In service to financial efficiency and vigorous representation of the public interest, municipalities and political subdivisions in Pennsylvania increasingly rely upon the expertise and acumen of outside counsel to assist them in their legal endeavors. Oftentimes, agreements retaining private counsel to assist in litigation arise in the context of major proceedings that are socially vital, complex and substantial-in-scope (e.g., tobacco, lead paint, opioids). Private firms so-retained regularly provide their services on a contingency basis, allowing the municipality to secure experienced representation while defraying litigation costs without burdening taxpayers. While this trend is reflective of the regular practice of government’s reliance upon private contractors, the use of these contingency agreements has recently attracted increased scrutiny from the defense bar. In particular, defendant-corporations have begun to regularly levy third-party assaults seeking to undermine the legitimacy of such contracts under the guise of alleged federal due process violations. In reality, such gambits seem calculated to forestall political subdivisions from prosecuting valid, good-faith civil claims, altogether.

The Pennsylvania Supreme Court’s holding in Commonwealth v. Janssen Pharmaceutica, 8 A.3d 267 (Pa. 2010) touched upon this very issue in addressing the propriety of a contingency fee between the Pennsylvania Office of General Counsel and an outside law firm. In Janssen, the defendant-corporation argued that “the agreement deprives the defendant of its due process rights because those who exercise the government’s powers in adjudicative proceedings must have no financial interest in the outcome, must be impartial, and must maintain the appearance of impartiality.” Ultimately, the Supreme Court declined to address the merits of the challenge due to operation of 71 P.S. Section 732-103, which provides that “no party to an action, other than a commonwealth agency …, shall have standing to question the authority of the legal representation of the agency.” Relying upon Janssen, the Pennsylvania Commonwealth Court has issued more-recent precedent along similar lines. See, e.g., GGNSC Clarion v. Kane, 131 A.3d 1062, 1073-74 (Pa. Commw. 2016) (no standing to challenge contingency fee agreement between the Pennsylvania Office of Attorney General and private firm due to Section 732-103).