The judges on West Virginia’s mass litigation panel have ordered final approval of a recommended $141 million in attorneys fees for work on major opioid lawsuits, although the state Attorney General then filed a formal objection.
The order signed by judges Alan Moats and Derek Swope was filed Monday. The presiding judges were assessing a set of recommendations by Chris Wilkes, a retired judge from the Eastern Panhandle who has been serving as common benefit fund manager in West Virginia’s mass opioid litigation. Wilkes earlier proposed a framework for divvying up compensation for lawyers in the cases that brought in a total of $940,386,000.
“The Court finds the Commissioner’s recommendations regarding attorney fees and expenses are well-reasoned, fair, and equitable,” the judges on the mass litigation panel wrote in their order.
The panel’s judges agreed with the reasoning that compensation for lawyers should represent 15 percent of the full settlement amount, leaving 85 percent for remediation in communities battling the effects of addiction.
In response, a filing on behalf of Attorney General Patrick Morrisey counters that his office “has serious concerns regarding the payment of attorney fees.”
Distribution of opioid litigation dollars
West Virginia was hit hard by opioid addiction that resulted in the state experiencing one of the largest increases in overdose deaths in the country.
The state, along with nearly every county and city throughout West Virginia, filed lawsuits against entities they alleged to be responsible. The targets of the lawsuits included manufacturers, distributors and pharmacies that distributed and/or dispensed prescription opioids.
“Giving $141 million to attorneys for their ‘work’ on this opioid lawsuit is absolutely outrageous. Much of these funds should have been given to the people affected by opioid abuse, not to out-of-state Democrat personal injury lawyers,” stated Greg Thomas of West Virginia Citizens Against Lawsuit Abuse.
A hearing is scheduled for 2 p.m. Friday at the Kanawha County Courthouse “regarding the anticipated distribution of settlement proceeds from the West Virginia First Qualified Settlement Fund.”
The West Virginia First Qualified Settlement Fund is the shared financial vessel for keeping West Virginia’s opioid litigation money. The West Virginia First Foundation is a collaboration of the state and the many counties and cities to use the bulk of the money to push back against ongoing drug addiction issues.
So although the question of attorneys fees could come up at the hearing, it is likely to be a much broader conversation about the current status of the litigation proceeds and a timeline of deposits.
Attorney General objects
The state Attorney General’s Office, which is at the center of the opioid litigation and the coordination of West Virginia First, filed objections to this week’s order on attorneys fees and expenses.
The Attorney General’s objections were formally submitted after the judges on the mass litigation panel entered their order, but John Mangalonzo, press secretary for the Attorney General, said “the objection sets forth the long held position of the Office as far as attorneys’ fees are concerned.”
The Attorney General’s Office wrote in its filing that “the most concerning portion of the Commissioner’s Recommendation is that 15% of the aggregate settlement amount be paid to attorney fees. While we believe that a substantial amount of time, effort, and work by numerous firms has led to the recovery in these matters, the payment of 15% of the gross settlement amounts in attorney fees is not appropriate in this matter.”
The $940 million current total from opioid litigation could actually grow to beyond $1 billion, the Attorney General wrote. If that’s the case, the percentage going to lawyers could grow to $150 million or more.
“Such an amount is wildly excessive and will directly reduce the amount of money that can be used to save people’s lives,” the Attorney General wrote.
Lawyers representing different government entities and carrying out different levels of responsibility were assessed as being entitled to different amounts of compensation, according to the framework.
Two firms, national Motley Rice and local Webb Law Centre, which served as outside counsel to the state Attorney General, are in line for $41.65 million for representing the state as a whole. The firms are in line for even more than that because they also represented cities and counties, but they are subject to a cap in state code limiting their entire compensation to no more than $50 million.
The firms hired by the Attorney General’s Office were brought on through a competitive bid, with their compensation largely determined by tiers that reflect larger percentages for smaller payouts and smaller percentages for larger payouts.
The Attorney General contends the same concept should apply to lawyers representing cities and counties. Doing so would hold the attorneys fees for cities and counties to about half what they would get from the current system, the Attorney General’s filing shows.
The Attorney General requested that the opioid litigation panel amend its order approving the framework for attorneys fees. The filing noted that the Attorney General would be available to discuss the issues at Friday’s hearing.
Thomas of West Virginia Citizens Against Lawsuit Abuse credited the Attorney General with trying to keep attorneys fees lower.
“Attorney General Patrick Morrisey deserves credit for a very well-reasoned complaint that lays out a plan to ensure that the personal injury lawyers get paid for their work, but more money needs to get in the hands of the victims and their communities rather than out-of-state lawyers,” Thomas stated.
Justification for attorneys fees
The lead firms representing cities and counties are recommended for the biggest compensation from a pot of money representing shared legal work: $22.5 million to Fitzsimmons Law Firm of Wheeling and $20 million to Farrell Fuller of Huntington and Powell Majestro of Charleston. Those amounts are in addition to specific contingency fees the firms will get from representing local governments.
More West Virginia law firms will also be compensated significantly for their work on the mass opioid litigation.
Charleston attorney Tony Majestro said cities and counties got involved with the litigation after state settlements with three national distributors took in only $75 million. With cities and counties entering the litigation, he said, the result was an additional $400 million settlement.
The work in the cases exceeded 177,000 hours and was advanced through $13 million up front from the firms themselves in litigation that lasted over six years in a complex and risky case without any guarantee that they would ever be paid, Majestro said.
Four times over that period, Majestro said, the litigation panel signed orders designating 15 percent of the recoveries as litigation expenses.
“The Attorney General never once objected these prior determinations. The Attorney General’s surprise at the 15% award is perplexing given these unobjected to orders,” Majestro said. “The current objection, coming only after the Panel approved Judge Wilkes’ recommendation, is too little, too late.”