Pickering v. Langston Law Firm, P.A.


<- Return to Search Results


Docket Number: 2010-CA-00362-SCT
Oral Argument: 06-08-2011
 

 

* This video is best viewed in the most current version of Google Chrome, Internet Explorer with Windows Media Player plug-in, or Safari (Mac Users).


Supreme Court: Opinion Link
Opinion Date: 05-24-2012
Opinion Author: Dickinson, P.J.
Holding: Reversed and remanded.

Additional Case Information: Topic: Attorney General's power - Attorney's fees - Private counsel - Section 7-5-7 - Public funds - Attorney lien - Miss.Const. Art 4, Sec. 100 - Section 7-5-5 - Contingent fee agreement - Waiver - Section 7-7-211(g) - Auditor's right to proceed
Judge(s) Concurring: Waller, C.J., Randolph, Lamar and Pierce, JJ.
Judge(s) Concurring Separately: Pierce, J., Specially Concurs With Separate Written Opinion Joined by Waller, C.J., Dickinson, P.J., Randolph and Lamar, JJ.
Non Participating Judge(s): Carlson, P.J.
Concur in Part, Dissent in Part 1: King, J. With Separate Written Opinion
Concur in Part, Dissent in Part Joined By 1: Kitchens and Chandler, JJ.
Procedural History: Summary Judgment
Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES

Trial Court: Date of Trial Judgment: 02-24-2010
Appealed from: Hinds County Circuit Court
Judge: Winston Kidd
Disposition: Granted summary judgment to Appellees.
Case Number: 251-07-1258CIV

  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Stacey Pickering, in his Capacity as Auditor for the State of Mississippi




ARTHUR F. JERNIGAN, JR. CRAIG M. GENO SAMUEL E. L. ANDERSON



 
  • Appellant #1 Brief
  • Supplemental Brief
  • Appellant #1 Reply Brief

  • Appellee: Langston Law Firm, P.A.; Joseph C. Langston; State of Mississippi; Lundy & Davis; and Aylstock, Witkin, Kreis & Overholtz FRED KRUTZ C. YORK CRAIG, III OFFICE OF THE ATTORNEY GENERAL: JIM HOOD GEOFFREY C. MORGAN HAROLD EDWARD PIZZETTA, III JUSTIN L. MATHENY  

    Synopsis provided by:

    If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals
    hand downs please contact Tammy Upton in the MLI Press office.

    Topic: Attorney General's power - Attorney's fees - Private counsel - Section 7-5-7 - Public funds - Attorney lien - Miss.Const. Art 4, Sec. 100 - Section 7-5-5 - Contingent fee agreement - Waiver - Section 7-7-211(g) - Auditor's right to proceed

    Summary of the Facts: A corporation settled its delinquent tax liability to the State of Mississippi by paying $100 million to the State, $4.2 million to a private charity, and $14 million to a private law firm hired by the Attorney General to pursue the claim. Mississippi’s Auditor demanded that, because the $18.2 million paid to the private charity and the law firm constituted public funds, it must be turned over to the State. The charity complied; but the law firm refused, claiming the payment of its fees was not made with public funds and, in any case, the Auditor had waived the State’s claim. The Auditor filed suit and the trial court granted summary judgment to the law firm. The Auditor appeals.

    Summary of Opinion Analysis: The issue in this case is whether Mississippi law allows public settlement funds due to the State of Mississippi to be paid directly to outside counsel. The Legislature has limited the Attorney General to two sources from which he may pay the private attorneys he appoints to assist with litigation filed in the State of Mississippi. Section 7-5-7 provides that “[t]he compensation of appointees and employees made hereunder shall be paid out of the attorney general’s contingent fund, or out of any other funds appropriated to the attorney general’s office.” The statutory restriction was in place when the Attorney General and Langston signed the contract, and they cannot now claim they are not subject to it. Rather than attack the statute’s mandate, the Langston Firm argues that the statute does not apply, because it was not paid with public funds. The Attorney General argues that he has authority – without legislative appropriation – to pay private attorneys with public funds. And both Langston and the Attorney General argue that the Auditor waived the State’s claim to the $14 million. Langston and the Attorney General both argue on the one hand that the $14 million never belonged to the client (the State of Mississippi); but then argue on the other hand that Langston holds an attorney lien on the funds, citing as authority cases that recognize an attorney’s lien on funds that do belong to the client (the State of Mississippi). These arguments are irreconcilable. It is true that, under certain circumstances, an attorney’s lien is the right of an attorney to hold or retain a client’s money or property. But it is also true that – if Langston is truly asserting an attorney’s lien, as he claims – the $14 million would be in his trust account, which it is not. By Langston’s own admission, even if an attorney lien were proper in this case, there are no funds in trust on which to assert it. Our Legislature has carved out a special, statutory, payment requirement for private lawyers who work for the Attorney General; they may be paid only from the Attorney General’s contingent fund, or from funds appropriated by the Legislature. The statute does not allow direct payment of attorney fees from taxes collected through litigation. And the statute’s mandatory language includes no option for payment by assertion of, and execution upon, an attorney’s lien on public funds. The Court does not call into question the right of the Attorney General to enter into contingency-fee contracts with outside counsel. But contracts with lawyers hold no special privilege. They are – as are all other contracts – subject to, and restricted by, applicable law. Even if the Legislature had not carved out the statutory exception to the common-law attorney’s lien, Article Four, Section 100 of the Mississippi Constitution does not permit the Legislature to forgive, or even diminish, a tax obligation to the State, unless it is a doubtful claim. Nor does it permit MCI – or any other taxpayer – to satisfy its tax obligation to the State by remitting tax payments to private lawyers. The Legislature may constitutionally permit the Attorney General to compromise doubtful claims. But once the claim is settled, and the amount due is determined and agreed through compromise, the claim and debt become liquidated, and full payment of the amount due must be made into the proper State treasury. Section 100 clearly requires that, for MCI to extinguish its tax debt, it must pay the full amount due into the proper treasury. The Langston Firm argues that the $14 million was not “received, collected by, or available” for the State’s use, because the attorney fees were paid pursuant to a separate negotiation, and the funds were never transferred to the State. This entire argument is based on the false notion that MCI first settled its tax liability with the State, and then engaged in an entirely separate negotiation and agreement concerning the Langston Firm’s attorney fees. The State – claiming MCI owed more than a billion dollars in taxes, penalty, and interest – filed suit to collect. MCI agreed to pay $118.2 million as “payment of tax and interest.” But MCI did not pay all of its “taxes, penalty, and interest” directly to the State treasury, allowing the State, in compliance with statutory requirements, to pay its own attorney-fee bill from Langston. Instead, the Attorney General allowed MCI to use part of the State’s tax revenue to pay Langston. The fact that $14 million of MCI’s taxes has not yet been filtered through the State treasury does not make it any less a payment of taxes. The Attorney General argues that, even if the $14 million was public funds, MCI’s direct payment to Langston was proper, because section 7-5-5 does not restrict his authority to enter into contingent-fee agreements. While the Attorney General may enter into contingent-fee agreements with private counsel, the $14 million paid to Langston in this case was not a contingent fee, but rather was a negotiated fee. Although the Attorney General and Langston did sign a contingent-fee agreement, Langston was instructed to negotiate attorney fees with MCI. Since Langston was not paid on a contingent-fee basis, but rather was paid a negotiated fee by MCI, neither the Attorney General’s authority to enter into contingent-fee agreements, nor his authority to judge the compensation, is at issue in this case. Langston claims that, even if the $14 was public funds subject to section 7-5-7’s restrictions, the Auditor waived his right to pursue the claim. The state-court action that resulted in this appeal unfolded parallel to a bankruptcy court action in New York, in which the Langston Firm requested a declaratory judgment that the State Auditor had waived (or was estopped from asserting) his right to challenge the settlement. The bankruptcy court held that the Auditor’s attempt to recoup the payment was not a challenge to the settlement agreement, that the Auditor couldn’t have challenged the agreement anyway, because the State already was represented in the proceeding by the Attorney General, and that the Auditor’s claims were strictly Mississippi state-law claims. So, whatever law governs waiver and estoppel of creditor claims in a bankruptcy case, that law is inapposite here. The State Auditor is not challenging the settlement itself, but the Langston Firm’s receipt of money in violation of section 7-5-7. Here, the only conduct alleged to constitute waiver was the State Auditor’s decision to wait thirty months before seeking recovery of the $14 million fee payment. But the Attorney General notes that the State Auditor launched an investigation into the settlement less than two months after the State memorialized the Settlement Agreement with MCI. The Auditor began to investigate almost immediately, and he has actively pursued the case to this point. Because neither Langston nor the circuit court cited any authority for the proposition that waiver can be implied in this situation, the circuit court is reversed. The State Auditor did not waive his right to proceed under section 7-7-211(g).


    Home | Terms of Use | About the JDP | Feedback | Using JDP | MC Law Library | Mississippi Supreme Court