Atlantic Legal Attacks Pennsylvanias Use of Private Contingent Fee Counsel

Atlantic Legal has filed an amicus brief in the Pennsylvania Supreme Court challenging a trial courts refusal to disqualify a Texas law firm from serving as counsel for the Commonwealth of Pennsylvania. The defendant pharmaceutical company raised constitutional objections to the Commonwealths use of private contingent fee counsel to prosecute this action. It argued that the contingent fee arrangement between the Commonwealth and the law firm violated the Pennsylvania Constitution and the doctrine of separation of powers because it commits the Commonwealth to pay private counsel prosecuting the case a portion of any recovery, without express authorization from the General Assembly, and that the contingent fee arrangement also violated the companys rights to due process under the United States and Pennsylvania constitutions, which guarantee that attorneys representing the Commonwealth, acting in its capacity as sovereign, have no direct financial interest in the outcome.

The contingent fee contract under which the law firm was retained was not the subject of any competitive bidding or legislative authorization. Rather, the contract appears to be the product of private negotiations between the Governors Office of General Counsel and the law firm. Under the contract, the law firm can receive as much as 15% of any recovery.

Moreover, in a significant deviation from previous contingent fee contracts executed on behalf of the Commonwealth, this contract does not include an express provision for Control and Management of the Litigation. It instead contains a Consultation paragraph that merely obligates the firm to consult with the Office of the General Counsel and to deal with the OGC as it would with any other client. The pharmaceutical company argues that OGC has delegated at least a substantial part of the control and management of this litigation to its outside contingent fee counsel.

Atlantic Legals brief argued that (i) due process requires that those who exercise the Commonwealths power in legal proceedings act impartially and without a financial stake in the outcome, (ii) contingent fee counsels substantial financial interest in the outcome of this action prevents the Commonwealth from exercising its powers impartially, and (iii) the Commonwealth did not need to retain private outside contingent fee counsel to pursue its case, because the Office of General Counsel itself claims to be the largest legal enterprise in the Commonwealth of Pennsylvania, employing approximately 500 attorneys[whose work] is as sophisticated and professionally challenging as that performed by our counterparts in the private sector.

To view a copy of the Foundations brief, please click here.