deciding whether to bring these cases are likely to be political. Most of the litigation that has been filed by states and municipalities in recent years has targeted industries—tobacco companies, gun manufacturers, lead paint producers, mortgage lenders, HMOs, and most recently BP—that were already quite unpopular with a significant part of the population at the time the cases were brought. It is not surprising, therefore, that Attorneys General have decided to proceed against these particular defendants, and that several state legislatures have specifically authorized them to do so. Although one can certainly argue whether cases like this are likely to make good law, bringing such actions appears to be good politics. And where it is not good politics, the case is likely to have a much shorter half-life.
Moreover, while the availability of contingent fees will certainly put a thumb on the scale in favor of suing, this incentive also acts as a counterweight against the strong incentives that politicians face not to sue such powerful private interests. As Marc Galanter taught us more than forty years ago, one of the main reasons that the “have's” tend to come out ahead in litigation is that they have the ability to “play for the rules” by lobbying to create favorable policies or procedures—or just as importantly to block unfavorable ones—in a manner that shifts the litigation terrain dramatically in their favor. To be sure, the Attorney General is not a typical “one-shot” litigant. But neither does he or she have the same ability to influence legislation through campaign donations and targeted advertising that tend to have the most direct influence on elected representatives. These weapons are likely to be particularly potent in the context of an Attorney General's attempt to procure a specific funding authorization to bring a lawsuit against a well-funded and politically connected adversary. It might be successful in a case like BP where there is a strong enough public outcry to make it difficult for legislators to vote against it, but in many other cases the advantages held by industry lobbyists will simply be too great to overcome.
Indeed, this is precisely why courts and legislatures have embraced the concept of the “private attorney general”—and more generally “public law litigation”—in the first place. Although as my colleague William Rubenstein has argued, there have been a multitude of definitions of and justifications for these concepts, one important strain is the recognition that there will inevitably be some important public interests that are too diffuse to gain legislative recognition—particularly when opposed by interests that are both concentrated and well financed—and that public officials can and should harness private incentives to supplement public enforcement. Thus, the complaint that “[b]y the use of contingent fee layers, Attorneys General gain an unparalleled ability to determine the size of their own agency budgets” ignores the fact that both Attorneys General and legislatures have been using the concept of the private attorney general to expand state enforcement resources for more than fifty years. Although legal doctrines such as standing may prevent purely private lawyers from bringing the precise claims that governments have been litigating in this area, as those who have filed these suits acknowledge the distance between these public actions and the private ones that were already underway was more a matter of form than function.
The real question, therefore, is whether the state should expand its enforcement resources through the use of substitute attorneys general who are specifically deputized for this purpose, or instead rely on what Rubenstein calls supplemental private attorneys general, who he defines as “private attorneys whose work for private clients contributes to the public interest by supplementing the government's enforcement of laws and public policies.” Although there are many distinctions between these two roles, one of the most important concerns the degree of control that the public attorney general is able to exercise over the private one. Because they are hired directly by the Attorney General and charged with functioning as if they are members of that office, public officials can—and should—exercise substantial control over the actions of private lawyers acting as substitute attorneys general. Supplemental attorneys general, who gain their authorization from legislation, rules, or judicial decisions, and who work almost exclusively on their own, are subject to far less direct public control. To the extent that the criticism we are discussing sounds in democratic accountability, this greater degree of public control should make the former context clearly preferable to the latter.
Of course, as indicated above, to say that public officials can and should exercise significant control over substitute attorneys general does not mean that they will always be able to do so effectively. The critics who raise this issue, therefore, have identified an important issue that bears watching. Where they err, however, is in assuming that the only context in which this issue arises is in situations in which the lawyer is being compensated on the basis of some form of contingent fee.
Many of those who have objected the loudest to the hiring of contingent fee lawyers in this context appear to assume that retaining substitute attorneys general on a flat or hourly fee basis, or enlisting the help of attorneys who will assist the state pro bono, is unproblematic. Indeed, some even go on to assert that engaging private lawyers on anything other than a contingent fee basis is affirmatively beneficial and should be promoted whenever public authorities may need the assistance of the kind of expertise or resources that can best be found in the private sector. This view, however, severely underestimates the potential conflicts of interest and monitoring issues that can—and often do—arise in both of these other contexts. Thus, as anyone who has studied the legal profession over the last decade is well aware, the very types of large corporations who are being sued in the cases we are now discussing have been trying for years to move away from compensating their own outside counsel on the basis of hourly fees on the ground that it creates a significant incentive for law firms to “run the meter” in a way that is not at all in the interests of their clients. Although companies have been attempting to cabin this practice for years through ex ante instructions, detailed monitoring of work in progress, and ex post review, many contend that the problem of overcharging and unnecessary work persists. It is hard to imagine that public authorities who possess both far fewer resources—which, of course, is one of the primary reasons for hiring substitute attorneys general in the first place—and who have far less experience monitoring outside counsel are likely to do a better job. Certainly, the history of government contracting generally provides little indication that public oversight will be particularly effective in this area. Moreover, although flat fees arguably correct for some of these negative incentives, they increase the danger of others, particularly shirking and other forms of underinvestment. Once again, it seems doubtful that public authorities will be better at detecting and preventing such conduct than their counterparts in the general counsels' offices of major companies.
The Treasury Department's recent decision to retain thirteen of the country's largest and most prestigious outside law firms to help run the Troubled Assets Relief Program at a potential cost of over $100 million underscores just how many of the same issues that arise when substitute counsel are hired on a contingent fee basis are likely to be equally present when the retainer is by the hour. Notwithstanding the fact that Treasury has almost 2,000 lawyers—making it the equivalent of the fourth largest law firm in the country—the agency has decided it needs outside counsel to assist it with the complex and specialized work that TARP requires. Although Treasury claims that it selected counsel on the basis of a comprehensive bidding process in which the firms had to agree to detailed oversight and evaluation by government officials, both the process itself and the exact terms on which the firms are being hired have not been disclosed—even to the Congressional Oversight Panel that is supposed to oversee the TARP program. Even the billing rates that the firms will be charging the government for their services “are considered proprietary and will not be provided.” Given that these rates are almost certainly many hundreds of dollars an hour—and that the total fees will certainly run into the tens of millions—it is hard to imagine a less democratically accountable process. Clearly, the hourly fee contract in TARP is far less transparent than the contingency fee contract entered into between the State of Nevada and Cohen Milstein discussed above.
Nor is pro bono representation as free from conflict as the critics of contingent fees in this context appear to believe. As Scott Cummings demonstrates, law firms are increasingly viewing pro bono representation through the lens of their broader business and strategic interests. As a result, these firms are hesitant to participate in any pro bono matter that is likely to upset their current clients—or conflict them out of representing future ones. Given these incentives, it is one thing to find a law firm that is prepared to assist in litigation against gun manufacturers. It is quite a different matter to find a firm that would be willing to play a significant role in a similar action against mortgage lenders or HMOs. The list of prominent law firms defending lead paint manufacturers cited above suggests that there will be relatively few firms willing to jeopardize their current or future business prospects with these kinds of potentially lucrative clients.
Moreover, even if an Attorney General can find a firm willing to take one of these cases on a pro bono basis, he or she will still have to pay careful attention to ensure that the case is being handled properly. Pro bono cases are often treated as second-class work in many large law firms. The cases tend to be staffed primarily by associates as opposed to partners, and there is a constant danger that the work will be put on the back burner if the lawyer's paying cases heat up. Nor are the lawyers who volunteer to work on these cases likely to be experts in the particular substantive or procedural issues in question. To the contrary, firms tend to use pro bono cases as “training vehicles” for young lawyers to gain the kind of experience that their paying clients are increasingly less willing to pay for. As many a public interest organization has discovered, getting these novices up to speed and making sure that they are working competently and effectively takes a considerable amount of time by the “real” lawyers that these organizations employ full-time.
Finally, lawyers who litigate cases pro bono sometimes appear to believe that they are—or at least ought to be—less bound by their clients' direction and control than would be the case in a fee-for-service relationship. Needless to say, few would admit to such a view. Nevertheless, the fact that pro bono lawyers “donate” their services, and that working on these cases is often touted as giving lawyers an opportunity to express their own interests and commitments in ways that they often do not feel they can do in their paying work, seems likely to promote a feeling of entitlement with respect to influencing the goals to which one's efforts are being directed, at least at a subconscious level. Once again, state officials will have to monitor for this kind of potential personal or ideological bias when they engage pro bono counsel.
None of this should be taken to suggest that state officials are likely to encounter more problems when they engage substitute private attorneys general on the basis of hourly fees or pro bono representation than they are likely to confront when they proceed—as they have in most cases—to retain such counsel on a contingent fee basis. My point simply is that the distance between these two states of affairs is far less great than the critics of contingent fees in this context suggest.
More generally, my point is that the kind of issues that those who have been critical of the trend toward bringing in private contingent fee lawyers to represent public entities suing private companies are likely to be present in any situation in which private and public lawyering roles are intermingled. As I indicated at the beginning of this Essay, this blurring of boundaries between public and private is becoming increasingly common in the legal profession. I conclude by making a few observations about what the case of the substitute attorneys general can teach us about this more general phenomenon.
IV. Toward a New Model of the Public-Private Lawyer
At one level, the case of the private lawyer hired to be a substitute private attorney general might appear to be one of the simplest to resolve from the perspective of sorting through a lawyer's public and private responsibilities. After all, both supporters and critics alike agree that these lawyers are intended to be indistinguishable from their public counterparts. The only relevant question, therefore, would seem to be how to ensure that the private lawyers who assume these roles carry out their duties in a manner that is fully consistent with the directions of their public lawyer bosses. As we have already seen, however, this simple characterization misses much of the complexity that is actually going on in these relationships. As noted above, many of the criticisms about the hiring of contingent fee lawyers in this setting seem to bemoan the fact that these agents might carry out their principle's wishes too well by helping Attorneys General achieve highly public victories against unpopular companies in order to further their own political gain. Although one might reasonably complain that such actions are not in “the public interest,” the fact that publicly elected Attorneys General are likely to see it otherwise suggests that the real problem is not one of agency but instead lies with how the principal is defining his or her public responsibilities to the private parties that are affected by the exercise of state power.
As Howard Erichson demonstrates, this is a pervasive problem in a world in which the actions that public officials take with respect to these cases will have implications that reach far beyond the contours of whatever litigation the state chooses to bring. Given the near certainty that any government lawsuit will produce what Erichson calls “coattail class actions” by private parties, he argues that public lawyers should have an obligation to consider these secondary effects when deciding whether and on what terms to settle their initial litigation. Specifically, Erichson argues that government lawyers should consider the benefit that private plaintiffs receive from both issue preclusion and access to discovery materials before agreeing to a settlement that would deprive future plaintiffs from the benefit of either. But as others would surely argue (and as Erichson himself points out in another part of the same article), the defendants are also part of the “public” the government lawyer represents. As a result, government lawyers should also consider whether giving private plaintiffs the benefit of issue preclusion and the public disclosure of discovery material will result in over-deterrence rather than prevent under-deterrence.
Similarly, the private lawyers who are engaged as substitute attorneys general are also likely to have complexly dual commitments—regardless of whether they are retained on an hourly or a contingent fee basis. It is tempting, as William Rubenstein notes, to think of these temporary public lawyers as performing their public and private roles sequentially, as Rubenstein puts it, “private one day, public the next.” But this characterization ignores the fact that most of the lawyers hired in this position will continue to represent private clients at the same time that they are doing the people's work—and if the lawyer herself does not, then other members of her firm surely will. As a result, these lawyers (or law firms) will be called upon to balance their public and private responsibilities simultaneously as well as sequentially (both before and after their time as a substitute attorneys general is over).
This duality creates a significant potential for conflicts of interest. In the TARP case, for example, many of the firms hired by the Treasury Department also represent TARP recipients. [FN146] Indeed, the firm receiving the lion's share of the work—New York's Cadwalader, Wikersham & Taft—was widely regarded as one of the leading firms in the country in handling the very credit default swaps, collateralized debt obligations, and other complex financial products that are now being blamed for the collapse. Not surprisingly, this duality does not sit well with many observers. Thus the Congressional Panel Overseeing TARP asked Cadwalader to disclose its client relationships with TARP recipients so that it could assess the conflict. Cadwalader and the Treasury Department refused to do so. Instead, both the government and the firm emphasized that Cadwalader was required to provide Treasury with a detailed “conflict-of-interest mitigation plan” that identified “actual, potential or apparent organizational and personal conflicts of interest as part of its proposal.” A senior representative of the firm assured an interviewer that while Cadwalader “has represented TARP recipients on unrelated matters,” it “would never represent someone directly in connection with TARP funds” since doing so “would be antithetical to our engagement agreement.”
Needless to say, one can certainly be skeptical about such promises—especially since neither the firm nor Treasury was willing to make the exact terms of the engagement public. But even if one is willing to credit the fact that Cadwalader will not represent a TARP recipient in a matter that is “directly adverse” to the firm's duties as substitute attorney general while representing the government, this important restriction does not exhaust the potential for conflict. As a member of the Congressional Oversight Committee accurately observed, “TARP recipients are going to be these firms' clients forever and TARP is going to go away.” The sequential pull of these past loyalties, or the prospect of gaining lucrative business in the future—or both—may cloud the judgment of lawyers at these firms even in the absence of any current direct conflict.
This is not to say that the Treasury Department should not hire Cadwalader or any other firm that has, or might in the future, represent TARP recipients. As a lawyer for another firm that will be part of the Treasury's program conceded, a strict rule prohibiting any such conflicts would mean that “[e]very law firm that's ever represented a bank would have a problem.” Given the complexity of the issues that the government is confronting in TARP, it would be counterproductive to prevent Treasury from availing itself of the very representatives most likely to know how to get the job done effectively and efficiently. Indeed, given the rules of vicarious disqualification and the increasing mobility of lawyers both between the public and private sectors and among major law firms, the problem of finding a conflict-free lawyer or firm in this area with the relevant experience that the government needs could be insurmountable.
The question, therefore, is not how to find a “pure” private lawyer who can serve the public interest free from any potential conflict, but rather how to define the responsibilities of lawyers who are exercising an increasingly complex mix of public and private duties both simultaneously and sequentially. The answer to this question is likely to lie partly in the realm of institutional design. What are the proper checks and balances to insure that private lawyers who are hired as substitute attorneys general, either on a contingent fee as is typically happening at the state level, or on an hourly fee basis as is increasingly prevalent in programs like TARP, serve the public interest when carrying out their official duties and do not use information or other resources that they obtained in their official capacity to unfairly disadvantage some citizens or advantage others once they return to their “private” practices? Should the private lawyers who serve in this public capacity be viewed as independent contractors whose rights and obligations are primarily a matter of contract? Or should they be considered quasi employees who are subject to the same rules of ethics and conflicts of interest as the public officials for whom they act as surrogates? Engaging with scholars who think about the proper design and functioning of public institutions will be essential to answering these and other perplexing questions. Given the enormous expansion in the use of government contractors and other similar means of providing public services through private parties, [FN157] this is a conversation that needs to begin immediately.
In the last analysis, however, addressing this new reality is likely to be as much a matter of ethics and identity as structures and rules. As William Rubenstein concludes, we must first determine how much a given private attorney general should be “an agent for public ends, in addition to private ones” before we can determine the “rules by which we should enable (and constrain) her and the fees with which we should reward her.”
Ironically, the legal profession used to have a fairly simple and straightforward way of thinking about this question. Lawyers, according to this traditional view, are simultaneously and indivisibly both zealous advocates for the interests of their private clients and officers of the legal system with a special obligation to protect democratic values and the rule of law. Given this ethos, it is not surprising that elite lawyers in the “Golden Age” of the large law firm in the middle decades of the twentieth century drew relatively little distinction between their work for private clients and their occasional service in the public arena. As Erwin Smigel reported in his study of Wall Street lawyers in the 1960s:
bq. Such partnerships are likely in the future, as they have in the past, to prepare and offer for public service men exceptionally qualified to serve. The very nature of such a partnership permits a man to do more, not less civic work, and permits him, as a true officer of the court and a responsible citizen, more readily to enter public service for various periods and to serve society to his full professional capacity. Today, such confident pronouncements about the seamless and mutually reinforcing connection between private practice and public service ring hollow against the backdrop of the increasingly competitive and cutthroat global market for legal services. There is a widespread feeling among younger and older lawyers alike that the once interconnected worlds of private practice and public service have grown increasingly distant from each other, with lawyers and even law students forced to stake their claim to one or the other realm at an ever earlier time. And yet, the series of connected trends discussed at the outset of this Essay point to a more complex reality. Public and private roles are arguably more inextricably intertwined than they have been at any other time in the profession's history. Although it is unlikely that the profession could ever recreate the ethic of seamless integration that it purported to maintain during the “Golden Age”— and it is far from clear that it would be desirable to do so even if turning back the clock in this fashion were indeed possible—it does seem necessary to move away from the current understanding that tends to separate public and private interests into distinct and largely insular camps.
As I said at the outset, defining exactly what such an ethic would look like is far beyond the scope of this Essay. Nevertheless, the above analysis suggests three dimensions along which the task of articulating a new synthesis should proceed. First, at a minimum lawyers need to be taught to recognize and appreciate the various public and private dimensions of their particular roles. This process must go beyond the “Golden Age's” simple sloganeering that a lawyer is always and indivisibly an “advocate” for the private interests of clients and an “officer of the court” responsible for protecting the public purposes of the legal framework. Although as I have argued elsewhere, there is an important truth wrapped inside this standard bromide, this characterization does not help lawyers to distinguish which public or private responsibilities attach to particular lawyering roles, nor how practitioners (or policymakers) should resolve the inevitable conflicts that arise when these two sets of responsibilities pull in different directions. What is needed, therefore, is a much more specific articulation of the nature of a lawyer's public and private duties in particular contexts and an examination of the institutional incentives and constraints that either contribute to exacerbating the tension between these responsibilities or that might be enlisted to reduce this tension.
Thus, it is not sufficient to tell plaintiffs' lawyers serving as substitute attorneys general that they should behave as if they were government lawyers. Notwithstanding the fact that they have been deputized to serve as public officials, these lawyers nevertheless remain private practitioners subject to the incentives created by their law firms and by the private marketplace generally. Given their position, it is not only inevitable but completely appropriate for these lawyers to care about being compensated for the work that they perform and their law firm's continuing ability to compete in the marketplace. The question, therefore, is not whether these private-public lawyers will be motivated in part by their own financial interests. Indeed, it is precisely the desire to harness these market-based incentives that have led many public actors to favor privatizing various public functions in the first place. Instead, the relevant question is the extent to which substitute counsel should be entitled to act on these motivations, and whether institutional and procedural mechanisms can be put in place by both public and private actors to keep these incentives within reasonable bounds.
Overall, the kind of contract exemplified by the agreement between Cohen Milstein and the state of Nevada appears to do a pretty good job of balancing these competing considerations. As indicated above, the agreement gives the Attorney General the right to control all major elements of the litigation, including whether and on what terms the case will be settled. There is, however, one exception to the Attorney General's plenary authority in this area. In the event of a settlement “for injunctive relief only” (or other terms that provide relief directly to borrowers in the form of favorable future terms), the contract provides that Cohen and Milstein will receive “costs and hourly fees at fair market value of their legal services expended on behalf of the State.” “In such an event,” the contract continues, “the State agrees not to settle the case unless the defendant agrees to pay said amount.” This provision is meant to protect Cohen and Milstein from so-called “sacrifice” offers in which the defendant agrees to provide certain injunctive relief in return for the plaintiff agreeing to waive any claim for attorney's fees.
In Evans v. Jeff D., the Supreme Court approved the defendant's use of such offers over the strenuous objection of many members of the public interest bar who claimed that allowing defendants to demand fee waivers would diminish the enforcement of the civil rights laws. In reaching this conclusion, however, the court endorsed the negotiability of fee waivers more generally, suggesting that there was nothing to prevent lawyers from entering into agreements with their clients to refuse such offers ex ante, or to provide that accepting such a settlement would trigger an obligation by the plaintiff to pay the lawyer from other sources. Consequently, Cohen Milstein would arguably be entitled to insist on inserting a provision preventing a fee waiver in its retainer agreement with one of its private clients. In the context of this kind of public representation, however, this kind of contract provision can legitimately be seen as a restriction on the state's plenary power to settle the case without respect to Cohen Milstein's interests.
The fact that the State of Nevada has agreed not to accept a pure sacrifice offer to settle the case, however, does not mean that the Attorney General has exceeded her authority in agreeing to this term. To be sure, if the state were represented solely by public lawyers, it would be able to settle the case on any terms the Attorney General saw fit, including terms that precluded the state from seeking payment for its attorneys fees. But the state has chosen to seek the benefit of engaging private lawyers to help it pursue its claim. As private practitioners, Cohen Milstein cannot stay in business unless it is paid for its work. While the firm might decide to donate its services to the state pro bono, it is not required to do so. It therefore should have the right to protect itself against opportunism by both defendants and state officials in crafting a settlement that essentially forces the firm to donate its services, even if the practical effect of this provision is to make it more difficult to settle the case. Although many would argue that preventing settlements conditioned on fee waivers promotes the public interest, even if it is only in the narrow economic self-interest of Cohen Milstein the firm should nevertheless be entitled to insist that it will only go forward with the representation if the state agrees to forgo this potentially beneficial option. If the Attorney General believes that this is too much of an imposition on the public interest, he or she can always try to find another private firm that will not insist on this provision, or prosecute the action with public attorneys over whom the state can exercise plenary control.
By the same token, the public lawyers working with Cohen Milstein ought to be entitled to insist on certain restrictions on conduct within the firm that in the private context would be considered perfectly appropriate in order to preserve the state's legitimate public interest in the representation. The contract between the state and the firm indeed does provide many such restrictions. As indicated above, the contract lays out in great detail Cohen Milstein's obligation to litigate the case in a manner that allows the Attorney General to ensure that the public's interest is protected—as the Attorney General defines these goals. The agreement also requires the firm to adhere to restrictions regarding conflicts of interest that arguably go beyond what would be required in the private context. Thus, Cohen Milstein must “advise the Attorney General of any perceived conflict throughout the performance of this Contract” and is prevented from “engage[ing] in private litigation against the State at the same time [that the firm] accepts appointments representing the State” pursuant to the contract without the government's express consent. Finally, Cohen Milstein agrees that its “books, records, documents and accounting procedures” relevant to the firm's performance under the contract “shall be subject to inspection, examination and audit by the State.”
These restrictions, however, should arguably extend beyond the four corners of the representation itself. Concurrent conflicts, in which a law firm like Cohen Milstein is simultaneously representing a client with interests opposed to the state at the same time it is acting as substitute attorney general, are only one of the potential risks to the public interest in these cases. As the TARP example underscores, there is also the danger that private firms in this role will be influenced by their past client relationships, or the possibility of representing clients in the future. Although the Model Rules of Professional Responsibility applicable to all lawyers provide some protection against these kind of former (or future) client conflicts, the fact that substitute attorneys general are also discharging public responsibilities counsels in favor of state officials requiring firms like Cohen Milstein to disclose past client relationships that have been adverse to the state as well as those that are currently ongoing.
Indeed, once we acknowledge that defendants are also part of the “public” that both the public and private lawyers in these cases are obligated to protect, it is clear that contractual provisions requiring firms like Cohen Milstein to make certain representations and disclosures to state officials may not be enough to protect these third parties' interests. To address these concerns, we must move beyond the realm of private contracting to examine how public law can help to ensure a proper balance between public and private responsibilities in cases of this kind.
At a minimum, the “pay-to-play” risks associated with private lawyers vying for potentially lucrative appointments as substitute attorneys general underscores the need for both state and federal authorities to ensure that such engagements are subject to statutes or regulations requiring transparency and open procedures. Similarly, to the extent that these private lawyers are being deputized to operate as if they are officers of the state, they should be subject to the public regulations that govern the conduct of public employees.
Consider, once again, the conflict rules. The Model Rules of Professional Responsibility have always contained special rules regulating conflicts of interest for government lawyers. These rules restrict the ability of former government lawyers to represent private clients in matters in which the lawyer “participated personally and substantially as a public officer or employee” and restrict current government attorneys from “participat [ing] in a matter in which the lawyer participated personally and substantially while in private practice.” As the comment to the Rule states, these provisions are designed not only to protect the interests of former clients but also “to prevent a lawyer from exploiting public office for the advantage of another client.” As indicated above, one of the risks associated with bringing in private lawyers to act as substitute attorneys general is that they will use this position to further the interests of other past, present, or future clients—either by subsequently bringing “coattail litigation” against similar defendants in cases like the Tobacco Litigation, or in the TARP area, by steering government policy in favor of financial institutions that may have been former clients (or which may one day be future clients). Yet it is not clear that the law firms engaged as substitute attorneys general in these cases are covered by these restrictions. The agreement between Cohen Milstein and the State of Nevada, for example, expressly provides that the firm is being hired as an “independent contractor” and “shall not be deemed officers, agents or employees of the State of Nevada.” Given that these firms are supposed to act as if they are simply just another public lawyer for the state, however, it is hard to see why the legal distinction between an “officer or employee” on the one hand and an “independent contractor” on the other should exempt them from these regulatory prohibitions.
Indeed, one can make an argument that the special dangers inherent in this kind of representation counsel in favor of providing more protection to affected third parties than is currently provided in Model Rule 1.11. As currently drafted, the Rule allows a former government lawyer to represent a private client in a case in which he or she participated personally and substantially while in government—or a current government lawyer to participate in a matter in which he or she had the same kind of involvement on behalf of a former client while in private practice—so long as “the appropriate government agency gives its informed consent, confirmed in writing.” Although this requirement arguably protects the government's interest, it may not be sufficient to protect the interest of private parties who may also be affected by whether these substitute attorneys general are properly weighing their public and private responsibilities, both while acting in this capacity and after they return to private practice. To be sure, there are certainly valid reasons for not requiring all such affected parties to give their express consent in every case where a lawyer is moving from government to private practice or vice versa. It does, however, make sense to require government officials to disclose publicly in such cases that they have given their consent, along with a description of whatever safeguards have been put in place, so that private parties can challenge whether the decision is consistent with a broad understanding of the public interest that includes their interests as well.
A similar analysis should apply to the restrictions regarding the use of confidential information that a substitute attorney general learns in the course of her representation. The contract between Cohen Milstein and the State of Nevada expressly recognizes the danger that the firm's acquisition of this kind of information can pose for third parties. Thus, the firm is required to use any “confidential business information” that it learns in the course of the representation “only for the purposes of carrying out the work required by the Contract” and may not disclose the information “to anyone other than properly cleared employees” and must return all such information to the Attorney General “whenever the information is no longer required for performance of the work or upon completion/termination of the Contract.” These restrictions, however, are not nearly as protective of the interests of third parties as those provided for in Model Rule 1.11 with respect to government officers or employees. That Rule flatly provides that
bq. a lawyer having information that the lawyer knows is confidential government information about a person acquired when the lawyer was a public officer or employee, may not represent a private client whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person. The Rule goes on to provide that other lawyers in the firm may only handle such a matter if “the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom.” Once again, given that substitute attorneys general are supposed to be indistinguishable from their public counterparts, there seems little reason to exempt them from these requirements simply because they are technically independent contractors and not government officers or employees.
Indeed, here too one might argue that the rules should go even further in this context to ensure that affected private parties receive notice and an opportunity to be heard to protect their interests. In a move that itself highlights the shrinking distance between public and private lawyers, the Model Rules were recently amended to allow law firms hiring lawyers moving from one private law firm to another to engage in the kind of screening that previously had only been permitted when lawyers moved from government employment to the private sector. In order to ensure that former clients are able to protect their interests in these circumstances, the Rule requires that any firm seeking to set up such a screen provide written notice to “any affected former client,” including “a description of the screening procedures employed; a statement of the firm's and of the screened lawyer's compliance with these Rules; a statement that review may be available before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or objections” as well as periodic certifications during and after the case. Although these requirements only apply to “former clients,” a similar set of disclosure and reporting obligations to inform parties who may be affected by the screening of a lawyer who is or has acted as a substitute attorney general in a matter in which that attorney has learned confidential information that may be relevant to a matter being litigated by other lawyers in the firm would serve similar purposes.
Although there are, therefore, persuasive arguments for holding substitute attorneys general to the same rules regarding conflicts of interest that apply to government lawyers in general, and perhaps in some circumstances rules that are even more stringent, these same rules caution against making these restrictions so stringent that they discourage lawyers from serving in this role. As the Comment to Model Rule 1.11 makes clear, “the rules governing lawyers presently or formerly employed by a government agency should not be so restrictive as to inhibit transfer of employment to and from the government.” This is particularly important in this context since notwithstanding their duty to act as if they are just another lawyer for the state, substitute attorneys general remain, as I have argued above, private lawyers who are entitled to respond to the incentives of the private marketplace. Moreover, as the description of the differences between Motley Rice and Cohen Milstein outlined above underscore, there are benefits as well as risks associated with having former government lawyers engaged in this kind of public-private representation. This brings us to the third and final factor that should shape our understanding of how to balance these two increasingly intertwined but nevertheless conflicting aspects of the lawyer's role: mobility.
As I indicated at the outset of this Essay, a growing number of lawyers are building careers that move between the public and the private sector. Indeed, even the Eternal General Frank Kelley returned to the private sector after completing his thirty-seven years in office, building one of the most successful lobbying firms in the state. This revolving door clearly creates risks, in the language quoted above from the Model Rules, that lawyers will “exploit” the benefits of public office for the advantages of private clients. But it also creates a cadre of private lawyers who understand the benefits of public service, and public lawyers who know what it is like to be on the receiving end of public power. To be sure, there is no guarantee that these lessons will be used to bring these two domains closer together. But just as those who support mandatory pro bono programs and other forms of public service in law school have argued that being socialized into the culture of public service at an early age will affect the way that this new generation of lawyers understand and act on the public dimensions of their roles as private practitioners, there is at least the possibility that spending time in multiple areas of practice will give those who do so a greater appreciation of the legitimate (and illegitimate) interests and concerns of, for example, public officials even as they represent private clients. Reports about the culture and standards of the community of former Assistant United States Attorneys who have moved into private practice suggest that in at least some circumstances these hopes can be realized. The fact that firms such as Cohen Milstein are developing government-representation practices that are largely staffed by former government lawyers, therefore, should be taken as a hopeful sign.
Needless to say, it remains to be seen whether any of these three strategies— educating lawyers about the need to consider and address the specific tensions created by the tug of public and private considerations in particular lawyering contexts, crafting ethical and regulatory policies that seek to shape and constrain these tensions, or encouraging professional socialization that takes advantage of the growing movement of lawyers between public and private settings—will create a new and workable way of conceptualizing and managing the public-private distinction in legal ethics. What is certain is that we are unlikely to make progress unless we find a way of talking about this issue that goes beyond both the traditional model's assumption that there is in fact no tension between these two roles and the more recent tendency to talk as if these two domains are irreconcilable and mutually exclusive. The growing use of substitute attorneys general at both the state and federal levels and the complex issues this practice poses for both governments and private parties underscores that we delay moving beyond these standard hobby horses at our peril.
1 Elmer E. White, Michigan Lawyers in History—Frank J. Kelley: The Eternal General, 79 MICH. B.J. 688, 688, available at http:// www.michbar.org/journal/article.cfm?articleID=87&volumeID=8 (last visited Oct. 18, 2010).
2 Id. at 689.
3 Id. at 688.
4 For example, in a nationwide survey of legal careers conducted in 2003, more than one third of all lawyers who entered the bar in 2000 had already changed jobs—and more than 44% were planning on changing jobs in the next two years. RONIT DINOVITZER, ET AL., AM. BAR FOUND. & NALP FOUND. FOR LAW CAREER RESEARCH AND EDUC., AFTER THE JD: FIRST RESULTS OF A NATIONAL STUDY OF LEGAL CAREERS 53 (2004). Four years later when we surveyed these lawyers again, the average number of jobs held by the entire sample was 2—and almost two-thirds had changed jobs at least once since we surveyed them in 2003. RONIT DINOVITZER, ET AL., AM. BAR FOUND. & NALP FOUND. FOR LAW CAREER RESEARCH AND EDUC., AFTER THE JD II: SECOND RESULTS FROM A NATIONAL STUDY OF LEGAL CAREERS 54 (2009) [hereinafter AJDII].
5 See AJDII, supra note 4, at 54-60. Indeed about 50% of lawyers who were working in the federal government in 2003 had switched to other practice settings by 2007. Id.
6 See Nate Raymond, Deferred Associates Evaluate their Experience in Public Interest Jobs, N.Y. L.J., Mar. 8, 2010, available at http:// www.law.com/jsp/article.jsp?id=1202445875118.
7 See generally JOHN C. COFFEE, JR., GATEKEEPERS: THE PROFESSIONS AND CORPORATE GOVERNANCE (2006).
8 See Steve Lohr, U.S. Investing $250 Billion to Bolster Bank Industry, N.Y. TIMES, Oct. 14, 2008, at A1, available at http:// www.nytimes.com/imagepages/2008/10/13/business/20081014_BAILOUT1_GRAPHIC.html (see the graphic summarizing the rescue plan and the largest recipients). For a discussion of the key role played by federal insurance in the banking business, see David B. Wilkins, Making Context Count: Regulating Lawyers After Kaye, Scholer, 66 S. CAL. L. REV. 1145 (1993).
9 See Ben W. Heineman Jr. High Performance with High Integrity (Memo to the CEO) (2008) (discussing these and other similar examples and arguing that understanding and incorporating public norms is key to a corporation’s long term success).
10 See Kathleen Clark, Government Lawyers and Confidentiality Norms, 85 WASH. U. L. REV. 1033, 1049-1073 (2007) (noting the multiple and often conflicting public and private responsibilities of government lawyers).
11 See Kathleen Clark, Ethics for an Outsourced Government (January 19, 2011) (unpublished manuscript) (on file with author).
12 See, e.g., Scott L. Cummings, The Politics of Pro Bono, 52 UCLA L. REV. 1, 1 (2004).
13 See infra notes 27-30 and accompanying text.
14 Bill Barrow, House Committee Approves Hiring Lawyers for Gulf Oil Spill Cases, TIMES-PICAYUNE, June 15, 2010, available at http:// www.nola.com/news/gulf-oil-spill/index.ssf/2010/06/house_committee_approves_ hirin.html. Although the legislature adjourned without reaching a final vote on the matter, Louisiana Governor Bobby Jindal has vowed to ensure that Caldwell has “the tools he needs” to protect the state’s interest. Bill Barrow, Attorney General Buddy Caldwell’s Office to Receive Another $5 Million of BP Grant, Jindal Says, TIMES-PICAYUNE, June 23, 2010, available at http:// www.nola.com/news/gulf-oil.spill/index.ssf/2010/06/attorney_general_buddy_ caldwel_2.html [hereinafter Caldwell’s Office to Receive Another $5 Million].
15 Brief for Plaintiff at 6 Kelley ex rel. Michigan v. Philip Morris, Inc. (Mich. Cir. Ct. Ingham Cnty.) (1996) (No. 96-84281-CZ) (on file with author).
16 See Cnty. of Santa Clara v. Superior Court, 235 P.3d 21 (Cal. 2010). The U.S. Supreme Court recently denied cert in the case, but as the public reaction to the decision suggests, this is unlikely to bring an end to the controversy. See Abigail Rubenstein, High Court Won’t Hear Calif. Contingency Fee Case, Law 360, Jan. 12, 2011, available at http:// www.law360.com/web/articles/219214.
17 See Abha Bhattarai, Class-Action Lawyer Given 5 Years in a Bribery Case, N.Y. TIMES, June 28, 2008, at C3, available at http:// www.nytimes.com/2008/06/28/business/28tort.html?_ r=2&sq=scruggs&st=nyt&adxnnl=1&oref=slogin&scp=1&adxnnlx=1214747506-am4UNsWZJnsR/wM7NemCvA. Not surprisingly, the additional fact that a federal judge publicly accused Scruggs of conspiring with the Attorney General of Mississippi to skirt a court order issued in a related case requiring the return of documents that the Attorney General believed demonstrated that the same insurance company Scruggs was suing in the private class action had committed fraud against policyholders in the state has only added to the controversy. See Jay Reeves, Federal Judge: Mississippi Attorney General Conspired with Trial Lawyer, INS. J., June 9, 2008, available at http:// www.insurancejournal.com/news/southeast/2008/06/09/90752.htm. I return to the fact that documents discovered in private litigation may be used to support public causes of action brought by Attorneys General—and that documents discovered in public actions often fuel private “coattail” class action litigation—below.
18 See William B. Rubenstein, On What a “Private Attorney General” is—and Why it Matters, 57 VAND. L. REV. 2129, 2143-55 (2004) (distinguishing “substitute” private attorneys general who—at least in theory—“perform the exact functions of the attorney general’s office” from either “supplemental” private attorneys general, who bring private litigation to vindicate public rights, and “simulated” private attorneys general, whose actions on behalf of a private party generate a common fund that benefits other private parties). I return to Rubenstein’s helpful analysis below.
19 See RICHARD KLUGER, SIMPLE JUSTICE: THE HISTORY OF BROWN V. BOARD OF EDUCATION AND BLACK AMERICA’S STRUGGLE FOR EQUALITY 529-31 (Vintage Books ed., 2004) (1975) (describing how the state of South Carolina hired John W. Davis, former U.S. Solicitor General and founder of the Wall Street law firm of Davis, Polk, Wardwell, Sunderland & Kiendl to defend “separate but equal” in the famous Supreme Court case). According to Kluger, the state “turned the case over to Davis without any strings attached.” Id. at 545. I return to the question of control below.
20 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, 17 (2000). Indeed, as Jack Coffee points out, after some states refused to accept the settlement between Microsoft and the government at the end of the liability stage, both the objectors and the government hired high profile private lawyers to represent their respective interests in the litigation over whether the agreement should be upheld. 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, 242-43 (2001) (describing how California hired Brendan Sullivan from Williams & Connolly to challenge the settlement, while the federal government brought in Phillip Beck from Bartlit, Beck, Herman, Palenchar & Scott to defend it). Ironically, two years later Boies and Beck would square off in litigation culminating in the Supreme Court’s consideration of Bush v. Gore, 531 U.S. 98 (2000), arguably the most important Supreme Court case since Brown v. Board of Education, in which both represented public officials claiming that they were entitled to occupy the highest office in the land.
21 See Nanette Asimov & Lance Williams, Gov. Davis vs. Schoolkids—High Priced Legal Team Browbeats Youths About Shoddy Schools, S. F. CHRON, Sept. 2, 2001, at A1 (describing how California Governor Gray Davis hired the law firm of O’Melveny & Meyers to defend him against a law suit challenging the conditions in California schools).
22 See Rubenstein, supra note 18, at 2143 (discussing the federal special prosecutor statute).
23 Richard A. Daynard & Graham E. Kelder Jr., The Many Virtues of Tobacco Litigation: In the Failed Global Settlement, the Tobacco Industry Almost Freed Itself from the Civil Justice System, TRIAL, Nov. 1998, at 34 (describing the cause of action).
24 Erichson, supra note 20, at 19. Indeed, in the Microsoft case itself, the government primarily sought various forms of injunctive relief, including the break-up of the company. See Massachusetts ex rel. v. Microsoft Corp., 373 F.3d 1199, 1204-05 (D.C. Cir. 2004) (reporting that “[t]he two complaints sought various forms of relief, including an injunction against certain of Microsoft’s business practices”).
25 In the Microsoft case, for example, the Justice Department paid Daivd Boies a reduced hourly fee of $250 per hour—down significantly from the $600 an hour he typically charged his private clients while at Cravath. See Elisabeth Bumiller, Readying the Slingshot for a Modern Goliath, N.Y. TIMES, June 12, 1998, at B2.
26 I return to the question of whether it matters if the fee is entirely contingent or, as is more commonly the case, the product of some form of arbitration or judicial determination. Nevertheless, it is fair to say that in most of these cases “the lawyers would have received nothing had there been no recovery, and the amounts were driven largely by the size of the recovery.” Erichson, supra note 20, at 18.
27 See Howard M. Erichson, Private Lawyers, Public Lawsuits: Plaintiffs’ Attorneys in Municipal Gun Litigation, in SUING THE GUN INDUSTRY: A BATTLE AT THE CROSSROADS OF GUN CONTROL AND MASS TORTS 129, 138-39 (Timothy D. Lytton, ed., 2005).
28 See, e.g., Adam Liptak, A Deal for the Public: If You Win, You Lose, N.Y. TIMES, July 9, 2007, at A10 (describing several pollution cases); Walter Olson, Op-Ed, Tort Travesty, WALL ST. J., May 18, 2007, at A17 (reporting that “trial lawyers representing public clients on contingency fee are suing businesses for billions over matters as diverse as prescription drug pricing, natural gas royalties and the calculation of back tax bills”); Cnty. of Santa Clara v. Superior Court, 235 P.3d 25, 25 (Cal. 2010) (reporting that the litigation concerns “[a] group of public entities prosecuting a public-nuisance action against numerous businesses that manufactured lead paint”); Erichson, supra note 20, at 20-21 (describing actual and potential litigation against other industries); E. Scott Reckard, Countrywide Sued by State Over Lending, L.A. TIMES, June 26, 2008, at C1, available at http:// articles.latimes.com/2008/jun/26/business/fi-country26 (describing California’s suit against Countrywide).
29 See Erichson, supra note 27, at 137-38 (reporting that Wendell Gauthier and a group of lawyers known as the Castano Group for their role in the Tobacco Litigation played a key role in several law suits by municipalities against gun manufacturers).
30 See Cnty. of Santa Clara, 235 P.3d at 36; see, e.g., Erichson, supra note 27, at 137 (reporting that “New Orleans retained the Castano Group to represent the city on a contingent fee basis: the attorneys would get 20 percent of the recovery if the case settled and 30 percent if it went to trial verdict”).
31 See generally Hanoch Dagan & James White, Governments, Citizens, and Injurious Industries, 75 N.Y.U. L. REV. 354 (2000) (describing the rise of such law suits). It is important to recognize that this may not always be the case. In People ex rel. Clancy v. Superior Court, for example, the City of Corona, California, hired a private attorney to bring a nuisance abatement action against a small adult bookstore, agreeing to double the attorney’s $30 hourly rate if the action was successful. 705 P.2d 347, 348, 350 (Cal. 1985). In County of Santa Clara, the California Supreme Court relied in part on the Clancy defendant’s relatively small size to distinguish the holding in that case prohibiting the City of Corona from retaining a private lawyer on a contingent fee from its decision to allow Santa Clara and other counties and municipalities to use contingent fees in compensating private lawyers working as special attorneys general in prosecuting large companies responsible for manufacturing and distributing lead paint. 235 P.3d at 34 (noting that “[d]efendants are large corporations with access to abundant monetary and legal resources”). I return to this distinction below.
32 Plaintiffs’ Brief in Opposition To Defendants’ Motion To Disqualify the Attorney General’s “Unlawfully Retained Contingent Fee” Counsel, Kelley ex rel. Michigan v. Philip Morris Inc., No. 96-842181-CZ (Mich. Cir. Ct. Ingham Cnty. 1996) [hereinafter Kelley Brief], available at http:// stic.neu.edu/mi/MTDCOU~1.htm. In a masterful bit of strategy designed to drive this point home, Kelley opened his brief by quoting a lawyer for RJR Reynolds as crowing that “‘the way we won these cases was not by spending all of [RJR}’s [sic] money, but by making that other son of a bitch spend all of his.”’ Id. (quoting Haines v. Ligget Group, Inc., 814 F. Supp. 414, 421 (D. N.J. 1993).
34 See Robert A. Levy, The Great Tobacco Robbery: Hired Guns Corral Contingent Fee Bonanza, LEGAL TIMES, Feb. 1, 1999, at 27 (arguing that hiring private lawyers “might be justified to acquire unique outside competence or experience”); see also Erichson, supra note 27, at 135-37 (describing the expertise of the lawyers who brought the tobacco and gun cases).
35 See Erichson, supra note 27, at 138 (describing Chicago’s decision not to bring in plaintiff contingent fee lawyers but to instead rely on a combination of city attorneys, a law professor compensated by the hour, and two law firms working on a pro bono basis). I return to this case and Professor Erichson’s analysis below.
36 As noted above, Boies reduced his $600 per hour billing rate to $250 when working for the federal government. See Bumiller, supra note 25. Today, many mid-level associates bill out at rates higher than $250 an hour, while partners of Boies’s stature routinely charge more than $1000 an hour. See, e.g., Jenna Greene, NY Billing Rates the Highest, but Guess Who Comes in Second?, LEGAL TIMES, Sept. 13, 2010, available at http:// www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202471972166 (citing “[a] massive study of billing rates” revealing that associates in Washington, D.C., for example, charge about “$375 an hour on average,” representing “a relative bargain” compared to other markets such as New York City); Amy Miller, Survey Shows Law Firms Charging Different Rates for the Same Work, CORP. COUNS., May 26, 2010, available at http://www.law.com/jsp/article.jsp?id=1202458774347 (reporting that “[i]n 2009, partners at law firms charged up to $1,590 per hour for work with major corporate clients”).
37 See Erichson, supra note 27, at 135 (describing the large, up-front expenses required to mount this kind of litigation).
38 See Erichson, supra note 20, at 38 n.185 (quoting Mississippi’s Attorney General as telling the Tobacco litigation lawyers that “you are going to have to pay all the expenses and it may be as much as $10 or $12 million”).
39 Barbra S. Gillers, Remarks at the Fordham University Law Review Panel Discussion: The Tobacco Litigation and Attorneys’ Fees, 67 FORDHAM L. REV. 2827, 2840-41 (1999).
40 See John Gramlich, On Campaign Trail, Attorneys General Walk a Fine Line, STATELINE, July 21, 2010, http://www.stateline.org/live/details/story? contentId=499873 (describing Michigan’s former Attorney General Mike Cox’s run for governor and noting that in 2010 there were “nine other attorneys general who are running for higher office this year (seven for governor and two for U.S. Senate”).
41 See id. (describing how attorneys general running for higher office have used litigation against tobacco, social networking and mortgage companies to garner publicity and burnish their credentials).
42 Coffee, supra note 20, at 251. Of course, if a case is either settled or abandoned prior to a complaint being filed there is likely to be far less publicity. To the extent that actions of this kind are typically disposed of in this manner, the incentives created by either favorable or unfavorable publicity discussed in the text will therefore be diminished. I return to the question of settlement below.
43 See David B. Wilkins, Partners Without Power? A Perliminary Look at Black Partners in Corporate Law Firms, 2 J. INST. STUDY LEGAL ETHICS 15, 32-33 (1999) (citing this practice as a reason why it is difficult for minority partners to get business, particularly in high profile cases).
44 See, e.g., Cnty. of Santa Clara v. Superior Court, 235 P.3d 21, 41 (Cal. 2010); Rhode Island v. Lead Indus. Ass’n, 951 A.2d 428, 480 (R.I. 2008).
45 See, e.g., VA. CODE ANN. § 2.2-510.1 (2005); TEX. GOV’T CODE ANN. § 2254.103 (West 2008); COLO. REV. STAT. §§ 13-17-301 to 13-17-304 (2006); see also 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, 182-83 (2006) (discussing state authorization and regulation of an Attorney General’s ability to enter into contingent fee agreements). By contrast, federal agencies are generally barred from using contingent fee lawyers under an Executive Order signed by President Bush. See Exec. Order No. 13433, 72 Fed. Reg. 28441 (May 16, 2007).
46 I will return to the question of exactly how much supervision and control public officials are required to exercise—and the credibility of their claim to do so—below.
47 For example, former Texas Attorney General Dan Morales was sentenced to four years in prison for attempting to steer over $1 million in legal fees to himself and another lawyer from the state’s $17 billion tobacco settlement. See Steve Barnes, National Briefing, Southwest—Texas: Prison for Ex-Official, N.Y. TIMES, Nov. 1, 2003, at A12, available at http:// www.nytimes.com/2003/11/01/us/national-briefing-southwest-texas-prison-for-ex-official.html?ref=dan_morales. Similar charges have been leveled at others. See generally Lester Brickman, Remarks at the Fordham University Law Review Panel Discussion: The Tobacco Litigation and Attorneys’ Fees, 67 FORDHAM L. REV. 2827, 2849 (1999) (arguing that “[i]n most states, the hiring was done on a pay-to-play basis” and that many lawyers were “selected on the basis of the campaign contributions that they made to the state attorneys general”).
48 See Jon B. Jordan, The Regulation of “Pay-to-Play” and the Influence of Political Contributions in the Municipal Securities Industry, 1999 COLUM. BUS. L. REV. 489, 494 (1999).
49 See David B. Wilkins, “If You Can’t Join ‘Em, Beat ‘Em!” The Rise and Fall of the Black Corporate Law Firm, 60 STAN. L. REV. 1733, 1770-72 (2008) (arguing that larger firms tended to benefit the most from “pay-to-play” in the municipal bond area).
50 See Erichson, supra note 20, at 35 (reaching a similar conclusion).
51 See, e.g., WALTER K. OLSON, THE RULE OF LAWYERS: HOW THE NEW LITIGATION ELITE THREATENS AMERICA’S RULE OF LAW 102-03, 107-08 (2003); Brickman, supra note 47, at 2830-33. Brickman has been one of the most ardent critics of the use of contingent fees. See, e.g., Lester Brickman, A Rejoinder to the Rejoinder to On the Theory Class’s Theories of Asbestos Litigation, 32 PEPP. L. REV. 781, 788 (2005). Similarly, as the title of his book implies, Olson is one of the leading critics of the “evils” of the litigation system.
52 See Erichson, supra note 20, at 36-38.
53 See, e.g., Martin H. Redish, Private Contingent Fee Lawyers and Public Power: Constitutional and Political Implications 4-5 (Apr. 7-8, 2008) (written for the Searle Center’s 2008 Research Roundtable on Expansion of Liability Under Public Nuisance (on file with author)) (citing this analogy and arguing that “[i]t is difficult to imagine an arrangement more rife with danger, cynicism and potential abuse than this one”).
54 See Erichson, supra note 20, at 38-40 (articulating the first objection that contingent fees remove appropriate legislative checks on prosecutors); Redish, supra note 53, at 32-33 (articulating the second objection relating to the Due Process rights of defendants) (see also the sources cited therein).
55 Steven K. Berenson, Public Lawyers, Private Values: Can, Should, and Will Government Lawyers Serve the Public Interest?, 41 B.C. L. REV. 789, 789 (2000).
56 See Berger v. United States, 295 U.S. 78, 88 (1935).
57 Brady v. Maryland, 373 U.S. 83, 87 (1963).
58 Miranda v. Arizona, 384 U.S. 436, 444 (1966).
59 Mapp v. Ohio, 367 U.S. 643, 655 (1961).
60 Gideon v. Wainright, 372 U.S. 335, 342 (1963).
61 Strickland v. Washington, 466 U.S. 668, 669 (1984).
62 Bruce A. Green, Must Government Lawyers “Seek Justice” in Civil Litigation?, 9 WIDENER J. PUB. L. 235, 256 (2000) (arguing that “[j]udicial decisions and other professional writings take the view that, even outside the context of criminal prosecutions, government litigators have a different role and different ethical responsibilities from lawyers representing private litigants”).
63 235 P.3d 21, 35-36 (Cal. 2010).
64 Id. at 25.
65 705 P.2d 347 (Cal. 1985).
66 Cnty. of Santa Clara, 235 P.3d at 29 (citing Clancy as holding that “the neutrality rules applicable to criminal prosecutors were equally applicable to government attorneys prosecuting certain civil cases”).
67 Id. at 31.
68 Id. at 33.
69 Id. at 34.
70 Id. at 34-35; see also Rubenstein, supra note 18, at 2146 (arguing that “[t]he substitute attorney general is a first step on the spectrum away from the purely public side; she is removed not only because she is a private attorney substituting for a public one, but also because she tends to perform more private-like functions than those that constitute the core of the attorney general’s work”).
71 Santa Clara, 235 P.3d at 32.
72 Id. at 34.
73 See id. at 24-25 (listing such prominent law firms as Arnold & Porter; Orrick, Herrington & Sutcliffe; McGuire Woods; Jones Day; Shook, Hardy & Bacon; Latham & Watkins; and Akin Gump Strauss Hauer & Feld as appearing on behalf of the defendants).
74 To say that the defendants’ size and resources “reduces” the risk of government overreaching should not be read to imply that there is no danger of attorneys general abusing their power when pursuing powerful private corporations. One need only look at the Department of Justice’s ability to force companies to “voluntarily” waive their attorney-client privilege as a pre-condition to even obtaining a hearing with government officials to understand that the state has potent weapons capable of bringing even the most powerful private corporation to its knees. See Gretchen Elizabeth Eoff, Losing the War on Attorney-Client Privilege: Viewing the Selective Waiver Quagmire Through the Tenth Circuit’s In re Qwest Communications International, DEF. COUNS. J., Jan. 1, 2008, available at http:// www.allbusiness.com/legal/evidence-privileged-communications/8891799-1.html (noting the “harsh reality” in which “companies accused of wrongdoing, or who engage in voluntary self-reporting, are often forced to selectively waive attorney-client privilege in order to be judged as ‘cooperating’ with federal prosecutors of government agencies under current governmental policies.”). As Howard Erichson points out, governments have other weapons—including subpoena power, the ability to circumvent joinder issues and other collective action problems, and the threat of issue preclusion in subsequent private litigation— that give public litigants a significant advantage when taking on powerful corporation like the tobacco companies. Erichson, supra note 20, at 28-30. As I argue below, these advantages—and their concomitant potential for abuse—are relevant to defining what the public responsibilities of government lawyers toward the private parties over whom they inevitably hold power should be. In defining these responsibilities, however, it is also important to account for the ability that corporate clients have to press public officials to curb their abusive practices—a strategy that has resulted in a significant modification (albeit certainly less than what many companies and their lawyers would have wanted to see) of the Justice Department’s policy concerning the circumstances where it is appropriate to ask companies to waive their attorney-client privilege. See, e.g., David Z. Seide, Is the Department of Justice’s McNulty Memorandum a Cure-All?, 15 CORP. GOVERNANCE ADVISOR, Mar.-Apr. 2007, at 1, 1-4, available at http://lawprofessors.typepad.com/whitecollarcrime_ blog/files/seide_article_is_the_dojs_mcnulty_memo_a_cureall.pdf (describing the efforts that lead up to the revision of the Justice Department’s original waiver policy and adoption of the McNulty Memo); see also Attorney-Client Privilege Bill Introduced in the House, MAIN JUST. (Dec. 17, 2009, 9:59 PM), http://www.mainjustice.com/2009/12/17/attorney-client-privilege-bill-introduced-in-the-house/ (reporting on efforts to introduce a bill to prohibit the Justice Department from requesting a waiver of the attorney-client privilege as a measure of cooperation in civil and criminal investigations).
75 Santa Clara, 235 P.3d at 36.
76 Id. at 39-40.
77 Id. at 40.
78 See Redish, supra note 53, at 18-19 (making this claim).
79 See Press Release, John H. Sullivan, President of the Civil Justice Ass’n of Cal., Statement on County of Santa Clara v. Superior Court, (July 26, 2010), available at http://www.cjac.org/newsandresearch/press-releases/county-of-santa-clara-v-superi/ (criticizing the Supreme Court’s test in Santa Clara by asking “[h]ow 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?”). As a “reality check” Sullivan goes on to contend that “[l]ast March 12 District Attorney Tony Rackauckas announced a ‘contingency fee’ agreement with an Orange Country-based law firm to sue Toyota” which “[d]espite media and private citizen requests has not been made public” on the basis of an opinion by a county attorney “that it is privileged as attorney-client communication.” Id.
80 See Kelley Brief, supra note 32 (arguing that the Memorandum Agreement between the Attorney General’s office and private contingent fee lawyers including Dickie Scrugg specifically provides that “the Attorney General retains control over all aspects of the litigation”).
81 See Erichson, supra note 27, at 134-38 (describing both cases).
82 Id. at 147 (arguing that “[p]rivate lawyers naturally bring a mass tort/product liability orientation, whereas public lawyers are more likely to bring a law enforcement orientation”). The risk of this kind of divergence is likely to be particularly acute in cases like the Gun Litigation which have a clearly defined “law enforcement” component. This component is likely to be less present in many consumer cases where the state’s primary interest is in compensation.
84 See id. at 140 (describing lawsuits in Boston and Cincinnati brought by traditional mass tort lawyers that were voluntarily dismissed after it became clear that they would be both protracted and expensive).
85 Richard L. Cupp, Jr., State Medical Reimbursement Lawsuits After Tobacco: Is the Domino Effect for Lead Paint Manufacturers and Others Fair Game?, 27 PEPP. L. REV. 685, 699 (2000) (advocating in favor of this kind of approach).
86 235 P.3d 21, 40-41 (Cal. 2010) (acknowledging that only five of the ten fee agreements at issue contained an express acknowledgement that public officials retained “final authority over all aspects of the litigation” and that none of the contracts contained sufficient detail to meet the court’s new standard). As a result, the court remanded all ten cases back to the court of appeals to oversee the drafting of contracts consistent with the court’s opinion. Id. at 40.
87 Exhibit A to First Amended Complaint for Declaratory and Injunctive Relief, Contingency Fee Professional Services Agreement, Lennar Corp. v. Cortez-Masto, No. 1:10-cv-00378-HHK, (D.D.C. Aug. 11, 2010) [hereinafter Fee Agreement] (pleading on file with the author). I am grateful to Joseph Sellers, Betsy Miller, and Linda Singer of Cohen Millstein for bringing this case to my attention and sharing these public documents with me.
88 Id. § 1.1. There is one exception to the Attorney General’s plenary authority in this area that bears mentioning. In the event of a settlement “for injunctive relief only” the contract provides that Cohen and Milstein will receive “costs and hourly fees at fair market value of their legal services expended on behalf of the state.” Id. § 3.5.4. “In such an event,” the contract continues, “the State agrees not to settle the case unless the defendant agrees to pay said amount.” Id. I return to the significance of this exception in Part IV.
89 Id. §§ 1.1-.2.
90 Id. § 8.1; see also §§ 1.1, 9.
91 235 P.2d at 39-40 (“[R]etention agreements between public entities and private counsel must specify that any defendant that is the subject of such litigation may contact the lead government attorneys directly, without having to confer with contingent-fee counsel.”).
92 Fee Agreement, supra note 87, § 3.2 (“The reasonableness of the attorney’s fees must be approved by the court.”).
93 Under a provision labeled “Contingency” the agreement expressly provides: “Neither the Attorney General nor the State is liable under this Contract to pay compensation to Contractor, other than from monies which may be paid to the State or its agencies party to the Litigation, whether by settlement or judgment, from any entities named as defendants in the Litigation.” Id. § 3.1.
94 See, e.g., Hall v. AT&T Mobility, LLC, No. 07-5325, 2010 WL 4053547, *16 (D.N.J. Oct. 13, 2010) (“[T]he district court should ‘engage in robust assessments of the fee award reasonableness factors recognizing an especially acute need for close judicial scrutiny of fee arrangements in class action settlements.”’) (quoting In re AT&T Corp., 455 F.3d 160, 166 (3rd Cir. 2006) (internal citations omitted)).
95 Redish, supra note 53, at 7-8 (discussing this motivation).
96 Erichson, supra note 27, at 136 (describing the motivations of Wendell Gauthier, the substitute attorney general hired by New Orleans and one of the principal architects of the gun litigation nationally).
97 Id. at 145-46 (arguing that it is difficult to explain the gun litigation in simple “entrepreneurial terms” and that Gauthier continued to fight the case long after it was clear that there was no “pot of gold” at the end even if the case was successful).
98 See id. at 139.
99 Once again, this is partially a function of the unique nature of the public safety issues presented in the Gun Litigation. The fact that several law professors and public interest organizations filed amicus briefs in support of allowing city and county governments to engage private contingent fee lawyers in the Lead Paint litigation at issue in Santa Clara, however, suggests that the close working relationship between these substitute attorneys general and the public interest bar is not unique to the Gun Litigation.
100 This mission is prominently reflected on each firm’s website. See, e.g., COHEN MILSTEIN, http://www.cmht.com/home.php (last visited Oct. 20, 2010) (titling their site “Access to Justice” and prominently featuring a quote from Corporate Legal Times touting the firm as “[t]he most effective law firm in the United States for lawsuits with a strong social and political component” at the top of their home page); COTCHETT, PITRE & MCCARTHY, http:// www.cpmlegal.com/ (last visited Oct. 20, 2010) (stating in the firm’s initial website paragraph that “[t]he firm’s dedication to prosecuting or defending socially just actions has earned it both a national and statewide reputation”).
101 See, e.g., Firm Profile, MOTLEY RICE, http:// www.motleyrice.com/info/firm-profile (last visited Oct. 20, 2010) (noting that “Motley Rice seeks justice and accountability on behalf of people and institutions harmed by wrongdoing and negligence” and touting its extensive experience in litigating cases involving occupational disease and workers rights in cases like asbestos and tobacco).
102 Although both Cohen Milstein and Motley Rice claim to specialize in securities and consumer fraud, Cohen Milstein has a strong presence in civil rights and human rights litigation, whereas Motley Rice’s expertise lies primarily in traditional tort law areas such as product liability, medical malpractice, and catastrophic disasters such as airplane crashes and environmental lawsuits such as the BP Oil Spill. Compare COHEN MILSTEN, supra note 100, with MOTLEY RICE, supra note 101.
103 Cohen Milstein’s website features a home page link to its Pro Bono activities listing numerous awards for the firm’s pro bono work on high profile cases, including seeking compensation from the 9/11 fund and law suits on behalf of Holocaust survivors against Swiss banks. Pro Bono, COHN MILSTEIN, http://www.cmht.com/probono.php (last visited Oct. 20, 2010) (leading with a quote from Kenneth Feinberg saying that the firm is “willing to dig into their pockets and do whatever is necessary for their clients”). Motley Rice, on the other hand, has no link for Pro Bono on its site but instead has a link describing its contributions to “local, national, and international non-profit organizations that work to strengthen our communities and enhance the quality of life for others.” Community Connections, MOTLEY RICE, http:// www.motleyrice.com/info/community-connections (last visited Jan. 8, 2011).
104 For example, three of the four named partners at Cohen Milstein spent significant time in government or public interest organizations before joining the firm. Attorneys, COHEN MILSTEIN, http://www.cmht.com/attorneys.php (last visited Oct. 20, 2010) (listing Jerry S. Cohen (Michigan Attorney General’s office and Senate Antitrust Committee), Herbert E. Milstein (Securities and Exchange Commission), and Joseph Sellers (Equal Opportunities Commission, Department of Justice Civil Rights Division, and the Washington Lawyers Committee for Civil Rights Under Law)). By contrast, neither Motley nor Rice list any public sector or public interest experience on their web pages.
105 See Linda Singer, COHEN MILSTEIN, http:// www.cmht.com/attorneys.php?PeopleID=59 (last visited Oct. 20, 2010) (describing Ms. Singer as the head of the Public Client practice group and listing her background and credentials). Ms. Singer is joined in the practice by Betsy Miller who served as Ms. Singer’s Chief of Staff and Senior Counsel at the DC Attorney General’s office before joining the firm. See Betsy Miller, COHEN MILSTEIN, http://www.cmht.com/attorneys.php?PeopleID=6; see also Practice Areas—Qui Tam, CROCHETT, PITRIE & MCCARTHY, http:// www.cpmlegal.com/practicearea-quitam.php (last visited Oct. 20, 2010) (describing the firm’s practice in bringing lawsuits by “whistleblowers” on behalf of the state to recover money from corporations that have defrauded the government). As William Rubenstein argues, lawyers who bring such actions are also properly characterized as substitute private attorneys general. See Rubenstein, supra note 18, at 2144-45.
106 Joseph F. Rice, MOTLEY RICE, www.motleyrice.com/attorneys/view/joseph-f-rice (last visited Oct. 20, 2010).
107 See generally Derrick A. Bell, Jr., Serving Two Masters: Integration Ideals and Client Interests in School Desegregation Litigation, 85 YALE L.J. 470 (1976).
108 See Scott Cummings & Ann Southworth, Between Profit and Principle: The Private Public Interest Firm, in PRIVATE LAWYERS AND THE PUBLIC INTEREST: THE EVOLVING ROLE OF PRO BONO IN THE LEGAL PROFESSION 186 (Robert Granfield & Lynn Mather, eds. 2009) (describing “private public interest firms” as “organized as for-profit entities, but advancing the public interest is one of their primary purposes—a core mission rather than a secondary concern”). Needless to say, whether Cohen Milstein or Crochett Pitrie fully merit this designation is beyond the scope of this inquiry—although the differences cited above certainly suggest that these firms are attempting to portray themselves as if they do. My point simply is that state officials can and should look to see whether the law firms that they hire as substitute attorneys general have this orientation—and defendants and the public at large can and should hold public officials accountable for whether they in fact engage in this inquiry.
109 I return to the issue of professional identity below.
110 Coffee, supra note 20, at 251.
111 Indeed, opponents criticize the fact that sitting attorneys general make such frequent use of this bully pulpit because it affords these state officials an unfair advantage on the campaign trail. See Gramlich, supra note 40 (describing how California Attorney General and gubernatorial candidate Jerry Brown “spent much of last week making televised public appearances to tout the work he is doing as the state’s top lawyer, including expanding the state’s DNA database and suing the nation’s two largest mortgage lenders,” all without airing a single campaign commercial).
112 Erichson, supra note 20, at 40. Indeed, in light of the political risks associated with losing such high profile actions, Attorneys General are unlikely to bring these cases in the first place unless they know that they have a very strong case. The fact that state officials are entitled to use their subpoena power to collect important factual information prior to bringing suit will further reinforce their tendency to move forward only on cases where there is a significant probability of success. See generally id. I return to the issue of the government’s subpoena power below. Notwithstanding these incentives, however, the Gun Litigation underscores that sometimes public officials will bring actions where there is a relatively low chance of success. See Erichson, supra note 27, at 129-51 (describing the legal and factual difficulties encountered by the lawyers who brought the gun cases).
113 See generally Cass R. Sunstein, Interest Groups in American Public Law, 38 STAN. L. REV. 29 (1985).
114 See infra note 117 and accompanying text regarding states that have passed legislation specifically authorizing contingent fee suits.
115 See Mark Galanter, Why the “Haves” Come Out Ahead: Speculations on the Limits of Legal Change, 9 LAW & SOC’Y REV. 95 (1974). See also IN LITIGATION: DO THE “HAVES” STILL COME OUT AHEAD? (Herbet M. Kritzer & Susan S. Silbey eds., 2003).
116 See Lynn Mather, Theorizing about Trial Courts: Lawyers, Policymaking, and Tobacco Litigation, 23 LAW & SOC. INQUIRY 897, 909 (1998) (noting that legal claims against the tobacco industry filed by state governments using private contingent fee lawyers were an important means of “overcom[ing] well-known facts about ‘why the ‘haves’ come out ahead’ in litigation”) (citing Galanter, supra note 115).
117 Indeed, the fact that at the time of this writing the legislation authorizing the Louisiana Attorney General to hire contingent fee counsel to litigate against BP is still stuck in committee suggests just how difficult it is to get authorization from the legislature even in cases where the defendant is extremely unpopular and the state is not being asked to appropriate funds directly from the public coffer. See Caldwell’s Office to Receive Another $5 Million, supra note 14.
118 Rubenstein, supra note 18.
119 For the classic description of public law litigation, see Abram Chayes, The Role of the Judge in Public Law Litigation, 89 HARV. L. REV. 1281 (1976). For a description of the widespread use of private attorneys general by both courts and legislatures as an integral part of public enforcement, see Rubenstein, supra note 18, at 2134-36.
120 Erichson, supra note 20, at 39 n.187 (citing Gale A. Norton, The Long Term Implications of Tobacco Litigation 8 (Jan. 8, 2000) (unpublished manuscript) (on file with author)).
121 See id. at 19-20 (quoting the former Attorney General of Colorado as conceding that while “‘[i]n a strict legal sense, the state is collecting only its own expenses [i]n a less stringent sense, the state is aggregating the claims of its citizens and fulfilling a role similar to that of a class action”’); see also Rubensein, supra note 18, at 2146 (arguing that cases like tobacco constitute a “more private-like function than those that constitute the core of the attorney general’s work”).
122 Rubenstien, supra note 18, at 2146. As Rubenstien acknowledges, these two kinds of private attorneys general are not perfectly interchangeable since the substitute attorney general can bring claims on behalf of the state that are not available to private parties. Id. at 2143-54. Nevertheless, as indicated above, in many instances at the core of what Attorneys General are doing in this area, the claims are very similar.
123 I return to the question of whether that control should be plenary, or whether there are some areas where these private lawyers should retain autonomy, below.
124 See Rubenstein, supra note 18, at 2153 (noting that such lawyers are “clearly not paid by [the] government” nor expressly “represents” government interests). This is not to say that public officials currently exercise no control over these lawyers—or that they should not try to exercise more such control. Once again, I will return to these matters below.
125 The fact that a recent “primer” commissioned by the US Chamber of Commerce on defending cases filed by state Attorneys General could not cite to a single instance in which a court had upheld this kind of due process claim, however, suggests that at least to date there is no direct evidence that these legitimate concerns have materialized. See DICKSTEIN SHAPIRO LLP, BEYOND DUE PROCESS—A LITIGATION PRIMER: CHALLENGING ATTORNEY GENERAL AND OTHER GOVERNMENT CONTINGENCY FEE AGREEMENTS (Jan. 2009) (acknowledging that “courts largely have rejected the argument that government contingency fee arrangements are fundamentally at odds with due process”) (on file with author).
126 See, e.g., Erichson, supra note 20 at 35-36 (arguing that “[w]hen private lawyers are hired by the government on an hourly or flat fee, it raises typical outsourcing issues, but need not present major problems of government legal policy” and “[n]or does the government’s use of pro bono lawyers”); see also Redish, supra note 53, at 5.
127 See, e.g., JERRY CUSTIS, LITIGATION MANAGEMENT HANDBOOK § 5:14 (2009) (stating that in-house counsel have voiced “[m]any criticisms of hourly pricing,” including “considerable suspicion that the hourly system encouraged overworking of cases, the assignment of too many lawyers to cases and the spending of time on unimportant or useless tasks,” with “no incentive to spend less rather than more time to accomplish tasks”).
128 See, e.g., id.
129 See, e.g., Jody Freeman, Extending Public Law Norms Through Privatization, 116 HARV. L. REV. 1285, 1317 (2003) (noting that governmental agencies are “generally ill-equipped” to “extensive[ly] monitor private contractors not only for cost control and fraud prevention purposes, but also for quality control, which these agencies charged with oversight have traditionally not done very effectively”).
130 See, e.g., Wendy Leibowitz, Getting Paid: Is There A Light at the Bottom of the Stack of Bills?, 30 L. PRAC. MGMT., May/June 2004, at 22, 22 (describing problems with various legal billing procedures, including “flat fee” arrangements).
131 See Jenna Greene, Cadwalader Biggest Beneficiary as Treasury Adds Firms to Help Run TARP, NAT’L L.J., Oct. 4, 2010, available at http:// www.law.com/jsp/article.jsp? id=1202472863561&src=EMCmail&et=editorial&bu=Law.com&pt=Law.com%20Newswire% 20Update&cn=LAWCOM_NewswireUpdate_20101004&kw=Cadwalader%20Biggest%C20Beneficiary%C20as%C20Treasury%C20Adds%C20Firms%C20to%C20Help%C20Run%%2TARP.
134 See Fee Agreement, supra note 87, § 3.3 (specifying in detail the exact percentage of any recovery that the law firm will receive in particular circumstances).
135 See generally Cummings, supra note 12, at 33-41.
136 Even here, it would be interesting to know how many law firms the City of Chicago asked before finding the ones who agreed to undertake that case—or whether these same firms would do so today.
137 See, e.g., Scott L. Cummings & Deborah L. Rhode, Managing Pro Bono: Doing Well by Doing Better, 78 FORDHAM L. REV. 2357, 2426-27 (2010).
138 I discuss this possibility in David B. Wilkins, Race, Ethics, and the First Amendment: Should a Black Lawyer Represent the Ku Klux Klan?, 63 GEO. WASH. L. REV. 1030, 1057 (1995) (raising the specter that “when lawyers are not being paid, they have more control over their clients’ actions and goals”).
139 As a partner once reminded me, this characterization is somewhat disingenuous since in most instances the lawyers who are working on these cases are still being paid by the firm to take on this work. As he said with a shrug: “It’s pro bono for us not for them!”
140 See generally William H. Simon, The Dark Secret of Progressive Lawyering: A Comment on Poverty Law Scholarship in the Post-Modern, Post-Reagan Era, 48 U. MIAMI L. REV. 1099 (1994) (noting that public interest lawyers will inevitably exert such control but arguing that in the end it is the right thing to do).
141 Compare Redish, supra note 53, at 17 (arguing that “when government delegates the power to litigate claims on the government’s behalf to private attorneys, those attorneys are subject to the exact same ethical and political limitations as are full time government attorneys”), with Rubenstein, supra note 18, at 2143 (describing substitute attorneys general as “literally perform [ing] the exact functions of the attorney general’s office”). As indicated above, Redish is far more critical of this practice than Rubenstein.
142 Erichson, supra note 20, at 27-35.
143 Id. at 29-30.
144 Rubenstein, supra note 18, at 2170.
145 Rubenstein, borrowing from Robert Cover, calls these two forms of duality “synchronic” and “diachronic.” Id. at 2169-70 (citing Robert M. Cover, The Uses of Jurisdictional Redundancy: Interest, Ideology, and Innovation, 22 WM. & MARY L. REV. 639 (1981)).
146 Greene, supra note 131 (reporting this fact).
147 See Stuart Goldstein & Angus Duncan, The Developing Global Market for CRE CDOs, ISR, CDO SUPPLEMENT, Mar. 2007, at 10, available at, http:// www.cadwalader.com/assets/article/030107DuncanGoldsteinISR.pdf (last visited Oct. 20, 2010) (touting the firm’s expertise in complex European CDOs in a paid supplement written by two Cadwalader partners).
148 See Greene, supra note 131 (quoting a member of the panel as complaining that “[t]he panel has requested a comprehensive list of Cadwalader clients that have received TARP funds [but] [w]e have yet to receive that list”).
152 See generally MODEL RULES OF PROF’L CONDUCT R. 1.7(a)(2) (2009) (noting that a conflict can exist when “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer”). In its motion to disqualify Cohen Milstein from representing the State of Nevada in cases involving deceptive mortgage practices, the defendant mortgage company raises a similar argument on the basis of Cohen Milstein’s prior representation of a labor union which the defendant alleges has engaged in a concerted campaign against it and other Nevada mortgage lenders. See First Amended Complaint for Declaratory and Injunctive Relief at 15, Lennar Corp. v. Cortez-Masto, No. 1:10-cv-00378-HHK, (D.D.C. Aug. 5, 2010) (arguing that “[t]he harm to Lennar will be immediate and irreparable if outside counsel is permitted to access Lennar’s confidential materials and to use whatever it may learn for the benefit of other past, current, or future clients, including Lennar’s legal adversaries”). Cohen Milstein denies that it has a conflict on the ground that it resigned from representing the union before undertaking the current public representation. See Nevada Attorney General’s Motion to Dismiss Lennar’s First Amended Complaint at 27, Lennar Corp. v. Cortez-Masto, No. 1:10-cv-00378-HHK, (D.D.C. Aug. 25, 2010) (citing an acknowledgement by Lennar that the firm withdrew from representing the union several months before the complaint was filed and therefore “dual representation is not occurring and, in fact, never occurred”). As indicated above even if correct, this does not entirely resolve the potential conflict.
153 Greene, supra note 131 (quoting a partner at Haynes & Boone).
154 See Gina Passarella, Government Lawyers Sought After as Law Firm Laterals, LEGAL INTELLIGENCER, Oct. 4, 2010, available at, http:// www.law.com/jsp/article.jsp?id=1202472833973 (last visited Oct. 20, 2010) (reporting that “[i]n a lateral market where books of business typically reign supreme, some law firms have found hiring from the public sector can create business in other ways”). With respect to the rules of vicarious disqualification, see MODEL RULES OF PROF’L CONDUCT R. 1.10 (2009) (describing the rules governing lawyers moving from one private law firm to another) and MODEL RULES OF PROF’L CONDUCT R. 1.11 (describing the rules applicable to lawyers moving in and out of government). I return to the shrinking difference between these two rules below.
155 See Clark, supra note 11, at 4 (reporting that “[m]ost of the ethics statutes and rules that regulate government employee ethics do not apply to contractor personnel”). Indeed, as Clark notes in another piece, TARP differentiates between the fiduciary and disclosure obligations of law firms such as Cadwalader, which are classified as “contractors,” and “fiduciary agents” that TARP hires to manage its assets, who are expressly required to “agree to act at all times in the best interests of the United States.” Kathleen Clark, Fiduciary-Based Standards for Bailout Contractors: What Treasury Got Right and Wrong in TARP (Feb. 2, 2011) (unpublished manuscript on file with the author), at 8. For an excellent discussion about the increasingly complex relationship between the public and private spheres, see MARTHA MINOW, PARTNERS, NOT RIVALS: PRIVATIZATION AND THE PUBLIC GOOD (2002).
156 For a thoughtful analysis that attempts to begin a conversation between those who study professions and theorists of public institutions in a related context, see Adrian Vermeule, Second Opinions and Institutional Design (2010) (unpublished manuscript) (on file with author and available at http:// papers.ssrn.com/sol3/papers.cfm?abstract_id=1646414) (linking the professional literature on second opinions with a political theory analysis of the design of public institutions).
157 Kathleen Clark estimates that between 1983 and 2007, the amount of government service contracting grew by 85% in constant dollars from $70 billion to $130 billion ($268 billion in today’s terms). Kathleen Clark, Financial Conflicts of Interest In and Out of Government (Feb. 2, 2011) (unpublished manuscript on file with the author forthcoming in the Alabama Law Review), at 9-10.
158 Rubenstein, supra note 18, at 2173. Rubenstein uses a distinctly personal analogy to drive this point home. Id. at 2172 (analogizing the mix of public and private duties of various private attorneys general to the mix of heterosexual and homosexual impulses that make up an individual’s unique sexuality).
159 I elaborate this traditional claim in David B. Wilkins, Legal Realism for Lawyers, 104 HARV. L. REV. 468, 470-71 (1990).
160 As Marc Galanter has been quick to remind us, these often celebrated days were not particularly “golden” for the many groups who were excluded from law firms—or indeed the legal profession altogether. See Marc Galanter, Lawyers in the Mist: The Golden Age of Legal Nostalgia, 100 DICK. L. REV. 549 (1996). For my own take on this kind of golden age rhetoric, see David B. Wilkins, Practical Wisdom for Practicing Lawyers: Separating Ideals from Ideology in Legal Ethics, 108 HARV. L. REV. 458 (1994) (reviewing ANTHONY T. KRONMAN, THE LOST LAWYER: FAILING IDEALS OF THE LEGAL PROFESSION (1995), which makes several approving references to the golden age).
161 ERWIN O. SMIGEL, THE WALL STREET LAWYER: PROFESSIONAL ORGANIZATIONAL MAN? 8-9 (Ind. Univ. Press 1973) (1969).
162 David B. Wilkins, Doing Well by Doing Good? The Role of Public Service in the Careers of Black Corporate Lawyers, 41 HOUS. L. REV. 1, 3-7 (2004) (describing this growing separation); see also Deborah L. Rhode, The Professionalism Problem, 39 WM. & MARY L. REV. 283, 297-98, 300 (1998) (noting a reduction in public service among lawyers and reporting that three quarters of bar members surveyed believe that lawyers are increasingly money conscious).
163 Of course, whether the profession ever really lived up to its stated creed is debatable to say the least. See Robert W. Gordon, “The Ideal and the Actual in the Law”: Fantasies and Practices of New York City Lawyers, 1870-1910, in THE NEW HIGH PRIESTS: LAWYERS IN POST-CIVIL WAR AMERICA 51 (Gerard W. Gawalt ed., 1984) (arguing that notwithstanding all of its many faults, that elite lawyers in the late nineteenth and early twentieth centuries did at least take seriously their commitments to public service both within and outside their roles as private lawyers).
164 See David B. Wilkins, Partner Shamartner! EEOC v. Sidley Austin Brown & Wood, 120 HARV. L. REV. 1264, 1273-77 (2007) (discussing the “paradox of professional distinctiveness” which posits that a plausible connection to public purposes and goals is one of the key things that makes the legal profession distinctive and helps to preserve its autonomy and prestige).
165 For my prior arguments in favor of a more context-specific approach to legal ethics, see, for example, Wilkins, supra note 8; David B. Wilkins, Who Should Regulate Lawyers?, 105 HARV. L. REV. 799 (1992); Wilkins, supra note 159. I return to the issue of regulation below.
166 See Minow, supra note 155, at 25-27 (discussing market based justifications for privatization).
167 Fee Agreement, supra note 87, § 3.5.4.
169 2 MARTIN A. SCHWARTZ & JOHN E. KIRKLIN, SECTION 1983 LITIGATION: STATUTORY ATTORNEYS FEES 441 (Aspen Law & Business 3d ed. 1997) (defining a sacrifice offer as an offer in which “the defendant expressly conditions the granting of substantial relief, often of an equitable nature, on the plaintiff’s waiver or severe compromise of the right to statutory attorney’s fees on which plaintiff’s counsel is wholly or partly relying for the payment of his fee”).
170 See 475 U.S. 717, 730-38 (1986).
171 Id.; see also Moore v. Nat’l Assn. of Sec. Dealers, Inc., 762 F. 2d 1093, 1105 (D.C. Cir. 1985) (specifically noting that “carefully drafted retainer agreements” between plaintiffs and their attorneys could “minimize the potential conflicts” between plaintiffs’ attorneys and their clients with respect to possible fee waivers resulting from settlement negotiations with defendants).
172 See generally Margaret Annabel de Lisser, Comment, Giving Substance to the Bad Faith Exception of Evans v. Jeff D.: A Reconciliation of Evans with the Civil Rights Attorney’s Fees Awards Act of 1976, 136 U. PA. L. REV. 553 (1987) (arguing that Evans was inconsistent with the spirit of the fees act).
173 Given that the firm would have done nothing wrong in a situation where the defendant makes a “sacrifice” offer—and will have procured injunctive or other non-monetary relief for the state?this kind of provision is qualitatively different from ones that attempt to restrict the state’s plenary right to control the case by requiring that substitute counsel be paid a large percentage of any future recovery even after it has been dismissed for cause or that require outside counsels’ approval before the Attorney General can accept a monetary settlement. See DICKSTEIN SHAPIRO, supra note 125, at 6-7 (reporting courts that have questioned these provisions).
174 Once again, whether this is really protecting the public interest is a function of the Attorney General’s political motivations—and the ability of other state officials and the public at large to check these incentives.
175 Fee Agreement, supra note 87, §§ 16.1, 16.2.
176 Id. § 24.
177 See MODEL RULES OF PROF’L CONDUCT R. 1.7 (a)(2) (2009) (prohibiting lawyers from representing clients where there is a significant risk that their judgment will be compromised by their representation of a former client or by the interests of a third person or by the personal interests of the lawyer); see also MODEL RULES OF PROF’L CONDUCT R. 1.9 (relating to conflicts involving former clients).
178 Fee Agreement, supra note 87, § 16.2 (requiring disclosure of “all litigation, claims and maters in which Contractor represents parties adverse to the State”) (emphasis added).
179 MODEL RULES OF PROF’L CONDUCT R. 1.11 (entitled “Special Conflicts of Interest for Former and Current Government Officers and Employees”).
180 Id. R. 1.11(a)(2), (d)(2)(i).
181 Id. R. 1.11 cmt. 3.
182 Fee Agreement, supra note 87, § 20. As indicated above, the lawyers who are hired under the TARP program are similarly treated as “contractors” and not “financial agents.” See Clark, What Treasury Got Right, supra note 155.
183 Kathleen Clark makes a similar argument with respect to independent contractors performing government functions generally. See Clark, supra note 11 (arguing that independent contractors should be subject to the same restrictions on conflicts of interest as government employees).
184 See MODEL RULES OF PROF’L CONDUCT R. 1.11(a)(2), (d)(2)(i).
185 Congress appears to have reached a different conclusion. Unlike the Model Rules, federal law prohibits federal agencies from consenting to such representation, at least in circumstances where the former government lawyer would make an appearance in federal court or communicate with the government on behalf of a client. See 18 U.S.C. § 207(a). I am grateful to Kathleen Clark for bringing this statute to my attention.
186 Fee Agreement, supra note 87, §§17-3.
187 MODEL RULES OF PROF’L CONDUCT R. 1.1©. The Rule goes on to define “confidential government information” as “information that has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose and which is not otherwise available to the public.” Id. It is likely that a significant amount of the information that private lawyers acting as substitute attorneys general learn during the course of litigation against private clients would fit this definition.
188 Id. R. 1.11(b).
fn18]. Id. R. 1.10(a)(2).
191 Id. R. 1.11, cmt. 4. Cf. Clark, supra note 10, at 1065-66 (noting that “[b]ecause the lawyer-client relationship is different [in the public context], the state attorney general is permitted to do things that conflict-of-interest standards would normally prohibit” such as representing two state agencies opposing each other in a law suit).
192 See KELLEY CAWTHORNE, http://www.kelley-cawthorne.com/index.html (reporting that Mr. Kelley founded the firm in 1999 and that it has “quickly distinguished itself by being named as one of the state’s top five (5) most effective lobbying organizations”).
193 See Robert Granfield & Philip Veliz, Good Lawyering and Lawyering for the Good: Lawyers’ Reflections on Mandatory Pro Bono in Law School, in PRIVATE LAWYERS & THE PUBLIC INTEREST: THE EVOLVING ROLE OF PRO BONO 53 (Robert Granfield & Lynn Mather, eds. 2009) (making this argument).
194 I and others have written generally about the unique culture and community of former AUSAs in a variety of contexts. See, e.g., Wilkins, supra note 162, at 43-44 (referring to the “‘former assistant’s club’ of ex-AUSAs” in private practice that helped AUSA Angela Dawson secure a job in the white collar defense bar, and emphasizing that Dawson specifically chose a firm with “a larger number of former AUSAs who could help ease her transition”); Ellen Yaroshefsky, Cooperation with Federal Prosecutors: Experiences of Truth Telling and Embellishment, 68 Fordham L. Rev. 917, 931-63 (1999) (describing interviews with former AUSAs that revealed strong consensus on many important issues involving the cooperation process and role of cooperators in criminal cases).
EXHIBIT A TO FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
CONTINGENCY FEE PROFESSIONAL SERVICES AGREEMENT
October 29, 2009
This Agreement (the "Contract contains the terms under which the Nevada Attorney General Office, Bureau of Consumer Protection (the "Attorney General. for the State of Nevada on behalf of the People and the State of Nevada, agree to retain the law firms off Cohen Milstein Sellers & Toll PLLC, ("Special Contractor" and/or "Contractor" or "Counsel") to provide legal services to the Attorney General. her deputy attorneys general, the Bureau of Consumer Protection and the Office of the Attorney General to assist in the· matter of the prosecution of all available civil claims, damages, civil penalties, restitution and disgorgement of profits and injunctions against all appropriate defendants relating to the act, use, or employment by lenders and/or related parties of any deception, deceptive act or practice, fraud, false pretense, misrepresentation, or concealment, suppression or omission of any material fact in connection with certain mortgage lending practices, including, without limitation, origination of loans - (including without -limitation, subprime loans, Option ARM's and other Adjustable Rate Mortgages and Alt-A or similar loan products), servicing of loans, securitizatlon of loans, appraisal practices, and practices of home builders and home sellers in connection with the Bale and/or financing the purchase of homes (collectively, "Lending Practices") including, but not limited to any deception, deceptive act .or practice, fraud, false pretense, misrepresentation, or concealment, suppression or omission of any material fact as to Lending Practices (collectively, the "Acts" and/or the "Litigation'');
WHEREAS, NRS 228,170(1) provides that whenever, m the opinion of the Attorney General, commencement of an action is necessary to protect and secure the interen of the State of Nevada, the Attorney General shall commence the action; and
WHEREAS, pursuant to NRS 228.380, the Attorney General through her Bureau of Consumer Protection, may bring civil action to enforce the consumer and trade practices laws of the State ofNevada; and
WHEREAS, pursuant to NRS 228.330, the Consumer Advocate through the Bureau of Consumer Protection, may perform such other functions and make such other arrangements as may be necessary to carry out his duties and the functions to enforce the consumer and trade practices laws of the State of Nevada; and
WHEREAS, pursuant to NRS 228.380, the Consumer Advocate may exercise the power of the Attorney General in areas of consumer protection; and
WHEREAS, in accordance with NRS 41.03435, It is the opinion of the Attorney General that without the employment of Special Contractor it is impracticable for the Attorney General's Office to proceed with complex litigation on behalf of the State of Nevada; and
WHEREAS, NRS 284.173 authorizes elective officers, heads of Attorney Generals, boards, and commissions of institutions to engage, subject to approval of the Board of Examiners, services of persons as independent contractors; and
WHEREAS, the Litigation is likely to entail numerous complex factual and legal issues;
WHEREAS, such Litigation win require the expenditure of substantial resources by any private attorneys retained to assist Nevada;
WHEREAS, the Attorney General seeks to limit the expenditure of resources by Nevada in such Litigation;
WHEREAS, it is deemed that the. services of the law finn of Cohen Milstein Sellers & Toll PLLC herein specified, are both necessary and desirable and in the best interests of the Attorney General and the State of Nevada; and
NOW, THEREFORE, based upon the foregoing premises and upon the following covenants, the parties mUtually agree as follows:
1. Scope of Representation. Contractor is authorized to take appropriate legal steps to prosecute the Litigation as it pertains to liability, damages, civil penalties, injunctive relief and restitution/disgorgement of profits and to participate in any settlement negotiations, Contractor shall provide sufficient resources, including attorney time, to prosecute this action faithfully and with due diligence its conclusion including the exhaustion of any and all appeals by the defendants.
1.1 Contractor and the Attorney General will discuss all major litigation decisions, including but not limited to: (i) which defendants to name; (ii) what claims to allege; (iii) whether to opt out of any c)ass certified in any federal court; (lv) retention of experts; and (v) whether to procede to trial, It is expressly understood that the Attorney General will have final and exclusive authority over all aspects of this case, including settlement decisions. The Attorney General and the Contractor agree that the Attorney General may settle all or part of the related Litigation over the objection of the Contractor when in the Attorney General's opinion it is in the best interest of tho State of Nevada to do so.
1.2 Contractor may obtain written approval from the Attorney General before taking any positions that could potentially impact policy concerns of the State. Contractor will provide the Attorney General with drafts of any court filings sufficiently in advance of filing the documents in order for the Attorney General to review the filings and provide comments, unless the Attorney General affirmatively waives such review.
1.3 Attorney General agrees that Contractor shall coordinate with affiliated Contractor to allocate workloads and responsibilities as appropriate. Contractor may associate with additional Co-Contractor without additional expense to the State only upon approval by the Attorney General. Contractor shall fully indemnify, hold harmless and defend the State of Nevada, the Attorney General and her office from any and all claims or compensation related to Contractor's Co-Contractor.
2. Reporting. Contractor shall prepare and submit monthly reports to the Attorney General summarizing activities from the previous month and detailing the costs incurred. Where expenses are disbursed or are incurred by Contractor which also benefit other clients of Contractor in other, similar litigation, only the portion of such expenses fairly and properly allocable to Plaintiffs) in the Litigation shall be claimed as reasonable expenses of prosecuting the Litigation. The report shall also include activities planned for the upcoming month and budgetary costs associated with these activities, The report shall be due by the seventh day of each month. Reports shall be prepared in a format and of a quality approved by the Attorney General.
Furthermore, all reasonable expenses shall be itemized in the monthly report for which reimbursement will be claimed upon conclusion of the Litigation. Certain disbursements will not be paid unless agreed to in advance. These include: a. Photocopy expenses of more than 15 cents per page; b. Photocopy costs in excess of $2.000 for a single job;
The State win not reimburse expenses for the following: a. Local telephone expenses of office supply costs; b. The costs of first-class travel (travel arrangements should be made in advance to take advantage of cost-effective discounts or special rates).
To the extent it is applicable, all expenses including travel expenses shall be reimbursed accordance with the provisions of the current State Administrative Manual (http://budget.state.nv.us/SAM/). See Attachment CC for current travel reimbursement rates.
3. Contract Type/Compensation.
3.1 Contingency. Neither the Attorney General nor the State is liable under this Contract to pay compensation to Contractor, other than from monies which may be paid to the State or its agencies party to the Litigation whether by settlement or judgment, from any entities named as defendants in the Litigation.
3.2 Compensation. Compensation shall be contingent upon recovery and collection of damages or monetary penalties, except as provided in 3.3.3 below. The amount of compensation shall be based on the amount of damages or monetary penalties recovered to the extent that such funds are available after reimbursement for all disbursements as set forth in 3.5 below. The reasonableness of the attorney's fees must be approved by the court. It is understood that only one fee, calculated as provided in this section, will be paid.
3.3 Basis of Compensation. If there is a recovery and collection of damages or penalties for the State and subject to judicial approval for reasonableness of attorney's fees, the amount of compensation to the Contractor will be as follows:
3.3.1 For amounts obtained by the State from a defendant who is settling or with respect to which a judgment has been entered within two (2) months and four (4) months of the date of this Contract, Counsel shall receive ten (10) percent of any recovery.
3.3.2 For amounts obtained by the State from a defendant who is settling or with respect to which a judgment has been entered after four (4) months of the date of this Contract, Counsel shaH receive fifteen (IS) percent of any recovery.
3.3.3 Counsel shall distribute to the Attorney General fifteen (15) percent of any compensation received pursuant to paragraphs 3.3.1 through 3.3.2 for costs and expenses, including attorney's fees, of the Attorney General.
3.3.4 "A defendant who is settling" is a defendant who has entered into a written settlement agreement with the State. The settlement agreement date shall determine the time periods to be computed under paragraphs 3.3.1 through 3.3.2 above.
3.3.5 If Contractor represents any other governmental entity in this type of litigation and agrees to represent such entity for a contingency fee lower than that set forth in paragraphs 3.3.1 through 3.3.3, the contingency fee herein shall be reduced to meet that lower percentage. It is the intent of Contractor to provide the State with the best price it offers for its services.
3.3.6 The state reserves the right to petition any court before payment to determine reasonableness of attorney fees outlined in this Contract.
3.3.7 If as a result of a settlement a separate·pool for attorney's fees is created, Contractor agrees to be paid solely out of that pool, and to waive the right to collect fees from the Slate.
3.3.8 Attorney fees under this Contract are not payable out of the State of Nevada's statutory contingency account and Contractor will waive any and all claims for compensation or costs under NRS 41.03435. Attorney fees under this Contract shall be paid out of funds pursuant to settlement or out of funds pursuant to final judgment.
3.4 Invalid Contract. If there is a recovery for the State and this Contract is found to be invalid, Contractor and the Attorney General agree that Contractor and the Attorney General each are entitled to the fair market value of their legal services expended on behalf of the State. The Attorney General agrees to use its best efforts to support any application for judicial approval for such fees made pursuant to this paragraph.
3.5 Costs, Expenses and Disbursements.
3.5.1 No Cost Recovery or Court Awarded Costs. Contractor shall advance all litigation expenses and costs related to any demands, claims, actions, and other work required in the prosecution of the Scope of Representation (unless undertaken by the State), including without limitation court or tribunal costs, expenses of investigation, discovery and the costs of obtaining and presenting evidence, including without limitation expert evidence. Contractor shall have no right to recover these litigation expenses and costs from the State unless there is a recovery and collection of damages or monetary penalties.
3.5.2 Complete or Partial Cost Recovery or Court Awarded Costs. If there is a recovery for the State, all costs advanced by Contractor for reimbursable costs of litigation shall first be reimbursed In amounts equal to their respective contributions. If Contractor recovers monies in the Litigation, but in an amount that does not exceed reimbursable costs and disbursements in the Litigation, such monies shall be used to reimburse disbursements.
3.5.3 Court Awarded Attorney Fees. The State intends to seek an award from the court of fees and costs for prosecution of the case. Court awarded attorney fees and costs shall be paid to Counsel (and to the extent awarded for work performed or costs advanced by the State, shall be paid to the State) and Counsel shall receive an additional payment from any recovery and collection of damages or penalties for the State such that the total fee payment to Counsel shall equal the appropriate percentage (pursuant to Sections 3.3.1 through Sections 3.3.5 ) of the sum of (i) the total recovery to the Stat.. and (ii) and attorney fees and costs awarded by the court. Any separate pool for attorney fees created as a result of settlement or otherwise shall be treated pursuant to revised Section3.5.3 as If the separate pool were an award of attorney fees by the court.
3.5.4 Settlement. This Contract applies to any settlement. In the event the Litigation is "resolved by the settlement for injunctive relief only or under terms involving provision of goods, services or other "In-kind" of non monetary payment, including, without limitation, favorable future interest fates or terms available to borrowers, renegotiation of terms of previous loans, rebates or other credits for consideration, Contractor will receive costs and hourly fees at fair market value of their legal services expended on behalf of the State. In such an event, the State agrees not to settle the case unless the defendants agree to pay said amount.
3.5.5 Advance Payment Prohibited. No payment In advance or in anticipation of services or supplies under this Contract shall be made by the Attorney General.
3.6 Term of Contract. The term of the Contract shall extend from the date of appointment through the term of Litigation unless terminated pursuant to the terms and conditions of Ibis Contract.
3.7 Termination Without Cause or if Jeopardizes Federal Grant. The Attorney General may terminate this Contract without cause and without penalty upon at least thirty (30) days written notice to Contractor.
3.7.1 In the event it is determined that this Contract potentially jeopardizes federal grant funds received by the State, if any, the State may immediately terminate this Contract upon providing written notice to the Contractor.
3.7.2 Notwithstanding anything above to the contrary, in the event of termination of this appointment by the Attorney Genoral, Counsel shall be entitled to the reasonable value of his services, In determining the reasonable value of the Contractor's services, all factors affecting the value of the Contractor's contributions shall be taken into account, including but not limited to the length of time spent on the case, the funds invested, the time value of money, the quality of representation, the result of the Contractor's efforts and the viability of the claim at the time of termination.
3.8 Termination With Cause. The Attorney General may terminate this Contract for cause if Contractor breaches any material terms or conditions of this contract, or fails to perform or fulfill any material obligation under this Contract upon seven (7) days written notice to Contractor of any intent to terminate. If Contractor does not cure the breach of failure to perform within seven (7) days or such longer period 83 specified by the Attorney General, the Attorney General may terminate this Contract. If Contractor is terminated for cause, Contractor shall not be entitled to compensation or reimbursement of any kind under this Contract.
4. Ownership of Materials. All materials, documents, deliverables and/or other products of the Contract (including but not limited to e.g., work plans, reports, etc.) shall be tho sale, absolute and exclusive property of the State and the Attorney General, free from any claim or retention of right on the part of the Contractor, its agents, subcontractors, officers or employees.
5. Contractor Responsibilities.
5.1 Key Personnel. It is essential that the Contractor provide an adequate staff of experienced personnel, capable of and devoted to the successful accomplishment of work to be performed under this Contract. The Contractor must assign specific individuals to key positions. The Contractor agrees and understands that this Contract is predicated, in part and among other considerations, on the utilization of the specific individual(s) and/or personnel qualification(s) as identified and/or described in the Contractor's proposal. Therefore, the Contractor agrees that no substitution of such specified individual(s) and/or personnel qualification(s) shall be made without the prior written approval of the Attorney General. The Contractor further agrees that any substitution made pursuant to this paragraph must be equal or better than originally proposed and that the Attorney General's approval of a substitution shall not be construed as an acceptance of the substitution's performance potential. The Attorney General agrees that an approval of a substitution wiJl not be unreasonably withheld. The Contractor shall bear all traditional expenses incurred for any costs associated with removing or replacing Key Personnel are performing work under this Contract. The Contractor agrees to reveal its staffing levels by function, including resumes, upon request by the Attorney General at any time during the performing of this Contract.
5.2 Lead Contractor. The Contractor shall name an individual as the Lead Contractor for the outside Contractor team. This individual shall be considered a Key Personnel as defined in this Contract. The Contractor shall provide the Lead Contractor's complete address, e-mail address and telephone and fax numbers. The Lead Contractor shall be the company representative to whom all correspondence, official notices, and requests related to the project shall be addressed. If a firm joins together with another firm or firms. the firms shall name only one Lead Contractor.
5.3 Other Key Personnel. Contractor should provide the name of any other individual who will perform duties to directly support the person offered as the Lead Contractor. The role and Crucial duties this individual will perform shall be identified.
5.4 Removal ofContractor's Employees. The Attorney General may require the Contractor to remove from an assignment employees who endanger persons, property or whose continued employment under this Contract is inconsistent with the interests of the Attorney General.
6. Availability of Contractor. The Contractor shall be available immediately upon receipt of the Notice to Proceed and remain available to the Attorney General throughout the period of performance as stated in the Contract.
7. Submission of Electronic Deliverable on Compact Disk (CD). At the request of the Attorney General, the Contractor shall submit deliverables in electronic format. All electronic deliverables shall be packaged in accordance with standard commercial practices. CDs shall be IBM compatible and labeled to indicate: i) Name of deliverable; ii) Contractor name; iii) Project description; and iv) Date written. All files contained on the CD shall be in a format compatible with the Attorney General's software.
8. Oversight and Draft Document Review
8.1 Oversight. The retention of Contractor is intended to aid the Attorney General in representing the State in a major matter. The Attorney General will be actively involved in all stages of this matter and deciding all major issues, Including whether to file suit, when to tile suit, who to file suit against, approval of the asserted claim or claims and whether and on what basis to settle or proceed to trial. The Contractor shall acknowledge and defer to the Attorney General for direction and decisions.
8.2 Review of Services. The Attorney General reserves the right to review all and every part of the Services during performance or after completion as the Attorney General may see fit. If the Services or any part thereof have not been performed in accordance with this Contract to the satisfaction of the Attorney General. the Attorney General may order that no further services be performed and may reject and refuse to pay for any improperly performed services.
8.3 Draft Document Review. Review of all documents is required to assure the Attorney General's approval of the information, content and completeness. Documents for review shall include all pleadings, petitions, findings and any other document produced in the pursuit of this matter. All draft deliverables and other materials developed by the Contractor as part of thIs project shall be reviewed and approved in writing by the Attorney General prior to finalizing the material. Contractor shall promptly provide, in final form. the designated assistant with copies of all pleadings, discovery requests and responses, and relevant correspondence related to the Litigation.
9. Settlements/Compromises. All offers of compromise shall be promptly transmitted to the Attorney General together With Contractor's recommendation.
10. Depositions. Notices of depositions shall not be sent by Contractor without prior written authorization from the Attorney General, Notices of depositions of State employees filed by any party will be submitted to the Attorney General immediately upon Contractor's receipt to make necessary arrangements for their testimony. Summaries of all depositions will be supplied by the assigned Contractor on conclusion of the deposition. The Attorney General may request the presence of a State employee at one or more depositions.
11. Testimony. Should Contractor be required to testify at any judicial, legislative or administrative hearing concerning matters in any way related to the Services performed under this Contract, Contractor shall, prior to the scheduled time of each hearing, supply to the Attorney General in writing all information likely to be disclosed at said hearing as well as Contractor's position thereon. Should Contractor be required by a third party to testify at any judicial, legislative or administrative hearing not specified in this Contract but concerning the subject matter of this Contract. Contractor shall notify the Attorney General in advance of the date and time of such hearing to enable State representatives to attend and participate.
12. Privileged Communications. All confidential communications between the Attorney General, any State of Nevada officer, employee or agent ("Nevada'') and Contractor, whether oral or written, and all documentation, whether prepared by Contractor or supplied by Nevada shall be considered privileged communications and shall not, except as required by law, be communicated by Contractor to any public agency, insurance company, rating organization, contractor, or vendor, whether or not connected in any manner with Nevada or Contractor, without the prior consent of the Attorney General. If such communications are approved, or if such communications are required to be disclosed by law, Contractor shall provide the Attorney General with two (2) copies of each written communication and/or two (2) copies of summaries of each oral communication. If such communication is required by law, Contractor shall provide the Attorney General written notice as to the time, place, and manner of such disclosure as well as a written summary of any information likely to be disclosed by such disclosure, and Contractor's position thereon.
13. Records. Contractor shall retain and shall contractually require each Subcontractor to retain books, records, documents and other evidence pertaining to the acquisition and performance of the Contract, hereinefter collectively called the "Records," to the extent and in such detail as will properly reflect all net costs, direct or indirect, of labor, materials, equipment, supplies and services and other costs and expenses of whatever nature for which payment is made under the Contract. The Contractor shall agree to make available at the office of the Contractor at all reasonable times during the period, as set forth below, any of the Records for inspection, audit or reproduction by any authorized representative of the State or Attorney General. The Contractor shall preserve and make available the Records for a period of five (5) years from the date of final payment under tho Contract and for such period, if any. as is required by applicable statute. If the Contract is completely or partially terminated, the Records relating to the work terminated shall be preserved and made available for a period of five (5) years from the date of any resulting final settlement.
14. Offshore Performance of Work Prohibited. All services under this contract shall be performed within the borders of the United States. All storage and processing of information shall be performed within the borders of the United States. This provision applies to work performed by Subcontractors at all tiers.
15. Professional Responsibility.
15.1 General. Contractor shall use Best Efforts to perform and complete' the Services in accordance with the provisions of this Contract. Best Efforts shall be considered those efforts which a skilled, competent, experienced and prudent legal professional would use to perform and complete the requirements of this Contract in a timely manner, exercising ·the degree· of skill, care, competency and prudence" customarily imposed on a legal professional performing similar work.
15.2 Liability. In the event that Contractor breaches its obligations under this Contract:, Contractor shall take the necessary actions to correct and cure its breach of this Contract. If Contractor, upon notification of said breach, does not promptly take steps to correct the breach, the Attorney General without waiving any other rights or remedies it may have at law or otherwise may do so and Contractor shall reimburse the Attorney General for all expenses and costs incurred in performing such corrective action.
16. Conflict of Interest/Litigations against the State.
16.1 Conflicts. The Contractor shall advise the Attorney General of any perceived conflict. This duty shall extend throughout the performance of this Contract when a conflict or perceived conflict becomes known to the Contractor. The decision as to whether the conflict is remote or disqualifying will be the Attorney General's decision.
16.2 Litigations against the State. Contractor is retained only for the purposes and to the extent set forth in this Contract. Contractor shall be free to dispose of such portion of his entire time, energy and skill not required to be devoted to the State in such manner as he sees fit and to such persons. firms or corporations as he deems advisable, but shall not engage in private litigation against the State at the same time Contractor accepts appointments representing the State pursuant to this Contract unless such litigation docs not present an ethical conflict of interest, and a written waiver is first obtained from the Attorney General. Contractor shall disclose to the State, in the proposal, all litigation, claims and matters in which Contractor represents patties adverse to the State, if Contractor is selected to contract with the Stete pursuant to the Contract, Contractor shall have a continuing duty to disclose such information to Attorney General.
17. Treatment of Confidential Business Information. The Attorney General may turn over to the Contractor Confidential Business Information (CBI) necessary to carry out the work required under the Contract or Contractor may be exposed to CBl while working with the Attorney General. Contractor and Contractor's employees agree to use the CBI only under the following conditions:
17.1 Use the CBI only for the purposes of carrying out the work required b y the Contract;
17.2 Not disclose the information to anyone other than properly c!eared employees; and
17.3 Return the CBI to Attorney General whenever the information is no longer required by the Contractor for performance of the work required by the Contract, or upon completion/termination of the Contract.
18. At Will Independent Contractor. Contractor and any additional Co- Contractor shall serve in this capacity at will and at the pleasure of the Attorney General.
19. Other Matters Related to Scope of Representation. Any substitution of Contractor must be approved in advance by the Attorney General and the Board of Examiners. The scope of the Contractor's representation is also subject to the relevant requirements of the Nevada State Administrative Manual, § 0325 (http://budgetstate.nv.us/SAM/).
20. Independent Contractor Status. The officers, agents and employees of Contractor, in performing the services regulated by this Contract, shall be independent contractors and shall not be deemed officers, agents or employees of the State of Nevada. The provisions of NRS 284.173 are incorporated into this Contract by this reference to define the status of the officers, agents and employees of Contractor.
21. Special Contractor Compensation Waiver. Contractor waives any and all claims for compensation or costs under NRS 41.03435 from the State of Nevada's statutory contingency account.
22. Recovery of Attorneys' Fees. In the event that a civil action is instituted to collect any payment due under the Contract or to obtain performance under the Contract, the prevailing party shall recover, as the court deems appropriate, reasonable attorneys' fees and all costs and disbursement incurred in such action.
23. Personal Services Contract. This Contract calls for the personal services of Contractor. Contractor shall make no payments to, or share compensation with, any attorneys other than affiliated Contractor or members of Contractor's own firm without prior written approval by the Attorney General.
24. Inspection of Records. The books, records, documents and accounting procedures of Contractor relevant to this Contract shall be subject to inspection, examination and audit by the State of Nevada, the Attorney General, and by state legislative auditors.
25. Assignment. Contractor shall neither assign, transfer nor delegate any rights, obligations or duties under the Contract without the prior written consent of the Attorney General and/or approval of the Board of Examiners.
26. Work Papers. In the event of termination, all records, documents and copies of work papers, research and other materials prepared by the Contractor prior to the date of termination shall be provided to the Attorney General.
27. Effective Date. The Contract shall not become effective unless and until approved by tho State of Nevada Boord of Examiners.
28. Governing Law. The Contract shall be subject to and governed by the laws of the State of Nevada, and any recourse to judicial action shall be in the courts of the State of Nevada.
29. Contractor's Certification. In the event federal funds arc used for payment of all or part of this contract, Contractor certifies, by signing the Contract, that neither it nor its principals are presently debarred, suspended. proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction, by any federal department or agency. This certification is made pursuant to the regulations implementing Executive Order 12549, Debarment and Suspension, 28 CFR Par 67, Section 67.510, published as Part VII of the May 26, 1988, Federal Register (pages 19160-1921 1).
30. Evidence of Insurances. Copies of malpractice insurance will be attached to the Contract as Attachment BB with proof of attorney liability insurance for errors and omissions that is issued by an admitted insurance company authorized to transact surplus lines in the State of Nevada in the amount of not less than $1,000,000, or as determined by:
Contractor further agrees to provide proof of workers' compensation insurance as required by Nevada Revised Statutes Chapter 616A through 616D inclusive. If the Contractor qualifies as a sole proprietor as defined in NRS Chapter 616A.310 and has elected to not purchase industrial insurance, the sole proprietor must submit an executed "Affidavit of Rejection of Coverage under NRS 616B.627 and NRS 617,210" form.
31. Entire Contract and Modification. The Contract constitutes the entire agreement between the parties and may only be modified by a written amendment signed by the parties and approved by the Board of Examiners.
32. Conflicts. Contractor shall immediately notify the Attorney General if it becomes aware of any potential or actual conflict of interest, and shall provide a full disclosure of the nature of tho conflict. The Attorney General shall consider requests for waivers of any conflict of interest on a case by case basis.
33. Confidentiality. Contractor shall maintain as confidential all information concerning their legal work product and attorney-client communications. Contractor shall not disclose such information to a third-party unless the Attorney General has consented in writing or unless otherwise required by law. The obligations of this section shall survive the termination of the Contract. . 34. Media Contact. The Attorney General shall be the primary point of contact for all dealings with the media. If Contractor is contacted by the media, Contractor should decline comment beyond confirming matters that are a matter of public record and refer the individuals to the Attorney General.
Effective July 1, 2007, the State of Nevada has adopted the per diem and travel expenses as imposed by the U.S. General Services Administration (GSA). Travel reimbursements will be made in accordance with the GSA per diem rates. However, the State's policy will supersede the GSA website in specific areas. The GSA rates are maintained at ww.gsa.gov.
The following are general guidelines hi interpreting the GSA ruling.
MEAL PER DIEM: Meals will be reimbursed in accordance with the meals and incidental expense (M & IE) allowances for the primary destination (based on times in travel status). Receipts are not required for meals and incidentals.
LODGING PER DIEM: Lodging taxes and fees are reimbursable in addition to the GSA established rate of reimbursement for lodging. Lodging taxes are limited to the taxes on the amount of the reimbursable lodging costs. For example: if the minimum GSA lodging rate is $50 per night, but the hotel costs $100 per night, the amount of the claim can onJy include the amount of taxes on $50, which is the maximum authorized lodging amount.
If the GSA website does not recognize the county in which the contractor is traveling, the rates default to the standard CONUS location reimbursement rates ($70 per night for lodging, $7 for breakfast, $11 for lunch, $18 for dinner, and $3 for incidentals). Lodging receipts are required if individual travelling is claiming costs in excess of CONUS rates.
MILEAGE: Mileage will be reimbursed at the standard mileage reimbursement rate for which a deduction is allowed for travel for federal income tax (decreased from 58.5 cents per mile to 55 cents per mile effective January 1 . 2009). . AIRFARE: These costs are reimbursed at actual amounts paid. An airline itinerary and receipts must accompany the Travel Expense Reimbursement Claim form
OTHER EXPENSES INCLUDING RENTAL CAR, TAXI, AIRPORT SHUTTLE, PARKING, et cetera: These costs are reimbursed at actual amounts paid and require receipts.
EXHIBIT B TO FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
June 26, 2009
Attorney General Catharine Cortez Masto
State of Nevada Bureau of Consumer Protection
555 East Washington Ave, Suite 3900
Las Vegas, Nevada 89101
Dear Attorney General Masto,
Enclosed please find consumer complaints from 18 families about the sale and lending practices of four major home builders and their affiliated mortgage companies.
These complaints against KB Homes, Lenmar, Puite, and Centex demonstrate that the abusive and deceptive practices contained in the complaints are not limited to one company but are an industry wide problem. There are striking similarities among the homebuyers' experiences, indicating that these are standard practices in the industry.
Together, the individual complaints also highlight the role that homebuilders played in the boom, bubble, and bust that brought on the current crisis. They continued to build, buy land, and push mortgages even though there were clear signs the housing market was not sustainable and that homebuyers were financially over their heads. In the process they misled homebuyers about the deals they were getting and pushed them into mortgages that were unfair and deceptive.
Homeowners in new developments have been especially hard hit by the current housing crisis and their subdivisions are in a unique situation. Unlike older, existing neighborhoods where there is a mix of when homeowners received their mortgages and how much equity they have, new subdivisions have concentrations of homeowners who purchased their homes within a year or two of each other.
The following is a summary of the sales and lending practices described in the complaints.
The homebuilders' sales staff directed home buyers to their affiliated mortgage lenders in order to control the buying process, ensure the sale of homes at a higher price than might be the case if there were third party lenders, and earn additional fees.
In several cases, the buyers report that they didn't know they had a choice about where to get their mortgage. In other cases, the builders promised deep discounts on the prices of the home, construction costs, and/or free closing costs if they used the builders' mortgage companies. The promised benefits were more than made up for by inflated appraisals, unfavorable mortgage terms, or other fees. Buyers who became wary of the terms of the mortgages were threatened with losing their deposits if they walked away from the mortgages.
Most of the homebuyers report having very high credit scores and putting down large down payments but insist that they received mortgages with terms that were not what they wanted or they thought they were getting, such as interest-only, adjustable rate loans and piggyback and disguised second mortgages with high interest rates and balloon payments. Some found out about these terms at closing, but by then it was too late. Others found out about the terms after they were in the home.
In some of the cases, the buyers were Spanish speakers who generally did not read or write English. The Lennar sales and loans representatives conducted the transactions primarily in Spanish, but mortgage documents were provided only in English, making it even less likely that buyers would understand or reject the mortgage terms.
In other cases in Nevada and other states the homebuilders’ sales representatives discouraged homebuyers away from better loans, including credit union and Veterans Administration loans, misrepresenting the availability of those loans and promising more favorable terms.
The complainants all believe now that their homes were overpriced and that the appraisals seriously overstated their homes’ values. There is evidence that this may have been a common practice among builders.
We have been conducting reviews of appraisals that were done by Countrywide/KB Home Loans on homes that were being sold in Arizona by KB Homes. The reviews have found a number of irregularities, such as that the appraisers overlooked sales that were more similar in size and closer geographically in favor of homes of dissimilar sizes that were much farther away (10 miles in one case).
The homeowners whose appraisals we reviewed are now the plaintiffs in a $2.8 billion class action lawsuit filed against Countrywide KB and its appraisal firm Landsafe. Another countrywide KB lawsuit includes a former regional vice president and manager claiming wrongful termination after he reported fraudulent lending practices to superiors and refused to approve mortgages for unqualified applicants. Among other things, he alleges “being strongly encouraged to inflate homes’ appraised values by as much as 6 percent” resulting in buyers owing more than their home was worth.
We believe that similar claims may exist against other homebuilders.
Disguised Second Mortgages
Many homebuyers report not knowing that they received a second mortgage until they closed on their new homes. These second mortgages were described as home equity lines of credit (HELOCs). However, the HELOCs were in fact second mortgages: they were for the balance of the purchase price and were fully drawn down at closing. Homebuyers weren’t told the monthly payment, as is required for closed-end second mortgages under the Truth in Lending Act (though open-ended HELOCs are exempt). These seconds also contained adjustable interest rates that could go up to 18% and had interest only payments.
False Promises of Refinancing
The builders and their mortgage lenders routinely misrepresented to the homebuyers that they would be able to refinance and therefore shouldn’t worry about the adjustable rates or high rate second mortgages. However, homes experienced such dramatic decreases in value that refinancing was virtually impossible.
Large Increases in Monthly Escrow Payments
Almost every new home has an enormous increase in property taxes the second year due to the fact that the first year’s taxes were based on only the lot and not on the home. This is a fact that was clearly known by the builders and their mortgage companies, but not by the buyers – buyers whose affordability was already stretched so far that the lenders gave them interest-only ARMs and second mortgages with balloon payments to qualify them for the purchase. The property tax increases were substantial and created hardships for many buyers.
We ask that you investigate the practices outlined in this complaint to secure relief for these homeowners and to bring about needed reform in this industry. Please let us know if you have any questions or if we can provide any additional information or assistance.
Payment by Attorney General in MCI Case at Issue
JACKSON, Miss. (AP) — A group of lawyers awarded $14 million for their work to collect more than $100 million for the state has told the Mississippi Supreme Court that no attorney would work for the state if they had to depend on the Legislature for compensation.
The Supreme Court heard arguments Wednesday in a lawsuit that attacks a law that allows the attorney general to hire lawyers from outside his office to handle legal cases.
A Hinds County judge in 2010 upheld $14 million in fees paid to two attorneys for handling a state lawsuit against telecommunications giant MCI.
Fred Krutz of Jackson, who represents the group of attorneys, told the justices that the lawyers would have been entitled to $17 million and plans to pursue that amount if the court sides with the state auditor.
“Mississippi got a lot more (in the settlement) than any of the 17 other states,” he said.
He compared the $14 million to an “attorney lien.”
“The $14 million in attorney fees was never the property of the state,” he said.
Ridgeland attorney Arthur Jernigan Jr., representing State Auditor Stacey Pickering, said the money the attorneys received for pursuing the MCI case on behalf of the state is public funds and only can be appropriated by the Legislature.
“The Legislature holds the purse strings,” he said and should have a say in the size of the fees paid attorneys.
Krutz said, however, that the state “could get the benefit of the contract (with the private attorney) and then renege on paying all the fees.”
The lawsuit over the legal fees was originally filed by Phil Bryant, a Republican now lieutenant governor and a candidate for governor. Pickering, also a Republican, picked up the fight after succeeding Bryant as state auditor in 2008.
Joey Langston and Timothy Balducci in 2005 negotiated the legal fees separate from a settlement with MCI in a lawsuit they filed on behalf of the state. They were later disbarred after pleading guilty in an unrelated judicial bribery investigation.
A Hinds County judge said state law allows the attorney general to hire outside lawyers. He said the lawyers received no funds from the state and the legal fees are “separate and apart” from what the state received in the MCI settlement.
The political feud over using private attorneys to represent the state in high-profile cases is nothing new. During the 1990s, then-Attorney General Mike Moore used several private attorneys, including his law school friend Richard “Dickie” Scruggs, to sue tobacco companies to recover the costs of treating sick smokers.
Attorney General Jim Hood, a Democrat, hired Langston and Balducci to try to recoup unpaid taxes and interest stemming from the collapse of Clinton-based WorldCom, which emerged from bankruptcy as MCI in 2004 after a massive accounting fraud. In 2005, MCI agreed to pay the state $100 million and hand over real estate valued at several million.
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 the case to him.
Fourth Circuit Sends W.Va. AG’s Drug-Pricing Case to State Court
By John O’Brien
RICHMOND, Va. (Legal Newsline) – A federal appeals court has ruled that West Virginia Attorney General Darrell McGraw’s lawsuit against prescription drug retailers is not a class action and should be heard in state court.
Six drug stores—including CVS, Wal-Mart and Target—disagreed with McGraw, who says he is representing the interests of the state in his parens patriae capacity. They claimed he is representing consumers affected by their alleged pricing policies in a class action, and as such the lawsuit should be heard in federal court.
A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit agreed with McGraw, though one of the judges dissented.
“This action was not brought under Federal Rule of Civil Procedure 23, nor under West Virginia’s corresponding rule…” says the decision, filed Friday.
“Rather it was brought under a West Virginia statute regulating the practice of pharmacy and the West Virginia Consumer Credit Protection Act, neither of which includes provisions providing for a typical class action, such as provisions addressing the adequacy of representation, numerosity, commonality and typicality requirements.”
McGraw hired two Charleston law firms to sue the drug stores, which he alleges did not pass savings on generic drugs onto consumers.
“Acting under the State’s parens patriae authority to protect its sovereign and quasi-sovereign interests in enforcing its own laws, the state of West Virginia, by its Attorney General, is the real party in interest in this case,” McGraw wrote.
McGraw had noted that the defendants have abandoned their three previous arguments for federal jurisdiction.
“This case was not filed under West Virginia Rule 23, and therefore it is not a class action,” McGraw wrote. “Nor was this matter filed ‘as a class action.’
“Rather, it was filed in the sovereign interest to carry out what the district court correctly described as the Attorney General’s ‘freestanding consumer-protection duty’ and his ‘broad powers to implement the (West Virginia Consumer Credit and Protection Act) and protect and promote consumer welfare in the process.’”
In its appeal brief, the group of pharmacies claimed McGraw’s lawsuit satisfies the jurisdictional requirements of the federal Class Action Fairness Act.
“The AG’s allegations make abundantly clear that more than $5 million and the interests of more than 100 persons are at issue. If the rightful interests of the West Virginia consumers on whose behalf the AG has brought suit are recognized, there also is undeniably minimal diversity between at least some plaintiffs (who are West Virginia citizens) and all defendants (as none of the defendants reside in or is a citizen of West Virginia.”
The pharmacies added that any consumer who was allegedly overcharged is a real party in interest to the case.
The decision says the West Virginia statutes on which McGraw relies contain none of the essential requirements for a class action. McGraw is not designated as a member of the class and he is not required to give notice to overcharged customers, the decision says.
“Indeed, the West Virginia Attorney General’s role here is more analogous to the role of the EEOC or other regulator when it brings an action on behalf of a large group of employees or a segment of the public,” the decision says. “Yet, the Supreme Court has concluded that such a regulator’s action is not a class action of the kind defined in Rule 23.”
Judge Ronald Lee Gilman dissented. Even though the action was brought under state statutes, it doesn’t take away the “essence” of the case, he wrote.
”(T)he elements of numerosity, commonality, typicality and adequacy of representation have not been specifically pleaded,” Gilman wrote. “But I submit that these are subsidiary factors that do not detract from the essence of the action.
“They are, in other words, ‘bells and whistles’ whose absence in the pleadings do not prevent the Attorney General’s suit from being considered a class action under CAFA.”
Gilman wrote that similar lawsuits filed by McGraw’s outside counsel in other states are undisputed class actions.
McGraw hired two private firms – Bailey & Glasser and DiTrapano Barrett & DiPiero – to pursue his case, and another one against Rite Aid. The two firms have contributed more than $60,000 to McGraw’s campaign fund over the years, including $11,800 for his 2008 race against Republican Dan Greear.
Bailey & Glasser brought similar lawsuits in Michigan and Minnesota. The Michigan suits were dismissed by a state judge because the only specific pricing information was obtained by a West Virginia whistleblower who worked at Kroger.
The Minnesota lawsuit, brought on behalf of unions that provide health care for their members, was initially dismissed in November 2009 by U.S. District Judge James Rosenbaum, who had harsh words for the plaintiffs attorneys.
Rosenbaum was peeved that the complaint, filed against 13 defendants, only contained specific pricing information about two of them.
”(T)his Complaint utterly fails to state a cause of action on any basis. There are no, none, factual allegations touching any defendant other than CVS and Walgreen’s,” Rosenbaum said Nov. 20, 2009.
“There being no facts from which a fact finder could infer any liability concerning (the other defendants), and you asked me to sustain a complaint based upon that. It’s not only laughable, it’s absolutely reprehensible.”
A federal magistrate judge is currently deciding if that lawsuit will be remanded to a Minnesota court.
Should the drug stores want to appeal Friday’s decision in McGraw’s case, they can ask for a rehearing before the entire roster of Fourth Circuit judges or appeal to the U.S. Supreme Court.
Numerous organizations and businesses are anxious to have state attorneys general support litigation efforts for policy and legal reasons. These organizations take comfort in that an attorney general or group of attorneys general are on “their side.” If they succeed in attracting an attorney general to their efforts, they are also able to take advantage of the unique standing that attorneys general possess that might not be available to private litigants. Because attorneys general budget's are restricted, these parties often offer to under right the costs of the litigation.
Lobbying Group Picks up Costs of Florida’s Health-Care Legal Challenge
By Charles Elmore
Florida has paid less than $6,000 for its landmark challenge to President Obama’s health care law largely because a business lobbying group is picking up an undisclosed share of the remaining legal costs.
While Florida, joined by 25 other states, won a favorable ruling last month from a federal district judge, the cost the states have split so far amounts to $46,000.
Florida Attorney General Pam Bondi told a state House committee this month that most of the rest is being covered by the National Federation of Independent Business, a group that opposes the law because of what it considers unconstitutional costs and regulations on firms and people.
“They have dedicated a tremendous amount of resources to the lawsuit,” Bondi said Feb. 10. “We’re thrilled, because that’s saving our state money. That’s saving the 25 other states money as well.”
Not so thrilled: Advocacy groups supporting the health care law that aims to cover more than 30 million uninsured.
“I’m not sure most voters understand that a lawsuit by their states is being funded by an ideological organization with an issue ax to grind,” said Ethan Rome, executive director of Health Care for America Now, a Washington-based group whose contributors include unions and others who support the act. “In this case there appears to a serious perversion of the process.”
Role raises red flags
U.S. District Court Judge Roger Vinson in Pensacola ruled in favor of the states in January in a case that eventually could wind up before the U.S. Supreme Court. Florida officials declined to disclose how much NFIB is spending.
“I would think the answer would be millions of dollars that would be spent by the complainants in this case,” said Joseph W. Little, law professor emeritus at the University of Florida. “Millions of dollars and probably tens of millions of dollars.”
Some legislators said they were troubled that a business group with its own agenda is playing such a prominent financial role.
“My concern is if it’s a lawsuit on behalf of the people of Florida, then I would believe it should be the people of Florida footing the bill,” said state Rep. Mark Pafford, D-West Palm Beach, a member of the House Health and Human Services Committee. “When you have an outside party paying, then every aspect of the AG’s office might be up for sale. This type of thing raises all kind of red flags.”
NFIB officials declined to say how much the group is spending.
“Not gonna, no,” said Bill Herrle, NFIB’s Florida executive director. “Good luck.”
NFIB is a plaintiff in the case and is using both in-house lawyers and outside counsel, and certainly it would be fair to say the group is paying its own way, Herrle said. “I think it would be incorrect to say NFIB is paying for all the costs of this,” Herrle said.
The Nashville-based organization says it represents 350,000 small businesses, 10,000 of them in Florida, and IRS records show it has an annual budget of more than $80 million. Its affiliated NFIB Small Business Legal Center participates in the lawsuit on behalf of the parent organization. On its own, the legal center reported a budget of about $1 million in 2009.
The legal center gets money from donations and also has gotten pro bono legal support, said Executive Director Karen Hamed, in an e-mail. “I can’t speculate on what the costs of prosecuting this case will be, but NFIB is prepared to follow this case through to the Supreme Court.”
Vinson ruled that Congress overstepped its powers by passing a health-care law with an “individual mandate” requiring people to buy health insurance or pay a penalty. The federal government, which won other lower court decisions but lost early rounds in Florida and Virginia, has indicated it will appeal.
The lead outside counsel for the states, David Rivkin, has called the law “in its design, the most profoundly unconstitutional statute in American history; in its execution, one of the most incompetent ones.”
Rivkin is a partner in the Washington law office of Baker & Hostetler, which also represents NFIB in the case. The same firm formerly employed Bill McCollum, Bondi’s predecessor as attorney general and the man who led the multi-state legal challenge last spring. McCollum lost a GOP primary bid for governor to Rick Scott.
In a telephone interview, McCollum said NFIB has a separate relationship and fee arrangement with outside counsel, though it happens to be the same law firm. The states remain in charge of the case, he said.
“I’m not trying to dispute for a minute NFIB is paying for the bulk of the outside counsel,” McCollum said, adding he does not know an amount. “It’s great to have NFIB there in my opinion.”
Having NFIB as well as individual plaintiffs in the lawsuit provides a broader range of parties affected by the law, strengthening the case, McCollum said.
‘Taxpayers can be proud’
Dexter Lehtinen, the former U.S. attorney for South Florida who served during GOP administrations, said he can understand why state legislators and others might raise questions about NFIB’s role. That does not mean anything wrong is happening, he said.
“The question is appropriate but the answer can be appropriate,” said Lehtinen, an adjunct professor of law at the University of Miami.
As long as the NFIB is not paying for the state’s portion of the case, and the state remains in charge, “that’s something taxpayers can be proud of,” Lehtinen said.
As for costs, he estimates private counsel would likely cost “at least $250,000” in a case like this.
The states agreed in a contract signed in March to pay attorneys Rivkin and Lee Casey $250 an hour up to a maximum of $50,000. A new contract signed Jan. 4 commits to spending an additional $50,000.
Florida and the other states have been sent invoices for $46,242.38 by lawyers serving as outside counsel, Kimberly Case, Bondi’s legislative affairs director, wrote in response to an inquiry from Pafford.
So far the state has spent $40,693 and been reimbursed by participating states for $33,529, with $7,164 pending.
That leaves Florida’s portion at $5,549. The figure does not include in-house lawyers already employed by the state.
As for NFIB’s share? “Questions related to NFIB’s expenditures for their legal challenge should be directed to NFIB,” Case wrote.
Last fall, NFIB backed Bondi in her race for attorney general, citing her commitment to continue the legal challenge.
NFIB, its affiliates and employees gave more than $2.3 million to candidates in state races and ballot initiatives around the nation between 2003 and 2010, including more than $65,000 in Florida, according to the National Institute on Money in State Politics.
More than 78 percent of the contributions went to GOP candidates.
State Rep. Elaine Schwartz, D-Hollywood, said she was curious after hearing Bondi bring up NFIB in a Feb. 10 hearing of the House Health and Human Services Committee. She asked who the group was. Then she asked if the group was “basically funding” the lawsuit by the states. Bondi answered yes.
Schwartz said later, “I’m thinking, ‘Can a group promoting profit-making interests decide to use the AG’s stationery and have the state be the instrument to carry out their wishes because they’re funding it?’ ”
In introductory remarks to the House committee, Bondi praised NFIB. “Bill Herrle and the national folks have been so actively involved in the lawsuit, which has been a great, great help to Florida and the other states,” Bondi said.
By Jan Biles
Kansas Attorney General Derek Schmidt said Friday the state’s top appellate lawyer and Wichita-based law firm Foulston Siefkin will round out the legal team defending the state against three federal lawsuits challenging new Kansas laws related to licensing abortion clinics and distributing health care funding.
The attorney general’s office will coordinate the overall defense through the deputy attorney general for civil litigation, he said.
Schmidt made the announcement after it was revealed he had hired Foulston Siefkin, a firm that also represents billionaire brothers David and Charles Koch, to represent the state in a lawsuit filed by Planned Parenthood. The Koch brothers have made significant donations to the Republican Party.
Schmidt issued a statement responding to recent criticism of the decision that said previous attorneys general hired outside lawyers to represent the state in lawsuits over school finance and water issues. Those topics, he said, were resource intensive and warranted outside assistance.
“The attorney general’s office has far broader responsibilities than abortion-related litigation,” said Schmidt, a Republican in his first term. “This is a situation where prudent case management requires the assistance of outside counsel to supplement the state’s resources.”
Schmidt said the state is facing three federal lawsuits brought by a dozen out-of-state lawyers and two Kansas law firms in the past three weeks.
“These plaintiffs have launched a massive legal assault on the authority of Kansas to set its own laws and priorities,” he said in a statement. “As is our duty, our office will provide for a zealous defense of the state’s duly enacted laws.”
Schmidt said the state’s legal defense against two federal lawsuits challenging the state’s new abortion clinic licensing law will be led by Kansas Solicitor General Steve McAllister, a former dean of The University of Kansas Law School and former U.S. Supreme Court clerk who has represented the state in federal litigation in the past.
Foulston Siefkin, the largest law firm in Kansas, has been retained to represent the state against the lawsuit filed in June by Planned Parenthood over a budget provision that blocks $334,000 from going to the health provider.
Schmidt said Foulston Siefkin has represented “thousands of diverse clients,” as well as the state under both Democrat and Republican attorneys general.
The state attorney general’s office said outside counsel has been retained in accordance with Kansas laws and will be paid through the Kansas Tort Claims Fund, which is administered by the attorney general.
Foulston-Siefkin’s rates for para-legal services are $115 per hour and rates for litigation partners range up to $300 hourly.
Democrats have said the hiring of private lawyers instead of using the state’s attorneys is a waste of tax dollars.
“At a time when the Brownback administration has enacted deep cuts in education, social services and other important areas of the budget, the attorney general should be using his existing staff to defend the state,” Senate Democratic leader Anthony Hensley, of Topeka, said in a news release Friday.
Hensley said he found it disturbing the attorney general was “awarding a state contract to political cronies on a no-bid basis.” He said Harvey Sorensen, a partner in Foulston Siefkin, was co-chair of Schmidt’s election campaign.Schmidt said the state attorney general’s office has 10 staff attorneys who defend the state and its officials against a wide range of civil lawsuits. Those attorneys currently are handling more than 600 case files.
He said it would be unwise to pull those in-house attorneys off other cases and redirect their efforts toward the three new lawsuits.
To date, Schmidt said, at least 16 lawyers from nine different legal organizations have entered appearances in Kansas in support of the plaintiffs suing Kansas.
He also said outside counsel has been used in the past by Democrat and Republican attorneys general to assist when additional resources or expertise is needed. He pointed to ongoing school finance litigation and interstate water litigation as other current examples of major cases where the state is using outside counsel.
But Hensley took exception to the attorney general’s statement.
“I have no idea why Attorney General Derek Schmidt is comparing his hiring of the law firm Foulston Siefkin to the process used by the previous attorney general to hire outside counsel in other litigation,” he said. “The law firm hired to defend the state in the school finance lawsuit went through an extensive competitive bid process designed to guarantee that Kansas taxpayers’ money was used appropriately.”
The Associated Press contributed to this report.
SUPREME COURT OF THE UNITED STATES
JUSTICE GINSBURG delivered the opinion of the Court.9
We address in this opinion the question whether the plaintiffs (several States, the city of New York, and three private land trusts) can maintain federal common law public nuisance claims against carbon-dioxide emitters (four private power companies and the federal Tennessee Valley Authority). As relief, the plaintiffs ask for a decree setting carbon-dioxide emissions for each defendant at an initial cap, to be further reduced annually. The Clean Air Act and the Environmental Protection Agency action the Act authorizes, we hold, displace the claims the plaintiffs seek to pursue.11
In Massachusetts v. EPA, 549 U. S. 497 (2007), this Court held that the Clean Air Act, 42 U. S. C. §7401 et seq., authorizes federal regulation of emissions of carbon dioxide and other greenhouse gases. “[N]aturally presentin the atmosphere and . . . also emitted by human activities,”greenhouse gases are so named because they “trap . . . heat that would otherwise escape from the [Earth’s] atmosphere, and thus form the greenhouse effect that helps keep the Earth warm enough for life.” 74 Fed. Reg. 66499 (2009).1 Massachusetts held that the Environmental Protection Agency (EPA) had misread the Clean Air Act when it denied a rulemaking petition seeking controls on greenhouse gas emissions from new motor vehicles. 549 U. S., at 510–511. Greenhouse gases, we determined, qualify as “air pollutant[s]” within the meaning of the governing Clean Air Act provision, id., at 528– 529 (quoting §7602(g)); they are therefore within EPA’s regulatory ken. Because EPA had authority to set greenhouse gas emission standards and had offered no “reasoned explanation” for failing to do so, we concluded that the agency had not acted “in accordance with law” when it denied the requested rulemaking. Id., at 534–535 (quoting §7607(d)(9)(A)).
Responding to our decision in Massachusetts, EPA undertook greenhouse gas regulation. In December 2009, the agency concluded that greenhouse gas emissions from motor vehicles “cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare,” the Act’s regulatory trigger. §7521(a)(1); 74 Fed. Reg. 66496. The agency observed that “atmospheric greenhouse gas concentrations are now at elevated and essentially unprecedented levels,” almost entirely “due to anthropogenic emissions,” id., at 66517; mean global temperatures, the agency continued, demonstrate an“unambiguous warming trend over the last 100 years,”and particularly “over the past 30 years,” ibid. Acknowledging that not all scientists agreed on the causes and consequences of the rise in global temperatures, id., at 66506, 66518, 66523–66524, EPA concluded that “compelling” evidence supported the “attribution of observed climate change to anthropogenic” emissions of greenhouse gases, id., at 66518. Consequent dangers of greenhouse gas emissions, EPA determined, included increases in heat-related deaths; coastal inundation and erosion caused by melting icecaps and rising sea levels; more frequent and intense hurricanes, floods, and other “extreme weather events” that cause death and destroy infrastructure; drought due to reductions in mountain snowpack and shifting precipitation patterns; destruction of ecosystems supporting animals and plants; and potentially “significant disruptions” of food production. Id., at 66524– 66535.215
EPA and the Department of Transportation subsequently issued a joint final rule regulating emissions from light-duty vehicles, see 75 Fed. Reg. 25324 (2010), and initiated a joint rulemaking covering medium- and heavy duty vehicles, see id., at 74152. EPA also began phasing in requirements that new or modified “[m]ajor [greenhouse gas] emitting facilities” use the “best available control technology.” §7475(a)(4); 75 Fed. Reg. 31520–31521. Finally, EPA commenced a rulemaking under §111 of the Act, 42 U. S. C. §7411, to set limits on greenhouse gas emissions from new, modified, and existing fossil-fuel fired power plants. Pursuant to a settlement finalized in March 2011, EPA has committed to issuing a proposed rule by July 2011, and a final rule by May 2012. See 75 Fed. Reg. 82392; Reply Brief for Tennessee Valley Authority 18.17
The lawsuits we consider here began well before EPA initiated the efforts to regulate greenhouse gases just described. In July 2004, two groups of plaintiffs filed separate complaints in the Southern District of New York against the same five major electric power companies. The first group of plaintiffs included eight States3 and New York City, the second joined three nonprofit land trusts4; both groups are respondents here. The defendants, now petitioners, are four private companies5 and the Tennessee Valley Authority, a federally owned corporation that operates fossil-fuel fired power plants in several States. According to the complaints, the defendants “are the five largest emitters of carbon dioxide in the United States.” App. 57, 118. Their collective annual emissions of 650 million tons constitute 25 percent of emissions from the domestic electric power sector, 10 percent of emissions from all domestic human activities, ibid., and 2.5 percent of all anthropogenic emissions worldwide, App. to Pet. for Cert. 72a.
By contributing to global warming, the plaintiffs asserted, the defendants’ carbon-dioxide emissions created a “substantial and unreasonable interference with public rights,” in violation of the federal common law of interstate nuisance, or, in the alternative, of state tort law. App. 103–105, 145–147. The States and New York City alleged that public lands, infrastructure, and health were at risk from climate change. App. 88–93. The trusts urged that climate change would destroy habitats for animals and rare species of trees and plants on land the trusts owned and conserved. App. 139–145. All plaintiffs sought injunctive relief requiring each defendant “to cap its carbon dioxide emissions and then reduce them by a specified percentage each year for at least a decade.” App. 110, 153.21
The District Court dismissed both suits as presenting non-justiciable political questions, citing Baker v. Carr, 369 U. S. 186 (1962), but the Second Circuit reversed, 582 F. 3d 309 (2009). On the threshold questions, the Court of Appeals held that the suits were not barred by the political question doctrine, id., at 332, and that the plaintiffs had adequately alleged Article III standing, id., at 349.23
Turning to the merits, the Second Circuit held that all plaintiffs had stated a claim under the “federal common law of nuisance.” Id., at 358, 371. For this determination, the court relied dominantly on a series of this Court’s decisions holding that States may maintain suits to abate air and water pollution produced by other States or by out-of-state industry. Id., at 350–351; see, e.g., Illinois v. Milwaukee, 406 U. S. 91, 93, (1972) (Milwaukee I) (recognizing right of Illinois to sue in federal district court to abate discharge of sewage into Lake Michigan).25
The Court of Appeals further determined that the Clean Air Act did not “displace” federal common law. In Milwaukee v. Illinois, 451 U. S. 304, 316–319 (1981) (Milwaukee II), this Court held that Congress had displaced the federal common law right of action recognized in Milwaukee I by adopting amendments to the Clean Water Act, 33 U. S. C. §1251 et seq. That legislation installed an all encompassing regulatory program, supervised by an expert administrative agency, to deal comprehensively with interstate water pollution. The legislation itself prohibited the discharge of pollutants into the waters of the United States without a permit from a proper permitting authority. Milwaukee II, 451 U. S., at 310–311 (citing §1311). At the time of the Second Circuit’s decision, by contrast, EPA had not yet promulgated any rule regulating greenhouse gases, a fact the court thought dispositive. 582 F. 3d, at 379–381. “Until EPA completes the rulemaking process,” the court reasoned, “we cannot speculate as to whether the hypothetical regulation of greenhouse gases under the Clean Air Act would in fact ‘spea[k] directly’ to the ‘particular issue’ raised here by Plaintiffs.” Id., at 380.27
We granted certiorari. 562 U. S. ___ (2010).29
The petitioners contend that the federal courts lack authority to adjudicate this case. Four members of the Court would hold that at least some plaintiffs have Article III standing under Massachusetts, which permitted a State to challenge EPA’s refusal to regulate greenhouse gas emissions, 549 U. S., at 520–526; and, further, that no other threshold obstacle bars review. Four members of the Court, adhering to a dissenting opinion in Massachusetts, 549 U. S., at 535, or regarding that decision as distinguishable, would hold that none of the plaintiffs have Article III standing. We therefore affirm, by an equally divided Court, the Second Circuit’s exercise of jurisdiction and proceed to the merits. See Nye v. United States, 313 U. S. 33, 44 (1941).
“There is no federal general common law,” Erie R. Co. v. Tompkins, 304 U. S. 64, 78 (1938), famously recognized. In the wake of Erie, however, a keener understanding developed. See generally Friendly, In Praise of Erie—And of the New Federal Common Law, 39 N. Y. U. L. Rev. 383 (1964). Erie “le[ft] to the states what ought be left to them,” id., at 405, and thus required “federal courts [to] follow state decisions on matters of substantive law appropriately cognizable by the states,” id., at 422. Erie also sparked “the emergence of a federal decisional law in areas of national concern.” Id., at 405. The “new” federal common law addresses “subjects within national legislative power where Congress has so directed” or where the basic scheme of the Constitution so demands. Id., at 408, n. 119, 421–422. Environmental protection is undoubtedly an area “within national legislative power,” one in which federal courts may fill in “statutory interstices,” and, if necessary, even “fashion federal law.” Id., at 421–422. As the Court stated in Milwaukee I: “When we deal with air and water in their ambient or interstate aspects, there is a federal common law.” 406 U. S., at 103.
Decisions of this Court predating Erie, but compatible with the distinction emerging from that decision between “general common law” and “specialized federal common law,” Friendly, supra, at 405, have approved federal common law suits brought by one State to abate pollution emanating from another State. See, e.g., Missouri v. Illinois, 180 U. S. 208, 241–243 (1901) (permitting suit by Missouri to enjoin Chicago from discharging untreated sewage into interstate waters); New Jersey v. City of New York, 283 U. S. 473, 477, 481–483 (1931) (ordering New York City to stop dumping garbage off New Jersey coast); Georgia v. Tennessee Copper Co., 240 U. S. 650 (1916) (ordering private copper companies to curtail sulfur dioxide discharges in Tennessee that caused harm in Georgia). See also Milwaukee I, 406 U. S., at 107 (postErie decision upholding suit by Illinois to abate sewage discharges into Lake Michigan). The plaintiffs contend that their right to maintain this suit follows inexorably from that line of decisions.37
Recognition that a subject is meet for federal law governance, however, does not necessarily mean that federal courts should create the controlling law. Absent a demonstrated need for a federal rule of decision, the Court has taken “the prudent course” of “adopt[ing] the readymade body of state law as the federal rule of decision until Congress strikes a different accommodation.” United States v. Kimbell Foods, Inc., 440 U. S. 715, 740 (1979); see Bank of America Nat. Trust & Sav. Assn. v. Parnell, 352 U. S. 29, 32–34 (1956). And where, as here, borrowing the law of a particular State would be inappropriate, the Court remains mindful that it does not have creative power akin to that vested in Congress. See Missouri v. Illinois, 200 U. S. 496, 519 (1906) (“fact that this court must decide does not mean, of course, that it takes the place of a legislature”); cf. United States v. Standard Oil Co. of Cal., 332 U. S. 301, 308, 314 (1947) (holding that federal law determines whether Government could secure indemnity from a company whose truck injured a United States soldier, but declining to impose such an indemnity absent action by Congress, “the primary and most often the exclusive arbiter of federal fiscal affairs”).39
In the cases on which the plaintiffs heavily rely, States were permitted to sue to challenge activity harmful to their citizens’ health and welfare. We have not yet decided whether private citizens (here, the land trusts) or political subdivisions (New York City) of a State may invoke the federal common law of nuisance to abate out-of-state pollution. Nor have we ever held that a State may sue to abate any and all manner of pollution originating outside its borders.41
The defendants argue that considerations of scale and complexity distinguish global warming from the more bounded pollution giving rise to past federal nuisance suits. Greenhouse gases once emitted “become well mixed in the atmosphere,” 74 Fed. Reg. 66514; emissions in New Jersey may contribute no more to flooding in New York Cite as: 564 U. S. __ (2011) 9 Opinion of the Court than emissions in China. Cf. Brief for Petitioners 18–19. The plaintiffs, on the other hand, contend that an equitable remedy against the largest emitters of carbon dioxide in the United States is in order and not beyond judicial competence. See Brief for Respondents Open Space Institute et al. 32–35. And we have recognized that public nuisance law, like common law generally, adapts to changing scientific and factual circumstances. Missouri, 200 U. S., at 522 (adjudicating claim though it did not concern “nuisance of the simple kind that was known to the older common law”); see also D’Oench, Duhme & Co. v. FDIC, 315 U. S. 447, 472 (1942) (Jackson, J., concurring) (“federal courts are free to apply the traditional common-law technique of decision” when fashioning federal common law).43
We need not address the parties’ dispute in this regard. For it is an academic question whether, in the absence of the Clean Air Act and the EPA actions the Act authorizes, the plaintiffs could state a federal common law claim for curtailment of greenhouse gas emissions because of their contribution to global warming. Any such claim would be displaced by the federal legislation authorizing EPA to regulate carbon-dioxide emissions.45
“[W]hen Congress addresses a question previously governed by a decision rested on federal common law,” the Court has explained, “the need for such an unusual exercise of law-making by federal courts disappears.” Milwaukee II, 451 U. S., at 314 (holding that amendments to the Clean Water Act displaced the nuisance claim recognized in Milwaukee I). Legislative displacement of federal common law does not require the “same sort of evidence of a clear and manifest [congressional] purpose” demanded for preemption of state law. Id., at 317. “ ‘[D]ue regard for the presuppositions of our embracing federal system . . . as a promoter of democracy,’ ” id., at 316 (quoting San Diego Building Trades Council v. Garmon, 359 U. S. 236, 243 (1959)), does not enter the calculus, for it is primarily the office of Congress, not the federal courts, to prescribe national policy in areas of special federal interest. TVA v. Hill, 437 U. S. 153, 194 (1978). The test for whether congressional legislation excludes the declaration of federal common law is simply whether the statute “speak[s] directly to [the] question” at issue. Mobil Oil Corp. v. Higginbotham, 436 U. S. 618, 625 (1978); see Milwaukee II, 451 U. S., at 315; County of Oneida v. Oneida Indian Nation of N. Y., 470 U. S. 226, 236–237 (1985).
We hold that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants. Massachusetts made plain that emissions of carbon dioxide qualify as air pollution subject to regulation under the Act. 549 U. S., at 528–529. And we think it equally plain that the Act “speaks directly” to emissions of carbon dioxide from the defendants’ plants.49
Section 111 of the Act directs the EPA Administrator to list “categories of stationary sources” that “in [her] judgment . . . caus[e], or contribut[e] significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.” §7411(b)(1)(A). Once EPA lists a category, the agency must establish standards of performance for emission of pollutants from new or modified sources within that category. §7411(b)(1)(B); see also §7411(a)(2). And, most relevant here, §7411(d) then requires regulation of existing sources within the same category. For existing sources, EPA issues emissions guidelines, see 40 C. F. R. §60.22, .23 (2009); in compliance with those guidelines and subject to federal oversight, the States then issue performance standards for stationary sources within their jurisdiction, §7411(d)(1).51
The Act provides multiple avenues for enforcement. See County of Oneida, 470 U. S., at 237–239 (reach of remedial provisions is important to determination whether statute displaces federal common law). EPA may delegate implementation and enforcement authority to the States, §7411©(1), (d)(1), but the agency retains the power to inspect and monitor regulated sources, to impose administrative penalties for noncompliance, and to commence civil actions against polluters in federal court. §§7411©(2), (d)(2), 7413, 7414. In specified circumstances, the Act imposes criminal penalties on any person who knowingly violates emissions standards issued under §7411. See §7413©. And the Act provides for private enforcement. If States (or EPA) fail to enforce emissions limits against regulated sources, the Act permits “any person” to bring a civil enforcement action in federal court. §7604(a).53
If EPA does not set emissions limits for a particular pollutant or source of pollution, States and private parties may petition for a rulemaking on the matter, and EPA’s response will be reviewable in federal court. See §7607(b)(1); Massachusetts, 549 U. S., at 516–517, 529. As earlier noted, see supra, at 3, EPA is currently engaged in a §7411 rulemaking to set standards for greenhouse gas emissions from fossil-fuel fired power plants. To settle litigation brought under §7607(b) by a group that included the majority of the plaintiffs in this very case, the agency agreed to complete that rulemaking by May 2012. 75 Fed. Reg. 82392. The Act itself thus provides a means to seek limits on emissions of carbon dioxide from domestic power plants—the same relief the plaintiffs seek by invoking federal common law. We see no room for a parallel track.55
The plaintiffs argue, as the Second Circuit held, that federal common law is not displaced until EPA actually exercises its regulatory authority, i.e., until it sets standards governing emissions from the defendants’ plants. We disagree.
The sewage discharges at issue in Milwaukee II, we do not overlook, were subject to effluent limits set by EPA; under the displacing statute, “[e]very point source discharge” of water pollution was “prohibited unless covered by a permit.” 451 U. S., at 318–320 (emphasis deleted). As Milwaukee II made clear, however, the relevant question for purposes of displacement is “whether the field has been occupied, not whether it has been occupied in a particular manner.” Id., at 324. Of necessity, Congress selects different regulatory regimes to address different problems. Congress could hardly preemptively prohibit every discharge of carbon dioxide unless covered by a permit. After all, we each emit carbon dioxide merely by breathing.59
The Clean Air Act is no less an exercise of the legislature’s “considered judgment” concerning the regulation of air pollution because it permits emissions until EPA acts. See Middlesex County Sewerage Authority v. National Sea Clammers Assn., 453 U. S. 1, 22, n. 32 (1981) (finding displacement although Congress “allowed some continued dumping of sludge” prior to a certain date). The critical point is that Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law. Indeed, were EPA to decline to regulate carbon-dioxide emissions altogether at the conclusion of its ongoing §7411 rulemaking, the federal courts would have no warrant to employ the federal common law of nuisance to upset the agency’s expert determination.61
EPA’s judgment, we hasten to add, would not escape judicial review. Federal courts, we earlier observed, see supra, at 11, can review agency action (or a final rule declining to take action) to ensure compliance with the62
Indeed, this prescribed order of decisionmaking—the first decider under the Act is the expert administrative agency, the second, federal judges—is yet another reason to resist setting emissions standards by judicial decree under federal tort law. The appropriate amount of regulation in any particular greenhouse gas-producing sector cannot be prescribed in a vacuum: as with other questions of national or international policy, informed assessment of competing interests is required. Along with the environmental benefit potentially achievable, our Nation’s energy needs and the possibility of economic disruption must weigh in the balance.64
The Clean Air Act entrusts such complex balancing to EPA in the first instance, in combination with state regulators. Each “standard of performance” EPA sets must “tak[e] into account the cost of achieving [emissions] reduction and any non-air quality health and environmental impact and energy requirements.” §7411(a)(1), (b)(1)(B), (d)(1); see also 40 C. F. R. §60.24(f) (EPA may permit state plans to deviate from generally applicable emissionsstandards upon demonstration that costs are “[u]nreasonable”). EPA may “distinguish among classes, types, and sizes” of stationary sources in apportioning responsibility for emissions reductions. §7411(b)(2), (d); see also 40 C. F. R. §60.22(b)(5). And the agency may waive compliance with emission limits to permit a facility to test drive an “innovative technological system” that has “not [yet] been adequately demonstrated.” §7411(j)(1)(A). The Act envisions extensive cooperation between federal and state authorities, see §7401(a), (b), generally permitting each State to take the first cut at determining how best to achieve EPA emissions standards within its domain, see §7411©(1), (d)(1)–(2).66
It is altogether fitting that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions. The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order. See generally Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 865–866 (1984). Judges may not commission scientific studies or convene groups of experts for advice, or issue rules under notice-and-comment procedures inviting input by any interested person, or seek the counsel of regulators in the States where the defendants are located. Rather, judges are confined by a record comprising the evidence the parties present. Moreover, federal district judges, sitting as sole adjudicators, lack authority to render precedential decisions binding other judges, even members of the same court.68
Notwithstanding these disabilities, the plaintiffs propose that individual federal judges determine, in the first instance, what amount of carbon-dioxide emissions is “unreasonable,” App. 103, 145, and then decide what level of reduction is “practical, feasible and economically viable,” App. 58, 119. These determinations would be made for the defendants named in the two lawsuits launched by the plaintiffs. Similar suits could be mounted, counsel for the States and New York City estimated, against “thousands or hundreds or tens” of other defendants fitting the description “large contributors” to carbon-dioxide emissions. Tr. of Oral Arg. 57.70
The judgments the plaintiffs would commit to federal judges, in suits that could be filed in any federal district, cannot be reconciled with the decisionmaking scheme Congress enacted. The Second Circuit erred, we hold, in ruling that federal judges may set limits on greenhouse gas emissions in face of a law empowering EPA to set the same limits, subject to judicial review only to ensure against action “arbitrary, capricious, . . . or otherwise not in accordance with law.” §7607(d)(9).72
The plaintiffs also sought relief under state law, in particular, the law of each State where the defendants operate power plants. See App. 105, 147. The Second Circuit did not reach the state law claims because it held that federal common law governed. 582 F. 3d, at 392; see International Paper Co. v. Ouellette, 479 U. S. 481, 488 (1987) (if a case “should be resolved by reference to federal common law[,] . . . state common law [is] preempted”). In light of our holding that the Clean Air Act displaces federal common law, the availability vel non of a state lawsuit depends, inter alia, on the preemptive effect of the federal Act. Id., at 489, 491, 497 (holding that the Clean Water Act does not preclude aggrieved individuals from bringing a “nuisance claim pursuant to the law of the source State”). None of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand.
* * *76
For the reasons stated, we reverse the judgment of the Second Circuit and remand the case for further proceedings consistent with this opinion.78
It is so ordered.80
JUSTICE SOTOMAYOR took no part in the consideration or decision of this case.82
JUSTICE ALITO, with whom JUSTICE THOMAS joins,concurring in part and concurring in the judgment.84
I concur in the judgment, and I agree with the Court’s displacement analysis on the assumption (which I make for the sake of argument because no party contends otherwise) that the interpretation of the Clean Air Act, 42 U. S. C. §7401 et seq., adopted by the majority in Massachusetts v. EPA, 549 U. S. 497 (2007), is correct.86
1 In addition to carbon dioxide, the primary greenhouse gases emitted by human activities include methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. 74 Fed. Reg. 66499.88
2 For views opposing EPA’s, see, e.g., Dawidoff, The Civil Heretic, N. Y. Times Magazine 32 (March 29, 2009). The Court, we caution, endorses no particular view of the complicated issues related to carbon dioxide emissions and climate change.90
3 California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont, and Wisconsin, although New Jersey and Wisconsin are no longer participating. Brief for Respondents Connecticut et al. 3, n. 1.92
4 Open Space Institute, Inc., Open Space Conservancy, Inc., and Audubon Society of New Hampshire.94
5 American Electric Power Company, Inc. (and a wholly owned subsidiary), Southern Company, Xcel Energy Inc., and Cinergy Corporation.96
6 In addition to renewing the political question argument made below, the petitioners now assert an additional threshold obstacle: They seek dismissal because of a “prudential” bar to the adjudication of generalized grievances, purportedly distinct from Article III’s bar. See Brief for Tennessee Valley Authority 14–24; Brief for Petitioners 30–31.98
7 There is an exception: EPA may not employ §7411(d) if existing stationary sources of the pollutant in question are regulated under the national ambient air quality standard program, §§7408–7410, or the “hazardous air pollutants” program, §7412. See §7411(d)(1).