Following “pay to play” allegations brought by a defendant in a securities class action, U.S. District Judge William Alsup in San Francisco has asked law firms Chitwood Harley Harnes and Lieff Cabraser Heimann & Bernstein to provide details of campaign contributions made to the Democratic Attorneys General Association since 2012. The law firms have until Monday to comply with the order.
The law firms are representing the Mississippi Public Employees’ Retirement System against Diamond Foods Inc.
The orders came after the lawyers of Diamond Foods contended that the Mississippi fund does not have sufficient standing to be a class representative. They also submitted to the court that the plaintiff’s firms had made political contributions to the election campaigns of Mississippi Attorney General Jim Hood.
Diamond Food alleged that the contributions were “an apparent ‘pay to play’ arrangement” as until recently only Jim Hood had the sole discretion to pick counsel for representing state agencies in litigation.
With the enactment of the Sunshine Act, Hood lost the authority to unilaterally pick counsel to represent Mississippi agencies. When the Sunshine Act was passed, the U.S. Chamber of Commerce hoped it would help to control abuse of the authority of the attorney general in awarding contingency fee contracts to campaign contributors.
The pension fund responded that it should not be disqualified only due to the contributions made by plaintiff’s firms. The fund also said that the contributions were not secret and had been publicly disclosed for long, and that previously courts had never found such contributions to require disqualification.