Private lawyers pocket $73 million in Florida's opioid case; Is it against state law?
By Daniel Fisher - May 17, 2023
TALLAHASSEE, Fla. (Legal Newsline) - Florida Attorney General Ashley Moody says she found a way to pay private lawyers tens of millions of dollars for negotiating opioid settlements without triggering the state’s $50 million cap on contingency fees, though a state legal reform group disagrees.
Moody’s explanation: The companies she sued paid the fees, with more than $70 million flowing to one Washington law firm. But her explanation could be seen as contradicted both by the contract a predecessor AG signed with outside law firms as well as Florida law, which treats any legal fee that is conditioned upon winning a case as a contingency fee. And Section 16.0155 of the Florida statutes states “in no event shall the aggregate contingency fee exceed $50 million” in any set of litigation, regardless of the number of cases or lawyers involved.
“It does not appear that the department is correctly interpreting section 16.0155, at least in light of how courts define a contingency fee,” wrote William Large, president of the Florida Justice Reform Institute, in a legal analysis obtained by Legal Newsline.
Florida passed its fee cap in 2010, part of a wave of such laws known as Transparency in Private Attorney Contracting, or TIPAC, statutes. Business organizations supported such legislation after plaintiff lawyers, many with political ties to the AGs who hired them, collected a $14 billion fee award in tobacco litigation in the late 1990s. They went on to earn hundreds of millions of dollars more, typically through no-bid contingency fee contracts.
Florida’s law requires the AG to make all contracts with outside lawyers public and limits contingency fees to $50 million. The contract former AG Pam Bondi signed in 2018 with Kellogg Hansen of Washington D.C. and three Florida law firms to sue Walgreens, Walmart, CVS and other opioid distributors acknowledges Section 16.0155 and the $50 million fee cap, but also says the private lawyers “shall first seek” to have their fees “paid by one or more of the parties legally responsible for the opioid crisis.”
After Florida negotiated more than $1.6 billion in settlements with those companies, a Pasco County judge awarded Kellogg Hansen $73.5 million in fees. When asked why the law firm’s fees exceeded the cap, Moody spokesperson Whitney Ray said the cap didn’t apply because the money came from the companies, not out of the state’s share of the settlement.
“We have not paid any firms,” Ray said in an e-mailed response to questions from Legal Newsline. “The contract, which was negotiated during the previous administration, provided that counsel would attempt to get fees from the defendants first.”
That explanation defies Florida precedent, said Large of the Florida Justice Reform Institute. While no court has decided how to apply Section 16.0155 – and none may, since it isn’t clear who would have standing to sue over the AG’s interpretation of the law – prior decisions including a 1990 opinion by the Florida Supreme Court have made it clear that any fee dependent on the outcome of the case is a contingency fee, Large wrote.
“That the parties agreed that the law firms would first seek payment from the defendants — and ultimately they did obtain fees as part of settlements and pursuant to fee-shifting statutes — does not transform the fees into something other than contingent fees,” Large wrote.
Moody, like her predecessor Bondi, is a Republican and Florida’s TIPAC statute was signed by Republican then-governor Charlie Crist. But Republican AGs have also shown themselves willing to make deals with private attorneys that contribute to their campaigns. Florida firms Drake Martin Law Firm, Curry Law Group, Harrison Rivard Duncan & Buzzett and Newsom Melton also may have shared in opioid fees, although Moody’s spokesperson didn’t respond to a question asking how much they were paid. Some of those firms contributed thousands of dollars to Moody’s political campaigns.
Former Republican AG Bill McCollum, who helped draft and pass Florida’s TIPAC statute, said in an interview last year that the fee cap law means what it says.
"The fee cap applies regardless of what the court is doing,” McCollum said then. He declined to comment for this article.
Moody’s office also declined to answer questions about possible inconsistencies in the AG’s position. The global settlement with opioid distributors, which Florida attached to its court filings in Pasco County, describes the state’s contract with outside lawyers as governed by TIPAC (seen on page 585 here).
To explain why the fee cap didn't apply, the AG's office cited section 501.2105 of the Florida statutes, which allows the AG's office to recover fees in consumer fraud cases. If that statute applies, however, the law also requires a sworn statement of the state's costs to be attached to the court order awarding fees. No such statement is in the Pasco County court docket and the AG's office didn't respond to requests for the affidavit.