H. B. 4490

 

         (By Delegates Sponaugle, Reynolds, Skinner,

              Poore, Wells, Moore, Marcum, Ferro,

                    Pino, Manchin and Hunt)

         [Introduced February 13, 2014; referred to the

         Committee on the Judiciary.]

 

 

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §5-3-1a; to amend and reenact §5-3-2, §5-3-3, §5-3-4 and §5-3-5 of said code; to amend said code by adding thereto a new section, designated §5-3-6; and to amend and reenact §5A-3-13 of said code, all relating to management of legal proceedings of the state and its political subdivisions; specifying the manner in which the Attorney General contracts for legal services; establishing ethical limitations and requiring withdrawal by the Attorney General from certain proceedings and actions when a conflict of interest may or does exist; limiting the Attorney General’s common law authority; providing that court rules supercede statutes in certain circumstances; authorizing hiring of special assistant attorneys general when a conflict exists; providing requirements for special assistant attorneys general contracts; providing requirements for certain requests for proposals; requiring certain reports to be prepared for the Governor and the Joint Committee on Government and Finance regarding certain contracts for legal services with the Attorney General; limiting the amount of fees payable for legal services for the Attorney General; providing for the disposition of funds or assets recovered in a legal action or settlement by or on behalf of the general public, the state or its officers, agencies or political subdivisions; establishing the Attorney General's litigation support fund; providing for the deposit of certain money into the fund; providing for the deposit of certain money into the General Revenue Fund of the state and exceptions thereto; requiring certification, records and reports of certain moneys recovered and prescribing the use thereof; requiring certain disposition of funds to be held in trust; limiting certain powers to administrate certain funds; requiring legislative appropriation of certain funds; requiring certain advice be given to courts; prohibiting agreements to settle contrary to law; and requiring that contracts proposed by the Attorney General be approved as to form by the Secretary of State.

Be it enacted by the Legislature of West Virginia:

    That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §5-3-1a; that §5-3-2, §5-3-3, §5-3-4 and §5-3-5 of said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §5-3-6; and that §5A-3-13 of said code be amended and acted, all to read as follows:

CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,

SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD

OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS,

OFFICES, PROGRAMS, ETC.

ARTICLE 3. ATTORNEY GENERAL.

§5-3-1a. General authority of Attorney General; recusal when conflict or perceived conflict of interest; and common law abrogation.

    (a)(1) Conflicts of interest- Because the Attorney General is the legal representative of the State of West Virginia there exists with this office the highest duty to provide legal services in a manner that preserves public trust and confidence. Therefore, the following ethical standards apply to the Attorney General:

    (A) When a perceived or actual conflict of interest arises under the West Virginia State Court rules of Professional Responsibility arises in any litigation wherein the Attorney General represents the interests of the state, consumers pursuant to chapter forty-six-a of this code, or other proceeding in his or her legal capacity, the Attorney General shall recuse him or herself and office from participation in litigation and shall forthwith select a special assistant attorney general pursuant to section three of this article. The Attorney General shall not allow any employee or other person subject to his or her directive to advise or otherwise participate in the litigation;

    (B) An appearance of conflict of interest exists when the Attorney General has previously accepted any monetary campaign contributions from a party to any case, complaint or other proceeding under the jurisdiction of his or her office;

    (C) An appearance of conflict of interest exists if the Attorney General or any immediate family member of the Attorney General has been employed, under contract or otherwise received economic compensation from a party; and

    (D) A conflict exists if the Attorney General asserts any legal position or takes any action in a legal proceeding or other representation that is inconsistent with the legal position taken by the state officer, board, agency or other political subdivision whom his or her office is representing.

    (2) Disqualification of any assistant or special assistant Attorney General does not disqualify the entire office but requires the Attorney General to remove any such employee from participation and knowledge of the case.

    (3) The Attorney General shall withdrawal from a case when the Attorney General determines that perceived or actual conflict of interest exists, and forthwith appoint a special attorney general pursuant to section three of this article.

    (4) Upon adoption of a Rule of Professional Conduct by the Supreme Court of West Virginia that conflicts with the provisions of this subsection, this subsection is superceded by that rule or rules.

    (b) Common law powers.- The common law authority of the Attorney General is specifically abrogated to the extent it is inconsistent with any provision of this article.

§5-3-2. Act as counsel for state; duties and powers as to prosecuting attorneys; defense of National Guardsmen.

    (a) The Attorney General shall appear as counsel for the state in all causes pending in the Supreme Court of Appeals, or in any federal court, in which the state, is interested officer, board or agency of the state is a party. he The Attorney General shall appear in any cause in which the state is interested that is pending in any other court in the state, on the written request of the Governor, and when such appearance is entered he the Attorney General shall take charge of and have control of such cause; he the Attorney General shall defend all actions and proceedings against any state officer in his or her official capacity in any of the courts of this state or any of the federal courts when the state is not interested in such cause against such officer, but should the state be interested against such officer, he a party the Attorney General shall appear for the state; he the Attorney General shall also institute and prosecute all civil actions and proceedings in favor of or for the use of the state which may be necessary in the execution of the official duties of any state officer, board or commission on the written request of such officer, board or commission.

    (b) he The Attorney General shall, when requested by the prosecuting attorney of a county wherein a state institution of correction is located, provide attorneys for appointment as special prosecuting attorneys to assist the prosecuting attorney of said county in the prosecution of criminal proceedings when, in the opinion of the circuit judge of said county, or a justice of the West Virginia Supreme Court of Appeals, extraordinary circumstances exist at said institution which render the financial resources of the office of the prosecuting attorney inadequate to prosecute said cases; he the Attorney General may consult with and advise the several prosecuting attorneys in matters relating to the official duties of their office. and may require a written report from them of the state and condition of the several causes, in which the state is a party, pending in the courts of their respective counties; he The Attorney General may require the several prosecuting attorneys to perform, within the respective counties in which they are elected, any of the legal duties required to be performed by the Attorney General which are not inconsistent with the duties of the prosecuting attorneys as the legal representatives of their respective counties; when the performance of any such duties by the prosecuting attorney conflicts with his or her duties as the legal representative of his or her county, or for any reason any prosecuting attorney is disqualified, from performing such duties, the Attorney General may require the prosecuting attorney of any other county to perform such duties. in any county other than that in which such prosecuting attorney is elected and for the performance of which duties outside of the county in which he is elected The prosecuting attorney shall be paid his or her actual traveling and other expenses out of the appropriation for contingent expenses for the department for which such services to another county are rendered.

    (c) The Attorney General shall keep in proper books, a register of all causes prosecuted or defended by him or her in behalf of the state or its officers and of the proceedings had in relation thereto, and deliver the same to his or her successor in office. and he The Attorney General shall preserve in his or her office all his official opinions of the Office of the Attorney General and publish the same in his or her biennial report.

    (d) Upon request of any member of the West Virginia National Guard who has been named defendant in any civil action arising out of that guardsman's action while under orders from the Governor relating to National Guard assistance in disasters and civil disorders, the Attorney General shall appear as counsel for and represent such guardsman.

§5-3-3. Assistants to Attorney General; appointment of special assistants to the Attorney General.

    (a) The Attorney General may appoint such assistant attorneys general as may be necessary to properly perform the duties of his or her office. The total compensation of all such assistants shall be within the limits of the amounts appropriated by the Legislature for personal services. All assistant attorneys general so appointed shall serve at the pleasure of the Attorney General and shall perform such duties as he the Attorney General may require of them.

    (b) If the Attorney General seeks to obtain legal services of any kind from any person who is neither a full-time assistant attorney general on his or her staff nor a full-time employee of another state agency, whether or not such person is designated at any time as an assistant or special assistant attorney general, he or she shall contract for such services regardless of the amount of fees and expenses to be incurred, and to the extent applicable, shall comply with the general purchasing requirements under article three, chapter five-a of this code. The contract shall be subject to the following requirements: (1) A statement of the reimbursement rate by the Attorney General of expenses that may be incurred by the applicant, including, but not limited to, items such as travel, telephone and copying; (2) certification by the applicant of the hourly rate or fee he or she will charge under the contract and agreement to the reimbursement rate for expenses set forth by the Attorney General; (3) certification by the applicant that he or she will agree to any relevant statutory confidentiality requirements; (4) certification by the applicant that he or she will submit an annual budget of fees and expenses to be incurred for any matter that may extend for more than six months; and (5) certification by the applicant that neither he or she, nor any person in practice with the applicant, represents nor may represent during the pendency of the contract, a person who has a claim or punitive claim involving any matter for which the applicant or any person in practice with the applicant has been retained by the Attorney General. Consistent with the general purchasing requirements, the Attorney General shall submit a request for proposal when he or she seeks to obtain these legal services, and the request for proposal shall include the following elements: (1) A statement by the Attorney General as to why the matter cannot be handled by the regular full-time staff of the Attorney General; (2) a statement of the particular experience and expertise required of the person or persons being sought under the contract; and (3) the estimated total amount of time and fees to be expended by the persons under the contract.

    Nothing in this section creates or expands any rights of the Attorney General that do not otherwise exist in this code. All laws or parts of laws inconsistent with the provisions hereof are hereby amended to be in harmony with the provisions of this section.

§5-3-4. Annual report to Governor.

    The Attorney General shall annually biennially, on or before May 1 and November 1, deliver to the Governor a report of the state and condition of the several causes, in which the state or the Attorney General is a party, pending in courts mentioned in section two of this article, or in any other chapter of this code, as of December 30 and June 30, immediately preceding May 1 and November 1, or closed or concluded during the preceding six month period. This report shall also include the terms and conditions upon which the Attorney General has engaged any Special Assistant Attorney General or any other person to perform legal services of any kind, including a copy of all contracts for such legal services, including the fees and expenses to be paid to these persons; and the amount of judgments, settlements, costs and fees awarded by the courts to the Attorney General or persons with whom he or she has contracted for legal services, including any Special Assistant Attorney General, in cases closed or concluded during the preceding fiscal year of the state, and that amount paid to any Special Assistant Attorney General, or other persons under contract with the Attorney General to perform legal services, for representing the state or a public officer or employee of the state. This report shall also include copies of the report provided in the preceding six months under subsection (b) of this section.

    (b) Whenever the Attorney General contracts for legal services for a person other than as a full-time member of his or her staff, in accordance with section three of this article, he or she shall immediately deliver to the Governor and to the Joint Committee on Government and Finance a list of the persons with whom he or she has such contract; a list of all persons who responded to the proposal and copies of all communication in response to the proposal; and a review of the current and prior relationship of the Attorney General and his or her deputies with the persons to whom he or she has awarded the contracts.

§5-3-5. Fees to be paid into State Treasury. Attorney General’s Litigation Support Fund.

    On the final determination of any cause in any of the courts mentioned in the second section of this article, in which the Attorney General appeared for the state, the clerk thereof shall certify to the Auditor the fee of the Attorney General which was taxed in the bill of costs against the defendant, and when such fee shall be collected it shall be paid into the state Treasury and placed to the credit of the state fund.

    (a) There is established in the State Treasury a special fund to be known as the “Attorney General’s Litigation Support Fund.”

    (b)(1) The fund shall consist of any and all moneys designated by a court order as reasonable attorney fees and related expenses received by the Attorney General pursuant to this section as a result of any fees, fines, restitution, forfeitures, penalties, costs, interest, or judgments collected pursuant to any civil litigation, or any administrative proceedings, or in settlement of any claim asserted by or against the people of West Virginia, the State of West Virginia, or any of its departments, agencies, institutions, officers, employees, or political subdivisions thereof, not to exceed the actual expenses of the Office of the Attorney General pursuant to the litigation or the issue settled. Moneys in the fund shall be available for expenditure only upon appropriation by the Legislature in accordance with the provisions of West Virginia Constitution, article six, section fifty-one.

    (2) From any moneys collected or recovered by the Attorney General, pursuant to any civil litigation, or any administrative proceedings, or in settlement of any claim asserted by or against the people of West Virginia, the State of West Virginia, or any of its departments, agencies, institutions, officers, employees, or political subdivisions thereof, the Attorney General shall deduct and deposit into the Attorney General's Litigation Support Fund the net actual expenses of the office as more particularly described in subdivision (1) of this subsection, if any such amounts were made available by court order, and shall deposit the balance of any fees, expenses, fines, restitution, forfeitures, penalties, costs, interest, judgments or settlements received by the Office of the Attorney General on behalf of the people of West Virginia, the State of West Virginia, or any of its departments, agencies, institutions, officers, employees, or political subdivisions thereof that are in excess of the actual expenses of the Office of the Attorney General pursuant to the litigation or the issue settled in the treasury of the state to the credit of the state fund, general revenue, unless:

    (A) The recovery or a portion thereof was on behalf of a special fund established under the provisions of this code, in which event those moneys shall be deposited in the special fund if it is established in the State Treasury, or into a special fund established for that purpose in the State Treasury;

    (B) The recovery or a portion thereof was on behalf of or required to be held in a trust fund, in which event those moneys shall be deposited in a special fund established in the State Treasury to be held in trust;

    (C) The recovery was on behalf of a political subdivision of the state, in which event the remainder of the recovery shall be transmitted to the treasurer of such political subdivision for deposit in its general fund;

    (D) Amounts were recovered as attorney fees and expenses separate and apart from any amounts recovered by the state or the Attorney General by a person not employed by the state who provided legal services in the matter as a special assistant attorney general appointed by the Attorney General for that purpose, in which event, those attorney fees and expenses shall not be deposited into the Treasury of the state nor into the Attorney General’s Litigation Support Fund, but retained by the special assistant attorney general; or

    (E) The recovery or a portion thereof was for specifically identified persons, in which event those moneys shall be deposited into a pass through account in a banking institution designated by and administered subject to conditions established by the State Treasurer to ensure the accountability of the disbursement of the funds.

    (3) The actual expenses of the Office of the Attorney General pursuant to litigation or the issue settled shall be certified by the Attorney General to the Governor, the Secretary of the Department of Administration, the President of the Senate and the Speaker of the House of Delegates.

    (4) Notwithstanding any provision of this subsection to the contrary, or any other provision of law, the Attorney General may not expend the proceeds of judgments or settlements of any kind, or any part thereof, for the use of the Office of the Attorney General in excess of the actual expenses of the Office of the Attorney General pursuant to the litigation or the issue settled.

    (c) The Attorney General may expend moneys appropriated by the Legislature from the Attorney General’s Litigation Support Fund for the performance of any of the powers, functions, duties, and responsibilities of the Office of the Attorney General.

    (d) The Attorney General’s Litigation Support Fund shall be placed under the management or administration of the Attorney General for the purpose of performing any of the functions, duties, powers, and responsibilities of the Office of the Attorney General and all moneys deposited in the fund are available for appropriation to the Office of the Attorney General.

    (e) The appropriation of these moneys may be in addition to any moneys appropriated to the Office of the Attorney General from any other sources.

    (f) Neither the Attorney General, nor any employee of that office, may have any financial interest in the investment of moneys in the fund nor receive any commission with respect thereto.

    (g) The Attorney General shall keep detailed permanent records of all expenditures and disbursements from the fund.

    (h) On or before the fifteenth day of January, April, July and October, the Attorney General shall cause to be filed with the Governor, with copies to the secretary of the Department of Administration, the President of the Senate and the Speaker of the House of Delegates, a full and complete account of the receipts and disbursements from the fund in the previous calendar quarter.

§5-3-6. Public accountability for funds or assets recovered by the Attorney General and other officer or agencies of the state through judgment or settlement; applicability of open records and open meetings laws; administration and disbursement of state judgment or settlement proceeds.

    (a) The Legislature hereby finds and declares that:

    (1) Public accountability for funds or other assets recovered in a legal action or settlement by or on behalf of the general public, the state or its officers, agencies or political subdivisions is appropriate and required, whether the character of the assets or funds recovered is public or private;

    (2) Accountability for assets or funds recovered by the Attorney General or other officer or agency of the state is essential to the public trust, and is even more critical when the Attorney General or other officer of the state was a party to the action that resulted in the recovery by virtue of the public office he or she holds;

    (3) Public accountability demands the applicability of the freedom of information law, article one, chapter twenty-nine-b of this code, and the open governmental proceedings law, article nine-a, chapter six of this code, so that the actions of individuals or agencies who are charged with the administration of funds or other assets are conducted in full view, and are open to public scrutiny;

    (4) While it may be important that, in certain circumstances, funds or assets received retain their character, identity, and purpose, it is also important that the process by which funds are administered be open to public scrutiny and be accountable to the public; and

    (5) The power to appropriate funds for public purposes is solely within the purview of the legislative branch of government, and the Legislature, as a steward of the budgetary process, shall take steps to assure that settlements are handled in a manner that assures maximum accountability to the citizens of the state and their duly elected legislative representatives.

    (b) Therefore, any other provision of the common law or statutory law to the contrary notwithstanding:

    (1) Whenever the Attorney General or other officer or agency of the state is a party to or has entered his or her appearance in, a legal action on behalf of the State of West Virginia, including ex rel. or other type actions, and a disposition of that action has resulted in the recovery of funds or assets to be held in trust by the state, through court action or otherwise, to administer the trust funds or assets, for charitable, eleemosynary, benevolent, educational, or similar public purposes, those funds shall be deposited in a special revenue account or trust fund established in the State Treasury. The Attorney General or other officer or agency of the state or a person, organization, or entity created by the Attorney General or other officer or agency of the state are prohibited from administering trust funds or assets for charitable, eleemosynary, benevolent, educational, or similar public purposes except as is thereafter provided by law;

    (2) Except as otherwise provided in this section, any funds or assets not for charitable, eleemosynary, benevolent, educational, or similar public purposes, of any kind or nature whatsoever, including, but not limited to, public funds and private funds or assets when recovered by judgment or settlement of a legal action by or on behalf of the State of West Virginia, including ex rel. or other type actions filed by the Attorney General or other officer or agency of the state under their statutory or common law authority shall be deemed public funds, and shall be deposited in the State Treasury in the General Revenue Fund; and

    (3) No funds to which this subsection applies when deposited in an account in the State Treasury shall be disbursed without a specific legislative appropriation of the deposited funds by the

Legislature.

    (c) The common law, including the common law authority of any duly elected statewide constitutional officer or other officer of the state, is specifically abrogated to the extent it is inconsistent with the provisions of this section.

    (d) The provisions of this section do not apply to actions by or on behalf of the state or its duly elected statewide constitutional officers or any other state official or agency, if the recovery sought and received is for specific individuals identified as parties to the action either by individual social security number, other individual identifying number, or by the individual's proper name.

    (e) In the preparation of a judgment order that will result in the recovery of funds or assets by the state, the Attorney General or other officer or agency of the state who is a party to or has entered his or her appearance in the action on behalf of the State of West Virginia shall advise the court of the provisions of this section.

    (f) In the event of an extra-judicial settlement that would result in the recovery of funds or assets by the state, the Attorney General or other officer or agency of the state acting on behalf of the State of West Virginia may not agree to any terms contrary to the provisions of this section.

CHAPTER 5A. DEPARTMENT OF ADMINISTRATION.

ARTICLE 3. PURCHASING DIVISION.

§5A-3-13. Contracts to be approved as to form; filing.

    Contracts shall be approved as to form by the Attorney General, except that a contract proposed by the Attorney General shall be approved as to form by the Secretary of State. A contract that requires more than six months for its fulfillment shall be filed with the State Auditor.

    NOTE: This bill establishes ethical guidelines and provides financial accountability for the Attorney General. It establishes ethical guidelines for when the Attorney General should remove himself or herself from conflicts of interest. It clarifies the authority of the Attorney General to hire special assistants. It directs the Attorney General to comply with certain requirements when entering into contracts for legal services to be performed by persons other than full-time assistant attorneys general or other full-time employees of the state. It requires the Attorney General to report to the Governor and the Joint Committee on Government and Finance relative to these contracts, as well as report upon the conclusion of the legal services provided under each of them, including a statement of fees involved on an hourly basis; requires reporting of the payment of fees and expenses under these contracts. It requires the Attorney General to deposit any amounts received or recovered in providing legal services into the State General Revenue Fund, except in specific circumstances, and requires that certain funds recovered by the Attorney General may not be disbursed without a specific legislative appropriation. Lastly, the bill requires that contracts proposed by the Attorney General be approved as to form by the Secretary of State.

    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

    §5-3-1a and §5-3-6 are new; therefore, they have been completely underscored.