Wall Street Journal editorial, “The Pay-to-Sue Business“:
Our editorial last week on the state lawsuit racket has created a stir in Pennsylvania, where Governor Ed Rendell has finally had to defend his “pay-to-play” relationship with Houston plaintiffs lawyer F. Kenneth Bailey. That’s the good news. The rest of this underreported story is that Mr. Bailey has been running a nationwide “pay-to-sue” operation with Democratic state Attorneys General.
As we reported, Mr. Bailey made repeated donations to Mr. Rendell’s 2006 re-election campaign in the months before his law firm was given a no-bid, contingency-fee contract to sue Janssen Pharmaceuticals on the state’s behalf. Mr. Rendell told the Philadelphia Inquirer — whose reporters have roused from their slumbers — that “there wasn’t the slightest bit of pay-to-play here.” But the Governor was obliged to acknowledge that Mr. Bailey had approached the state about suing Janssen. Normally, the state Attorney General would handle such legal matters, but the AG rebuffed Mr. Bailey. Mr. Rendell’s office then decided to hire the law firm that was also his major campaign donor. Smile if you think the two were related.
Part of a big picture, a grander strategy, the WSJ explains:
It’s some racket. The plaintiffs attorneys come up with novel legal theories under which to sue companies or entire industries. They then solicit state AGs (or cash-hungry Governors like Mr. Rendell) to retain them to bring cases on behalf of the government on a contingency-fee basis. Motley Rice and Lieff Cabraser are among the firms that have targeted drug companies as well as makers of cigarettes, paint and guns.
The Rhode Island Supreme Court last year threw out the AG-hired-Motley Rice “public nuisance” suit against the paint manufacturers, but there’s still some benefit for the law firm — a federal judgeship. From Walter Olson at Point of Law, “Rhode Island: Motley Rice’s McConnell tagged for federal bench“:
John J. “Jack” McConnell Jr. of South Carolina-based Motley Rice, considered a key architect of the close alliance between the trial bar and the Rhode Island Democratic Party that led up to the state’s failed litigation against lead paint companies, has been tagged for a seat on the state’s federal district court by Sens. Sheldon Whitehouse and Jack Reed (both D-R.I.). [Providence Journal via Genova] As I noted eight years ago (see also this update from David Nieporent and this summary from Jim Copland), an investigation by Forbes found that after McConnell opened a Motley branch office in Providence, the firm quickly established itself as Rhode Island’s largest political contributor for the 2000 elections, and McConnell himself became treasurer of the state party (and a key donor ever since, including to campaigns of Reed and Whitehouse). Whitehouse (as state AG) then proceeded to hire the Motley firm to conduct the state’s much-publicized lawsuit seeking to assign the costs of lead paint cleanup to companies that produced the paint many decades earlier. That suit would have yielded enormous returns (and legal fees) had it succeeded, but in the event proved to be too drastic a stretch of legal principles for the courts to accept. For McConnell, though, at least, if not for many of the others involved, the whole episode seems to have resulted in a happy ending.
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