The state attorney general won the right to hire contingent fee counsel — but lost the case on the merits.

The Supreme Court of Rhode Island today held that the state attorney general acted properly and within his authority in hiring private counsel to help prosecute a public nuisance case on a contingent fee basis.  The court nonetheless imposed conditions:

In order to ensure that meaningful decision-making power remains in the hands of the Attorney General, if is our view that, at a bare minimum, the following limitations should be expressly set forth in any contingent fee agreement between that office and private counsel:  (1) that the Office of the Attorney General will retain complete control over the course and conduct of the case; (2) that, in a similar vein, the Office of the Attorney General retains a veto power over any decisions made by outside counsel; and (3) that a senior member of the Attorney General’s staff must be personally involved in all states of the litigation.

Moreover, not only must the Attorney General have absolute control over all stages of the litigation, but he or she must also appear to the citizenry of Rhode Island and to the world at large to be exercising such control.

State of Rhode Island v. Lead Industries Ass’n, Inc., Nos. 2004-63-M.P., 2006-158-Appeal & 2007-121-Appeal, slip op. at 74-75 (R.I. July 1, 2008) (footnote omitted).

(The ruling may influence other states’ courts.  The Supreme Court of California, for example, has recently granted review on the issue.  County of Santa Clara v. Atlantic Richfield Co., No. S163681 (Cal.).)

The court also concluded that the nuisance claim against lead paint manufacturers lacked merit, in part because the defendants lacked control over their product at the time it caused injury, and that the trial court erred in holding the attorney general in contempt for out-of-court statements.

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