The contingency arrangements between the state attorney general office and private law firms that are so controversial in Rhode Island and California public nuisance lead-paint lawsuits just got more so. As Petra Pasternak reports in THE RECORDER such "outsourcing" is moving to other kinds of industries and beyond pure contingency structures.
Pasternak notes that one of the new target industries is Big Pharma. For instance, the state Deputy AG in New Mexico has joined forces with private plaintiff law firm Hersh & Hersh against Eli Lilly & Co. These kinds of complaints can take one or both forms: Lawsuits about medically unnecessary claims for Medicaid reimbursement and/or the medication's side effects. In many of the complaints the drug is the anti-psychotic Zyprexa. Because of its marketplace success, the drug and its manufacturer Lilly represent deep pockets.
Law firms are entering this arena either on a contingency basis or on some other custom-made arrangement. In the latter, they might be reimbursed expenses, even if the case doesn't settle or result in a win verdict, or obtain a percentage of the settlement or award. In the case of New Mexico, the Deputy AG Albert Lama didn't use the contingency structure. And if there isn't a win Hersh & Hersh won't have its legal fees reimbursed but there is a chance some of its expenses will be.
Not every state AG or private law firm is rushing into outsourcing. There are constitutional gray areas associated with the state joining forces on a contingency basis with private law firms. And, frankly, the big money that tobacco lawsuits brought in for both the states and private law firms, might be a thing of the past.
It's expected that the ruling in the California public nuisance lead-paint case will be appealed.
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