Product Liability -- 2011



Atlantic Richfield Co. v. County of Santa Clara   (U.S. Supreme Court)

Whether states may hire private attorneys under contingent fee agreements

The California Supreme Court ruled in July, 2010, that local governments may use contingency fee lawyers to bring product liability cases as long as the ultimate authority for the litigation remained with the governments. Using a balancing of interests test, it found that neither a liberty interest (such as in a criminal case) nor the right of an existing business to continued operation is threatened by the government's litigation, as long as the contingent-fee lawyers act under a "heightened standard of neutrality."

The NAM joined with the American Chemistry Council, American Coatings Ass'n, National Petrochemical and Refiners Ass'n, Property Casualty Insurers Ass'n of America, and Pubilc Nuisance Fairness Coalition in an amicus brief in support of the appeal. We argued that the neutrality requirement for government lawyers is of national importance, involving fundamental due process rights. Government attorneys must not have personal, financial or other extraneous influences that might bias their ability to be impartial or to elevate their own interest over a just outcome in any case. The public expects public officials not to tolerate the "appearance of impropriety," particularly in public nuisance cases, which are quasi-criminal proceedings that seek to vindicate rights owed to the population generally.

We argued that contingency fee agreements distort the decision-making of both private attorneys and the government attorneys who retain and oversee them. The agreements create improper financial incentives for both parties to the contract, fostering opportunistic attitudes that distort the government's duty to exercise independent and unbiased judgment. And as a practical matter, there is no way for the public to verify that a government supervisor is in fact neutral and controlling the acts of the contingent-fee lawyer. Government's use of contingency fee lawyers has provoked public outrage, and has so far affected many industries, including tobacco, firearms, lead paint, poultry and pharmaceuticals.

Unfortunately, the Court on Jan. 10, 2011, declined to hear this appeal.


Related Documents:
NAM brief  (November 24, 2010)