SB 2418

This bill authorizes a political subdivision to only enter into a contingent fee contract for legal services if the governing body of the political subdivision adheres to all of the following requirements:  Calls a public meeting for the purpose of considering the contract and provides in the notice of the meeting (i) the reasons for pursuing the matter that is the subject of the legal services being procured and the desired outcome of pursuing the matter; (ii) the qualifications, experience, and competence of the attorney or law firm proposed for retention by the governing body; (iii) the nature of the relationship, if any, between the political subdivision or governing body and the attorney or law firm that is proposed for retention; (iv) the reasons the legal services cannot be adequately performed by the attorneys and supporting personnel of the political subdivision; (v) the reasons the legal services cannot be reasonably procured under a contract providing for an hourly rate payment structure as opposed to a contingent fee structure; and (vi) an explanation as to why a contingent fee contract for legal services is in the best interest of the residents of the political subdivision.  Makes a written finding that (i) there is a substantial need for the legal services that are the subject of the proposed contingent fee contract; (ii) the legal services cannot be adequately performed by the attorneys and supporting personnel of the political subdivision; and (iii) the legal services cannot reasonably be obtained from attorneys under a contract providing for an hourly rate payment structure due to the nature of the legal matter that is the subject of the contract or because the political subdivision does not have the funds necessary to pay the estimated cost of legal services provided under a contract at an hourly rate.  Approves the contract in a public meeting after discussion and consideration of the items described above. DUTIES OF THE ATTORNEY GENERAL Before a contingent fee contract for legal services proposed by a political subdivision is executed, this bill requires the political subdivision to obtain approval of the contract by the attorney general. The political subdivision must provide to the a ttorney general a copy of the proposed contract; a description of the legal matter that is the subject of the proposed contract; a copy of the notice issued above, the date such noticed was issued, and a description of the method for providing such notice ; and a copy of the written findings made as described above. Within 90 days after the political subdivision has provided the attorney general with such information, this bill requires the attorney general to approve the contract, or refuse to approve the contract and provide the political subdivision with one of t he following reasons for the refusal to approve:  The legal matter that is the subject of the contract presents one or more questions of law or fact that are in common with a matter that has already been adjudicated or that the state is currently litigating.  Pursuit of the legal matter by the political subdivision will not promote the just and efficient resolution of the matter.  The contract does not comply with the Tennessee rules of professional conduct for attorneys adopted by the Tennessee supreme court. If the attorney general has not taken action on a contract as described above within 90 days after receipt of the proposed contract, then this bill provides that such contract is deemed approved. In a judicial or quasi-judicial proceeding in which a political subdivision is represented by an attorney providing legal services under a contingent fee contract for legal services that was not approved in accordance with this bill, this bill authorizes the attorney general to intervene in such proceeding and request that the proceeding be dismissed. If the court or quasi-judicial body concludes that the contract for legal services was not approved in accordance with this bill, then the court or quasi- ju dicial body must dismiss the matter without prejudice. APPLICABILITY This bill applies to contracts entered into, amended, or revised after July 1, 2026. ON APRIL 9, 2026, THE HOUSE ADOPTED AMENDMENT #2. HOUSE BILL 2069, AS AMENDED, FAILED TO RECEIVE A CONSTITUTIONAL MAJORITY AND WAS RE-REFERRED TO THE CALENDAR COMMITTEE. AMENDMENT #2 makes the following changes:  Redefines "contingent fee"" to mean a fee charged for legal services that is contingent upon the successful outcome of a civil action.  Changes the provision pertaining to a political subdivision entering into a contingent fee contract for legal services from permissive to mandatory.  Clarifies that within 90 days after the political subdivision has provided the attorney general with the information required, the attorney general must either (i) approve the contract or (ii) refuse to approve the contract and provide the political subdivision with one of the reasons for the refusal, which might be that the legal matter that is the subject of the contract presents one or more questions of law or fact that are in common with a matter that has already been adjudicated in litigation involving this state or that this state is currently or may be litigating or investigating.  Provides that the attorney general's decision is final and not subject to review by a court. PUBLIC NUISANCE ACTIONS This amendment changes the definition of ""nuisance"" within present law by removing that it includes anything that is declared to be a nuisance by other statutes within present law. Present law provides that in all suits brought for the recovery of damages resulting from any nuisance, and the finding that the matter complained of is a nuisance, the court exercising a sound discretion may immediately, upon petition of plaintiff, orde r or decline to order the nuisance to be abated. This amendment changes present law to provide, instead, that a person must not initiate an action for recovery of damages resulting from a public nuisance, but actions for costs directly associated with ab at ement of a public nuisance are permitted. Present law also states that on the trial of such action for the recovery of damages, either party may show by proof the extent, if any, of the injury or injuries complained of, and how the alleged nuisance is caused or originated. This amendment repeal s this law. This amendment also repeals the common law of public nuisance that is inconsistent with the bill, except for present law pertaining to the abatement of nuisances, farms presumed not nuisances, or noise control at sport shooting ranges. It provides that the following nonexclusive list of actions or conditions must not be considered a public nuisance or be the basis for a public nuisance cause of action:  An action or condition that is lawful.  An action or condition that is authorized, approved, licensed, or mandated by statute, ordinance, regulation, permit, license, order, rule, or other similar measure issued, adopted, promulgated, or approved by a government entity.  Impairment of the spiritual, cultural, or emotional significance associated with public land, air, or water.  The design, manufacturing, distributing, selling, labeling, advertising, or marketing of a product.  The aggregation of individual injuries or private rights, including private nuisances. This amendment provides that a person is subject to a public nuisance cause of action only if that person proximately caused the public nuisance at the time the public nuisance was created, which includes controlling the condition, or instructing another person to engage in the activity, that unlawfully interferes with a public right. This amendment authorizes a public nuisance cause of action for a government entity only if the public nuisance is physically within the jurisdiction of that government entity. Past, current, or future expenditures made by a government entity related to injunction of or any other response to a public nuisance do not themselves confer standing to file or maintain a public nuisance action. In a public nuisance action brought by a government entity, the only remedies against a public nuisance are:  Indictment or information as regulated by present criminal law.  Injunctive relief to enjoin an unlawful condition that is proximately causing a public nuisance.  Monetary and nonmonetary resources, if quantifiable, that a court determines are reasonably necessary to abate the public nuisance based on relevant and reliable cost factors and established by clear and convincing evidence. All resources provided must be spent to abate the public nuisance itself. Remedies available through this amendment do not include the costs of abating a potential future public nuisance, or damages of any kind, including economic, noneconomic, and exemplary damages. This does not limit the authority of a government entity to order a person to vacate the right-of-way of any public land, air, or water of this state. This amendment authorizes a public nuisance cause of action for a private person only if that person has sustained a special injury proximately caused by the public nuisance and the person can show the existence of the special injury by clear and convinc ing evidence. A ""special injury"" is an injury that is different in kind, not just in degree, from an injury sustained by the general public exercising the same public right. A special injury is not an injury based upon impairment of the spiritual, cultu ra l, or emotional significance associated with public land, air, or water of this state. This amendment provides that financial expenditures made by a private person related to an injunction of, or any other response to, a public nuisance does not constitute a special injury sufficient to confer standing on the person to file or maintain a p ublic nuisance action. The remedy available to a private person in a public nuisance action is limited solely to compensatory damages for the special injury. The abatement of a public nuisance does not preclude the right of a person to recover compensat or y damages. Private persons are prohibited to bring a class action for special injuries arising out of a public nuisance. This amendment provides that unless otherwise set forth in present law, it is an affirmative defense to a claim that the defendant does not have ongoing control over the source of the alleged public nuisance. APPLICABILITY This amendment applies only to causes of action accruing on or after the effective date of this bill. A cause of action that accrued prior to that date is governed by the law applicable at the time of accrual of the cause of action, and that law is cont inued in effect for that purpose. This amendment also changes the effective date from July 1, 2026, to becoming effective upon becoming a law."