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Class action lawsuit loophole

Dan Juneau -   Jun 08, 2006

Last year, Congress did something it rarely does these days; it passed a major reform in the face of strong opposition. Responding to many well-documented abuses, Congress enacted a compromise bill on class action lawsuit reform. Class action petitions were flooding state courts prior to the reform and, on too many occasions, the plaintiffs got coupons and their attorneys got lots of cash. One of the primary provisions of the federal bill was to channel most of the class action suits into federal court. However, the bill made a clear exception: Class action cases brought by a state's attorney general could still be heard in state courts.

As the current legislative session winds down, some of the most controversial bills remaining would allow our attorney general to hire contingency fee lawyers to represent his office in lawsuits. At every hearing on the legislation, the committee rooms were packed with plaintiff attorneys. There is little doubt regarding what the real motivation is behind the legislation, which is to utilize the loophole in the federal law in order to bring class action suits in the often plaintiff friendly environment of our state courts.

Although the class action legislation wasn't part of Attorney General Charles Foti's original legislative package, he has now claimed ownership and is pulling out all the stops to pass the legislation. Basically, Foti argues that many potential areas of litigation are too complex for his staff attorneys to handle and, therefore, he needs to utilize contingency fee arrangements where outside attorneys represent the state and receive a percentage of the "take" instead of an hourly fee. He also claims that the state can't afford to pay outside attorneys on an hourly fee basis to handle the cases.

Foti's own strategic plan for his office seems to refute his contentions. One of the department's indicators for the civil division is to "retain in-house 98 percent of the litigation cases received during the fiscal year by 2010." As a justification for that indicator, the plan notes: "Increased in-house legal representation will be more cost effective for the citizens of the state."

Foti has other problems with his argument that his department has too little money to effectively argue civil litigation. The attorney general's budget has doubled in the last 10 years. Since Foti's election in 2004, there has been a significant refocusing of funding for the department's lawyers. Although the attorney general does not traditionally play a large role in law enforcement, Foti has grown the criminal division significantly-at the expense of the civil division. There were 102 authorized civil division positions when Foti took over, but only 90 in the proposed budget for this year. Conversely, criminal division positions have increased from 75 to 107. A proper alignment of his budget would give the attorney general the money he needs to properly litigate civil cases.

If Louisiana is to avoid being a hotbed of class action legislation, the attorney general's bills need to be killed. Allowing plaintiff attorneys a class action lawsuit "happy hunting ground" by using the office of the attorney general will give the state's judicial climate a double black eye. It will identify Louisiana as an easy access state for filing class action lawsuits, and it will bring more pressure on defendants to settle cases, since the entire weight of state government will be brought against them.

The Legislature should kill this unnecessary and unwarranted legislation, and if one of these bills should happen to get to the governor's desk, she should veto it.

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