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Kentucky Supreme Court to decide case regarding Beshear’s hiring of outside counsel for opioid cases

By Tom Latek
Kentucky Today

The Kentucky Supreme Court will decide over the next couple of months if the attorney general can hire outside legal counsel on a contingency fee basis without approval from the Finance and Administration Cabinet.

The issue stems from Attorney General Andy Beshear hiring four law firms to go after opioid manufacturers and distributors, whom he has said directly contributed to Kentucky’s drug epidemic. So far, he has filed lawsuits against nine such companies.

Attorney General Andy Beshear, left, and Gov. Matt Bevin have a case in front of the Kentucky Supreme Court over opioid lawsuits. (Kentucky Today file photos)

In all those cases, his office is being represented by outside counsel, headed by the Morgan and Morgan law firm. The contingency fee basis means the state has no upfront expenses, and the firm would be paid by collecting a percentage of any monetary verdict or settlement. They would get nothing if the case is lost.

The Finance Cabinet rejected the contract twice before approving it, but the Government Contract Review Committee recommended canceling it, in favor of one that would award a larger part of any court victory or settlement to the state and limit the attorneys’ legal fees.

Beshear filed a lawsuit at Franklin Circuit Court, where Judge Phillip Shepherd upheld the attorney general’s right to hire the law firms. The judge ruled that neither state law nor the Model Procurement Code, “requires the Attorney General to submit and receive outside approval of contingency-fee-based legal services contracts.”

He further added: “Entering into such contracts is a necessary part of the Attorney General’s common law and constitutional duty to bring actions to protect the legal rights of all Kentucky citizens.”

The Finance Cabinet appealed, prompting oral arguments before the High Court, which were held on Thursday.

As part of their case, Steve Pitt, Gov. Bevin’s general counsel, said: “In a single order, the Franklin Circuit Court nullified every good-government limitation created by the General Assembly in enacting the Code insofar as the Attorney General is concerned. And, according to the circuit court, this kind of freedom—which no other state agency has—is the Attorney General’s constitutional right. This ‘right,’ stated simply, may be summarized as ‘trust, but don’t verify.’”

Pitt held that the Franklin Circuit Court ruling “is an erroneous and unprecedented disruption to the Commonwealth’s longstanding procurement practices, with which the Office of the Attorney General has long complied. This Court should reverse on all fronts and remand the matter with instructions to enter judgment in favor of Secretary Landrum. “

This case is part of a long-standing feud between Beshear, a Democrat who is one of four Democrats seeking the 2019 gubernatorial nomination, and Bevin, a Republican who is running for re-election.

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