Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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 Former State Auditor and current Lieutenant Governor Phil Bryant’s (R) lawsuit that challenged the payment of attorney’s fees to lawyers who Attorney General Jim Hood (D) hired to sue MCI is clearly politically motivated. So naturally current Auditor Stacey Pickering (R) denied that the suit is politically motivated, as reported in the Clarion-Ledger on Saturday:

[Hood’s attorney Fred] Krutz said he thinks the auditor's office waited two years to go after the attorneys fees because the case is politically motivated.

"It was always about politics," he said.

Pickering denies that's the case. "It is our belief that precedent is on our side," he said. "Any money recovered would be public funds."

Pickering is a politician. Most people assume that most acts by politicians are politically motivated. The odds that Bryant’s lawsuit against Hood was politically motivated are somewhere north of 99%.

The MCI case resulted in $100 million in cash and $7 million in property paid to Mississippi. Former Mississippi attorney Joey Langston’s law firm received a $14 million attorney’s fee in the case, which MCI paid. 

Hinds County Circuit Court Judge Winston Kidd threw the case out last week finding that:

Since the subject attorney's fees were not paid by the state and did not come out of any state funds, this Court finds that there is absolutely nothing improper or illegal about MCI's payment of attorney's fees to the Langston Law Firm," Kidd's ruling states.

I previously criticized aspects of Hood’s hiring outside counsel, particularly his hiring Texas lawyers who made a huge campaign contribution to Hood. But Hood is right in this case. The argument that a lawyer already hired and paid must give the fee back is thin. Even thinner is the argument that it’s the Legislature’s job to dole out the fee. The Legislature’s job is to pass laws—not administer attorney’s fees in a lawsuit.

If Bryant and Pickering do not like the system, then they should lobby the Legislature to change it—not file grandstanding lawsuits that cost the taxpayers money.

How much money? Both Hood and Pickering hired outside counsel in this case, who are paid by taxpayers—not MCI. Pickering’s lawyers alone cost the State $340,000 for a loss—with Pickering promising to take his gamesmanship to the Mississippi Supreme Court. The appeal will cost the State an additional six figures in attorney's fees. 

There is a big difference from the outside counsel fee in the MCI case and in Bryant/ Pickering's lawsuit:

• In the MCI case taxpayers paid nothing for outside counsel.
• In the Bryant/ Pickering case taxpayers paid hundreds of thousands for outside counsel.
• In the MCI case Mississippi won.
• Bryant/ Pickering lost their case.
• The MCI case made valid claims against a crooked corporation.
• Bryant/ Pickering's case made novel claims that lost.   

In the MCI case, Hood hired a Mississippi law firm that recovered $107 million for Mississippi from a crooked corporation. Hats off to Jim Hood on this one. I’m sure that money has come in handy over the last view years given the State’s terrible budget crisis.

Pickering needs to stop the taxpayer bleeding and shut this lawsuit down.

Voters who are tired of the political gamesmanship need to remember this episode when Bryant runs for governor and Pickering runs for whatever he decides to run for next.

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Don't miss Marshall Ramsey's dead-on cartoon of the Jim Hood vs. Big Business rivalry that was discussed in this article in the Sunday Clarion-Ledger.

The article was a weak effort. It quoted a Texas lawyer who made millions after being hired by Hood to represent Mississippi and a Chamber employee whose job it is to beat the drum for big business and rail against anyone like Jim Hood who stands up to business interests. The article did not quote anyone who even pretends to be objective on the issue.

Here is Ramsey's cartoon from today's paper:

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Last week Attorney General Jim Hood announced an $18.5 million settlement with Eli Lilly & Co. based on the company’s improper marketing of Zyprexa in Mississippi. Here is an L.A. Times article about the settlement.

In this post in December, I described a ruling in the case for Eli Lilly as basically throwing out the case. I was wrong. In retrospect, my opinion on the decision was influenced by posts on blogs that are cheerleaders for the pharmaceutical industry. 

These blogs are good sources of information regarding the latest decisions in pharmaceutical cases. The problem is that they offer no objectivity. They are typically written by lawyers who are industry honks who want to look like true believers for the industry in order get hired in more cases. Every decision is either a big win for the industry or wrongly decided by a stupid judge. In the future, I will try to do a better job of using these blogs for information on recent decisions while ignoring the commentary.

Here are amounts recovered by some of the other states who settled Zyprexa cases:

• Idaho– $13 million
• Utah- $24 million
• West Virginia– $22 million
• Connecticut– $25.1 million
• South Carolina– $45 million

There is no doubt that the ruling hurt Mississippi’s claim and reduced the state’s recovery in the case. But the ruling was not a disaster for Mississippi.

It still looks bad for Jim Hood that one of the firms handling the case was a Texas firm (Bailey Perrin) that donated $75,000 to Hood. That looks like a pay-for-play situation. The Texas firm and a Mississippi firm (McCraney Montagnet & Quin) will divide a $3.7 million attorney fee in the case.

But with Mississippi in a budget crisis and Governor Barbour cutting the budget regularly, General Hood will not have to apologize for adding revenue to state coffers.    

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Plaintiff’s attorneys are seeking an $8.3 million attorney’s fee following a $40 million settlement between Microsoft and the State of Mississippi stemming from allegations that Microsoft monopolized the personal computer market in Mississippi. Here is a copy of the Petition to Approve Fees. The amount of the attorney's fee must be approved by the trial court in the case.

Plaintiff’s counsel who stand to benefit in the case are Brent Hazzard of Jackson, Susman Godfrey of Houston, Boies Schiller of New York, Precious Martin of Jackson, John Gadow of Jackson and Richard Schwartz of Jackson.

The Petition states that the requested fee represents 7.5% of the total gross settlement. According to the Petition, Plaintiff’s counsel paid over $1.7 million in out-of-pocket expenses over the course of the litigation and expended millions of dollars worth of attorney time in the case. Mississippi State Auditor Stacey Pickering filed an objection to the fee claiming that a special legislative appropriation is required to pay Plaintiff’s counsel the fee specified in their contract with Attorney General Hood.

The dispute seems to be political. A 7.5% contingency fee is not a big fee. Mississippi Republicans have been critical of A.G. actions going back to the days of Governor Fordice trying to stop the tobacco litigation asserted by Attorney General Mike Moore. It would be interesting to see what would happen if a Republican became Attorney General. Would Republicans continue to criticize the A.G. hiring outside counsel to represent the State? Or would the criticism end and the only real difference be the political affiliation of the outside lawyers being hired by the A.G. to represent the State?    

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Attorney General Jim Hood filed this motion to amend his complaint in a case against numerous manufacturers of vitamins for conspiracy and price-fixing. A copy of the proposed amended complaint is attached to the motion. The case is pending in the plaintiff “hotbed” of Rankin County Chancery Court.

According to the Complaint, the manufacturers already paid substantial fines to the federal government. Other states filed similar cases and many have settled, as reported here.

The Complaint alleges that over a many-year period the manufacturers of vitamins conspired to fix prices in violation of antitrust and other laws. The Complaint seeks to recoup money paid by Mississippians. Maybe they can get free vitamins thrown into the deal, like when Kramer got free coffee to settle his case on Seinfeld.

Hood hired several Mississippi lawyers to pursue the case, including Richard Schwartz, Brent Hazzard, Precious Martin, Lee Abraham and John Gadow.

It sounds like the kind of case that is very interesting if you are actually involved in it, but boring when you are not. Sort of like a complex commercial case.  

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Last night Ya’ll Politics reported a ruling by a New York federal judge that basically threw out Attorney General Jim Hood’s lawsuit against Eli Lilly & Co. over off-label marketing of the anti-psychotic drug Zyprexa. Ya'll linked this report from Legal Newsline. Here is the actual 117 page opinion in the case.

This looks like a disaster for General Hood. First, Mississippi loses and collects nothing while other states settled similar claims and made substantial recoveries:

“Of the 12 states that did not settle their claims against Eli Lilly in a 33-state, $62-million agreement five have already made their settlements official and others have tentative agreements. The states that have settled are:

-Connecticut settled for $25.1 million;

-West Virginia settled for more than $22 million ($6.75 went to outside counsel hired by state Attorney General Darrell McGraw);

-Idaho settled its case for $13 million ($2.5 went to outside counsel hired by state Attorney General Lawrence Wasden);

-Utah settled for $24 million (more than $4 million went to outside counsel hired by state Attorney General Mark Shurtleff); and

-South Carolina settled for $45 million (more than $6.5 million went to outside counsel hired by state Attorney General Henry McMaster).

Eli Lilly has paid $1.4 billion to settle federal civil and criminal claims stemming from alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that collectively received approximately $362 million.”

Eli Lilly hemorrhaged money to settle the Zyprexa claims and Mississippi, with its budget in ruins, gets nothing.

Second, as if the loss was not bad enough, the article revealed that Hood’s hand-picked outside counsel donated substantial money to Hood:

Bailey Perrin, which donated $75,000 to Hood, is also representing the states of Arkansas, Pennsylvania and Louisiana.

$75,000??? From a law firm in Texas? Why in the world, other than the obvious reason, would a law firm in Texas be donating $75,000 to the Mississippi Attorney General? Did they also donate $75,000 to the A.G.’s in Arkansas, Pennsylvania and Louisiana?

According to the Court’s opinion, Mississippi was also represented by William Quinn of Booneville (now Ridgeland). Quinn was working for Joey Langston at the time of Langston’s downfall and is generally credited for master minding the State’s claim against Worldcom that resulted in a $14 million fee for Langston.  

This is more ammunition for Hood’s critics in general, and the critics of the State’s system of allowing the A.G. to hire and pay outside counsel in particular.

I do not have a problem with the A.G. hiring outside counsel, in theory. But a Texas firm who donated $75,000 to Hood? Let’s be honest—that does not look good. There are plenty of good lawyers in Mississippi who could represent the State and need the work. But there is probably a shortage of non-incarcerated (former) Mississippi lawyers who donated $75,000 to Hood.

Hood is going to end up giving his critics enough ammunition to get the State Legislature to enact a law that restricts the A.G.’s ability to hire outside counsel.  

As for Hood’s political future, there are no threats on the horizon to his position as A.G. But for a higher office such as governor, the $75,000 donation from Texas lawyers may do more harm than good.