What’s the Deal with Cities and Counties Hiring Contingency Fee Lawyers?

Tom Scott
CA Executive Director, National Federation of Independent Business

I get that cities and counties in this economy are struggling, but it seems like lately they are willing to sue just about anyone. Is this a new scheme? Taxation through litigation? Who benefits from the public sector suing the private sector?

Santa Clara County seems to be leading the charge. Back in 2000, Santa Clara County and a whole host of other counties and cities sued the paint industry. In January of this year, Santa Clara County Superior Court Judge James Kleinberg issued his final statement of decision, holding five paint manufacturers liable for $1.15 billion to replace and maintain lead paint in millions of homes in California. This decision will likely be appealed, but the fact that these cities and counties used public nuisance laws as their claims is a step too far.

Then in May 2014, Santa Clara and Orange Counties filed a lawsuit against five pharmaceutical companies claiming the companies violated California’s false advertising and unfair competition laws, thereby creating  a public nuisance. They say the drug manufacturers knew that opioids were ineffective, addictive and unsafe for long term use but persuaded doctors to prescribe them in order to expand the market and boost their profits.

The Santa Clara Assistant County Counsel Danny Chou explained that their primary goal is to make sure people understand the risks and benefits of drugs like OxyContin and Percocet before taking them. If that was the only point of the lawsuit, then that doesn’t seem legitimate. The last time I checked opioids were regulated by the U.S. Food and Drug Administration and the only way a patient can access them is if they see a doctor and get a prescription.

Last year the City of Richmond decided to sue its number one taxpayer, Chevron, because of a refinery fire back in 2012. They hired Cotchett, Pitrie and McCarthy based out of Burlingame. This is a firm that seems to have created quite a niche representing cities and counties. They also were a part of the delegation on Governor Brown’s recent trip to Mexico.

Why is the public sector suing the private sector using contingency fee lawyers? Who are these firms? Have they contributed to the elected officials’ campaigns, and is this a quid pro quo? When you look at these cases, it’s really the trial lawyers who are benefitting, as they stand to win massive fees. This trend is very disturbing and only continues to highlight why California is such a hostile environment to do business in.

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