What Happened

California Attorney General (AG) Rob Bonta faces a legal challenge from a union representing state-employed attorneys over his decision to hire an outside law firm for a high-profile climate lawsuit against major oil companies. The California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment (CASE) argue that this decision violates Article VII of the California Constitution, which implicitly mandates that state work traditionally performed by civil service employees should not be outsourced to private entities.

The Details

In a complex legal battle, the California AG’s office, led by Rob Bonta, is embroiled in a dispute over its decision to hire the law firm Lieff Cabraser Heimann & Bernstein for a high-profile climate lawsuit against major oil companies. CASE argues that outsourcing legal work violates state law and undermines the civil service mandate.

The controversy began on September 15, 2023, when the California Department of Justice (DOJ) filed a 135-page complaint against several major oil companies. The lawsuit alleges multiple causes of action, including public nuisance and misleading advertising, aiming to hold these companies accountable for climate-related damages in California.

Despite the DOJ’s internal team of deputy AGs handling the initial filing, Lieff Cabraser was brought on board almost immediately, raising concerns about the necessity and legality of such a move. The DOJ justified the contract under Government Code Section 19130, citing the need for specialized expertise and the inability of its current staff to manage the lawsuit’s complexity and scale. The DOJ argued that Lieff Cabraser provides specialized knowledge and resources critical for effectively litigating the Climate Deception Lawsuit, which are not available within the civil service. The firm’s ability to handle litigation surges, providing a dedicated team of professionals with expertise in complex litigation, was deemed essential for the case’s success. The DOJ also contends that Lieff Cabraser’s external perspective on novel factual and legal issues warrants enlistment of outside counsel.

In California, as in some other states, the government is prohibited from entering into personal services contracts with private entities for services that can be executed by state personnel unless an exception applies.

California Government Code Section 19130 outlines specific exceptions under which personal services contracts with private entities are permissible. CASE contends that the AG’s office failed to demonstrate that any exceptions apply. Specifically, they argue that the services provided by Lieff Cabraser do not fall under the “highly specialized or technical nature” exception, as the necessary expertise and capabilities are available within the state’s existing legal workforce. CASE emphasizes that the state’s deputy AGs are fully equipped to handle complex litigation, citing their experience with high-stakes cases such as death penalty appeals. They argue that the decision to hire external counsel undermines the civil service system by depriving state attorneys of valuable career opportunities and setting a precedent that could lead to further outsourcing of legal work.

The lawsuit filed by CASE seeks judicial review of the State Personnel Board’s (SPB) decision to approve the contract, arguing that it was made in error and that the contract should be disapproved. The SPB, in its response, maintains that it acted within its discretion as an impartial quasi-judicial body, asserting that its decision was supported by substantial evidence and law.

Oral argument on CASE’s petition for a writ of administrative mandate was heard on June 27, the court has not yet made a decision.

Why It Matters

State AGs are increasingly enlisting outside counsel to help them pursue large-scale, complex litigation involving novel legal theories. In many states, statutory, procedural, ethical, and legal hurdles exist for doing so. States may argue that enlisting outside counsel allows access to specialized litigators. However, as CASE argues in its dispute with Bonta, state civil service corps include many accomplished and highly qualified attorneys capable of litigating complex, novel matters. As state AGs begin to look outward — rather than solely inward — for their litigation strategies, defendants should be prepared to challenge the state’s engagement of outside counsel.

Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education.
	Michael Yaghi Mike handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Blake R. Christopher Blake collaborates with clients on matters related to government contracting, investigations, and disputes. His senior-level government experience generates valuable insights and strategies for clients across a variety of industries.
	Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based on the West Coast. She routinely counsels clients on a variety of state and federal regulatory matters, with a particular emphasis on consumer protection and data privacy matters.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
	Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals.
	Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general.
	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.