Guiding members of the U.S. Chamber of Commerce must be tiring of getting taken to court by the Louisiana Attorney General's office. The Louisiana Attorney General has taken down the U.S. Chamber of Commerce's pharma members for some big multi-million dollar verdicts obtained through outside private counsel (“special counsel”) that often work with the State on a contingency fee arrangement. The State is essentially financing its litigation with outside capital to not burden the taxpayers, and paying the legal private legal fees only on successful recoveries.
Sounds like a win-win for Louisiana and its taxpayers. The business community, led by the U.S. Chamber of Commerce, is apparently not so thrilled, and heading the legislation route during this session of the Louisiana General Assembly in an attempt to impede the Louisiana Attorney General’s use of special counsel in the future.
At the same time that the U.S. Chamber of Commerce is waging a war on Louisiana consumer lawsuit lending companies through separate legislation efforts to water down the options of consumers that are in litigation with U.S. Chamber of Commerce member companies (such as insurers State Farm and Allstate), the U.S. Chamber is also trying to water down the options of the Louisiana Attorney General for litigating against U.S. Chamber of Commerce member companies (such as Pfizer and Eli Lilly).
Louisiana Attorney General Buddy Caldwell has rung the bell, recovering hundreds of millions of dollars for Louisiana taxpayers from U.S. Chamber of Commerce pharmaceutical members.
Medicaid Fraud. Unfair and Deceptive Trade Practices. Pricing Fraud.
The citizens of Louisiana have not been at risk for bearing the costs of outside counsel since these firms only get paid if the Louisiana Attorney General is successful.
So what is the Fortune 100 to do? Clip the wings of the Louisiana Attorney General, of course. In the name of Tort Reform, that appears to be what the U.S. Chamber of Commerce is up to with its recent introduction of HB 799 into the Louisiana General Assembly.
Louisiana HB 799, introduced by Louisiana State Representative Stuart Bishop, removes the discretion of the Louisiana Attorney General to enter into contingency fee arrangements with outside counsel. On top of that, it limits the State of Louisiana from hiring any outside firm that bills more than $500 per hour (thus limiting the legal fees they will be responsible for when found guilty). Note the the Louisiana Attorney General’s recoveries often allow for the awarding of attorney fees on top of the settlement amount for damages. Limiting the use of outside counsel and the rate that culpable corporations pay directly benefit guilty members of the U.S. Chamber of Commerce.
You can read the U.S. Chamber of Commerce bill at: Special Counsel Bill
Note these sections from the bill:
Section A: In the event that the attorney general, or any state agency, board or commission, or parish or local governmental entity is represented by a special attorney or counsel, the special attorney or counsel shall not be compensated for such representation on a contingency fee or percentage basis in the absence of express statutory authority.
My understanding of "Express Statutory Authority" means that the Louisiana Attorney General would need to pass resolutions with majority consent in both the Louisiana House and Louisiana Senate before entering into any alternative fee arrangement with outside private counsel. So the U.S. Chamber of Commerce and its member companies would have the opportunity to lobbying against any resolution that involves fraud litigation against its member companies.
Section D: In no case shall the attorney general, or any state agency, board or commission, or parish or local governmental entity incur fees in excess of five hundred dollars per hour for legal services. In the event of a settlement or final judgment which would result in an award of attorney fees in excess of five hundred dollars per hour, the fee amount shall be reduced to an amount equivalent to five hundred dollars per hour.
Top commercial litigators often command rates well in excess of $500.
To see some of the large successful recoveries achieved by the Louisiana Attorney General using special counsel, see the following links
AG Caldwell Recoups $186 Million from 27 Pharmaceutical Companies
Attorney General Recovers $238 Million from Pharmaceutical Companies Engaged in Fraudulent Drug-Pricing Scheme
AG announces recovery of $8.5 million from Watson Pharmaceuticals
Attorney General Caldwell Announces $20 Million Settlement with Pharmaceutical Company