Weekend Reading! Report on ‘Unholy Alliance’ Between AGs, Litigation Industry

An unholy alliance
New report examines big money windfalls for politically connected personal-injury lawyers.

The conservative Manhattan Institute has a new report out (OK, couple weeks old, relatively new, whatever) focusing on the “unholy alliance” between state attorneys general and “the litigation industry” (private personal-injury lawyers, dubbed “Trial Lawyers, Inc.” in the report title).

Are AGs and trial attorneys “in bed” with each other, the report asks? Indubitably, the report answers.

Oh, man, AGs and trial attorneys, you gotta keep an eye these guys!:

In fact, our state attorneys general have become not just allies of the trial bar but, in many cases, indispensable to developing Trial Lawyers, Inc.’s new lines of business. State AGs make possible the payment of windfall fees to their allies in the plaintiffs’ bar, whose lawyers in turn gratefully fill the officials’ campaign coffers with a share of their easily obtained cash. This report tells the story of the questionable bargain between the trial bar and the states’ top law-enforcement officers….

To subsidize their ambition, many state attorneys general have embraced the plaintiffs’ bar over the past two decades in a symbiotic relationship that has enriched each at the expense of the general public and the rule of law.

Among the aforementioned “questionable bargains”: Arkansas’ own AG Dustin McDaniel makes a special appearance in the report for his litigative derring-do, having hired the Texas law firm Bailey Perrin Bailey a few years back to handle the state’s suit against pharmaceutical manufacturer Eli Lilly. That suit resulted in an $18.5 million settlement between Eli Lilly and the state in 2010, and a $2.775 million payday for Bailey Perrin Bailey.

The report adds that Bailey Perrin Bailey has been a significant supporter of the Democratic Party of Arkansas, with $70,000 in contributions.

The Manhattan Institute concludes that the cycle of windfall legal fees for private attorneys and political contributions for AGs and political parties creates “an appearance of impropriety.” Their suggestions:

To put a stop to such conflicts of interest and the appearance of self-dealing, states need to place restrictions on AGs’ discretion in jobbing out state business, and they need to review laws that give AGs a putative basis for such overreaching. As the body with jurisdiction over interstate commerce, Congress also has a role to play in ensuring that state attorneys general are not perversely preempting federal regulatory schemes.

The report also alludes to a ranking of attorney general transparency conducted by Americans for Tort Reform, in which Arkansas scores a decidedly unimpressive “D” (PDF). But we should credit McDaniel for the recent move to improve accountability in his office by revising his policy on the disbursement of legal settlement funds, as we reported last month. That might push his score up to a “gentleman’s C.” Maybe.

What a great report!  I read the first half and learned a lot! Now your assignment is to read the rest of the report over the weekend, so I don’t have to, and report back to me what it says on Monday. Yes, this will be on the mid-term.

 Trial Lawyers, Inc.: A Report on the Alliance Between State AGs and the Plaintiff’s Bar 2011 (Manhattan Institute)

 

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