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The ability of the Rhode Island attorney general’s office to allow private counsel to litigate on the state’s behalf under contingency fee contracts is at stake in a case accepted by that state’s high court. The case has generated national interest, because most state attorneys general have used private firms that exercise the police powers of their office under contingency fee deals. Recent cases include tobacco, asbestos and handgun litigation. Several paint manufacturers sued by the state filed a writ of certiorari asking the Rhode Island Supreme Court to decide whether the state’s law enforcement power can be exercised by lawyers who have a personal financial interest in the outcome. Rhode Island v. Lead Industries Assoc., No. 2004-63-M.P. The writ arises from a public nuisance action brought against former lead paint and lead pigment manufacturers. It is again in pretrial, after a mistrial in 2002. The trial court had twice ruled that the case could proceed with private law firms representing the state under contingency fee contracts. Rhode Island v. Lead Industries Assoc., No. 99-5226 (Providence Co., R.I., Super. Ct.). Profitability an issue? Last week, the court accepted an amicus brief from the National Chamber of Commerce and the American Tort Reform Association. They assert that contingency fees “can lead to the prosecution of government lawsuits on the basis of profitability, not public interest,” and that such arrangements create an appearance of impropriety. They also allege that private lawyers are chosen outside the public’s view, and that these agreements-like the one in Rhode Island-are not put out for bid, but should be. “It provides private attorneys with a very perverse incentive . . . .We are curious about the [financial] relationships between the state AGs and the people they hire,” said Robin Conrad, senior vice president of the National Chamber Litigation Center. The state counters in its pleadings that while outside counsel do provide financial and legal assistance, the attorney general remains in “full control of the litigation at all times.” The state says that outside counsel are needed because of the tremendous financial resources of “the large national and international companies” being sued. But the attorney general is not dismissive of the chamber’s position. “I understand and respect the chamber’s concern,” said Rhode Island Attorney General Patrick Lynch. “I would be leery, too. It’s rare in our state to use outside counsel in circumstances such as this.” Lynch’s predecessor cut the current deal with outside counsel. Though lead paint is no longer manufactured, 1,000 children a year in Rhode Island still get lead poisoning, according to Lynch. “It was a different analysis for me,” he said. “You have to put it in context-[the mistrial and] the magnitude of the case. The defendants’ resources run deep, not just financially-they’re not using their in-house lawyers. We’re going against some of the most prominent teams of lawyers from the most prominent law firms across the nation. I only have 95 attorneys who are already facing an incredible volume [of cases].” In its brief to the state high court, the state also says that the fee agreement does not violate any “existing law.” The American Legislative Exchange Council, a national association of conservative state lawmakers, wants to change that. They have drafted model legislation, the Private Attorney Retention Sunshine Act, which would require contracts in which fees are expected to exceed $100,000 be put out to bid, and those above $1 million be subject to legislative approval. Several states, including Colorado, Texas and Virginia, have adopted versions of the model legislation, and none have engaged outside counsel on a contingency fee basis since doing so, according to Kristin Armshaw, the director of the organization’s civil justice task force. The American Trial Lawyers Association’s president, Todd Smith, said that giving the legislature a say over an attorney general presents a separation-of-powers issue, and that low bidders will not necessarily have the expertise required for a particular case. “I understand the interest in holding down attorneys fees,” said Smith of Chicago’s Power Rogers & Smith. “But particularly in a contingency fee case, you want to hire the team that’s going to give you the greatest likelihood of success.”

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