A lawsuit target charges that tort bar collusion with prosecutors is illegal.
Updated June 17, 2016 9:55 a.m. ET

A seedy side of American law is the widespread collusion between the plaintiffs bar and government prosecutors, who trade contingency-fee lawsuits for campaign contributions. Now the contingency-fee arrangements are getting a legal challenge in Texas, where a citizen says they are unconstitutional.

The government of Hunt County, Texas claimed that Kirk Grady was storing a pile of wood on his property in violation of a local waste-disposal law. The county subcontracted the 2015 lawsuit against Mr. Grady to the Houston plaintiffs firm Baker Wotring, which saw green in that woodpile.

The lawsuit claims Mr. Grady’s woodpile sat on the land from 1998 through 2015, or 6,208 days. Although Mr. Grady owned the property from 1998 to 2002, the suit sought up to the maximum penalty against him and co-defendant Republic Waste of $25,000 a day. With as many as 13 alleged violations a day, that adds up to a liability of $2 billion. The suit is still pending.

Mr. Grady decided to fight back. In his own lawsuit in federal court in Texas, Mr. Grady argues that the government illegally outsourced its enforcement power by entering into the contingency-fee deal with outside counsel. The suit claims the private tort lawyers “are unrestrained by the statutory and constitutional checks on the exercise of state authority.”

While government lawyers are required to serve the public interest when pursuing prosecutions, lawyers working on contingency-fee deals have an interest in winning the maximum possible settlement. Mr. Grady says this conflict of private with public interests violates his Fifth and Fourteenth Amendment due process rights.

The principles Mr. Grady invokes are well established in the courts. In Berger v. U.S (1935), the Supreme Court wrote that a prosecutor’s job isn’t to guarantee that the government “win a case, but that justice shall be done.” Addressing the use of private lawyers, the High Court wrote in Young v. United States ex rel. Vuitton et Fils S.A. (1987) that private attorneys “should be as disinterested as a public prosecutor who undertakes such a prosecution.”

There are few less disinterested lawyers than those seeking big tort paydays. The contingency-fee model is pitched as a bargain to taxpayers who don’t have to pay up front, but one check on excessive prosecution is limited resources. Prosecutors normally have to decide to bring the best cases against the worst violators.

When government makes the trial bar a business partner, the incentive shifts to bringing suits that offer the biggest potential settlements or verdicts. The goal becomes the private payday, not justice in the public interest. This trial lawyer-government business model is widespread, so Mr. Grady’s suit is one to watch.


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