Oregon Lawyers Battle Over Legal Aid Funding

SALEM, Ore. (AP) — A proposal in the Oregon Legislature to use unclaimed judgments from class-action lawsuits to fund legal services for the poor has raised deep divisions in the legal community.

The measure is supported by the Oregon State Bar but opposed by some of the state's most prominent lawyers. And two lawmakers say they were invited to talk about the bill to a group of lawyers who raise money for legal aid, only to be uninvited once they showed up the next day.

Class-action lawsuits involve a group of people who allege they were harmed in the same way by a defendant, such as an employer accused of failing to pay overtime or a manufacturer accused of product defects. In Oregon, defendants keep any unclaimed portion of the judgment, which often happens when members of the class can't be found or they choose not to respond because their individual earnings would be too small to justify the effort.

Rather than letting the unclaimed money stay with the defendant, Oregon Democrats want it to go to an endowment fund controlled by the state treasury. Interest income would be used to fund legal aid lawyers, who represent the poor in civil actions without charge.

"This is about holding companies accountable for the injuries they've done to Oregonians," said the Rep. Jennifer Williamson, (pictured) a Portland Democrat who is sponsoring the legislation.

Legal aid officials say about 850,000 Oregonians have income low enough to qualify for their services, but funding has diminished.

Williamson and Democratic Rep. Tobias Read of Beaverton said they were invited to talk about the bill at a luncheon for the Campaign for Equal Justice, a lawyer-led group that raises money for legal aid. Once they showed up, however, they were turned away, they said.

Mark Wada, a Portland attorney who chairs the organization's board, said several board members raised concerns about having the lawmakers discuss a bill that sparked divisions.

"We really wanted to keep this annual lunch as a celebratory event and not have that controversy at the lunch," Wada said.

The Campaign for Equal Justice supports the legislation, Wada said.

Lawyers from some of Oregon's most prominent firms — Harrang Long Gary Rudnick of Eugene; Stoel Rives and Davis Wright Tremaine of Portland — delivered their objections to the Senate Judiciary Committee on Thursday.

The critics said they agree legal aid needs more money, but the bill is unworkable. They object to changes in the procedures for identifying members of the class eligible for compensation and say the changes shouldn't apply to cases now pending.

"This is a very blunt and in my view inappropriate means to pursue that policy objective," said Brad Daniels, a partner at Stoel Rives who defends class actions. His clients include BP West Coast Products, which recently lost a class-action suit in Multnomah County over a $0.35 fee charged to customers who used a debit card to pay for gas.

"This measure throws a grenade into long-settled class action law," said Dave Frohnmayer, a former Oregon attorney general now in private practice at Harrang Long, whose clients include several defendants that would potentially be affected by the legislation. He said he was speaking only on behalf of BP.

Attorney General Ellen Rosenblum and the Legislative Counsel office, which provides legal advice to the Legislature, have written letters dismissing the concerns and saying the measure is constitutional.

The committee took no action, but the chairman, Democratic Sen. Floyd Prozanski of Eugene, said it will be discussed again next week.

The bill, HB 4143, cleared the House in a 36-21 vote on Monday backed mostly by Democrats. It's unclear how it will fare in the Senate, where conservative Democrats sometimes join with Republicans to block legislation that riles the business community.

Still, it has a powerful ally in the Senate President Peter Courtney, a former legal aid attorney.

"This idea is so Oregon. We don't let people suffer in our state if we can help it," said Courtney, D-Salem. "We don't. We're not built that way."