On February 2, 2012 the U.S. House of Representatives Judiciary Subcommittee on the Constitution held a hearing on “Contingency Fees and Conflicts of Interest in State AG Enforcement of Federal Law.”  At the hearing, three people testify:  Bill McCollum, a partner of SNR Denton’s Public Policy and Regulation Practice Group, Amy Widman, Assistant Professor of Northern Illinois University Collage of Law, and James R. Copland, Director and Senior Fellow of Manhattan Institute for Policy Research.

"The 'tort reform' lobby (i.e. U.S. Chamber of Commerce) is targeting this for one reason; it’s working.  Private lawyers have been effective in helping states reach huge settlements on behalf of their citizens," said Terry Jesse, Executive Director of NALFA.  “It makes sense for underfunded and understaffed AG offices to contract with outside law firms to represent citizens of their state against large-scale consumer abuses.  Working on a contingency fee basis actually protects taxpayers and ensures the people of their state are well represented against  well-funded industries,” Jesse concluded.

There’s been no legislation produced from this hearing, but in his testimony, Copland said that Congress should take a “modest step” and codify Executive Order 13433 (pdf).  Executive Order 13433 was signed by President George W. Bush and prohibits federal agencies from entering into contingency fee agreements with outside counsel.  In other words, Copland would have the federal government dictate to all state attorneys general what type of fee arrangement they may enter into with outside counsel.

CLICK HERE for a link to a video of the hearing.