LETTER: Adley Fires Back at Attorney General

The debate continues and intensifies between state Sen. Robert Adley, R-Benton, and Attorney General Buddy Caldwell. At issue is the role Caldwell's office plays in reviewing contingency fee contracts and Adley's accusations of a "cover-up." Below is the latest letter sent by Adley to Caldwell. You can see the original document by clicking here. For further background, see our last post on the matter by clicking here.

_____________________________

Dear General Caldwell:

In response to your letter of November 25, 2013, you accuse me of making the discussion over contingency fee contracts a public issue.  You are wrong.  I did not begin this public dialogue.  I only responded to your public comments regarding contingency fee contracts.

More importantly, you are trying to stretch the law for your own purposes.  As you noted in your letter, I do understand the laws I vote on.  Obviously I understand them much better than you do when reading them.  I will do my best to explain the law but I cannot understand it for you.

The law does not confer any authority onto the SLFPA-E to retain its own counsel.  La. R.S. 38:330.6 states:  The state attorney general and his assistants shall be and are hereby designated as counsel for each flood protection authority in the execution of the purposes of this Chapter and are hereby charged with the responsibility of representing each authority in any and all matters when called upon to do so.  This law makes clear the AG is designated counsel.

When law is clear and unambiguous, “the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature.” [La. Civ. Code Art. 9]. The language of “when called upon to do so” written without any additional granting of power to retain special counsel, should need no further interpretation. Under a plain reading of the statute, if the SLFPA-E requires legal services, it may call upon the attorney general, who may hire private counsel if necessary.

However if the language of the statute is ambiguous and susceptible to different meanings, there is also law to guide in its interpretation.  According to La. Civ. Code Arts 10 and 12, it should be examined in the context of the text as a whole and interpreted as having the meaning that best conforms to the purpose of the law. Furthermore, “laws on the same subject matter must be interpreted in reference to each other.” [La. Civ. Code Art. 13].

A law on the same subject matter of counsel for state and parish entities would be the provisions set forth in La. R.S. § 42:261 et seq. Under La. R.S. § 42:261(A), “the district attorneys of the several judicial districts ... shall ... be the regular attorneys and counsel for the parish governing authorities, parish school boards, and city school boards within their respective districts and of every state board or commission domiciled therein ...” Further, La. R.S. §42:261(D)(1) provides: Except as otherwise permitted by this Section it shall be unlawful for any parish governing authority or state board or commission to retain or employ for any compensation whatever any attorney or counsel to represent it generally, or except as provided in R.S. 42:263, to retain or employ any special attorney or counsel for any compensation whatever to represent it in any special matter, or pay any compensation for any legal services whatever.  The exceptions provided for in the statute are contained in La. R.S. 42:262 and 42:263, which require certain state and parish entities to have the approval of the governor and attorney general in order to circumvent the general counsel provided in La. R.S. 42:261 and retain special counsel.  These laws were also enacted prior to the creation of the SLFPA-East.

The later expression of the legislature enacted laws creating the SLFPA-East and West.  La. R.S. 38:330.6 specifically provides that the attorney general, rather than any district attorney, will serve as counsel for the flood protection authorities.  Interpreting La. R.S.38:330.6 in reference to La. R.S. 42:261, et seq., the difference is glaring that in the statutory provisions that establish the SLFPA-E, the Legislature did not provide any separate or exceptional authority for the SLFPA-E to retain and compensate its own special counsel as it did for parish school boards and other state and parish authorities in La. R.S. § 42:261 et seq.  Without express legislative authority to hire special counsel, the SLFPA-E must rely solely on the attorney general as counsel. If the attorney general and his assistants are unable to represent the flood protection authority because of the need for special expertise and experience, the attorney general would hire the special counsel, and such special counsel would be paid on an hourly rate rather than under a contingency fee basis.

You also claim that “SLFPA and its levee districts often exercise the constitutional and legal rights the Legislature gave them to hire special counsel and, at any given time, may have scores of lawyers working on a variety of issues ....” However, the SLFPA, both East and West, and the levee districts governed thereunder significantly differ in terms of retaining counsel. The fact that the levee districts may have had special counsel in the past has no bearing on whether such levee districts’ governing flood protection authority may also hire special counsel in the same manner.

You also attached to your letter a list of “SLFPA-E Legal Service Contracts Past and Present.”  However, you did not indicate whether or not these past and present service contracts are contingency fee arrangements, whether they were approved by the attorney general, or any other information. The mere existence of prior or present legal service contracts between the SLFPA-E and private attorneys does not make its current contingency fee contract valid or constitutional.

Finally, you claim that the law only requires your office to review a resolution by the SLFPA-E to hire special counsel for the following: (1) the resolution explains a real necessity, (2) the fee is reasonable under the circumstances, (3) the resolution is in compliance with Louisiana law, and (4) the attorney or law firm is in good standing with the Louisiana State Bar.  You did not cite any authority for this list of review requirements, but the list appears to be similar to the requirements under La. R.S. 43:263 for other state and local authorities to retain special counsel.

Under La. R.S. 43:263, a resolution seeking to retain special counsel must: (1) state fully the reasons for the action, (2) state fully the compensation to be paid, and thereby (3) show that a “real necessity” exists for retaining such special counsel.

As discussed above, the flood protection authorities cannot retain special counsel in the manner that other state and parish entities can under La. R.S. 43:263. However, in the event SLFPA-E could hire its own special counsel, the SLFPA-E resolution that was approved by you did not conform to the requirements of La. R.S. 42:263:

1.) State Fully the Reasons for the Action:  The SLFPA-E Resolution did not “state fully the reasons for the action.” The resolution submitted by SLFPA-E set forth the following:

WHEREAS, the levee districts within jurisdiction of the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) have experienced damages due to land loss and erosion caused by third parties; and

WHEREAS, retaining counsel to represent SLFPA-E in this matter will require a law firm with special expertise and experience.

BE IT HEREBY RESOLVED, that the SLFPA-E authorizes its President or Vice President to engage Jones, Swanson, Huddell & Garrison, LLC, on behalf of itself and the levee districts within its jurisdictions, regarding claims for damages due to land loss and erosion, for the benefit of and on behalf of the residents within its jurisdiction.

The resolution states that the reason for the action will be “land loss and erosion caused by a third party.” However, the resolution does not indicate the type of damages SLFPA-E seeks and does not identify from whom the damages will be sought. The resolution provides vague, imprecise, and unspecified allegations without providing sufficient information to establish whether a “real necessity” exists for hiring special counsel.

2.) State Fully the Compensation to be Paid:  The resolution submitted by SLFPA-E provided only a range of percentages under the contingency fee agreement:

BE IT HEREBY RESOLVED, that Jones, Swanson, Huddell & Garrison, LLC, shall be paid on a contingency basis ranging from 32.5 percent to 22.5 percent of any gross recovery depending on the amount in controversy.

SLFPA-E entered into a contingency fee contract that contained more than merely a range of percentages. Under the contract, the amount that SLFPA-E recovers will determine the exact percentage for the contingency fee, and the contract sets forth these details in depth.

Furthermore, the contact also contained a significant “poison pill’ provision that was not disclosed in the resolution.  The “poison pill” provision makes taxpayers liable for undisclosed attorney fees even if the law suit is withdrawn for any reason, including actions by the legislature or future board members of the SLFPA-East.

There is not authority in law to support your remarks that “the contingency fee range of 22.5% – 32.5% is within the legally acceptable range.” Louisiana law does not have an express “legally acceptable range” for contingency fee contracts. Instead, the reasonableness of a contingency fee is usually determined based on a number of factors enumerated in the Louisiana Rules of Professional Conduct, Rule 1.5(a).

3.) Real necessity:  Louisiana jurisprudence sheds some light on the La. R.S. § 42:263 in findings that “real necessity” for retaining counsel means that the state or parish authority requires special legal expertise beyond that of its normally available counsel (a district attorney or the state attorney general).  In your approval of the SLFPA-E resolution, you noted the following:

This office is not involved in deciding which claims the Board may or may not pursue.  Neither is this office involved in deciding which party or parties the Board wishes to pursue, if the Board decided to move forward with a claim. Under Louisiana law, the role of this office includes a review of the resolution the Board has submitted and a determination that counsel chosen by the Board is in good standing and is licensed to practice law in Louisiana and that the fee to be paid to counsel by the Board is reasonable under the circumstances.

Any finding of “real necessity” for retaining special counsel logically requires some knowledge of the claims the SLFPA-E intended to bring and against whom the SLFPA-E intended to bring them. Generally, the attorney general would serve as counsel for the SLFPA-E; therefore, the hiring of special counsel would require special skill, expertise, or other need beyond that which the attorney general and his assistants may provide. The resolution stated only that SLFPA-E “will require a law firm with special expertise and experience” but did not indicate or explain:  (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent.

You did not explain how your office came to the conclusion that the SLFPA-E resolution stated fully the compensation since the poison pill agreement was omitted.  Nor did you explain how the resolution shows a real necessity for special counsel without providing any explanation as to why the services of the AG would be insufficient in this matter.

Last, but not least, you gave no explanation as to why you would approve a contract that is clearly not in the public interest as it relates to fees, etc.

In short, the contract is illegal and your stretching the law to fit your purposes will not work this time.  If it walks like a duck and quacks like a duck, it is a duck!

Respectfully,

Robert Adley

Senate District 36

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