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During the past decade, many state attorneys general have moved dramatically to transform America’s legal landscape. Expanding their duties beyond the traditional scope of providing legal counsel to governors and state agencies while protecting consumers, some AGs have reinvented themselves as aggressive litigants seeking to shape public policy choices nationwide. Proponents of this regulation-through-litigation approach argue that such activist attorneys general are merely pursuing public policy goals that legislatures and regulators have “failed” to meet. Opponents counter that the founders intended our system of political consensus-building and compromise to be deliberate and sometimes slow-going, and they worry that the AG-driven transformation of our policymaking process erodes the integrity of, and public confidence in, our legal system. Whether one supports or opposes the transformation of our judiciary into a third, largely unchecked policymaking branch, the nation’s personal injury bar has been an integral part of it. These private-sector firms and lawyers have joined forces with the new activist attorneys general. Their partnerships combine the far-reaching prosecutorial power of the state with the zeal of profit-seeking legal entrepreneurs in multistate lawsuits against various companies, even entire industries, and they have paid off. The Tobacco Master Settlement Agreement, in which attorneys general from almost every state worked together and with personal injury lawyers to collect more than $250 billion in the course of 25 years, was a pioneering model that has frequently been replicated. Health care providers, paint and pigment manufacturers, automakers and energy companies have been targeted by AGs and trial lawyers, among others. Given the billions of dollars often up for grabs in this high-stakes litigation, it’s no wonder that more than a few abuses by the attorneys general-trial bar coalition have come to light. One former Texas AG went to prison for writing a false contract to reward a personal injury lawyer and political ally who, in fact, had not actually done any work to secure Texas’s share of the tobacco settlement. In California, an Associated Press investigation revealed that the former AG signed millions of dollars in contracts with politically connected lawyers and lobbyists, which he failed to make public as California law requires. And West Virginia’s AG is now coming under increasing fire for his unwillingness to cede to the Legislature control over certain funds generated by state litigation. Though a few judges have begun to push back, such as those in California, Illinois and Missouri who recently ruled against the contingency fee basis upon which private-sector attorneys were hired by government prosecutors to sue former lead paint manufacturers, it’s nonetheless become clear that, if partnerships between state AGs and outside lawyers are truly to benefit the public interest, they must be made much more transparent and subject to greater scrutiny. In fact, the American Tort Reform Association (ATRA) this past April released survey results from five representative states that indicated sizeable majorities of Americans favor such transparency and scrutiny. For example, roughly three-quarters of those surveyed said that their state’s AG should routinely disclose all contracts with private attorneys and make those contracts available for public inspection via the Internet. Two-thirds said such contracts should be subject to competitive bidding. And another three-quarters majority favored the creation of a national code of ethics to govern such contracts. Accordingly, ATRA is now offering for public debate such a transparency code appropriately based on public disclosure, competitive bidding, oversight and fiscal accountability. These principles track closely with model legislation known as the Private Attorney Retention Sunshine Act crafted by the American Legislative Exchange Council, which has already been enacted in at least seven states. First, the transparency code calls for all contracts with outside counsel performing legal work in the name of the state to be publicly disclosed and posted on the Internet. Second, whenever possible, contracts with outside counsel should be competitively bid to ensure taxpayers are getting a good deal for a fair price. Third, given that the litigation in question often has significant, long-lasting policy ramifications, contingency fee-based contracts should be subject to review by state legislatures. Fourth, work done by lawyers under such contracts should be fully disclosed, detailing precisely what was done, how much time was spent and what fees were received from the state. Finally, all funds comprising damages awards or settlements should be deposited in the state treasury for appropriation by the state Legislature, not distributed by the AG as he or she sees fit. In light of the growing influence of AG-trial lawyer partnerships, advocates of good government are likely to endorse these guiding principles. Many states’ laws are already based on these principles, or their AGs have independently adopted them. In any case, ATRA hopes our proposed transparency code will spur vigorous debate among AGs, legislators and other legal experts, which will lead to more accountability and, ultimately, greater public confidence in our legal system. Sherman Joyce is president of the American Tort Reform Association (www.atra.org), based in Washington.

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