The U.S. Supreme Court has decided not to hear an appeal from a California Supreme Court ruling allowing government prosecutors to hire private law firms on a contingency-fee basis to pursue public nuisance claims involving lead paint. Atlantic Richfield Co. v. Santa Clara County, No. 10-546 (U.S., cert. denied January 10, 2011). Additional information about the case appears in the August 5, 2010, Issue of this Report. The California court determined that this practice was acceptable as long as government lawyers retain the power to control and supervise the litigation. The court remanded the matter for the parties to adjust their contingency-fee agreements to include specific oversight requirements.

While the U.S. Supreme Court’ s ruling effectively ends any challenge to this aspect of the state court’s ruling, it does not serve as precedent on the issue. Further limiting its scope is the California high court’s recognition that the “unique circumstances of each prosecution may require a different set of guidelines for effective supervision and control of the case, and public entities may find it useful to specify other discretionary decisions that will remain vested in government attorneys.”

Companies opposing governmental entities’ use of contingency-fee attorneys contend that the agreements, which offer a share of the proceeds, create a conflict of interest by giving private counsel a stake in the outcome. City and county attorneys counter that they would be unable to prosecute complex public nuisance lawsuits if they were unable to hire private lawyers with the expertise and resources to sue major corporations. See San Francisco Chronicle, January 11, 2011.