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Friday, August 16, 2019

With threat of losing Mississippi as potential client, plaintiffs lawyers rain cash on GOP candidate for AG

Attorneys & Judges

By John O'Brien | Aug 1, 2019


Fitch

JACKSON, Miss. (Legal Newsline) – Plaintiffs lawyers have pegged a Republican candidate as their favorite to replace Mississippi Attorney General Jim Hood, a Democrat noted for his close ties to the trial bar during his years in office, as they fight another Republican who has vowed to stop giving them lucrative contracts.

Attorneys at prominent law firms like Bernstein Litowitz, Labaton Sucharow and Baron & Budd, which just scored a $4 million payday as a result of a contract with the AG’s office, are hoping Republican Lynn Fitch makes it through Tuesday’s three-person Republican primary. Fitch, currently the state's treasurer, has stated she will continue to use private lawyers to handle State issues, but one of her opponents – Mark Baker – wants to put an end to the practice of hiring them on contingency fees. 

Those agreements can lead to millions in fees, as evidenced by the $4.3 million recently collected by Baron & Budd for handling a case against Fresenius Medical Care.

Attorneys there, and the firm itself, then donated $3,258 to Fitch two months later. Russell Budd’s wife Dorothy also donated $1,000.

Campaign finance reports from June and July show plaintiffs lawyers have spent much more than $100,000 in an effort to get Fitch through the primary.

For example, attorneys at Bernstein Litowitz, a firm that often represents public pension funds that sue the companies they’ve invested in after drops in the value of stocks, have given at least $10,000.

Years ago, the firm was accused by a former employee of paying more than $112,000 to someone with connections to AG Hood’s office to help secure work with the state. The firm denied those allegations and settled with the employee.

The issue arose in Bernstein Litowitz’s contract to represent the Mississippi Public Employees Retirement System in a class action against Satyam Computer Services. MPERS was one of four lead plaintiffs in the case.

Bernstein Litowitz used a Jackson, Miss., solo practitioner named Vaterria Martin as local counsel. It was alleged that she was to “occasionally check on the status of the case for MPERS, even though (Bernstein Litowitz) was already providing this information directly” to Hood’s office.

The case was settled in principle in 2010 for $125 million. After the settlement, Bernstein Litowitz partner Max Berger assigned an allegedly unnecessary legal research project to Martin.

Bruce Bernstein said he objected to the project. Eventually, Martin produced an 18-page memorandum and billed for 207 hours of work. She received $112,500 from the settlement.

As it turned out, Martin was married to DeShun Martin, then an assistant attorney general for Mississippi. When he had protested the unnecessary project given to Martin’s wife, Bernstein said he was told by a fellow partner, “Do you ever want us to work with Mississippi again?”

Fitch recently told Mississippi Today: “As you would in any law firm, you’ve got great in-house individuals, lawyers, you would certainly use … as your first base because it’s more efficient and effective. But as in any law firms, there will be times that you don’t have all the subject-matter experts in your firm so you will need to look to outside counsel to have some hired at the right times.”

Meanwhile, Baker says the practice is a job-killer.

"It removes public policy analysis from the issue when you have outside counsel that are given those types of contracts because you're no longer looking for a resolution to the issue, you're simply looking for what I call 'taxation by litigation,'" he previously told Legal Newsline.

Earlier this year, Fitch held a campaign event with Ken Starr, who now works at large plaintiffs firm Lanier Law Firm, whose areas of expertise include product liability, pharmaceutical liability and asbestos.

A spokeswoman for Fitch said the fundraiser event with Starr was an opportunity for attendees to hear him speak about his service as Independent Counsel during an investigation of President Bill Clinton. Starr has released a book about the investigation. The event had nothing to do with the use of contingency-fee attorneys, the spokeswoman said.

Attorneys at Labaton Sucharow, another noted securities firm that teams with public pensions, have given Fitch at least $10,000.

Labaton’s representation of an Arkansas pension system has created a bit of a firestorm for the firm. A federal judge is investigating how $75 million in fees from a $200 million settlement with State Street were split.

Labaton paid $4.1 million to a Texas lawyer whose only role in the case was to introduce it to officials at the Arkansas Teachers Retirement System, which served as lead plaintiff. Labaton has denied any wrongdoing, while another plaintiffs firm in the case is explaining why it paid $200,000 to a public defender (and brother to a partner at the firm).

Lawyer Paul Napoli, of Napoli Shkolnik, donated $5,000. His firm is currently busy with the sprawling opioid litigation, in which thousands of lawsuits have been filed on behalf of cities, counties, states and other entities by lawyers working on contingency fees.

Other securities class action firms have donated thousands. Pomerantz gave $30,000 and Kaplan Fox gave $5,000.

Levin Papantonio, another prominent plaintiffs firm with government clients, gave $5,000.

In-state personal injury lawyers, some of them with ties to the tobacco settlement of the 1990s, are also contributing to Fitch.

Cypress Funding, the venture capital firm of attorney David Nutt, gave $25,000, and Don Barrett of Barrett Law Firm gave $10,500.

Other Mississippi personal injury lawyers and firms donating to Fitch include:

-McHugh Fuller, a firm active in nursing home litigation, gave $5,000;

-Attorneys at Reeves & Mastayer of Biloxi gave $10,000;

-Brent Hazzard of the Hazzard Law Firm gave $10,000;

-Timothy Porter of Porter Malouf gave $5,000;

-John Arthur Eaves of Jackson gave $10,000; and

-Paul Benton of Biloxi gave $5,000.

Andy Taggart is also running in the primary.

From Legal Newsline: Reach editor John O’Brien at john.obrien@therecordinc.com.

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Organizations in this Story

Baron and Budd Bernstein Litowitz Berger & Grossmann Kaplan Fox & Kilsheimer, Llp Labaton Sucharow McHugh Fuller Law Group, PLLC Napoli Shkolnik PLLC Pomerantz LLP

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