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Judge Limits Hiring of Outside Law Firms to Prosecute UCL Claims on Contingent Basis

Santa Clara County Superior Court Judge Jack Komar has ruled that public-entity plaintiffs may not retain outside attorneys on a contingency fee basis to handle public nuisance lawsuits. Judge Komar cited People ex rel. Clancy v. Superior Court (1985) 39 Cal.3d 740, which held that a contingent fee arrangement between a city government and a private attorney whom it hired to bring abatement actions against alleged pornography distributors, under the city's nuisance ordinance, was inappropriate under the circumstances, and in the interests of justice, the outside attorney was disqualified. A copy of his order can be downloaded and read here. Santa Clara County is likely to appeal. County Counsel Ann Ravel remarked "if that decision stands, it will impair the ability of cash-strapped public entities from proceeding against defendants who create nuisances in their communities." The issue could make for an interesting debate regarding the role of Business & Professions Code § 17200, and any time Section 17200 is discussed, there is a potential to affect wage and hour cases. However, we've never heard of a public entity hiring outside counsel to enforce wage and hour provisions, much less hiring them under contingent fee arrangements. Most of the time, enforcement of Labor Code and other wage and hour provisions are enforced via class actions or representative actions on behalf of affected representative employees, or are brought under PAGA.


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