May 4, 2019 - 9:00 pm
Updated May 4, 2019 - 9:38 pm
As the U.S. opioid crisis continues, lawsuits dominate the headlines. The problem is the basis for more than 1,000 lawsuits brought by state, county, municipal and tribal governments seeking to place responsibility for the crisis on drug manufacturers, distributors and pharmacies, despite the fact that these products are subject to extensive government regulation in the development, manufacturing and distribution processes.
Virtually all of the localities involved in the litigation are represented by lawyers paid on a contingency fee basis, and it appears Nevada’s opioid litigation will not stray from that formula. Attorney General Aaron Ford recently proposed the state enter into a contingency fee agreement in its upcoming opioid lawsuit.
These agreements allow a public entity to contract with a private law firm to represent it, with the attorneys’ fees contingent on either achieving victory in court or obtaining a favorable settlement. Typically, these arrangements pay plaintiffs’ lawyers up to one-third of the overall award plus their expenses. As a result, the incentive for the plaintiffs’ lawyers is to maximize the size of the award.
State attorneys general and local officials across the country have decided to pursue litigation at the urging of plaintiffs’ lawyers who stand to gain hundreds of millions of dollars if they succeed. A Bloomberg analysis of lawsuits pending in 2018 estimated that opioid litigation could net as much as $50 billion in damages, while plaintiffs’ lawyers predict that total damages will be “hundreds of billions” of dollars. Private law firms litigating these suits will receive from 25 to 33 percent of those awards, which would earn them countless millions of dollars.
A recent report by the American Tort Reform Association highlighted how firms make sizable campaign donations to elected officials and then turn around and negotiate contingency fee agreements with the very attorneys general or district attorneys they helped elect. For example, Oklahoma Attorney General Mike Hunter hired lawyers for his state’s opioid litigation whose business partners and spouses maxed out contributions to his campaign. That contract was never even put up for public bidding.
To make matters worse, Ford’s claim that he would recuse himself from the search for a firm to represent Nevada has proven hollow. Ford’s old firm, Eglet Prince, which has represented numerous Nevada municipalities in class-action lawsuits, is now in negotiations with the attorney general to represent the state. This is not surprising because, while serving in the state Senate in 2017, Ford pushed an amendment through on the last day of the legislative session that eliminated Nevada’s limits on contingency fees awarded to outside firms that enter into contracts with the state.
Americans are rightly concerned about the opioid crisis, as we lose more than 100 of our community members each day from drug overdoses. It is a complicated problem that requires a comprehensive solution. Governments and their lawyers point to the “success” of the tobacco litigation from a generation ago as a basis to justify litigation against drug manufacturers and distributors. A closer examination of the experience in Texas proves that trial lawyers are the true beneficiaries of litigation, while the stated goals of the litigation seem to be an afterthought.
While Texas receives $490 million each year under the 1998 tobacco settlement, only $10.2 million was allocated toward anti-smoking efforts in 2016. Matthew Myers of the Campaign for Tobacco Free Kids stated that “measured against the potential successes and the potential good that could have been achieved, Texas and many other states fell far short of their objectives.” This is hardly surprising considering barely 2 percent of the annual settlement payment to the state supports smoking cessation. There is one group, however, that did exceedingly well: the personal injury lawyers. The “big five” Texas tobacco settlement lawyers receive about $120 million each year for their work in the 1990s.
Our civil justice system exists to resolve disputes — not to perform the functions of legislators and regulators. Broader public policy challenges should be addressed by those entrusted with such responsibilities. Too many Americans are suffering serious drug abuse problems, and our leaders must work together to find good-faith solutions. It is essential that, as with broader policymaking, any litigation must serve the public interest, not the profit motives of outside counsel.
Tiger Joyce is the president of the American Tort Reform Association (ATRA).