Local governments try to abate lead paint — using contingent fee lawyers.

Kimberley A. Kralowec noted last month in The UCL Practitioner that a California Court of Appeal panel will soon hear argument on a hot issue among opponents of contingent fees:  Does the prospect of earning a contingent fee rob the lawyer who represents a public entity of "neutrality"?

The trial judge answered yes, at least in cases involving abatement of public nuisances.  He relied on a 22 year-old California Supreme Court decision, People ex rel. Clancy v. Superior Court, 705 P.2d 347 (Cal. 1985), which dealt with efforts to shut a book store on the ground that it sold obscene material, a misdemeanor.

The case, County of Santa Clara v. Superior Court, No. H031540 (Cal. Ct. App.), goes before Their Honors on January 17, 2008, in San Jose.  The plaintiffs, several cities and counties in California, seek to require pigment makers to pay for removing lead paint from homes and buildings.  You can read the principal briefs — courtesy of Ms. Kralowec — here.

Threat to Neutrality?  The trial judge focused on Clancy‘s "neutrality" requirement, dismissing the notion that any governmental entity could exercise enough control over a contingent fee lawyer (CFL) to assure lawyer’s necessary neutralness.  That the lawyer in Clancy served as the city’s sole counsel and could on his own say-so bring criminal charges did not appear to matter.  His Honor even concluded that the danger of the CFL’s committing un-neutral acts required invalidation of "any" contingent fee arrangement — regardless of the client’s contractual right to make litigation decisions (including ones regarding claims, settlement, and trial strategy), no matter how tight the language retaining those rights, and regardless the intensity of the oversight of the CFL.

Tort Reform Angle.  We may assume that the defendants who moved to axe the contingent fee arrangement did so with a particular kind of neutrality in mind — the type that kills the lawsuit because the government hasn’t the resources to pay lawyers on an hourly basis. 

That would help explain the defense-supporting involvement of amici like the American Tort Reform Association, the U.S. Chamber of Commerce, and the American Chemistry Council.

What Would Hourly Lawyers Do?  The decision raises interesting questions about the ability of cities, counties, and other units of government to enhance enforcement of civil law by hiring CFLs at no out-of-pocket cost to taxpayers.

First, does hiring a CFL to seek purely civil remedies raise the same "neutrality" concerns as appointing a private prosecutor to press criminal charges?

Second, would outside lawyers working by the hour feel any differently about enforcement than a CFL would?  Or would they simply prefer that the lawsuit last as long as possible, regardless of the outcome, maximizing their fee at no risk to them? 

Third, does paying by the hour in itself give the client effective control of the litigation?  Or is active supervision still necessary?

Finally, do contingent fee agreements really tie clients’ hands the way critics imagine they do?  In Blawgletter’s experience, a client will have only itself to blame if it doesn’t insist on retaining key rights — including the authority to fire the CFL, with or without cause; to accept or reject all settlement proposals, including handsome ones; and even to drop a case, regardless of its strength and prospects.

The economic consequences of pursuing civil remedies with the "neutral" stance of a government representative are essentially the same in either an hourly case or a contingent fee lawsuit.  The client’s decision to fire, reject, or quit has the effect of wasting the hours that have been invested in the litigation.  In an hourly case, the lawyer simply keeps the hourly fees.  The CFL situation differs only in that the client will have to reimburse the CFL’s expenses and, in some situations, pay the CFL’s lodestar (hours times hourly rate) or the contingent fee that the CFL would have earned. 

Our Take.  Blawgletter finds the idea that all contingent fee arrangements destroy a governmental client’s neutrality contrary to experience and implausible even in the realm of theory.  Last November, so did the court in City of Grass Valley v. Newmont Mining Corp., 2007 WL 4166238, at *1 (E.D. Cal. Nov. 20, 2007), which distinguished Clancy because "the City Attorney for the City of Grass Valley is acting as co-counsel in this action and the City retains ‘ultimate decision-making authority in the case.’"

We also doubt that forcing local governments to pay lawyers by the hour provides a "neutral" solution that, per Clancy, balances the interests of the people against those of the defendants.  An hourly arrangement doesn’t make the lawyers any more "neutral" than a contingent fee does.  Both the hourly lawyer and the CFL have an incentive to maximize their income.  And the financial consequences to the client of exercising control under either arrangement are basically the same.

The hourly fee has problems of its own.  It encourages inefficiency.  And the necessity of the government’s coming out of pocket weakens enforcement when it does not prevent it.

But of course we think The Hourly Fee Should Die.  And should die some more.

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Photo of Barry Barnett Barry Barnett

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck…

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck Redden).

Barnett is a Fellow in the American College of Trial Lawyers, and Lawdragon has named him one of the top 500 lawyers in the United States three years in a row. Best Lawyers in America has honored him as “Lawyer of the Year” for Bet-the-Company Litigation (2019 and 2017) and Patent Litigation (2020) in Houston. Based in Texas and New York, Barnett has tried complex business disputes across the United States.

Barnett’s background, training, and experience make him indispensable to his clients. The small-town son of a Texas roughneck and grandson of a Texas sharecropper, Barnett “developed an unusual common sense about people, their motivations, and their dilemmas,” according to former client Michael Lewis.

Barnett has been historically recognized for his effectiveness and judgment. His peers chose him, for example, to the American College of Trial Lawyers and American Law Institute. His decades of trial and appellate work representing both plaintiffs and defendants have made him a master strategist and nimble tactician in complex disputes.

Barnett focuses on enforcement of antitrust laws, the “Magna Carta of free enterprise,” in Supreme Court Justice Thurgood Marshall’s memorable phrase. “Barry is one of the nation’s outstanding antitrust lawyers,” according to Joseph Goldberg, a member of the Private Antitrust Enforcement Hall of Fame. Named among Texas’s top ten antitrust lawyers of 2023, Business Today calls Barnett a “trailblazer” among the “distinguished legal minds” who “dedicate their skill and expertise to the maintenance of healthy competition in various sectors” of the Lone Star State’s booming economy. Barnett is also adept in energy and intellectual property matters and has battled for clients against a Who’s Who list of corporate behemoths, including Abbott Labs, Alcoa, Apple, AT&T, BlackBerry, Broadcom, Comcast, Dow, JPMorgan Chase, Samsung, and Visa.

Barnett commands a courtroom with calm and credibility and “is the perfect lawyer for bet the company litigation,” said Scott Regan, General Counsel of former client Whiting Petroleum. His performance before the Supreme Court in Comcast Corp. v. Behrend prompted the Court to withdraw the question on which it had granted review. The judge in a trial involving mobile phone technology called Barnett “one of the best” and that his opening statement the finest he had ever seen. Another trial judge told Barnett minutes after a jury returned a favorable verdict against the county’s biggest employer that he was one of the two best trial lawyers he’d ever come across—adding that the other one was dead.

A versatile trial lawyer, Barnett knows how to handle a case all the way from strategic pre-suit planning to affirmance on appeal. He’s tried cases to verdict and then briefed and argued them when they went before appellate courts, including the Second, Third, Fifth, and Tenth Circuits, the Supreme Court of Louisiana, and (in the case of Comcast Corp. v. Behrend) the Supreme Court of the United States.

Barnett is a sought-after public speaker, often serving on panels and talking about topics like the trials of antitrust class actions and techniques for streamlining complex litigation. He also comments on trends in commercial litigation and the implications of major rulings for outlets such as NPR, Reuters, Law360, Corporate Counsel, and The Dallas Morning News. He’s even appeared in a Frontline program about underfunding of state pensions, authored chapters on “Fee Arrangements” and “Techniques for Expediting and Streamlining Litigation” (the latter with Steve Susman) in the ABA’s definitive treatise on Business and Commercial Litigation in Federal Courts, 5th, and commented on How Antitrust Enforcers Might Think Like Plaintiffs’ Lawyers.

Clients and other hard graders have praised Barnett for his courtroom skills and legal acumen.

A client in a $100 million oil and gas case, which Barnett’s team won at trial and held on appeal, said Barnett and his team “presented a rare combination of strong legal intellect, common sense about right and wrong, and credibility in the courtroom.” David McCombs at Haynes and Boone said Barnett “has a natural presence that goes over well with juries and judges.”

Even former adversaries give Barnett high marks. Lead opposing counsel in a decade-long antitrust slugfest said “Barry is a highly skilled advocate. He understands what really matters in telling a narrative and does so in a very compelling manner.”

Barnett relishes opportunities to collaborate with all kinds of people. At the Center for American and International Law (CAIL), founded by a former prosecutor at Nuremberg in 1947 and headquartered in the Dallas area, he has served on the Executive Committee, co-chaired the committee that produced CAIL’s first-ever strategic plan, supported CAIL’s Institute for Law Enforcement Administration and other development efforts, and proposed formation of a new Institute for Social Justice Law. CAIL’s former President David Beck said “Barry is extremely bright” and is “very well prepared in every lawsuit or professional task he undertakes.”

Barnett is also a Trustee of the New-York Historical Society, a Sterling Fellow at Yale, a member of the Yale University Art Gallery’s Governing Board, a winner of the Class Award for his work on behalf of his college class, and a proud contributor to the Yellow Ribbon Program at Harvard Law. Barnett’s pro bono work includes leading the trial team representing people who are at greatest risk of severe illness and death as a result of being exposed to the novel coronavirus SARS-CoV-2 while being detained in the Dallas County jail—work for which he received the NGAN Legal Advocacy Fund RBG Award.

At Susman Godfrey, Barnett has served on the firm’s Executive Committee, Employment Committee, and ad hoc committees on partner compensation, succession of leadership, and revision of the firm’s partnership agreement. He also twice chaired the Practice Development Committee.

Barnett understands that clients face many pressures. Managing the stress is important, especially in matters that take years to resolve. He encourages clients to call him whenever they have a question or concern and to keep the inevitable ups and downs in perspective. He wants them to know that he will do his level best to help them achieve their goals. He also strives to foster trust and to make working with him a pleasure.

Cyrus “Skip” Marter, the General Counsel of Bonanza Creek in Denver and a former Susman Godfrey partner and client, said Barnett is “excellent about communicating with clients in a full and honest manner” and can “negotiate for his clients from a position of strength, because he is not afraid to take a case through a full trial on the merits.” Stacey Doré, the President of Hunt Utility Services and a former client, said that Barnett is “an excellent trial lawyer and the person you want to hire for your bet-the-company cases. He is client focused, responsive, and uniquely savvy about trial and settlement strategy.” A New York colleague said, “Barry is a joy to work with as co-counsel. He tackles complex procedural and factual hurdles capably, efficiently, and without drama.”

Barnett’s wide-ranging experience and calm, down-to-earth approach enable him to connect with clients, judges, jurors, witnesses, and even opposing counsel. He grew up in Nacogdoches, Texas. He co-captained his high school varsity football team as an All-East Texas middle linebacker while also serving as the Editor of Key Club’s Texas-Oklahoma District, won the Best Typist award, took the History Team to glory, and sang in the East Texas All Region Choir. As Dan Kelly of client Vistra Corp. put it, Barnett is “a great person to be around.”

Barnett is steady and loyal. He has practiced at Susman Godfrey his entire career. He and his wife Nancy live in Dallas and enjoy spending time in Houston and New York. Their daughter works for H-E-B in Houston, and their son is a Haynes and Boone transactions lawyer in Dallas.

As a member of Ivy League championship football teams in his junior and senior years at Yale and a parent of two Yalies, Barnett has no trouble choosing sides for “The Game” in November. And he knows how important fighting all the way to the end is. On his last play from scrimmage, in the waning minutes of The Game on Nov. 22, 1980, he recovered a Crimson fumble.

Yale won, 14-0.