The House of Representative voted on party lines Friday to approve a bill that Republicans claimed would increase transparency in the Office of Attorney General and Democrats claimed was a reward for law-breaking corporations.
House Bill 281 sets limits on how much Attorney General Andy Beshear’s office can pay some of the outside attorneys it hires and requires him to submit an annual report on such contracts.
The bill focuses on personal service contracts, which Beshear uses to hire lawyers for some of its biggest cases, which are often consumer-protection actions against corporations. In some instances, the lawsuits generate tens of millions of dollars for the state.
Under most of these contracts, Beshear pays one dollar up front and then gives a portion of any money won in the lawsuit to the law firm. HB 281 limits how much money those law firms can receive, setting a contingency fee cap of $20 million.
Rep. Jason Nemes, R-Louisville, said his bill would bring needed legislative oversight to the process.
“When he hires council on contingency, that’s kind of outside the purview of what we paid him to do,” Nemes said. “And so he needs to tell us ‘I need to go outside what my office has been appropriated, so I need to hire contingency for council.’ So when he does that I think it’s appropriate that he report that to the General Assembly.”
Beshear opposes the bill, calling it a proposal “to protect multi-national corporations that have severely hurt Kentuckians.”
At the moment, Beshear’s office has five legal service contracts to handle lawsuits against Marathon Petroleum; Fresenius Medical Care Holdings; Johnson & Johnson and its subsidiaries; Bayer Pharmaceuticals; and an investigation of drinking water contamination.
Marathon Petroleum’s political action committee donated to 24 members of the House of Representatives in 2016, only two of which were Democrats. Nemes was not one of the lawmakers who received money from Marathon.
House Democrats opposed the bill, saying the cap would limit Beshear’s ability to hire the best lawyers to represent the state.
They also said the bill would put corporations before the people of Kentucky.
“This is a payback bill,” said Rep. James Kay, D-Frankfort. “A payback to the big corporations who use their funds through Citizens United to fund Super PACs to help elect governments who will put in good government measures for them so big business will be protected. So they don’t have the teeth of real litigators and real lawyers out there fighting the good fight for the people.”
In an impassioned attack on the bill, Rep. Jim Wayne, D-Louisville, said the House of Representatives is the best “money can buy.”
“Ladies and gentlemen, the limits this bill places on the people’s attorney to sue big corporations is scandalous,” Wayne said.
House Speaker Jeff Hoover, R-Jamestown, stepped down from his podium to rebut Wayne’s comments.
Nemes said the bill has nothing to do an ongoing feud between Beshear, a Democrat, and Gov. Matt Bevin, a Republican.
However, Bevin was paying attention to Beshear’s legal service contracts long before Friday’s debate on the House floor.
In September, Bevin requested a variety of information from Beshear’s office about its personal service contracts, asking Beshear to submit “the date each legal service contract was approved by the governor.”
Beshear provided Bevin with the information, but pointed out that Beshear is “not required to seek or obtain approval by the governor.”
Nemes said he has not talked to Bevin or his aides about the bill.