Cap on public prosecutor contract advances

The contingency fees paid by the state government to private law firms will be capped under the law, which has now been approved by the House Rules Committee.

Senate Bill 984Kim David and State Representative Terry O’Donnell, limits the scope and total amount of contingency fees that can be paid to private law firms hired by the state government.

The law was filed after a dispute over paying millions of dollars to some private law firms hired by former Attorney General Mike Hunter when the state sued several opioid makers.

SB 984 caps contingency fees based on a sliding scale tied to the size of any settlement, starting with a 25 percent fee cap for any amount that is $10 million or less and any amount that exceeds $25 million. Drops to 5 percent of the settlement. This law limits the total fee payable to a private firm to $50 million, excluding any costs and expenses provided for by the contract.

Under the law, the attorney general’s office would be required to publicly post all contingency-fee contracts on the agency’s website within five business days of the date the contract was executed, and make all contingency-fee payments to private firms. Will be published within 15 days after payment is delivered.

O’Donnell, R-Catosa told lawmakers that the bill would “put some railing on the contract between the attorney general and outside counsel.”

State Representative Kevin McDougall, R-Broken Arrow, asked whether the 5 percent cap could prevent private law firms from accepting state contracts.

“I’ve talked to the lawyer who did the opioids[sue],” McDougall said. “They were like 15 percent, they would be good, but when we drop down to 5 percent it can be a number that scares some.”

McDougall clarified that his conversations were with executives from the Nix Patterson firm in Texas.

“Kix Patterson has taken matters into Florida,” O’Donnell replied. “They have a similar fee structure like this.”

He said Nicks Patterson also worked for the state of Texas, which has a similar, though not identical, fee structure.

In 2017, then-Attorney General Mike Hunter announced that the state was suing several drug companies, accusing the companies of promoting widespread addiction in Oklahoma through their marketing efforts.

The lawsuits focused on a novel extension of the “public nuisance” law, and Hunter hired several private firms to handle the cases.

When Purdue Pharma opted to pay $270 million to the state of Oklahoma to settle its lawsuit in 2019, the private law firms involved in the lawsuit were to receive a substantial portion of those funds. Based on their contracts, Nicks Patterson was to receive $31.6 million, the Whitton Towers firm was to receive $18.3 million, and Glen Coffey & Associates was expected to receive $56 million.

When Teva Pharmaceuticals settled its lawsuit for $85 million, it was estimated that $12.75 million would go to private firms.

In addition to the settlement with Purdue Pharma, the state also won a $465 million judgment against Johnson & Johnson, with a significant portion of that settlement also expected to go to private law firms.

But in 2021 Johnson & Johnson’s decision was Overturned by the Oklahoma Supreme Court. The court held that the state-run “public nuisance” argument was not valid, emphasizing that public-nuisance claims “should address individual, local problems, not policy problems.”

The majority of the court held that “a factor in dismissing the imposition of liability for public nuisance in this case is that J&K, as a producer, does not at that time control the said instrument to constitute the nuisance.” … The State asks this Court to broaden the application of the nuisance statute, that is, to a situation where a manufacturer sold a product (for more than 20 years), which was subsequently deemed a nuisance. … The responsibility of a product manufacturer is to bring a legitimate, non-defective product to market. There is no common law tort duty to supervise that a consumer after sells a product. how it is used or misused. Without control, even a manufacturer cannot remove or reduce the nuisance – that is the remedy the state wants from J&K in this case.”

The dramatic amount being paid to private firms for opioid lawsuits prompted the filing of SB 984 in 2021. The bill quickly moved through the Oklahoma Senate, where it passed. 38-6 votes,

But the bill was never heard in the Oklahoma House of Representatives, and the measure was taken in the 2022 session.

NonDoc, an online news site, recently informed of That former Attorney General Mike Hunter asked Speaker of the House Charles McCall to stop the bill from moving forward during the 2021 legislative session.

Hunter resigned from office in May 2021, the same month the Oklahoma Legislature adjourned for the year.

SB 984 passed the House Rules Committee on a 5-4 votes, Despite his line of questioning, McDougall voted in favor of the bill and awarded the margin of victory. State representatives were among the lawmakers who voted against the bill. Chris Kennedy, R—Oklahoma City; Logan Phillips, R-Mounds; Maury Turner, D-Oklahoma City; and Emily Virgin, D-Norman.

The bill now goes on the floor of the Oklahoma House of Representatives.

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