Local governments that are planning to sue paint companies for lead cleanup may hire private lawyers to help and offer them part of those awards, after the U.S. Supreme Court declined to review the practice.
On Monday (Jan. 10), the high court denied, without comment, a petition for review in Atlantic Richfield Company et al., v. Santa Clara County, CA, et al., clearing the way for the fee agreements.
Chemical giant Atlantic Richfield had petitioned the high court Oct. 22 to review a July 26, 2010, California Supreme Court ruling that allowed the contingency fees under certain conditions.
Chemical Industry, Chamber File Briefs
Both the American Chemistry Council, which represents chemical manufacturers, and the U.S. Chamber of Commerce had filed amicus curiae briefs in support of Atlantic Richfield.
So did the Atlantic Legal Foundation, a conservative public-interest firm, which argued that allowing private contingency fees in public cases posed a conflict of interest by giving lawyers a financial stake in the cases’ outcome.
ALF noted on its site that the California Supreme Court, in its July ruling, had acknowledged a potential conflict but permitted the fees so long as:
· The public-entity attorneys retain complete control over the course and conduct of the case;
· Government attorneys retain a veto power over any decisions made by outside counsel; and
· A government attorney with supervisory authority must be personally involved in overseeing the litigation.
The court also said the suit could not threaten to shut down a business or involve free-speech issues.
‘Virtually Impossible to Implement’
ALF sharply criticized the decision, saying: “As a practical matter it is virtually impossible to implement that standard without intrusive and disruptive judicial inquiry and court supervision of the attorney-client relationship between the government entity and its outside counsel.
“Moreover, no amount of supervision of the private-contingency-fee lawyers by government attorneys and no amount of post hoc review of contingent fee counsel's performance by a court can cure the appearance of impropriety.”
The state court had previously barred cities and counties from offering private lawyers a percentage of the damages, rather than an hourly fee, in suits against businesses for activities that harm the public, the San Francisco Chronicle noted.
Lawyers Needed, City Says
San Francisco City Attorney Dennis Herrera told the Chronicle that his city and others needed private lawyers to pursue multibillion-dollar cases against paint companies.
The ruling means "we will continue to have all the tools available to us ... to protect environmental health," Herrera told the paper.
Atlantic Richfield company attorney Philip Curtis said in a statement: "The proven solution is enforcing the law against landlords who neglect their property, rather than engaging in wasteful litigation against companies that made a lawful product more than 50 years ago."
The federal government outlawed lead paint in 1978. The current suit accuses manufacturers of concealing the dangers while producing and marketing lead paint in previous decades. It seeks payment for the costs of removing the paint from housing and other places where children are likely to be exposed to lead poisoning.
Plaintiffs included Santa Clara, San Mateo, Alameda, Solano, Monterey and Los Angeles counties and the cities of San Francisco, Oakland and Los Angeles.
The Chamber of Commerce, American Chemistry Council and American Coatings Association had no immediate comment on the decision.