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Cities Release Fee Agreements in Opioid Litigation

February 9, 2018 | Posted in : Fee Agreements

A recent Connecticut Law Tribune story by Robert Storace, “3 Conn. Cities Release Fee Agreements in Opioid Lawsuits,” reports that three Connecticut cities have signed contingency agreements with law firms representing municipalities in suits claiming large pharmaceutical manufacturers are liable for losses related to the statewide and national opioid epidemic.

The fee agreements, which grant approximately a third of any money collected to the firms, charge the communities nothing without a settlement or jury verdict.

Waterbury and Bridgeport have signed agreements with Simmons Hanly Conroy of New York City and Drubner, Hartley & Hellman of Waterbury. New Britain and New Haven are represented by Scott + Scott. New Haven officials declined to release the city’s fee agreement, stating the document “has not been fully executed yet,” but it is expected to be virtually the same as New Britain’s.

The seven-page agreements for Waterbury and Bridgeport are identical, stating that “at a minimum attorneys shall provide the following services: work with city personnel to determine the costs the city has incurred of the over-prescription of opioids, determine the viable causes of action available to the city; and determine which if any manufacturers that should be targeted in a lawsuit. After such identification, and only as authorized by the city, the attorneys will, on behalf of the city, bring a lawsuit against those parties identified by the attorneys and agreed to by the city.” The stated fee in each case is “up to 33 percent” of the settlement or verdict.

The fee agreements also state that resolution through litigation “often takes years to achieve” and that “there is no guarantee or assurances of any kind regarding the likelihood of success” of the claim. The law firms “will use their skill, diligence, and experience to diligently pursue our action.”

The contracts allow the cities to terminate with 10 days’ notice and for the attorneys to terminate “at any time if they determine, at their sole discretion, that the city’s claims lack merit or that it is not worthwhile to pursue the city’s claim further.”

The New Britain fee agreement with Scott + Scott is two pages long and is similar to the  Waterbury and Bridgeport agreements.

If New Britain prevails, the agreement states, in part, “Scott + Scott will also seek reimbursement of any out-of-pocket costs, which we incur on plaintiff’s behalf, from the same (settlement or judgment) fund or directly from the defendant’s by agreement or court order.” Those out-of-pocket costs, which the city does not have to pay back if they do not prevail, include costs related to research, parking and travel and deposition and transcript costs.

Gennaro Bizzarro, New Britain’s corporation counsel, said Thursday that “Scott + Scott is essentially bearing all of the costs of this out-of-pocket at their own risk.”

Bizzarro continued: “We are not paying for any of the legwork. Scott + Scott is working with the city, and a lot goes into that. Right now, they are working with our finance department in collecting raw data for things like changes in the number of opioid-related calls that were placed to our public safety officials like police, fire, first responders and EMS. Down the road, they will be looking at specifics related to changes in department budgets. We will have the burden of showing this has had a direct impact on our finances. We are talking about, potentially, millions of dollars.”

Linda Whibey, Waterbury’s corporation counsel, and Christopher Meyer, Bridgeport’s city attorney, did not respond to requests for comment Thursday.

Paul Hanly Jr., a partner with Simmons Hanly Conroy and co-lead counsel for about 180 government plaintiffs suing pharmaceutical manufacturers through multidistrict litigation in Ohio, said Thursday the firm’s contracts with Waterbury and Bridgeport, and about 20 smaller Connecticut communities, benefit those communities.

“More importantly than the percentage [of settlement], is our law firm will front all of the substantial expenses in litigating the cases,” Hanly said. “We are talking, easily, millions of dollars in Connecticut.”

Among those being sued are Connecticut-based Purdue Pharma.

In a statement emailed Thursday, Purdue spokesman John Puskar said, in part, “We are deeply troubled by the prescription and illicit opioid abuse crisis, and are dedicated to being part of the solution. We vigorously deny these allegations and look forward to the opportunity to present our defense.”