Lawyers Create Big Paydays by Coaxing Attorneys General to Sue

MoneyBy Eric Lipton

The New York Times

There is a flourishing industry that pairs plaintiffs’ lawyers with state attorneys general to sue companies, a collaboration that has set off a furious competition between trial lawyers and corporate lobbyists to influence these officials.

Much as big industries have found natural allies in Republican attorneys general to combat federal regulations, plaintiffs’ lawyers working on a contingency-fee basis have teamed up mostly with Democratic state attorneys general to file hundreds of lawsuits against businesses that make anything from pharmaceuticals to snack foods.

The lawsuits follow a pattern: Private lawyers, who scour the news media and public records looking for potential cases in which a state or its consumers have been harmed, approach attorneys general. The attorneys general hire the private firms to do the necessary work, with the understanding that the firms will front most of the cost of the investigation and the litigation. The firms take a fee, typically 20 percent, and the state takes the rest of any money won from the defendants.

While prospecting for contracts, the private lawyers have also donated tens of thousands of dollars to campaigns of individual attorneys general, as well as party-backed organizations that they run. The donations often come in large chunks just before or after the firms sign contracts to represent the state, campaign finance records and more than 240 contracts examined by The Times show.

“This has gotten out of hand,” said Scott Harshbarger, a Democrat who was the attorney general of Massachusetts in the 1990s, when this practice first burst into prominence as a result of the litigation against tobacco companies. “And it seriously threatens the perception of integrity and professionalism of the office, as it raises the question of whether attorneys are taking up these cases because they are important public matters, or they are being driven more by potential for private financial gain.”

Emails and contingency lawyer contract documents obtained by The Times from attorneys general in 15 states show how these alliances have scrambled roles in the legal profession.

Private lawyers whose traditional work has been filing class-action tort claims or securities fraud cases on behalf of individuals or groups are now often operating with the power of the state, substantially increasing their chance for success by bringing claims on behalf of “the people.”

Continue to full article . . .

Picture: Wouter Engler (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)%5D, via Wikimedia Commons

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