by Amy McCullough
Published: December 12,2010
Pay-to-play accusations against Hood flying again
Democrats and Republicans disagree over AG’s role
The rivalry between business interests and trial lawyers reared its head again recently as the American Tort Reform Association (ATRA) released a report this month regarding accusations of “pay-to-play” activities of several states’ attorneys general, including Mississippi’s Jim Hood. The report said Hood’s tenure as attorney general represents “one of the most egregious examples of the impropriety that can be found in the process of (state attorneys general) hiring private attorneys” who have provided campaign donations.
A number of organizations including the U.S. Chamber of Commerce and Mississippians for Economic Progress as well as media outlets such as the Wall Street Journal have consistently attacked Hood since 2008, alleging inappropriately cozy relationships between the attorney general and campaign donors.
A spokesperson for ATRA, a national non-profit dedicated to promoting tort and liability reform, said the report was released this month so that it would be timed with the National Association of Attorneys General (NAAG) conference.
According to the NAAG website, the 2010 national conference already took place in October.
The report offers specific examples of allegedly unethical conduct by Hood, specifically a $25,000 campaign contribution from the firm Bernstein Litowitz Berger & Grossmann attorneys made in mid-February 2006. The firm was then selected Feb. 21, 2006, to sue Delphi Corp., which resulted in a $333.4 million award and $40.5 million in legal fees.
ATRA attributes the information to its own research via its AGWatch project, a contract available on the attorney general’s website, Bloomberg and the Wall Street Journal.
The Attorney General’s View
When contacted to verify the campaign contribution information, Attorney General Hood, who has been meeting this week with BP officials and the U.S. Department of Justice, offered the following comment via e-mail:
“The State of Mississippi has collected more than $500 million through the use of outside counsel since 2003 and it has not cost the taxpayers one dime. The companies funding these redundant attack press releases are funded by the companies from which the State of Mississippi has recovered over $500 million and the companies against which the state has cases pending against to collect money owed to the state.”
His is the only state office that earns money for Mississippi, and the Legislature is happy to spend it.
Hood said many elected state officials accept money from entities that could be considered a conflict of interest, such as the state treasurer, who has accepted money from the banking industry, state auditor campaign funds that have come from the accounting industry and insurance industry donations to the state insurance commissioner, he said.
Hood said he favors campaign finance reform and supported the 2004 House Bill 1244, which passed both legislative houses but was vetoed by Gov. Haley Barbour.
Barbour said in a press release that he supported “the required political disclosure in this bill, but not the restricted political participation,” citing a “last minute change” that would have limited the amounts that businesses could give to political action committees.
The attorney general’s critics say the large amounts of campaign contributions from trial lawyers who have won hefty sums via suing on Mississippi’s behalf is a problem. ATRA cites a 2008 Wall Street Journal editorial that references a $14-million payout that lawyer Joey Langston shared with the Lundy, Davis firm in an MCI/WorldCom settlement. The Langston Law Firm gave more than $130,000 to elect Hood, having been retained to sue Eli Lilly, the editorial states.
Hood said his campaigns in 2003 and 2007 cost well over $1 million each.
Historically, typical sources of Mississippi Democratic campaign funds have been teachers groups, labor unions and trial, or personal injury, lawyers, while Republicans typically have a large swath of the business community at their disposal.
The philosophical disagreement at the root of the issue is whether a voter believes the Attorney General’s Office ought to aggressively pursue tort cases against large business interests, or stick to the thousands of other cases handled by the office, such as civil defense cases when the state is sued.
Tort reform advocates point out that when businesses in the healthcare sector, for example, are sued, costs and insurance rates rise, hurting individuals, doctors and the business community as a whole.
Hood views his role as a champion for Mississippians.
Companies “don’t want to be sued. They don’t want to be held accountable… It’s not about transparency. We have the most transparent system in the nation,” Hood said in a February Mississippi Business Journal interview. “I’m willing to take criticism from companies I’ve had to sue because I think the people know I’m making companies pay. I’m recouping money from bad companies… If I wasn’t doing anything, nobody would complain.”
The website www.agjimhood.com explains that the Attorney General’s Office handles more than 3,000 civil cases at any given time, about 95 percent of which are handled by in-house, full-time attorneys. The office periodically contracts with outside lawyers for a small percentage of cases at a fixed hourly rate or on a contingency fee basis. These contracts are online for public inspection.
Litigation involving contingency fee contracts requires specialized areas of knowledge that could not best be handled by in-house staff. This type of litigation also requires large up-front expenditures for expert witnesses, document management and other items. Attorneys in these cases bear the risk of expenses: they are only paid if they win the case on behalf of the state.
ATRA spokesperson Darren McKinney said, “ATRA will grudgingly concede there are rare instances where an Attorney General’s Office does not have the in-house expertise and may well need to seek specialized outside counsel. In those rare circumstances, there is no reason in the world why a confidential bidding can’t take place. The job ought to go to the most qualified law firm for the least amount of money.”
Hood’s problem with bidding out lawsuits is that some litigation needs to be kept secret so that the company doesn’t get tipped off to the fact that it’s going to be sued.
Also, advertising a case might infringe on an attorney’s intellectual property rights, he said. As in the MCI/WorldComm case, an attorney discovered information pertaining to what became the state’s lawsuit while performing discovery for another case on his own.
Sunshine Law to up again for 2011 session
State Sen. Joey Fillingane, R-Sumrall, who has proposed the Sunshine Law for the past three years, argues that request for proposals (RPFs) can be vague and exclude case theory.
The 2010 Sunshine Law, which passed the Senate but failed in the House, requires that:
>> contracts to hire outside counsel which will result in contingency fees over $500,000 be reviewed by the Legislature;
>> contingency fees be capped at 30 percent of an award, after expenses are reimbursed;
>> and contracts must be put out for bidding.
Fillingane said he believes there is the “appearance of impropriety” in the Mississippi Attorney General’s Office and that putting cases up for bid would be better than allowing an attorney general to “hand pick” law firms who may be campaign donors.
Fillingane plans to introduce the Sunshine Law again in the upcoming 2011 session.
According to attorney general documents, the highest percentage an attorney is currently allowed to win in a case is 25 percent, a lesser amount than what is contained in the bill. However, Fillingane argues that although that internal regulation may exist, the attorney general’s office is not held to it by law.
Who is ATRA?
ATRA was founded in 1986 by the American Medical Association and the American Council of Engineering Companies.
McKinney, the group’s spokesperson, says he cannot release the names of its 300 dues-paying members, because some of them ask that their identities be hidden so they will not risk retaliation by attorneys general.
The Center for Justice and Democracy names “corporate giants” Philip Morris, Dow Chemical, Exxon, General Electric, Aetna, Geico and Nationwide as ATRA supporters.
Asked if any ATRA members had been sued by Hood, McKinney said “I wouldn’t be surprised, considering all the folks he has sued in the past.”
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