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Sub. S. B. No. 344 As Reported by the Senate State Government Oversight and Reform CommitteeAs Reported by the Senate State Government Oversight and Reform Committee
130th General Assembly | Regular Session | 2013-2014 |
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Cosponsors:
Senators Brown, Beagle, Coley
A BILL
To enact sections 9.49, 9.491, 9.492, 9.493, 9.494,
9.495, 9.496, 9.497, and 9.498 of the Revised Code
to provide transparency in contracts between the
state and private attorneys.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 9.49, 9.491, 9.492, 9.493, 9.494,
9.495, 9.496, 9.497, and 9.498 of the Revised Code be enacted to
read as follows:
Sec. 9.49. Sections 9.49 to 9.497 of the Revised Code shall
be known as the transparency in private attorney contracts act.
Sec. 9.491. As used in sections 9.49 to 9.497 of the Revised
Code:
(A) "Legal matter" means any administrative proceeding, case,
group of cases, or legal issue for which the state requires legal
representation or advice.
(B) "Private attorney" means any attorney in the private
practice of law or a law firm but does not mean an attorney
appointed by the attorney general pursuant to section 109.08 of
the Revised Code for the purpose of collecting debts certified to
the attorney general for collection under any law or debts that
the attorney general is authorized to collect.
(C) "State" means this state and any officer, department,
board, commission, division, bureau, council, or unit of
organization, however designated, of the executive branch of
government of this state and any of its agents.
(D) "Securities class action" means an action brought as a
class action that includes a violation of the "Securities Act of
1933," 15 U.S.C. 77a and following, or the "Securities Exchange
Act of 1934," 15 U.S.C. 78a and following.
Sec. 9.492. (A) The state shall not enter into a contingency
fee contract with a private attorney unless the attorney general
or the attorney general's designee makes a written determination
prior to entering into that contract or within a reasonable time
after entering into the contract that private representation is
both cost-effective and in the public interest. Any written
determination shall include findings for each of the following
factors:
(1) Whether there exist sufficient and appropriate legal and
financial resources within the attorney general's office to handle
the matter involved;
(2) The nature of the legal matter for which private
representation is required so long as divulging that information
would not violate any ethical responsibility of the attorney
general or privilege held by the state.
(B) If the attorney general or the attorney general's
designee makes the determination described in division (A) of this
section, the attorney general or the attorney general's designee
shall request qualifications from private attorneys to represent
the state, unless the attorney general or the attorney general's
designee determines that requesting qualifications is not feasible
under the circumstances and sets forth the basis for this
determination in writing.
(C)(1) Except as otherwise provided in division (C)(2) of
this section and subject to divisions (C)(3) and (4) of this
section, the state shall not enter into a contingency fee contract
with a private attorney that provides for the private attorney to
receive an aggregate contingency fee in excess of the total of the
following amounts:
(a) Twenty-five per cent of any damages up to ten million
dollars;
(b) Twenty per cent of any portion of any damages of ten
million dollars or more but less than fifteen million dollars;
(c) Fifteen per cent of any portion of any damages of fifteen
million dollars or more but less than twenty million dollars;
(d) Ten per cent of any portion of any damages of twenty
million dollars or more but less than twenty-five million dollars;
(e) Five per cent of any portion of any damages of
twenty-five million dollars or more.
(2) Except as provided in division (D) of this section with
respect to security class actions, the aggregate contingency fee
under division (C)(1) of this section, exclusive of reasonable
costs and expenses, shall not exceed fifty million dollars,
regardless of the number of lawsuits filed or the number of
private attorneys retained to achieve the recovery, unless the
contract expressly authorizes a contingency fee in excess of fifty
million dollars. The attorney general shall not enter into a
contract authorizing a contingency fee in excess of fifty million
dollars without the approval of the controlling board.
(3) A contingency fee in a contingency fee contract under
division (C)(1) of this section shall not be based on penalties or
civil fines awarded or on any amounts attributable to penalties or
civil fines.
(4) The amount of a contingency fee paid to a private
attorney under a contingency fee contract between the state and
the private attorney shall be the percentage of the amount of
damages actually recovered by the state to which the private
attorney is entitled under division (C)(1) of this section.
(D) In any contingency fee contract covering a securities
class action in which this state is appointed as lead plaintiff
pursuant to section 27(a)(3)(B)(i) of the "Securities Act of
1933," 15 U.S.C. 77z-1(a)(3)(B)(i) or section 21D(a)(3)(B)(i) of
the "Securities Exchange Act of 1934," 15 U.S.C. 78u-4(a)(3)(B)(i)
or in which any state is a class representative, division (C)(2)
of this section applies only with respect to the state's share of
any judgment, settlement amount, or common fund and does not apply
to the amount of attorney's fees that may be awarded to a private
attorney for representing other members of a class certified
pursuant to Rule 23 of the Federal Rules of Civil Procedure or
state class action procedures.
(E)(1) A contract entered into between the state and a
private attorney under this section shall include all of the
following provisions that apply throughout the term of the
contract and any extensions of that term:
(a) The private attorney shall acknowledge that the assistant
attorney general retains complete control over the course and
conduct of the case involved.
(b) An assistant attorney general with supervisory authority
shall oversee the litigation of the case.
(c) An assistant attorney general shall retain veto power
over any decisions made by the private attorney.
(d) Any opposing party in the case may contact the assistant
attorney general directly without having to confer with the
private attorney unless the assistant attorney general instructs
the opposing party otherwise.
(e) An assistant attorney general with supervisory authority
for the case may attend all settlement conferences.
(f) The private attorney shall acknowledge that final
approval regarding settlement of the case is reserved exclusively
to the discretion of the attorney general.
(2) Nothing in division (E)(1) of this section shall be
construed to limit the authority of the client regarding the
course, conduct, or settlement of the case.
Sec. 9.493. The state shall not enter into a contract with a
private attorney located outside this state unless the attorney
general determines that at least one of the following applies:
(A) There are no private attorneys with an office in this
state that are willing to accept the legal representation.
(B) All private attorneys with offices in this state that
possess the necessary experience or capability are conflicted and
unable to represent the state or the attorney general or lack
necessary personnel and capacity in the firm to take on the
engagement.
(C) The attorney general is prevented from engaging a private
attorney with an office in this state under the rules of the
controlling board regarding waiver of competitive selection.
(D) There are no private attorneys with offices in this state
that possess the necessary experience, capability, or capacity
required by the contemplated engagement.
Sec. 9.494. (A) A copy of the executed contingency fee
contract between the state and a private attorney pursuant to
section 9.492 or 9.493 of the Revised Code and any corresponding
submission by the attorney general to the controlling board
pursuant to division (C)(2) of section 9.492 of the Revised Code
shall be posted on the attorney general's web site and shall
remain posted on the web site for the duration of the contract.
(B) A private attorney under a contingency fee contract to
provide services to the state pursuant to section 9.492 or 9.493
of the Revised Code shall maintain from the inception of the
contract until at least three years after the contract expires or
is terminated detailed current records, including documentation of
all expenses, disbursements, charges, credits, underlying receipts
and invoices, and other financial transactions that concern the
provision of the attorney services. The private attorney shall
maintain detailed contemporaneous time records for the attorneys
and paralegals working on the legal matter and shall promptly
provide these records to the attorney general upon request.
Sec. 9.495. By the first day of September of each year, the
attorney general shall submit a report to the president of the
senate and the speaker of the house of representatives describing
the use of contracts with private attorneys in the preceding
fiscal year. The report shall include the following:
(A) Identification of all contracts entered into during the
fiscal year and all previously executed contracts that remain
current during any part of the fiscal year or that have been
closed during any part of the fiscal year, and for each contract a
description of all of the following:
(1) The name of the private attorney with whom the state has
contracted, including the name of the private attorney's law firm
if the private attorney is an individual;
(2) The nature of the legal matter that is the subject of the
contract so long as divulging that information would not violate
any ethical responsibility of the attorney general or privilege
held by the state;
(3) The state entity the private attorney was engaged to
represent or counsel;
(4) The total legal fees approved by the attorney general for
payment to a private attorney by the state for legal services
rendered during the preceding fiscal year.
(B) Copies of any written determinations made pursuant to
sections 9.492 to 9.494 of the Revised Code during the fiscal
year.
Sec. 9.496. Sections 9.491 to 9.495 of the Revised Code do
not apply to contingency fee contracts and renewals thereof that
are in existence on the effective date of this section.
Sec. 9.497. Nothing in sections 9.49 to 9.496 of the Revised
Code shall be construed to expand the authority of any state
agency or state agent to enter into contracts if no such authority
previously existed.
Sec. 9.498. The general assembly intends that any limitations
on entering into a contingency fee contract, as provided by
sections 9.491 to 9.495 of the Revised Code, are to be applied
only to contracts with private counsel retained on a contingency
fee basis by the state. These limitations shall not apply to
contingency fee contracts between private parties and contracts
not involving the state.
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