Could Louisiana's unclaimed-property administrator hire an attorney for a share of recovered property?

Plain-English summary

Louisiana's State Treasurer, as unclaimed-property administrator, asked whether it could hire a lawyer to recover abandoned property and pay a percentage of the recovery. In Opinion 03-0417, the AG said yes: La. R.S. 9:175 expressly authorized percentage-based expenses and attorney fees for enforcement actions under the Unclaimed Property Act. The opinion said that authority applied to actions within Louisiana and in other states.

The letter distinguished this express statutory authority from a general agency power to hire private counsel on contingency. It identified the Attorney General's and Civil Service department's approvals for the arrangement. It also said the professional-services procurement review depended on the source of payment: public funds triggered that review, while money held in the Unclaimed Property Fund was treated as custodial property rather than public funds. The quoted statute barred deducting these fees from an owner's claim.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant at issuance

Unclaimed-property administrators

The AG read the Unclaimed Property Act as permitting counsel to be paid on a percentage of recovered property. For an action in Louisiana, the quoted statute required the Attorney General's approval to retain another attorney. The opinion also identified Civil Service approval.

Property owners

The statute quoted by the AG prohibited subtracting enforcement expenses or attorney fees from the amount an owner could claim. The opinion described the state's custody of unclaimed property as a trust-like holding for missing owners.

State contract reviewers

The AG said a fee paid with appropriated or otherwise public funds fell under professional-services procurement review and additional approval. It concluded that payment from the Unclaimed Property Fund did not, because those funds were held in custody rather than as public money.

Common questions

Could the administrator pay counsel a percentage of recovered property?

Yes. The AG pointed to express language in La. R.S. 9:175 allowing fees based in whole or part on the value recovered.

Did an unclaimed-property owner lose part of the claim to pay the lawyer?

No. The quoted statute said the expenses and fees could not be deducted from the amount subject to the owner's claim.

Was Attorney General approval required?

The AG said La. R.S. 9:175(D) required it to retain another attorney for an action in Louisiana. The opinion also identified Civil Service approval.

Did every such contract require professional-procurement review?

The opinion drew a funding distinction. It said contracts paid from appropriated or other public funds were subject to that review, while payment from the custodial Unclaimed Property Fund was not under the law discussed.

Background and statutory framework

The Treasurer asked about a contingent-fee contract for enforcing the Louisiana Uniform Unclaimed Property Act. The AG quoted La. R.S. 9:174 on enforcement actions and La. R.S. 9:175 on attorney retention, payment, and protection of owners' claims. It then discussed the Professional Procurement Code's public-funds scope under La.R.S. 39:1482(A) and the additional approval identified in La.R.S. 49:258. The opinion's distinction turned on whether the fee would come from public money or property held for absent owners.

Citations and references

• La. R.S. 9:174: enforcement authority and possible attorney-fee awards.
• La. R.S. 9:175: interstate cooperation and percentage-based counsel fees.
• La.R.S. 39:1482(A): scope of professional-services procurement rules.
• La.R.S. 49:258: approval discussed for public-funded legal contracts.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0417

Original opinion text

~t~te ~
One American Place
301 Main Street, Suite 600
DEPARTMENT OF ~USTICE
P.O. Box 94005
CIVIL DIVISION
TEL.: (225) 342-7013
BATON ROUGE
FAX: (225) 342-2090

RICHARD P. IEYOUB
70804-9005
A’FrORNEY GENERAL

DEC ] 6 2003
OPINION NUMBER 03-0417

~ 167-A UNKNOWN OWNERS i R.S. 9:151, et seq.

Mr. James H. Napper II
General Counsel and
Discussion of Administrator of Unclaimed
Property utilizing contingency fee.
Assistant Attorney General
P. O. Box 44154
Baton Rouge, LA 70804

Dear Mr. Napper:

On behalf of the State Treasurer, acting as the Administrator (the "Administrator") under the Louisiana Uniform Unclaimed Property Act (the "Act"), La. R.S. 9:151, et seq., you requested the opinion of this office. Your questions pertain to the authority of the Administrator to enter into a contract with an attorney to enforce the provisions of the Act on a .contingency basis, that is, on a percentage of property and funds recovered.

In Meredith v./eyoub, 96-1110 (La. 9/9/97), 700 So.2d 478, the Louisiana Supreme Court held that, absent Constitutional or statutory authorization, contingency fee contracts between the Attorney General and private attorneys to represent the state in enforcing the state’s environmental laws were illegal and violated state law. Specifically, the Supreme Court noted that the fiscal affairs of the state are matters pertaining exclusively to the legislature and that the payment of outside attorneys to prosecute legal claims on behalf of the state is a fiscal matter. Thus, the Supreme Court found that, under the separation of powers doctrine, unless the Attorney General had been expressly granted the power in the constitution to pay outside counsel contingency fees from state funds or the legislature had enacted such a statute, then the Attorney General had no such power. The Supreme Court found no such grant of power in the constitution or by statute. See also, leyoub v.
W.R.Grace, 1997-728 (La.App. 3 Cir. 3/6/98), 708 So.2d 1227. While these cases specifically apply only to the Attorney General, the holding is applicable to all executive branch agencies.

The statutory authority for the retention of counsel under the Act is contained in La. R.S.
9:174 and 175, which provide in pertinent part as follows:

"§ 174. Enforcement

The administrator may maintain an action in this or another state to enforce this Chapter. The court may award reasonable attorney fees to the prevailing party."

Page 2

Mr. James H. Napper II
OPINION NUMBER 03-0417
Page -2-

"§ 175. Interstate agreements and cooperation; joint and reciprocal actions with other states; confidentiality

A. The administrator may enter into an agreement with another state to exchange information relating to abandoned property or its possible existence. The agreement may permit the other state, or another person acting on behalf of a state, to examine records as authorized in R.S. 9:172...

B. The administrator may join with another state to seek enforcement of this Chapter against any person who is or may be holding property reportable under this Chapter.

D. The administrator may request that the attorney general of another state or another attorney commence an action in the other state on behalf of the administrator. With the approval of the attorney general of this state, the administrator may retain any other attorney to commence an action in this state on behalf of the administrator. This state shall pay all expenses, including attorney fees, in maintaining an action under this Subsection. With the administrator’s approval, the expenses and attorney fees may be paid from money received under this Chapter. The administrator may agree to pay expenses and attorney fees based in whole or in part on a percentage of the value of any property recovered in the action. Any expenses or attorney fees paid under this Subsection may not be deducted from the amount that is subject to the claim by the owner under this Chapter.~ (Emphasis added)

Accordingly, the legislature has authorized the Administrator to retain counsel to commence actions on behalf of the Administrator, with the expenses and attorney fees to be based on a percentage of the value of the property recovered, or a contingency. This authority would be for both interstate and intrastate actions.

You next ask, what conditions and approvals are required to fully authorize the Administrator to enter into such a contractual arrangement. As set forth in La. R.S. 9:175(D), the approval of the Attorney General is required. The approval of the Department of Civil Service is also required. See, Civil Service Commission of the City of New Orleans v. The City of New Orleans, 2002-1812 (La. 9/9/03), 854 So.2d 322.

Generally, legal services contracts are subject to review and approval by the Office of Contractual Review pursuant to the provisions of the Professional, Personal, Consulting, and Social Services Procurement Code (the "Professional Procurement Code") found at

Page 3

Mr. James H. Napper II
OPINION NUMBER 03-0417
Page -3-

La.R.S. 39:1481, et seq. However, the Professional Procurement Code only applies to the "expenditure of public funds ... by the executive branch of this state for professional, personal, consulting, and social services procurement." La.R.S. 39:1482(A).

If the funds for the payment of the attorney fees due under a contingency fee contract between the attorney and the Administrator comes from funds appropriated by the legislature or are otherwise deemed to be public funds, the contract would fall within the provisions of the Professional Procurement Code and would also be subject to the approval of the Office of Contractual Review, and the Commissioner of Administration under La.R.S. 49:258.

If, however, the monies to be used to pay the attorney fees is paid from the Unclaimed Property Fund, those monies are not public/state funds and thus are not subject to the Professional Procurement Code.

As stated in pertinent part in Albach v. Kennedy, 2000-0636 (La.App. 1 Cir. 8/6/01) 801 So.2d 476:

"Louisiana’s Uniform Unclaimed Property Act derives from the uniform law proposed initially in 1954, revised in 1966 and again in 1981. In Act 146 of 1972, the Louisiana legislature enacted an adaptation of the 1954 Uniform Law; in Act 829 of 1986, Louisiana adopted the 1981 revision. Louisiana Health Service and Indemnity Company v. Tarver, 93-2449, p. 3 (La.4/11/94), 635 So.2d 1090, 1092. The most common modern form of unclaimed property legislation is exemplified by the 1954 and 1981 versions of the uniform Act. These are escheat laws: holders of property that is deemed abandoned by virtue of its having been unclaimed for a certain pedod of time are required to report its existence to the state. If the owners are not found, the property is turned over to the state, which holds it in perpetual custody for the missing owners. The primary rationale behind the legislation is its use as a revenue raising device. Pending a claim by the missing owner, the state receives the use of the property as well as any income that it may provide. The law reflects a policy that unclaimed property should benefit the general public rather than the holders of the property.
Louisiana Health Service and Indemnity Company v. McNamara, 561 So.2d 712, 716 (La.1990). (Emphasis added)

The Act was revised in 1986 and amended and reenacted in 1997 and currently provides in La.R.S. 9:162(B) as follows:

"Upon payment or delivery of property to the administrator, the state assumes custody and responsibility for the safekeeping of the property,,." (Emphasis added)

Page 4

Mr. James H. Napper II
OPINION NUMBER 03-0417
Page 4-

The monies are held in a custodial or trust capacity by the State of Louisiana and thus are not public funds subject to the Professional Procurement Code.

Trusting this adequately responds to your request, we remain

Yours very truly,

RICHARD P. IEYOUB
Attorney General

BY:
~y ueneral

RPI/MSH