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Wednesday, April 1, 2020

An Ohio county pays $500K of its opioid settlement to a pharma lobbyist not listed on court records

Attorneys & Judges

By Daniel Fisher | Mar 19, 2020

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Raffaelli

AKRON, Ohio (Legal Newsline) - An Ohio county that settled opioid lawsuits last year for $105 million paid more than $1 million in legal fees to two law firms that never appeared on any of the court filings, including one associated with a prominent Washington lobbyist whose firm represented multiple companies being sued by the county. 

Records obtained from Summit County show it paid $556,357.41 in legal fees on Jan. 30 to Raffaelli & Prazak, a Texarkana, Texas, law firm. The name partner in that firm, John D. Raffaelli, is also the founder and a shareholder in Capitol Counsel, one of Washington’s leading lobbying firms. Raffaelli is listed on federal disclosure forms as representing Walmart and Rite-Aid last year at a cost of as much as $80,000 a quarter on legislative and regulatory matters. 

Both companies are defendants in lawsuits by Summit County scheduled for bellwether trials later this year in federal multidistrict litigation. They didn’t immediately respond to a request for comment.

Reached by telephone, Raffaelli declined to discuss his work at Raffaelli & Prazak or Capitol Counsel, saying only “there is no connection between those two entities.”

“You’re drawing an incorrect conclusion” to suggest there might be a conflict between his role as a lawyer for Summit County and as a lobbyist for companies the county is suing, he said. 

Other clients of his lobbying firm have included Cardinal Health, a distributor also wrapped up in the opioid litigation, and the Pharmaceutical Research and Manufacturers of America (PhRMA).

While the legal and ethical duties of lawyers and lobbyists differ, the primary rule for attorneys is “you can't hurt your clients," said Carol Langford, a San Francisco attorney who teaches ethics at the University of California San Francisco Law School and was appointed to the commission that drafted the new California Rules of Professional Conduct.

Without commenting specifically on Raffaelli, Langford said a lawyer has a fiduciary duty to his or her clients, so the question is "is the lawyer doing something that helps the defendants and hurts the plaintiff?"

Raffaelli, a graduate of the University of Arkansas law school, is licensed to practice in Arkansas and Washington D.C. The other principal of Raffaelli & Prazak is Virginia Ann Raffaelli Prazak, who describes herself as a criminal defense attorney in her listing with the State Bar of Texas. 

Prazak is also a licensed realtor operating out of the same address the law firm listed on its invoice with Summit County. The phone number associated with Raffaelli & Prazak in her bar listing is disconnected and Prazak didn’t respond to calls and emails seeking comment on her work for Summit County or her relationship with Raffaelli. 

Summit County also declined to comment on Raffaelli, as did Motley Rice, the lead law firm for the county which earned more than $18 million in fees in the first round of settlements. 

Summit County hired four law firms to represent it in lawsuits against the opioid industry, with Motley Rice in the lead role entitled to a 79% share of any fees. An Ohio firm - Brennan, Manna & Diamond - got 15% or more than $3 million, while Nealon & Assoc. of Alexandria, Va., got a 3% stake. The law firms all held back 7% for common-benefit fees, resulting in a lower net payment from the county. 

Nealon, like Raffaelli & Prazak, appears an unusual choice for some of the most complex commercial litigation in history. The few cases associated with lead partner Robert Nealon in recent years in a federal court database involve minor lawsuits and traffic violations. The firm does appear to have close ties with Raffaelli and Capitol Counsel; it represented Capitol Counsel when it was sued to recover fees it was paid by Allen Stanford, a Houston businessman who was convicted of running a $7 billion Ponzi scheme in 2012. 

Capitol Counsel, which didn’t directly contract with any Stanford entities, was dismissed from the case.

Raffaelli, Nealon and a partner in Nealon & Assoc. have also been associated with iGen Networks, a Las Vegas-based penny stock where Nealon is chairman.

Since neither Nealon nor Raffaelli are licensed to practice law in Ohio or appear on any court filings there, it is unclear what legal work they did for Summit County. Plaintiff lawyers frequently share fees widely among themselves, but ethics rules in most states prohibit them from splitting fees except for legal work on a specific case. 

Raffaelli comes from a locally prominent family in Texarkana and lists the address of ERA Raffaelli Realtors for his law firm. But he is also a resident of Alexandria and the founding partner of Capitol Counsel, one of the biggest lobbying firms in Washington billing $17 million last year, according to Opensecrets.org.

Fee-splitting can get law firms in trouble. A federal judge this year ordered Labaton Sucharow, a prominent securities law firm, and a Boston firm to repay millions of dollars in fees they collected by inflating their bills in a class action against State Street. An investigation triggered by reporting in the Boston Globe revealed Labaton paid $4.1 million to Damon Chargois, a Texas lawyer whose only role in the case was to introduce the New York-based securities litigation firm to officials at the Arkansas Teachers Retirement System, which served as a lead plaintiff in the State Street case. 

The Thornton Law firm in Boston also paid $200,000 at $400 an hour to Michael Bradley, a $53-an-hour public defender who is the brother of lead Thornton partner Garrett Bradley. Labaton and Thornton both deny wrongdoing and are contesting the sanctions. 

In a 2018 order, U.S. District Judge Dan Polster required plaintiff lawyers in the opioid MDL to keep meticulous time records and restricted the expenses they could bill to their clients, including prohibiting markups on often contract attorneys and restricting reimbursements to coach airfare on flights less than four hours. Motley Rice partners Linda Singer and Joe Rice are among the most prominent plaintiff lawyers leading the MDL and stand to earn hundreds of millions of dollars in fees as thousands of opioid lawsuits by cities and counties are settled. 

From Legal Newsline: Reach Daniel Fisher at dan@waldenconsultants.com.

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Organizations in this Story

Capitol CounselMotley RiceRite AidWalmart