A House committee on Wednesday approved a bill that would limit the Kentucky attorney general’s authority to hire outside lawyers to pursue expensive and complex lawsuits against corporations.
House Bill 198 would cap the fees that outside lawyers could collect from such suits and give ultimate control over their hiring to the governor. The bill proceeds to the Republican-controlled House. A similar measure stalled one step short of the governor’s desk during the 2017 legislative session.
Representatives of Attorney General Andy Beshear, a Democrat, told the House Judiciary Committee that it sometimes is necessary for their office to bring in specialized attorneys, especially when pharmaceutical companies or other wealthy targets are suspected of wrongdoing. Those attorneys work for free until a case is won or settled, and then they collect a “contingency fee,” an agreed-on cut of the final award.
“Please keep in mind that corporations are unlimited in their resources,” Assistant Deputy Attorney General La Tasha Buckner told the committee. “They don’t put a cap on how many attorneys they have or what kind of fee they’re going to pay them. And there’s no limit to the damage they can cause Kentuckians.”
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The bill would require the attorney general to explain in writing why he needs to hire an outside lawyer and post all contracts and fee awards online for public inspection. Fees would be limited to 20 percent of up to $10 million recovered; 15 percent of up to $15 million recovered; 10 percent of up to $20 million recovered; and 5 percent of more than $20 million recovered, with an absolute fee cap of $20 million.
Last year, Buckner said, the attorney general’s office hired several high-powered law firms to sue drug manufacturers, distributors and retailers that contributed to Kentucky’s opioid abuse epidemic. Out of curiosity, the office asked the top 10 most qualified applicants how many of them would have bid under the sort of fee caps proposed by the House bill, Buckner said. Only three said they would have, she said.
The bill, sponsored by state Rep. Jason Nemes, R-Louisville, is aimed exclusively at Beshear’s office and would not affect contingency fee contracts awarded by Republican Gov. Matt Bevin’s administration.
The bill also would require the governor to approve any legal contracts issued by the attorney general, which Buckner said is unconstitutional because the attorney general is a separately elected constitutional officer.
Democrats on the committee said the bill is an attempt to weaken “the people’s attorney” as he sues deep-pocketed corporations that hurt people.
“Why the attack on the attorney general’s office? He’s there to protect the people of this commonwealth. I’ve never seen anyone in that office, a Republican or a Democrat, where I questioned their integrity,” said state Rep. Tom Burch, D-Louisville. “Quite frankly, I think this is a waste of time and the taxpayers’ money.”
Nemes said his bill isn’t meant to be an attack on Beshear, with whom Republican lawmakers sometimes spar. However, there are 88 staff lawyers at work inside the attorney general’s office, Nemes said. It’s fair to ask for written justification when outside lawyers are hired, and it’s fair to hold their fees down so that the bulk of the awards reach the damaged parties, he said.
“This is simply a matter of trying to get as much money as possible to the people of Kentucky,” Nemes said. “Imagine if attorneys on outside contingency fees were to receive 25 percent of tobacco settlement funds in perpetuity. Imagine that. Of course that’s absurd. That’s what I’m trying to do, Representative Burch. I’m trying to make sure that money goes to folks who need it.”