March 2, 2020

From the President’s Desk: Private Lawyers Creating Havoc in Opioid MDL

Welcome to “From the President’s Desk” – a new blog from me, Harold Kim, the president of the U.S. Chamber Institute for Legal Reform. I’ll be dissecting the latest legal reform trends every week, so make sure to check back!

By: Harold Kim

Private plaintiffs’ lawyers took the nation by storm a few years ago, signing up many local towns, cities, counties, and other types of municipalities for lawsuits over the opioid epidemic, making huge promises of big paydays. There are thousands of these lawsuits now consolidated before a federal judge in Ohio.

There is no question: the opioid epidemic must be addressed. But private lawyers representing public entities will not lead to effective solutions and justice, but rather personal enrichment for the lawyers and little money for anti-opioid programs. Take the tobacco litigation from the late 1990s as an example. The Manhattan Institute found that 300 private lawyers from 86 firms who represented some states pocketed more than 350 percent more than what was actually spent on anti-smoking campaigns.

For a whole host of reasons, attorneys general (AGs) have objected to these municipality opioid suits since the proceedings began. Now, they’re waving warning flags about how these private lawyers will get paid.

A bipartisan group of 37 AGs sent a letter to the judge last week saying the common benefit fund asked for by the plaintiffs’ attorneys goes “well beyond what is necessary to ensure fair compensation for private counsel.”

Common benefit funds traditionally reallocate fees to the lawyers and firms who did the most work. But the AGs say that this particular proposal would allow some lawyers to take money from the municipalities’ recoveries. They also say it would let these lawyers take fees from similar cases that are not in the Ohio MDL.

It should be no surprise that private lawyer payment has become an issue. There are countless other examples of attorneys’ fees getting in the way of legal proceedings. But these AGs are saying that this proposed structure is not only potentially unfair, it may also “disrupt — perhaps irreparably so — the substantial progress that has been made to negotiate a large national settlement with several defendants.”

The plaintiffs’ lawyers’ first response was shockingly cold. Rather than address the AGs’ concerns, they just accused them of not reading the proposal, having “no dog in this fight,” and simply “riding the coattails” of the work the municipalities have been doing.

This case is extrodinarily complex. As Kansas AG Derek Schmidt said the “scale of the claims, the unprecedented actions by thousands of local governments to hire private counsel and pay their attorney fees by giving away part of any funds recovered, the extraordinary demands by some of those private attorneys to take at least part of their cut off the top of any settlement, the uneven effect of the opioid crisis in different regions of the country and the ever-present risk of bankruptcy combine to make this one of the most complicated legal cases in U.S. history.”

The response to the opioid epidemic must be strong and forward-looking. Unfortunately, the lawyers bringing these lawsuits appear more concerned about their attorneys’ fees rather than solutions.

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