Kentucky’s government has no riches to spare, which is reason enough for Republican Gov. Matt Bevin to drop a pair of legal grudges against Democratic Attorney General Andy Beshear.
Two judges in separate cases recently rejected administration attempts to impede the attorney general’s ability to hire outside lawyers. Bevin should waste no state resources nor the courts’ time appealing the rulings.
A Feb. 20 decision by Franklin Circuit Judge Phillip Shepherd makes clear that the attorney general has the independent authority to enter into contracts with outside lawyers on a contingency-fee basis.
Beshear sought the ruling after Bevin’s Finance Secretary William Landrum attempted to cancel a contract between the AG’s office and an outside legal group hired to investigate Kentucky’s potential recourse against drug companies whose actions spurred the opioid epidemic.
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Taxpayers are not at risk in contingency-fee cases because the lawyers are paid from any settlement or judgment, so if the state loses the lawyers don’t get paid. States and cities around the country, including Lexington, are moving against drug companies that profited hugely by flooding unsuspecting communities with absurd amounts of addictive painkillers.
Statute, common law and the state constitution all support the AG’s authority to enter into contingency-fee contracts, concluded Shepherd, who said that such independence is key to fulfilling the AG’s duty to protect citizens’ rights. The judge cited case law dating back to 1942.
Shepherd also ruled that even if the AG lacked independent authority, Landrum’s cancellation of the contract was “arbitrary and capricious” and would be void under the state’s model procurement code. At one point during the three-month approval process, the Finance Cabinet rejected language that it earlier had insisted the AG’s office add to the contract. Landrum finally gave his approval only to rescind it after a legislative committee, which has advisory power, spurned the contract.
On Feb. 26, surely to no one’s surprise, Franklin Circuit Judge Thomas Wingate ruled that the state cannot stiff the law firm that represented Kentucky in a suit that produced a $24 million settlement against the maker of the addictive painkiller OxyContin in 2015. Bevin was trying to force the firm to return $4.2 million it was paid for its services.
Former AG Jack Conway, a Democrat, handed Republicans a political weapon by going to work for the firm that he as AG had hired to pursue a lawsuit inherited from his predecessor against Purdue Pharma in Pike Circuit Court. Republicans have complained Kentucky settled for too little, though the $24 million compares favorably with what other states won in similar suits. Canada settled a class-action suit against Purdue Pharma for $20 million last year. The optics may be poor, but decision to join the firm after he left office apparently violates no laws or ethics rules.
In Conway’s last year the contract with the law firm was unintentionally allowed to expire. When the mistake was discovered, the Finance Cabinet approved a retroactive renewal — a no-brainer — and the company was paid. Later, the Finance Cabinet changed its mind and sued the law firm to reclaim the $4.2 million.
The AG might have a hard time hiring outside lawyers in the future if the administration had succeeded. But Wingate rejected the attempt to force the law firm to repay the money, saying that dishonoring the deal would “violate the laws of equity.”
The Bevin administration, which has 30 days from the time of the rulings to appeal, should let this fight die.