Kentucky AG Slams Review of Lawyer Contract in Opioid Fight

FRANKFORT, Ky. (CN) – Kentucky Attorney General Andy Beshear claims the state’s finance secretary overstepped his bounds when he ordered a review of Beshear’s contract with outside attorneys to litigate claims against opioid manufacturers.

In a lawsuit filed Thursday in Franklin County Circuit Court, Beshear says his office requested proposals from outside firms in June 2017 to represent Kentucky in suits against opioid manufacturers and distributors, at no cost to the state or its taxpayers.

According to the complaint, “the outside firm would receive compensation only if the office of the attorney general recovered monetary damages from the opioid manufacturers, on a contingency fee basis.”

The AG ultimately chose a team of law firms headed by Morgan & Morgan, which included “the lead attorney in the BP oil spill litigation, and a nationally recognized attorney with multiple billion dollar verdicts against pharmaceutical companies,” the complaint states.

Beshear says his office followed all of the state’s requirements when it requested the proposals, and then submitted the proposals to the Finance and Administration Cabinet “for informational purposes.”

“Despite the urgency of the subject matter,” the complaint alleges, “the Finance Cabinet took nearly three months to finally approve the contract. After the initial submission, the Finance Cabinet – without justification or explanation – took more than five weeks to reject the contract, a much longer time period than for any prior contracts [the office of the attorney general] had submitted the Finance Cabinet.”

Beshear claims the cabinet and its secretary, William Landrum III, requested changes that had never been required in a contingency-fee contract, took another month to review those changes, and then rejected the revised contract, even though the AG had made the requested changes.

The Finance Cabinet then sent the proposed contract to the state’s government contract review committee, even though it didn’t need to be reviewed, according to the complaint.

“Contingency fee contracts are not subject to committee review, because ‘personal service contracts in aggregate amounts of ten thousand dollars ($10,000) or less during any one (1) fiscal year shall be exempt from routine review by the committee.,” the lawsuit says, citing state law.

Beshear claims representatives from his office appeared at the committee hearing, but to no avail.

“Without authority to act on the contract,” the complaint states, “the committee improperly voted to disapprove the contract and issued written notification of its disapproval on January 10, 2018. The written notification did not contain the requisite criteria for disapproving a contract under [state law].”

Beshear says Secretary Landrum may now cancel the contract “based on the committee’s flawed decision, which resulted from a flawed and inapplicable process.”

The AG seeks a court order that the legal-services contract is exempt from cancellation by the Finance Cabinet, that the cabinet’s disapproval of the contract is null and void, and that Landrum cannot attempt to cancel the contract.

“If Secretary Landrum cancels the contract, he will impede and obstruct the Commonwealth’s opportunity to fight this drug epidemic and recover against the opioid manufacturers, distributors, and retailers who have harmed so many Kentuckians,” the lawsuit states. “Kentucky would then miss out on recovering funds that other states have received or may receive, funds that would be vital to battling the opioid epidemic.”

Landrum and the Legislative Research Commission are named as defendants in the suit, which was filed by Deputy Attorney General J. Michael Brown. They did not immediately respond Friday to a request for comment.

Beshear went after a familiar foe, Kentucky Governor Matt Bevin, in a statement.

“I’m committed to holding accountable these multi-national companies that made billions flooding our communities,” he said. “Gov. Bevin and his allies continue to put politics before saving lives and have obstructed our efforts to file these suits at every turn. Kentucky families support my efforts to hold drug manufacturers responsible, and that’s what I will do. It’s truly sad that the Bevin administration is forcing me to go to court just to stand up for the people of Kentucky and sue these companies.”

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