D.C. Attorney General Karl Racine (D) already has one dedicated environmental attorney in his office–selected and paid for by Michael Bloomberg–but the office is apparently gearing up to go after Exxon and needs additional staff. On Friday, Racine tweeted that his office was looking for outside legal counsel to support its climate change work.
The solicitation document posted by the OAG makes it clear that the office is planning a major suit against Exxon–one that the OAG believes could net millions in damages. Details in the solicitation request suggest a lawsuit that would mimic the “Exxon Knew” lawsuits, which tried to prove that the company misled consumers about the connection between fossil fuel use and climate change.
“In connection with selling gasoline to DC consumers and others, Exxon has failed to inform consumers about the effects of its fossil fuel products on climate change. Exxon has also engaged or funded efforts to mislead DC consumers and others about the potential impacts of climate change,” the request explains, adding that the OAG is looking to investigate the company under the District’s consumer protection laws.
Though in 2016 Racine joined a coalition of state attorneys general vowing to investigate fossil fuel companies for misleading the public about climate change, his office has not yet launched an investigation of its own. The document shared on Friday is the first sign that an investigation or lawsuit might be imminent.
While it isn’t unusual for an AG’s office to solicit contractors to assist with various projects, the scope of this request is different. Previously posted solicitations sought help with tasks like performing market surveys, improving community engagement, and designing and printing a three-year report.
What makes this request unusual is the contingency fee arrangement specified in the contract. The office is looking for a senior climate lawyer, a junior lawyer and a paralegal on a five-year contract with options to extend.
All of them will be paid through contingency fees awarded in the event that a judge awards damages or court fees. Similar arrangements in other jurisdictions have raised concerns that the government is selling out its law enforcement authority to private firms seeking to make money.
“[This is] a contingency fee arrangement for the exercise of the District government’s law enforcement authority,” Andrew Grossman, partner and co-leader of the appellate practice at Baker Hostetler, tells InsideSources. “We’ve seen this a few times just in recent years dealing with climate litigation, but the fact that we’ve seen this a few times shouldn’t inure us to the fact that this is a fairly radical and unusual use of private counsel working on a for-profit basis to exercise the government’s authority.”
He explains that the arrangement laid out in the D.C. contract is particularly notable because it raises the possibility that attorneys may sell their fee to third-party financiers. This practice, known as litigation financing, raises concerns about spurious lawsuits, conflicts of interest, and other due process concerns.
“I think everybody should be worried about these types of contracts,” Grossman says. “You have the government effectively renting out to investors its law enforcement authority.”
Supporters of major climate lawsuits believe that a victory in court could net them hundreds of millions of dollars in settlements. Attorneys working on the case would be paid a percentage of that sum. A payoff that large is a prospect that will likely attract proposals from a variety of sources.
That is one of the concerns Congress has about litigation funding in general. Though relatively new, it is already attracting government scrutiny. In early February, four Republican U.S. Senators reintroduced a bill that would require disclosure of third-party litigation funding for class actions and multidistrict litigation. Critics of these types of suits argue that third-party funding increases abusive litigation, compromises the control litigants have over their lawsuits and prolongs litigation be discouraging settlements.
