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Critics say Gov. Edwards is running his own 'buddy system'

BATON ROUGE -- On August 12, the rain started falling and the rivers started rising, and floodwaters soon washed over much of Baton Rouge and the surrounding parishes.

Maybe that’s why nobody noticed when, four days later, a group of Gov. John Bel Edwards’ top campaign donors were brought in as attorneys on a controversial lawsuit against oil and gas companies — a case that could mean a big payday for Edwards’ hired guns.

The Edwards administration’s contract is with lawyer and former state Rep. Taylor Townsend of Natchitoches, who was a co-chairman of the governor’s transition team and now heads Edwards’ super PAC fundraising committee, Louisiana Families First. With the governor's approval, Townsend then brought in six other attorneys as subcontractors.

Townsend, his law firm and affiliates and those of a team of six subcontracted attorneys combined to give the Edwards campaign and his transition team $130,000 last year.

“There is a perception that the governor is turning his office into a private law firm,” said Melissa Landry of the tort reform group Louisiana Lawsuit Abuse Watch. The governor, she said, “is quietly handing no-bid legal contracts to his campaign supporters,” a practice for which Landry harshly criticized former Attorney General Buddy Caldwell.

So far, Townsend and his team have been enrolled in just a single lawsuit, filed by Jefferson Parish against various oil and gas companies over land loss the suit says was caused by the companies' pipelines and canals. But that suit is only one of several dozen filed by governments of coastal parishes, and Matthew Block, Edwards’ executive counsel, said he expects the Townsend group will eventually be enrolled on behalf of the state in all of them.

The lawsuits could result in a huge payday, given their scope and number and the deep pockets of some of the defendants, which include multinational energy companies like Exxon.

Block said the team members were selected not for their fund-raising prowess or their loyalty to Edwards but because of their legal acumen.

“The governor, as you know, is a lawyer who has had long-term relationships with a lot of these people, so I don’t think it’s cronyism; it’s just people the governor has a tremendous amount of faith in,” Block said, echoing some of the same arguments Caldwell made in 2013 to justify lucrative contracts he had given to his campaign manager's and treasurer’s law firms. “And I think if you talk to people throughout the state, they’ll tell you these are some of the best environmental lawyers in the state.”

“We need to make sure we get this right,” Block said. “It’s important to make sure we have the best team we can put together.”

Some of those on the Townsend team — including Gladstone Jones, who sued scores of oil and gas companies on behalf of the Southeast Louisiana Flood Protection Authority-East, and J. Michael Veron, who filed the first successful lawsuit against the industry over historic environmental damage its operations caused on private property — have long records in so-called “legacy lawsuit” cases like this.

Others, including Townsend, a personal injury and criminal defense attorney, don’t.

The group also includes Bernie Boudreaux, who served as executive counsel to former Gov. Mike Foster and now works for Jones' New Orleans-based firm, Jones Swanson Hubbell & Garrison; J. Rock Palermo, a major donor to Edwards and a partner of Veron's in the Lake Charles firm Veron Bice Palermo & Wilson; Jim Swanson of the New Orleans firm Fishman Haygood Phelps Walmsley Willis & Swanson; and Jim Garner of the New Orleans firm Sher Garner Cahill Richter Klein & Hilbert.

The case, and the controversy over the new legal team, is about more than just patronage, however. It also may signal growing tension between Edwards and his frequent political sparring partner, Attorney General Jeff Landry — who is not related to Melissa Landry — over how to handle a raft of similar suits targeting one of Louisiana’s biggest industries. Both the governor and the attorney general intervened in the coastal lawsuits in the spring.

Block said the governor always intended to bring in some high-powered legal talent on the coastal lawsuits because the suits are important and complex, and cash-strapped state agencies lack the resources to give them the attention they deserve.

But there was a rush in the Jefferson Parish matter when a judge threw the case out several weeks ago, ruling that the plaintiffs — including the state Department of Natural Resources, overseen by the governor — hadn’t exhausted all other available legal remedies before filing suit.

The Edwards administration wanted to challenge that ruling and had only seven days to do so. Block said the governor’s team had expected they’d be joined in doing so by the attorney general, who had intervened in the coastal lawsuits shortly after taking office this year.

Instead, Landry’s office issued a news release saying the attorney general agreed with the judge’s ruling. At that point, Block said, the Governor’s Office figured it was on its own in taking on the industry, so Edwards’ lawyers filed a motion enrolling the Townsend team to allow the outside lawyers to help prepare the challenge to the judge's ruling.

One current flashpoint of the dispute is that the attorney general must approve any hiring of outside legal counsel, and Edwards’ new lawyers were enrolled without Landry's OK.

Landry’s office filed a motion last week asking the judge to remove them, and the Edwards administration, acknowledging it didn’t follow the process, has withdrawn them.

But while he admitted a misstep, Block said the approval of outside lawyers for state agencies by the attorney general is meant to be “ministerial” — in effect, pro forma — and that it shouldn’t take long for Landry to sign off on the Townsend team.

However, he said Landry has been slow in approving lawyers in other cases, and he wondered aloud whether the political tension between the governor, a Democrat, and Landry, a Republican, is to blame.

“I'm hopeful that the Attorney General's Office is going to do what it's supposed to do and approve the appointment of these counsel so we can move on and ... make sure this case is about the issues and not who our lawyers are,” Block said.

Even if Edwards succeeds in adding his hand-picked team to the cases, further controversy over how the outside lawyers will be paid may be looming.

The state’s contract calls for paying Townsend and his team $225 per hour, up to a maximum of $150,000. But then it envisions the lawyers negotiating additional payments — potentially big ones — from the defendants after a settlement.

The practice is called “fee-shifting,” and it was used by Caldwell in a process that critics, among them Melissa Landry, called the “Buddy system.”

In fact, Jeff Landry is generally believed to have defeated Caldwell in the race for attorney general last year in no small part because of TV ads using that phrase to attack Caldwell.

Loyola Law School professor Dane Ciolino has said for years that the system — which aims to pay private lawyers competitive fees to represent the government while also avoiding awarding them contingency fees that require express legislative approval — is simply “illegal.”

“Private lawyers cannot be paid by third parties for the work they do for the government,” Ciolino said in 2014. “It’s that simple.”

Melissa Landry said Edwards is following Caldwell’s playbook.

“The difference is that the activity this time is perhaps more blatant, and it also flies in the face of reform the Legislature overwhelmingly passed in 2014,” she said.

The 2014 law she referenced said that state government legal fees must be paid on an hourly basis.

But Block said the law may be open to interpretation, noting that Edwards’ outside legal team believes that if they are paid out of a settlement — rather than by the defendants or plaintiffs directly — that does not violate the law.

He acknowledged that the question remains open, and he said the high-priced legal team is aware of the risk. If they have to settle for a mere $150,000, he said, that’s their problem.

“That is no doubt an issue," Block said, "and it's something that these lawyers are fully aware of — that this may, in fact, be a purely hourly-rate contract and that's the best they can do.”

Editor's note: This story was updated Sept. 1 to include the names of all of the lawyers on the governor's legal team.

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