International Paper Co. v. Harris County
445 S.W.3d 379
| Tex. App. | 2013Background
- Harris County sought civil penalties in an environmental enforcement action over San Jacinto River waste disposal.
- County authorized suit and retained CBW on a contingent-fee basis as special counsel.
- Contingent-fee terms tied fees to recovery and penalties, with County control and settlement provisions.
- Defendants challenged the contingent-fee arrangement as statutory noncompliant, violating separation of powers, and violating due process.
- Trial court voided the contingent-fee agreement for statutory noncompliance but allowed the suit to proceed via County Attorney.
- During appeal, County and CBW amended the contingent-fee agreement; appellees argued mootness and ongoing due-process concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statutory compliance of contingent-fee agreement | Brown argued CBW agreement violated Gov't Code 403.0305 and related statutes. | Defendants argued noncompliance tainted authority to retain contingent counsel. | Original agreement void; moot due to amended agreement. |
| Separation of powers and funding source concerns | Defendants claimed the arrangement usurped legislative appropriations and state funds. | Defendants contended the original terms violated separation of powers. | No live controversy on separation of powers after amendments. |
| Due process and neutrality in penalties-only civil action | Defendants asserted contingent-fee counsel violates due process because of private pecuniary interest in penalties. | County argued there is no blanket prohibition; neutrality depends on control over litigation. | Court denied relief; contingency-fee arrangement not constitutionally barred; no probable right to relief. |
| Mootness of appeal after new contingent-fee agreement | Dispute remained alive as to due process and terms of fee arrangement. | Amended agreement cured issues and rendered appeal moot; court should review issues only if live. | Appeal deemed moot; affirmed denial of injunction and dismissed appeal as moot. |
Key Cases Cited
- Marshall v. Jerrico, Inc., 446 U.S. 238 (U.S. 1980) (neutrality applicable to prosecutors not judges; not blanket ban on contingencies)
- Merck Sharp & Dohme Corp. v. Conway, 947 F. Supp. 2d 733 (E.D. Ky. 2013) (control by state attorney general over litigation determines due-process impact)
- People ex rel. Clancy v. Superior Court, 39 Cal.3d 740 (Cal. 1985) (contingent-fee disfavored in public nuisance actions; disqualification rationale)
- County of Santa Clara v. Superior Court, 50 Cal.4th 35 (Cal. 2010) (neutral supervision by government attorneys can permit private contingent counsel)
- State v. Lead Industries Association, Inc., 951 A.2d 428 (R.I. 2008) (contingent-fee contracts permissible if government retains control; policy-based view)
- West Virginia ex rel. Discover Fin. Servs., Inc. v. Nibert, 231 W. Va. 227 (W. Va. 2013) (summary rejection of due-process challenge to contingent-fee special assistants)