RALEIGH, N.C. (Legal Newsline) – North Carolina Attorney General Josh Stein won’t be telling voters how much he’s paying a private law firm to explore new litigation as he hopes to avoid rejection at the polls.
Three months before he faces Republican Jim O’Neill in a close first re-election campaign, Stein is going back to the well, so to speak. He’s decided to explore more litigation over chemicals known as PFAS that are in groundwater – despite a previous settlement with Chemours.
PFAS are chemicals that were used in firefighting foam, non-stick cookware and waterproof clothing, among other products, and are in the bloodstreams of nearly every American. Whether they cause health problems at their current levels is yet to be decided, but it is still a favorite cause of Democrats in state leadership and Congress alike.
State leaders in places like New Hampshire, New Jersey and Michigan pass their own maximum contaminant levels well below a federal advisory then hire private lawyers on contingency fees to sue companies like DuPont and 3M.
In Congress, Democrats last year tried to push through a measure that would have expanded liability to countless businesses but were turned back by Senate Republicans.
For his part, Stein, who won election in 2016 by less than a half-percent of the vote, has hired the law firm Kelley Drye, which is recruiting state clients to sue companies like Chemours, Dupont and 3M.
But in a response to a request for a copy of the firm’s contract, Stein’s office said it doesn’t have to turn that information over until after any litigation.
“The General Assembly specified that the contract is not a public record until the conclusion of the legal proceeding,” spokesperson Laura Brewer said. “If any legal proceedings result in monetary recovery to North Carolina, we will make public any payments to outside counsel.”
Brewer ceded that the firm is working on a contingency fee but it is unknown what percentage of any settlements or verdicts it will claim. It is also unknown if the firm was the lowest bidder – Brewer said requests for proposal are confidential. Government officials often tout contingency fee contracts with private lawyers who front the costs of litigation as beneficial for taxpayers, but those lawyers take a large chunk out of the recovery on the back end that could have been earmarked for other state causes if government lawyers had handled the case.
If there were RFPs soliciting private lawyers issued, there were likely multiple bidders. Plaintiffs firms are smelling a long-lasting and lucrative litigation not quite on the scale of asbestos, but close.
Scoring government clients like North Carolina is a shorter road to a jackpot than signing up hundreds of individuals. Kelley Drye nabbed the first big government client, filing four lawsuits for New Jersey last April.
Its contract in New Jersey sets up a tier system for payment. If the case is resolved before trial, they would make 10% of any amount recovered more than $300 million.
From $100 million to $300 million, they'd make 15%. From $3 million to $100 million, they'd make 20%.
Now, those percentages increase slightly if the case is concluded after a trial begins. Lawyers would make $12.5% on recovery more than $300 million and 17.5% on recovery between $100 million and $300 million.
For a recovery from $3 million to $100 million, they'd make 22.5%.
In New Hampshire, the firm is making 20% but sharing it with several others.
Hundreds of cases are consolidated in a multidistrict litigation in South Carolina. Lawyers are also testing new theories in California, alleging their clients wouldn’t have purchased certain products if they had known they contained PFAS.
Stein’s theory is that some money might have been left on the table when Chemours agreed in 2018 to provide drinking water and pay a $12 million civil penalty to settle PFAS liability at its Fayetteville Works facility.
Stein says his new investigation will determine the extent of damages to North Carolina’s natural resources. Asked why he hired a law firm for such a project, his office said Kelley Drye will work with “career lawyers from the Department of Justice to investigate potential legal claims arising from environmental damage.”