SENATE BILL NO. 828
March 11, 2020, Introduced by Senators
RUNESTAD, LUCIDO, BARRETT, MACGREGOR, VICTORY, NESBITT, BUMSTEAD, DALEY,
ZORN, HORN, THEIS, SCHMIDT, VANDERWALL, MACDONALD, LASATA and MCBROOM and
referred to the Committee on Oversight.
March 11, 2020, Introduced by Senators RUNESTAD, LUCIDO, BARRETT, MACGREGOR, VICTORY, NESBITT, BUMSTEAD, DALEY, ZORN, HORN, THEIS, SCHMIDT, VANDERWALL, MACDONALD, LASATA and MCBROOM and referred to the Committee on Oversight.
the people of the state of michigan enact:
(a) "Department" means the department of the attorney general.
(b) "Government attorney" means an attorney employed as a staff attorney by the department.
(c) "Private attorney" means a private attorney or law firm.
(a) The department makes a determination before entering into the contingency fee contract that contingency fee-based representation is cost-effective and in the public interest. The determination must be in writing and include specific findings for each of the following:
(i) Whether the department has sufficient and appropriate legal and financial resources to handle the matter.
(ii) The time, labor, skill, and experience required to properly perform the attorney services that are necessary to handle the matter.
(iii) The novelty, complexity, and difficulty of the legal questions involved in the matter.
(iv) The geographic area where the attorney's services are to be provided.
(b) The contingency fee contract provides for all of the following:
(i) Subject to subparagraph (ii), the private attorney must receive a contingency fee at a rate that is less than or equal to the following:
(A) 25% of the portion of the amount recovered that is less than $10,000,000.00.
(B) 20% of the portion of the amount recovered that is $10,000,000.00 or more but less than $15,000,000.00.
(C) 15% of the portion of the amount recovered that is $15,000,000.00 or more but less than $20,000,000.00.
(D) 10% of the portion of the amount recovered that is $20,000,000.00 or more but less than $25,000,000.00.
(E) 5% of the portion of the amount recovered that is $25,000,000.00 or more.
(ii) The private attorney must not receive an aggregate contingency fee of more than $50,000,000.00, not including reasonable costs and expenses, and a contingency fee must not be based on the awarding of a penalty or fine or amount attributable to a penalty or fine.
(iii) A government attorney must retain complete control over the matter.
(iv) The government attorney with supervisory authority must be personally involved in overseeing any litigation and must attend all settlement conferences.
(v) Decisions regarding settlement of the matter must be made at the sole discretion of the government attorney with supervisory authority.
(vi) A defendant in the matter who is a state employee or officer must not be prohibited from communicating with the government attorney.
(vii) The private attorney must maintain records regarding the performance of the contract for the duration of the contract and until 4 years after the contract expires or is terminated, and must make the records available for inspection upon the request of the department. Records required to be maintained under this subdivision include, but are not limited to, all of the following:
(E) Underlying receipts and invoices.
(F) Any other financial transaction regarding the provision of attorney services under the contract.
(viii) The private attorney must maintain detailed time records for each individual private attorney and each private attorney's paralegal who works on the matter, and must make the records available for inspection upon the request of the department. The time records must be recorded in increments of 1/10 of an hour or less.
(2) If the department makes a determination under subsection (1)(a) that contingency fee-based representation is cost-effective and in the public interest, the department shall request proposals from private attorneys to provide representation on a contingency-fee basis. The department is not required to request proposals under this subsection if the department makes a determination that requesting proposals is not feasible under the circumstances. A determination made under this subsection must be in writing.
(3) The department shall develop a standard addendum to be used in contingency fee contracts with private attorneys that meets the requirements of this act.
Sec. 7. (1) Within 5 days after entering into a contingency fee contract with a private attorney, the department shall post on the department's public website the executed contract and the associated determination made under section 5(1)(a). The contract and determination must remain posted on the website for the duration of the contract including any renewals or extensions of the contract.
(2) Within 15 days after the department pays a contingency fee to a private attorney, the department shall post on the department's public website the payment information including the payment amount and private attorney to whom the payment was made. The payment information must remain posted on the website for 1 year after the date it is first posted.
Sec. 9. By February 1 of each year, the department shall submit a report regarding contingency fee contracts entered into with private attorneys to the majority leader of the senate and the speaker of the house. The report must cover the immediately preceding calendar year and include all of the following:
(a) The following information for each contingency fee contract entered into during the calendar year and each contingency fee contract that expired or was terminated during the calendar year or was in effect at the end of the calendar year:
(i) The name of each private attorney who is a party to the contract including the private attorney's law firm, if applicable.
(ii) The nature and status of the matter.
(iii) The name of the parties to the matter.
(iv) The amount recovered, if any.
(v) The amount of contingency fees paid.
(b) All determinations made under section 5.