The Mississippi Supreme Court [official website] heard arguments Wednesday in a challenge by the State Auditor to the state Attorney General [official websites] practice of paying fees to hired private counsel directly out of litigation awards. State Auditor Stacey Pickering is appealing [AP report] a lower court ruling last April upholding $10 million in fees paid to private lawyers hired by the attorney general's office to handle a state lawsuit against Microsoft. The software giant settled with the state for $100 million and agreed to pay $10 million to the outside attorneys, as was directed by the trial judge at the time. The lower court decision against Pickering upheld the payments by ruling that the fees were separate from the state settlement, paid under a legal contract with the attorney general, and that in this case outside counsel actually received no state funds. Pickering argues that such monies are public and should be collected by the state, after which the attorney general can request appropriation from the State Legislature [official website].
The court heard a similar case in June over $14 million collected by a group of private attorneys who worked on a tax related claim against MCI/WorldCom. The original case ultimately resulted in the state collecting $100 million in cash and $7 million in downtown property from the telecommunications giant. Here also the attorney general maintains that the attorney's fees were separate from the state's settlement, negotiated and paid directly by MCI to the private law firm. Again Pickering argues that relevant state law should be interpreted such that outside counsel must be paid from funds appropriated to the attorney general and not directly out of litigation awards. In February a lower court granted summary judgment [order, PDF] against Pickering, holding that his arguments had no merit and thus there was no genuine issue of material fact in the case. A decision on the appeal has yet to be issued by the state Supreme Court.