Legal expert calls Michigan's oil and gas lawsuit ‘utterly unethical’

In early August, Attorney General Dana Nessel will announce a law firm partner to sue Michigan oil and gas companies for allegedly contributing to climate change.

Climate change decreases tourism, harms agriculture and depletes Michigan’s tax base, Nessel claimed in May.

The state’s hiring of an outside attorney to sue oil and gas companies using contingency fees is “utterly unethical,” Michael I. Krauss, a law professor emeritus at George Mason University’s Antonin Scalia Law School, told Michigan Capitol Confidential in an email.

“Contingent fees were designed, and authorized, solely to enable those who could not afford lawyers to get representation when they had been injured,” Krauss wrote. “Were it not for this, contingent fees would likely be unethical, as they are in most other countries, because they give lawyers part ownership in a claim, encouraging them to do unethical things.”

The state government can afford a lawyer and has “no business hiring outside lawyers at exorbitant fees,” Krauss told Capcon.

“It’s funny how political donations tend to accompany successful bids. In this way, the economic effects of the contingency fee are recycled to politicians,” Krauss wrote

“This response is about ethics, and it is in my opinion utterly unethical for the state of Michigan to proceed in this way.”

Michigan Capitol Confidential received the nine proposals through records requests. One attorney sought $475 an hour or between 10% and 25% of recovered amounts, documents show.

The firms pitched experience litigating “forever chemicals, unlawful marketing and auto industry cases. One firm sued social media companies on behalf of school districts alleging a role in the “youth mental health crisis.”

The Louisiana-based firm Kanner and Whiteley has partnered with the Conservation Law Foundation to sue gas and oil companies, including Shell, ExxonMobil, and Gulf Oil for alleged violations of the Clean Water Act.

Nessel’s press secretary, Danny Wimmer, said the office is reviewing the proposals based on qualifications, experience, capacity and cost-effectiveness.

“When a proposal is chosen, the State will enter into a contingency-based contract that provides for compensation on a contingency basis from an eventual litigation award only if the chosen team is successful,” Wimmer told CapCon in an email. “A contingency arrangement avoids using taxpayer dollars and ensures litigation costs will be, rightfully, borne by defendants.”

The lawsuit is a “partisan political stunt,” Rep. Pauline Wendzel, R-Watervliet, told CapCon.

“This political theatre will have a detrimental impact on a safe and reliable energy grid and jeopardize the ability of families to heat their homes and fuel their cars,” Wendzel wrote in an email. “Weaponizing our judicial system to advance a personal political agenda is simply wrong. It undermines the public’s trust and takes time and resources away from actual issues.”

State governments have filed similar lawsuits across the country. On July 10, a Maryland Circuit Court judge dismissed a lawsuit targeting oil and gas companies for contributing to climate change.

In Colorado, a judge refused to dismiss a similar case on June 21.