Last week, Peggy Little and the Competitive Enterprise Institute published Pirates at the Parchment Gates, in which she explained how the practice of state attorneys general entering into contingency fee contracts runs roughshod over at least three constitutional principles. Those contracts got their start in the tobacco litigation of the 1990s. After that experience left a bad taste in the mouths of many, the practice moved toward the shadows although it never disappeared. Average wholesale price litigation and other such schemes kept the practice alive until it reappeared in the recent climate change inquisition.
Little notes that, when state attorneys general enter into contingent fee contracts with private counsel, they: (1) end run the appropriation process in a constitutionally impermissible way that cannot be sanctioned by state statutes; (2) it creates pots of money that have not been legislatively authorized and are not subject to legislative control and accountability; and (3) the allow private firms to play a role in governmental investigations and prosecutions in violation of due process. Moreover, the contracts represent bad policy.