TALLAHASSEE — Legal bills continue to mount for the defense of insurance commissioner Kevin McCarty and the state Office of Insurance Regulation.
So far the state has been billed more than $55,000 by high-powered attorney Barry Richard, who is charging up to $715 an hour to defend against a lawsuit filed by the owner of a Texas insurance company who alleges McCarty unfairly rejected his proposal to do business in Florida.
That makes Richard, who represented George W. Bush in the 2000 presidential election recount, the highest-paid outside counsel hired by the state insurance office in the past four years.
In three other cases, the state's risk management office paid outside attorneys between $85 and $95 an hour to defend the insurance office, with charges totaling between $15,748 and $115,772. In those cases, risk management covered all the costs.
In this case, McCarty's office is picking up some of the costs.
"This case is not like any one of those three," said Audrey Brown, chief of staff for McCarty.
Those, she said, related to employment issues.
The case filed in January by Charles Wood, owner of Dallas National Insurance Co., involves complex federal constitutional issues, she said.
"We've never been sued like this," Brown said. "It's really the state that we're defending."
Brown also noted the contract calls for lower-priced attorneys in Richard's office to help with the case.
It's not unprecedented for the state to pay more than $700 an hour for outside legal services. In the 2009-10 fiscal year, the Department of Transportation contracted with attorneys who charged similar rates.
But watchdog groups call the expense excessive.
"That seems exorbitant at a time when there's a budget crisis in Tallahassee," said Tim Heberlein, a spokesman for the Florida Consumer Action Network. "It's the taxpayer that ends up getting hurt by all this."
Dominic Calabro, president of Florida TaxWatch, said the hourly rate would be high even in good economic times.
"It's even more difficult to swallow in the Great Recession," he said.
The Office of Insurance Regulation has 20 attorneys on staff.
Without the help of outside counsel, they successfully defended lawsuits filed in federal court by University Health Care Insurance in 2007 and by Life Partners Inc. in 2008.
Wood contends McCarty denied his company the right to sell workers' compensation insurance in Florida because of a long-standing "vendetta" against Bankers Insurance, a company that Wood did business with.
Bankers spied on McCarty in the mid 1990s in an attempt to out him as a gay man and get him fired. The company hired a private investigator and illegally tapped McCarty's phone when Bankers was passed over for a $16 million state contract while McCarty headed Florida's Joint Underwriting Authority, an insurer of last resort.
The state filed a complaint against Bankers Insurance Co. in 2001, charging the company tried to manipulate insurance regulators by prying into the private life of a state official. McCarty filed suit, saying his privacy was violated in a case that made it public knowledge that he is gay.
The company settled both cases, agreeing to pay the state $1 million in fines and costs, and $2.55 million to McCarty.
Wood alleges that history prompted McCarty to reject his company's bid to expand into Florida.
In a state suit filed by Wood, the 1st District Court of Appeal ruled Jan. 20 that McCarty had the authority to bar Dallas National from Florida. But about two weeks before that, Wood filed the federal complaint claiming the personal "vendetta."
A jury trial is scheduled for November.
Janet Zink can be reached at email@example.com or (850) 224-7263.