TPA Releases Report on Growing Costs of Outsourced State Lawsuits

FOR IMMEDIATE RELEASE

Contact: Kara Zupkus (224) 456-0257

WASHINGTON, D.C. – Today, the Taxpayers Protection Alliance (TPA) released a new report, “Outsourced Justice,” examining the growing trend of state attorneys general (AGs) hiring private law firms to pursue costly litigation against businesses. The report highlights troubling contractual arrangements in states including Arkansas, Florida, Iowa, Kentucky, and Texas, where politically connected law firms stand to collect millions of dollars through contingency-fee agreements. The report raises serious concerns about government transparency and the growing financial burden these lawsuits impose on taxpayers and consumers.

Ross Marchand, Executive Director of TPA, offered the following comment:

“Across the country, AGs are increasingly wielding the legal system as a political weapon and giving well-connected trial lawyers a taxpayer-funded payday. Taxpayers already spend billions of dollars supporting state AG offices and employing attorneys to enforce the law and protect consumers. Yet, instead of relying on these public servants, AGs are increasingly outsourcing litigation to private firms that stand to collect staggering fees from settlements. In Texas alone, outside counsel billed nearly $97 million following the state’s $1.4 billion settlement with Meta. These arrangements create perverse incentives to pursue speculative lawsuits and reward politically connected attorneys at the public’s expense.

“This troubling trend results in a hidden tax on consumers. Businesses developing new technologies and improving their services should be focused on serving consumers—not defending themselves against an endless barrage of politically motivated lawsuits. When companies must divert enormous sums of money toward legal defense and settlements, those costs are passed along to millions of Americans through higher prices and reduced investment. Families already face significant affordability challenges, and the last thing they need is for elected officials to make innovative products and services more expensive and less accessible.

“AGs have a responsibility to uphold the law, not enrich private attorneys or score political points at the expense of state residents. Taxpayers and consumers deserve an end to this costly system of outsourced justice.”

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The Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis, and dissemination of information on the government’s impact on the economy.