What happened to AG's promise to use in-house counsel for large lawsuits?

What happened to AG’s promise to use in-house counsel for large lawsuits?

In The News | June 22, 2023

It’s time to end the cycle of endless litigation and outrageous attorney fees

This op-ed was originally published by the Albuquerque Journal.

Since the “confidentiality provision” of New Mexico’s staggering $453 million settlement with Walgreens was lifted earlier this month, we’ve learned some unsettling details about that agreement.

While the Texas lawyers who represented the state celebrate their overflowing bank accounts to the tune of $148 million, New Mexicans will benefit little, if at all.

The state’s been undeniably devastated by the opioid epidemic that’s ravaged the country, but it’s important to delve deeper into these lawsuits and examine the staggering settlement fees earned by private lawyers.

This is part of a growing trend of thousands of public nuisance lawsuits, by which state, county, municipal and tribal governments aim to use the courts to assign blame for various public health crises.

To assist with its opioid lawsuit, the New Mexico Attorney General’s Office enlisted several outside law firms—Baron & Budd; Levin, Papantonio, Rafferty; Powell & Majestro; and, Robles Rael Anaya. While Robles Rael Anaya is the sole New Mexico-based firm involved in the case, the rest are from out-of-state and have practices around the country.

These firms then charged a staggering 33% contingency fee, meaning they’ll receive one dollar of every three in the settlement. This is dramatically higher than what firms typically earn in settlements over $100 million and nearly triple the rate paid by other states in similar lawsuits against major pharmaceutical chains. An astonishing $150 million of the $453 million settlement will go to these firms’ coffers.

But on the heels of his massive Walgreens settlement, Attorney General Raúl Torrez already set his sights on a fresh target.

In early June, the state announced a lawsuit against 21 chemical manufacturing companies, including 3M and DuPont, over PFAS contamination in drinking water – joining a growing wave of public nuisance litigation and 18 other state attorneys general.

It’s worth noting that during his 2022 campaign, Torrez criticized the frequent use of outside lawyers by the state. Less than a year ago, he told the Albuquerque Journal and its readers that he wanted to “end the extensive use of out-of-state law firms.”

Torrez’s actions today, however, tell a different story. New Mexico’s complaint reveals that the attorney general hired San Francisco-based litigation giant Sher Edling to litigate his PFAS lawsuit, as well as national firms Kelley Drye & Warren LLP and Taft Stettinius & Hollister. It raises questions about his evolving stance on the counsel he hires and the direction of the state’s litigation.

While some claim these settlements will provide relief to communities most affected by the opioid epidemic or contaminated drinking water, the reality is that the lawyers will reap the lion’s share of the benefits – not victims or their families.

As the attorney general chases mammoth settlements in which out-of-state lawyers receive huge payouts, it becomes clear that New Mexico must reevaluate the contingency fee system and ensure that when the state brings a lawsuit, the focus remains on the victims – not the profit-driven motivations of attorneys.

It’s time to end the cycle of endless litigation and outrageous attorney fees and instead call for reforms that promote fairness, efficiency, and justice in our legal system.

Bailey Aragon manages public affairs for the American Tort Reform Association. She previously worked for former Gov. Susana Martinez.