Pickering v. Hood
2012 Miss. LEXIS 365
| Miss. | 2012Background
- Auditor's unopposed motion to amend mandate granted; prior opinions withdrawn and new opinions substituted.
- Settlement with Microsoft: $50 million cash to State, with $10 million disbursed directly to outside counsel; $60 million total value including vouchers.
- AG Hood retained Hazzard Law, LLC and associated firms as Retained Counsel under a contingency-fee arrangement.
- Chancery Court approved the settlement and distribution, including direct payment to outside counsel; Auditor intervened seeking recovery of misappropriated funds.
- Mississippi law sections 7-5-5 and 7-5-7 govern payment of private attorneys retained by the Attorney General; issue here is whether public settlement funds may be paid directly to outside counsel and whether such payment complied with those statutes and the Constitution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mississippi law allows payment to outside counsel from public settlement funds. | Auditor: payments to outside counsel violate 7-5-7 and related law. | Attorney General: contingent-fee arrangements are lawful and payment may come from funds appropriated or from the contingent fund; relies on Pursue Energy and statutory interpretation. | No; payments must be from the AG's contingent fund or legislatively appropriated funds. |
| Whether the $10 million disbursed to outside counsel complied with 7-5-7. | Auditor: funds must be paid into the State treasury; misallocation occurred. | AG: contingent-fee payments permitted; Settlement agreement did not authorize such direct payment. | $10 million was not paid into the appropriate fund; relief granted. |
| Whether the Attorney General’s authority over contingency-fee contracts is constrained by 7-5-5 and 7-5-7. | N/A (focus is on statutory limits.) | AG: has common-law authority but subject to statutory limits; Pursue Energy supports payment from contingent fund or appropriated funds. | AG has authority to negotiate contingency fees but payments must come from the appropriate Defendant-approved funds. |
| Whether Section 100 of the Mississippi Constitution requires funds to be paid into the proper treasury and forecloses private distribution of State funds. | Auditor: require payment into proper treasury; private distribution to outside counsel violates Constitution. | Settlement allowed payment to State, but not properly structured to comply with 7-5-7. | Section 100 requires payment into proper treasury; direct payment to outside counsel was improper. |
Key Cases Cited
- Pursue Energy Corp. v. Mississippi Tax Comm’n, 816 So.2d 385 (Miss. 2002) (statutory payment from contingent fund or appropriated funds; separation of recovery and payment to counsel)
- Collins v. Schneider, 192 So. 20 (Miss. 1939) (attorney lien concepts; statutes govern payment to private counsel)
- Franklin v. Franklin, 858 So.2d 110 (Miss. 2003) (concerning statutory interpretation and attorney fees)
- Pace v. State ex rel. Rice, 4 So.2d 270 (Miss. 1940) (constitutional considerations for public funds)
- Heckler v. Cmty. Health Servs. of Crawford County, 467 U.S. 51 (U.S. 1984) (state government status and public funds principles)