Louisiana's attorney general defends his approval of east bank levee authority's resolution for hiring wetlands suit law firm

Mark Schleifstein, NOLA.com
January 09, 2014

Louisiana Attorney General Buddy Caldwell defended his actions involving the Southeast Louisiana Flood Protection Authority-East's hiring of a law firm to file a controversial wetlands damages lawsuit against 97 energy companies in July 2013, in a motion filed Thursday in a Baton Rouge state court.

And in the motion aimed at overturning a lawsuit filed in 19th Judicial District Court against him by the Louisiana Oil and Gas Association, Caldwell also defended his practice of hiring private law firms to handle lawsuits, and to allow them to be paid a share of any judgments. The oil and gas group has criticized Caldwell for allowing such contracts, which it contends are contingency fees.

Caldwell also asked the court for a ruling that he is allowed to act as counsel to flood protection authorities like the east bank levee authority, but only when called upon to do so.

The Louisiana Oil and Gas Association filed suit against Caldwell on Dec. 16 in an attempt to halt the levee authority's suit. The oil industry organization, whose members include many of the companies named in the suit, asked a state judge to declare that Caldwell's office improperly approved a contract between the levee authority and the Jones Swanson Huddell & Garrison LLC law firm and to issue an injunction rescinding the approval.

The oil and gas group hopes to have the contract declared to be improperly drawn, which could halt the case. It also contends that Caldwell improperly approved the way the law firm would be paid.

The contract between Jones Swanson and the levee authority guarantees the law firm between 22 percent and 33 percent of any damages collected. It also includes a "poison pill" provision requiring the payment of expenses and legal fees if the suit is canceled before a court decision or settlement is reached.

In his motion, Caldwell pointed out that the Louisiana Oil and Gas Association has questioned his authority to enter into similar legal service contracts, as indicated from a statement on its website that says, "LOGA adamantly opposes contingency contracts and has been successful in keeping them out of the Attorney General's office since the landmark litigation against (former Louisiana Attorney Gen. Richard) Ieyoub."

"In light of LOGA's public representations challenging the attorney general's legal authority to enter into contracts for legal services with private law firms, the attorney general hereby requests judicial clarification of this issue," Caldwell wrote in his motion. He said he has the right to enter into such contracts under a provision of state law when the contracts require fees will be awarded only through the order of a court and that the state won't be responsible for any costs or fees.

Caldwell also asked the court to declare that such contracts are not "contingency fee contracts" under state law because no state money is paid to the attorneys.

"My office was charged with reviewing the resolution presented by the Southeast Louisiana Flood Protection Authority-East, and we did so in a manner consistent with state law written and enacted by the Louisiana Legislature," Caldwell said in a news release announcing the filing. "We welcome the opportunity for the court to consider this matter.”

In his motion, Caldwell said he followed state law in determining the levee authority's resolution provided "a sufficient explanation for the necessity of obtaining outside counsel," summarized the compensation to be paid to the firm, and contained a "full statement of the reasons for the action."

"Pursuant to law, Mr. Caldwell merely reviewed and approved the resolution," his motion said. "Mr. Caldwell did not approve the contract with Jones, Swanson, Huddell & Garrison, LLC ... and Mr. Caldwell's approval of the resolution does not equate to approval of the contract."

Caldwell said he has approved "countless other similar resolutions" of the levee authority's board and of other political subdivisions in the same fashion, all in compliance with state law.

He denied he has any personal or political ties with the Jones Swanson law firm or its attorneys.

He also said he was never asked by the levee authority to represent it in filing the lawsuit against the energy companies, and that state law designates him as the authority's counsel only "when (he is) called upon to do so."

Caldwell also said his approval of the resolution is not a violation of the state Constitution's restrictions on appropriating or use of state funds, as alleged by the oil and gas group. In its suit, the group said that if the levee authority were to receive money as a result of the lawsuit, the Constitution required it to be given to the state.

But Caldwell said the money wouldn't be classified as state funds because the levee authority was created as an independent political subdivision, and not as a state entity or agency. 

And even if he had been asked by the levee authority to represent it, Caldwell said, he would not be required to hire a special counsel on an hourly basis -- rather than the percentage of the award basis used with Jones Swanson -- because any money recovered by the levee authority would not be state money. As an independent political subdivision, he said, the authority "can recover only for its own damages."

Caldwell said the oil and gas group also was wrong in saying the levee authority had to follow state law governing how state boards and commissions compensate special counsels, which would not allow the payment method being used with Jones Swanson.

"Because SLFPA-E is not a state board or commission, this statute does not apply to SLFPA-E," he wrote. 

Caldwell also disputed the oil and gas group's contention that the levee authority's resolution did not properly show a "real necessity" for hiring the law firm, and that the attorney general was required to assure that necessity existed.