Pirates at the Parchment Gates

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In recent years, state attorneys general (AGs), have partnered with private lawyers working on a contingency fee basis to advance policy agendas without any statutory authority. These remarkable arrangements call for close scrutiny. Recent legal attacks against  the energy industry and some think tanks over their positions on climate change and energy policy highlight the abusive nature of this partnership between state AGs and wealthy, politically connected lawyer barons.

With the benefit of 20 years of scholarship and ensuing appellate case law, it has become inescapable to conclude that contingency fee contracting by state attorneys general violates the structure of the Constitution and its guarantees of due process, as well as state fiscal laws and professional codes of ethics. Further, these arrangements result in the privatization of law enforcement, and thus transfer power into the hands of influential private counsel who have cashed in for billions of dollars in fees—in open defiance of constitutional and legal prohibitions put into place by our nation’s Founders to prevent such corruption.

At least three core constitutional principles are laid waste by attorneys general who retain private counsel to regulate industries by litigation.

  1. Contingency fee financing is an attempt to do an end run around the appropriations process, and is constitutionally prohibited. That means that even statutes permitting such arrangements violate constitutional controls over the flow of money expressly put into place to prevent government corruption.
  2. No private party or law firm should ever finance any government operation. Both state and federal constitutions require that all receipts of money or services must be legislatively authorized and subject to legislative control and accountability.
  3. No private party or law firm should ever play any role in a government investigation or prosecution, especially when that party has a direct financial stake in the outcome. State and federal due process clauses prohibit such compromised prosecutions, as recognized by the United States Supreme Court, along with state and federal appellate courts and governmental Codes of Ethics.

The billions in public money transferred to contingency fee lawyers fuels new cycles of regulation by litigation.

“Made to Settle” suits are cynical money grabs pushing an unlegislated ideological agenda and end up bloating state governments and levying national taxes on unsuspecting and unrepresented citizens. Regulation by litigation that is commenced because Congress or state legislatures “are not doing their job” violates the separation of powers and intrudes upon the legislative branch’s exclusive lawmaking function. State AGs are lawyers for their respective states. They do not possess national regulatory power, either singly or in combination. AGs who try to accomplish policy goals through litigation by self- interested proxies essentially privatize national lawmaking to a small band of state-funded cronies. The settlements that ensue enlarge government off-budget, often by the billions, and burden the public with taxation and regulation they would never vote into place.

These unlawfully enriched trial lawyer tycoons use these diverted public funds to wield enormous political power, while entrenching their ideological partners—the state AGs and their allies—in public office.

That so many and varied constitutional, legal, and ethical violations can be enumerated and that many appellate courts have ruled that such contracting is illegal is compelling evidence that this collusion between state attorneys general and contingency fee counsel works to severely undermine fundamental, structural American constitutional law and theory. This paper examines the illegality and unconstitutionality of the contingency fees that fuel these prosecutions, and systematically refutes the arguments proffered in favor of such arrangements.