Opinion ID: 1799392
Heading Depth: 2
Heading Rank: 2

Heading: Validity of the Contract under State Law

Text: The separation of powers doctrine, enunciated in Article II, § 2 of the Louisiana Constitution, provides as follows: Except as otherwise provided by this constitution, no one of these branches, nor any person holding office in one of them, shall exercise power belonging to either of the others. La. Const. Art. II, § 2. Unlike the federal constitution, a state constitution's provisions are not grants of power but instead are limitations on the otherwise plenary power of the people of a state exercised through its legislature. Board of Commissioners of Orleans Levee District v. Department of Natural Resources, 496 So.2d 281, 286 (La.1986). It is elementary that the `fiscal affairs of the state, the possession, control, administration, and disposition of the property, funds, and revenues of the state, are matters appertaining exclusively to the legislative department.'  State v. Duhe, 201 La. 192, 9 So.2d 517, 521 (1942) (citing Carter v. State, 42 La.Ann. 927, 933, 8 So. 836, 837 (1890)). This long-standing principle also applies under the 1974 Constitution, as we have more recently held that [t]he legislature has control over the finances of the state, except as limited by constitutional provisions. Louisiana Ass'n of Educators v. Edwards, 521 So.2d 390, 394 (La.1988). There, we further elaborated on the separation of powers doctrine, holding that [e]xcept as expressly provided by the constitution, no other branch of government, nor any person holding office in one of them, may exercise the legislative function. Id. (Emphasis added). It is also fundamental that [t]he legislative power of the state is vested in the Legislature. Board of Commissioners, supra at p. 286 (citing La. Const.1974, Art. III, § 1). In its exercise of the entire legislative power of the state, the Legislature may enact any legislation that the state constitution does not prohibit. Id. We find nothing in the state constitution which prohibits the Legislature from enacting statutes enabling the Attorney General to enter into contingency fee contracts with outside attorneys. Thus, under the separation of powers doctrine, unless the Attorney General has been expressly granted the power in the constitution to pay outside counsel contingency fees from state funds, or the Legislature has enacted such a statute, then he has no such power. The question is not, as the Attorney General and Intervenors argue, whether any law prohibits the Attorney General from entering into such contracts because, as we have seen, our constitution vests the power over state finances in the legislative branch as part of its plenary power, a power the Attorney General can obtain only by the constitution or other law. Thus, we first look for express authority for the Attorney General to enter into the Contract in the constitution. The authority of the Attorney General, part of the executive branch of government, is set out in Article IV, § 8 of the Louisiana Constitution as follows: There shall be a Department of Justice, headed by the attorney general, who shall be the chief legal officer of the state. The attorney general shall be elected for a term of four years at the state general election. The assistant attorneys shall be appointed by the attorney general to serve at his pleasure. As necessary for the assertion or protection of any right or interest of the state, the attorney general shall have authority (1) to institute, prosecute, or intervene in any civil action or proceeding; (2) upon the written request of a district attorney, to advise and assist in the prosecution of any criminal case; and (3) for cause, when authorized by the court which would have original jurisdiction and subject to judicial review, (a) to institute, prosecute, or intervene in any criminal action or proceeding, or (b) to supersede any attorney representing the state in any civil or criminal action. The attorney general shall exercise other powers and perform other duties authorized by this constitution or by law. The Attorney General and Intervenors argue that the Attorney General's powers to institute civil proceedings and to appoint assistant attorneys includes the inherent authority to hire outside attorneys on a contingency fee basis to prosecute these claims. We disagree. Paying outside attorneys to prosecute legal claims on behalf of the state is a financial matter. As our prior jurisprudence indicates, the power over finances must be expressly granted by the constitution to another branch of government or else that power remains with the Legislature. We find nothing in Article IV, § 8, nor any other constitutional provision, which expressly grants the attorney general the power to hire and pay outside legal counsel on a contingency fee basis. The power to institute suit on behalf of the state, while extremely broad, does not expressly give him this power. Nor does the power to appoint assistant attorneys to serve at his pleasure. This provision applies to the Attorney General's staff, and even then, in order to hire and pay his staff, he must include these assistant attorneys in his budget request. As the constitution does not expressly give the Attorney General the financial power to hire and pay outside attorneys on a contingency fee basis, we now look to statutory law to see if the Legislature has granted him this power under the Legislature's legislative power. When the Legislature has intended to allow the Attorney General to enter into contingency fee contracts in certain types of cases, it has done so by statute. See La. R.S. 23:1669(C) (contingency fees allowed in labor and worker's compensation cases); La. R.S. 41:724 (contingency fee lawyer allowed to deduct 10% before turning remainder over to state treasurer); La. R.S. 41:922 (contingency fees mandated in certain public land actions); La. R.S. 47:1512 (additional 10% attorney fee charge in tax recovery actions allowed where private attorney hired to assist in tax collection). However, in environmental cases, the Legislature has stated just the opposite. La. R.S. 30:2205, establishing the Hazardous Waste Site Cleanup Fund, provides as follows: A(1) All sums recovered through judgments, settlements, assessments of civil or criminal penalties, funds recovered by suit or settlement from potentially responsible parties for active or abandoned site remediation or cleanup, or otherwise under this Subtitle, or other applicable law, each fiscal year for violation of this Subtitle, shall be paid into the state treasury and shall be credited to the Bond Security and Redemption Fund. After a sufficient amount is allocated from that fund to pay all obligations secured by the full faith and credit of the state which become due and payable with any fiscal year, the treasurer, prior to placing such remaining funds in the state general fund, shall pay into a special fund, which is hereby created in the state treasury and designated as the Hazardous Waste Site Cleanup Fund,... the sums recovered through all judgments, settlements, assessments of civil or criminal penalties, fees and oversight costs received.... As noted by the lower courts, this provision expressly mandates that all recoveries in cases involving environmental legislation must be paid into the state treasury. The language of the statute is clear and unambiguous: [a]ll sums recovered through judgments means all sums, not all sums remaining after the Attorney General has paid his contingency fee lawyers. If the Legislature had intended to allow the Attorney General the right to deduct the fees of contingency fee lawyers from judgments or settlements in environmental cases before paying the remainder into the state treasury, surely it would not have clearly directed that all sums recovered be paid into the state treasury. [2] Furthermore, while it is beyond dispute that the Attorney General can hire private attorneys to represent the State, [3] he does not have unbridled discretion in this regard as numerous statutes set out specific requirements that must be met for professional service contracts, including the requirement of La. R.S. 39:1498(A) that the Office of Contractual Review must determine that [t]here has been appropriated or otherwise lawfully made available and ready for expenditure sufficient monies for payment of the services called for in the contract, at least for the applicable fiscal year. [4] See also La. R.S. 39:1497, 39:1498, 49:257, 49:258. Next, the Attorney General and Intervenors point to La. R.S. 39:1509 as a grant of authority to enter into contingency fee contracts with outside attorneys. We cannot agree. La. R.S. 39:1509, concerning the types of contracts that may be used by state agencies in the procurement of professional, personal, consulting and social services, provides that [s]ubject to the limitation of Section 1510 hereof, any type of contract which will promote the best interests of the state may be used. La. R.S. 39:1510 provides that [t]he cost-plus-a-percentage-of-cost system of contracting shall not be used. However, the types of contracts referred to in 39:1509 still need to be approved by the Commissioner of Administration and placed in the budget. Furthermore, if this statute gave the Attorney General the express authority to enter into contingency fee contracts, it would be redundant for the Legislature to enact statutes giving the Attorney General power to enter into such contracts in certain types of cases. In addition, it is evident that the Legislature was not intending this to be a blanket approval of contingency fee contracts because the definition of contract in La. R.S. 39:1484(5) does not include contingency fee contracts, but provides as follows: Contract means every type of state agreement, including orders and documents purporting to represent grants, which are for the purchase or disposal of supplies, services, construction, or any other item. It includes awards and notices of award; contracts of a fixed price, cost, cost-plus-a-fixed-fee, or incentive type; contracts providing for the issuance of job or task orders, and letter contracts. It also includes contract modifications with respect to any of the foregoing. Clearly, La. R.S. 39:1509 is not authority for the Attorney General to enter into contingency fee contracts in environmental cases without legislative authorization. Finally, the Attorney General and Intervenors argue that La. R.S. 37:218 gives the Attorney General authority to enter into contingency fee contracts without legislative authorization. La. R.S. 37:218 is the general law allowing Louisiana attorneys to enter into contingency fee contracts with their clients with the clients' written approval. Even if we were to accept the argument that this article applies to the Attorney General and not just private attorneys, the Attorney General would still need the client's approval, in this case the State through the Legislature.