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REFERENCE TITLE: private attorney retention; municipalities; counties |
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State of Arizona House of Representatives Fifty-fourth Legislature Second Regular Session 2020
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SB 1459 |
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Introduced by Senator Leach
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AN ACT
amending title 9, arizona revised statutes, by adding chapter 14; amending title 11, arizona revised statutes, by adding chapter 15; relating to legal representation of local governmental entities.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 9, Arizona Revised Statutes, is amended by adding chapter 14, to read:
CHAPTER 14
PRIVATE ATTORNEY RETENTION
ARTICLE 1. GENERAL PROVISIONS
9-1501. Definitions
In this chapter, unless the context otherwise requires:
1. "Government attorney" means an attorney employed by a city or town as a staff attorney in the city or town attorney's office.
2. "Private attorney" means any private attorney or law firm.
9-1502. Written determination of necessity to enter into contingency fee contract; procurement; attorney general approval
A. a city or town may not enter into a contingency fee contract with a private attorney unless the city or town attorney makes a written determination before entering into such a contract that contingency fee representation is both cost effective and in the public interest. The city or town attorney's written determination shall include specific findings for each of the following factors:
1. Whether sufficient and appropriate legal and financial resources exist within the city or town attorney's office to handle the matter.
2. The time and labor required to perform the task, the novelty, complexity and difficulty of the questions involved and the skill necessary to perform the attorney services properly.
3. The geographic area where the attorney services are to be provided.
4. The amount of experience desired for the particular kind of attorney services to be provided and the nature of the private attorney's experience with similar issues or cases.
5. Whether the issue is a matter of statewide concern.
B. If the city or town attorney makes the determination provided in subsection A of this section, the city or town attorney shall request proposals from private attorneys to represent the city or town on a contingency fee basis.
c. before a contingency fee contract with a private attorney is effective and enforceable and before any monies may be spent by the city or town, the city or town must receive approval from the attorney general's office for the contract. the city or town shall file the proposed contract with the attorney general along with the written determination pursuant to subsection a of this section. a contract filed with the attorney general by a city or town pursuant to this subsection is considered approved by the attorney general unless, not later than sixty days after the date the attorney general receives the request to approve the contract, the attorney general notifies the city or town the attorney general is refusing to approve the contract. if the attorney general refuses to approve the contract, the attorney general shall specifically identify the provisions of this section with which the contract fails to comply or the city or town failed to comply or the findings with which the attorney general disagrees. This section does not prohibit a city or town from correcting a failure to comply with the requirements of this section and resubmitting a proposed contract pursuant to the requirements of this section.
9-1503. Contingency fee limit; requirements; notices; applicability
A. a city or town may not enter into a contingency fee contract that provides for the city's or town's private attorney to receive a contingency fee from the city's or town's portion of the recovery in excess of an aggregate of all of the following:
1. Twenty‑five percent of the initial recovery of less than $10,000,000.
2. Twenty percent of that portion of any recovery of $10,000,000 or more but less than $15,000,000.
3. Fifteen percent of that portion of any recovery of $15,000,000 or more but less than $20,000,000.
4. Ten percent of that portion of any recovery of $20,000,000 or more but less than $25,000,000.
5. Five percent of any recovery of $25,000,000 or more.
B. The contingency fee received by the city's or town's private attorney may not exceed $50,000,000, except for reasonable costs and expenses and regardless of the number of lawsuits filed or the number of private attorneys retained to achieve the recovery.
C. the city or town may not enter into a contract for contingency fee attorney services unless the following requirements are met throughout the contract period and any extensions of the contract:
1. A government attorney retains ultimate control over the course and conduct of the case.
2. A government attorney with supervisory authority is personally involved in overseeing the litigation.
3. A government attorney retains veto power over any decisions made by the private attorney.
4. Any defendant's attorney that is the subject of the litigation may contact the lead government attorney directly without having to confer with the private attorney.
5. A government attorney with supervisory authority for the case attends all settlement conferences. For the purposes of this paragraph, "attends" includes attendance by telephone, teleconferencing or similar electronic devices.
6. Decisions regarding settlement of the case may not be delegated to a city's or town's private attorney.
D. The city or town attorney shall develop a standard addendum to every contract for contingent fee attorney services that the city or town attorney must use in all cases, describing in detail what is expected of both the contracted private attorney and the city or town, including the requirements prescribed in subsection C of this section.
E. The city or town attorney shall post copies of any executed contingency fee contract and the city or town attorney's written determinations pursuant to section 9-1502 to enter into a contingency fee contract with the private attorney on the city or town attorney's website or, if the city or town attorney does not have a website, on the website of the city or town for public inspection within five business days after the date the contract is executed, and the contract and determination shall remain posted on the website for the duration of the contingency fee contract, including any extensions or amendments of the contract, unless the city or town attorney determines that the posting may cause damage to the reputation of any business or person. Notwithstanding the requirements of this subsection, posting on the website shall be made not later than when a lawsuit is filed. The city or town attorney shall post any payment of contingency fees on the website within fifteen days after the payment of the contingency fees to the private attorney, and the payment shall remain posted on the website for at least three hundred sixty‑five days thereafter.
F. Any private attorney under contract to provide services to a city or town on a contingency fee basis, from the inception of the contract until at least four years after the contract expires or is terminated, shall maintain detailed current records, including documentation of all expenses, disbursements, charges, credits, underlying receipts and invoices and other financial transactions that concern the provision of the attorney services. The private attorney shall make all the records available for inspection and copying on request pursuant to title 39, chapter 1, article 2. The private attorney shall maintain detailed contemporaneous time records for the attorneys and paralegals working on the matter in increments of not greater than one-tenth of one hour and shall promptly provide these records to the city or town attorney on request.
G. This chapter does not apply to any contingency fee contract in which a city or town hires a private attorney to pursue debt collection cases for the city or town.
9-1504. Annual report
By February 1 of each year, the city or town attorney shall submit a report to the governor, the attorney general, the president of the senate and the speaker of the house of representatives and shall provide a copy of the report to the secretary of state that describes the use of contingency fee contracts with private attorneys in the preceding calendar year. At a minimum the report shall:
1. Identify all new contingency fee contracts entered into during the year and all previously executed contingency fee contracts that remain current during any part of the year.
2. Describe for each contract:
(a) The name of the private attorney with whom the city or town has contracted, including the name of the attorney's law firm.
(b) The nature and status of the legal matter.
(c) The name of the parties to the legal matter.
(d) The amount of any recovery.
(e) The amount of any contingency fee paid.
3. Include copies of any written determinations made pursuant to section 9‑1502 during the year.
9-1505. No expansion of authority
This chapter does not expand the authority of any city or town or city or town employee to enter into contracts where no authority previously existed.
Sec. 2. Title 11, Arizona Revised Statutes, is amended by adding chapter 15, to read:
CHAPTER 15
PRIVATE ATTORNEY RETENTION
ARTICLE 1. GENERAL PROVISIONS
11-2001. Definitions
In this chapter, unless the context otherwise requires:
1. "Government attorney" means an attorney employed by a county as a staff attorney in the county attorney's office.
2. "Private attorney" means any private attorney or law firm.
11-2002. Written determination of necessity to enter into contingency fee contract; procurement; attorney general approval
A. a county may not enter into a contingency fee contract with a private attorney unless the county attorney makes a written determination before entering into such a contract that contingency fee representation is both cost effective and in the public interest. The county attorney's written determination shall include specific findings for each of the following factors:
1. Whether sufficient and appropriate legal and financial resources exist within the county attorney's office to handle the matter.
2. The time and labor required to perform the task, the novelty, complexity and difficulty of the questions involved and the skill necessary to perform the attorney services properly.
3. The geographic area where the attorney services are to be provided.
4. The amount of experience desired for the particular kind of attorney services to be provided and the nature of the private attorney's experience with similar issues or cases.
5. Whether the issue is a matter of statewide concern.
B. If the county attorney makes the determination provided in subsection A of this section, the county attorney shall request proposals from private attorneys to represent the county on a contingency fee basis.
c. before a contingency fee contract with a private attorney is effective and enforceable and before any monies may be spent by the county, the county must receive approval from the attorney general's office for the contract. the county shall file the proposed contract with the attorney general along with the written determination pursuant to subsection a of this section. a contract filed with the attorney general by a county pursuant to this subsection is considered approved by the attorney general unless, not later than sixty days after the date the attorney general receives the request to approve the contract, the attorney general notifies the county the attorney general is refusing to approve the contract. if the attorney general refuses to approve the contract, the attorney general shall specifically identify the provisions of this section with which the contract fails to comply or the county failed to comply or the findings with which the attorney general disagrees. This section does not prohibit a county from correcting a failure to comply with the requirements of this section and resubmitting a proposed contract pursuant to the requirements of this section.
11-2003. Contingency fee limit; requirements; notices; applicability
A. a county may not enter into a contingency fee contract that provides for the county's private attorney to receive a contingency fee from the county's portion of the recovery in excess of an aggregate of all of the following:
1. Twenty‑five percent of the initial recovery of less than $10,000,000.
2. Twenty percent of that portion of any recovery of $10,000,000 or more but less than $15,000,000.
3. Fifteen percent of that portion of any recovery of $15,000,000 or more but less than $20,000,000.
4. Ten percent of that portion of any recovery of $20,000,000 or more but less than $25,000,000.
5. Five percent of any recovery of $25,000,000 or more.
B. The contingency fee received by the county's private attorney shall not exceed $50,000,000, except for reasonable costs and expenses and regardless of the number of lawsuits filed or the number of private attorneys retained to achieve the recovery.
C. the county may not enter into a contract for contingency fee attorney services unless the following requirements are met throughout the contract period and any extensions of the contract:
1. A government attorney retains ultimate control over the course and conduct of the case.
2. A government attorney with supervisory authority is personally involved in overseeing the litigation.
3. A government attorney retains veto power over any decisions made by the private attorney.
4. Any defendant's attorney that is the subject of the litigation may contact the lead government attorney directly without having to confer with the private attorney.
5. A government attorney with supervisory authority for the case attends all settlement conferences. For the purposes of this paragraph, "attends" includes attendance by telephone, teleconferencing or similar electronic devices.
6. Decisions regarding settlement of the case may not be delegated to a county's private attorney.
D. The county attorney shall develop a standard addendum to every contract for contingent fee attorney services that the county attorney must use in all cases, describing in detail what is expected of both the contracted private attorney and a county, including the requirements prescribed in subsection C of this section.
E. The county attorney shall post copies of any executed contingency fee contract and the county attorney's written determinations pursuant to section 11-2002 to enter into a contingency fee contract with the private attorney on the county attorney's website or, if the county attorney does not have a website, on the county's website for public inspection within five business days after the date the contract is executed, and the contract and determination shall remain posted on the website for the duration of the contingency fee contract, including any extensions or amendments of the contract, unless the county attorney determines that the posting may cause damage to the reputation of any business or person. Notwithstanding the requirements of this subsection, posting on the website shall be made no later than when a lawsuit is filed. The county attorney shall post any payment of contingency fees on the website within fifteen days after the payment of the contingency fees to the private attorney, and the payment shall remain posted on the website for at least three hundred sixty‑five days thereafter.
F. Any private attorney under contract to provide services to a county on a contingency fee basis, from the inception of the contract until at least four years after the contract expires or is terminated, shall maintain detailed current records, including documentation of all expenses, disbursements, charges, credits, underlying receipts and invoices and other financial transactions that concern the provision of the attorney services. The private attorney shall make all the records available for inspection and copying on request pursuant to title 39, chapter 1, article 2. The private attorney shall maintain detailed contemporaneous time records for the attorneys and paralegals working on the matter in increments of not greater than one-tenth of one hour and shall promptly provide these records to the county attorney on request.
G. This chapter does not apply to any contingency fee contract in which a county hires a private attorney to pursue debt collection cases for the county.
11-2004. Annual report
By February 1 of each year, the county attorney shall submit a report to the governor, the attorney general, the president of the senate and the speaker of the house of representatives and shall provide a copy of the report to the secretary of state that describes the use of contingency fee contracts with private attorneys in the preceding calendar year. At a minimum the report shall:
1. Identify all new contingency fee contracts entered into during the year and all previously executed contingency fee contracts that remain current during any part of the year.
2. Describe for each contract:
(a) The name of the private attorney with whom the county has contracted, including the name of the attorney's law firm.
(b) The nature and status of the legal matter.
(c) The name of the parties to the legal matter.
(d) The amount of any recovery.
(e) The amount of any contingency fee paid.
3. Include copies of any written determinations made pursuant to section 11‑2002 during the year.
11-2005. No expansion of authority
This chapter does not expand the authority of any county or county employee to enter into contracts where no authority previously existed.