Court rules against Beshear in dispute over opioid suits
LOUISVILLE, Ky. (AP) — Kentucky Gov. Matt Bevin’s administration and lawmakers acted within their authority when rejecting Attorney General Andy Beshear’s contract hiring outside lawyers to assist in suing manufacturers and distributors of opioid painkillers, the state’s Supreme Court ruled Thursday.
The ruling — the latest in a series of legal clashes between Bevin and Beshear — comes amid their campaign for governor in a race seen as a potential national bellwether heading into 2020. They took shots at one another in competing statements while reacting to the decision.
Beshear, a Democrat whose campaign touts his legal fight against opioid manufacturers, said the court’s decision would have “devastating impacts on our cases against companies that have ravaged our state and will cost taxpayers millions.” His office will seek a rehearing, he said.
“Matt Bevin just gave the opioid companies one of their biggest wins nationwide,” Beshear said in a statement.
Bevin said the high court’s ruling showed that Beshear “broke the law in awarding outrageous, uncapped state legal contracts to his friends and campaign donors.” He said it could “take millions of dollars away from Kentuckians who need it most.”
“If Andy Beshear feels that he and his office are not competent to fight against the opioid manufacturers, he can still hire outside counsel, but he must do it legally,” the Republican incumbent said.
The court ruling comes at a potentially crucial juncture in states’ addiction-related claims against the pharmaceutical industry.
In recent days, an Oklahoma judge imposed a $572 million verdict against Johnson & Johnson for its role in the nation’s opioid crisis. Meanwhile, published reports indicate a potentially massive nationwide settlement involving Purdue Pharma — the maker of OxyContin — is being negotiated.
Beshear’s predecessor, former Democratic Attorney General Jack Conway, settled the state’s case against Purdue Pharma for $24 million at the end of 2015, just a few days before he left office. Bevin has said the settlement shortchanged Kentucky.
The Kentucky ruling stems from Beshear’s decision to hire a team of private attorneys, led by the Morgan & Morgan law firm, on a contingency fee basis to assist his office in suing the pharmaceutical industry over the opioid addiction epidemic, which has taken a heavy toll on Kentucky.
A legislative committee disapproved the contract in early 2018. Bevin’s administration indicated it would not overrule the committee’s action.
Beshear sued, saying the attempt to cancel the contract was an attack on the attorney general’s constitutional powers. Beshear said the committee’s disapproval should be voided, as should any cancellation of the contract by Bevin’s finance secretary.
Bevin’s administration argued that the contract does not do enough to protect taxpayers in the event of a multimillion-dollar judgment or settlement for the state. Members of the GOP-dominated legislature said they wanted “a more favorable contingency fee schedule” and a “cap on the total amount of fees to be paid to the contractor.”
In the Supreme Court’s majority decision, Chief Justice John D. Minton Jr. wrote: “Whatever the breadth of the constitutional power of the Attorney General to enter into a contingency-fee contract with outside counsel may be, that power gives way to the overriding authority of the General Assembly.”
As for the role of Bevin’s finance and administration secretary, William Landrum III, in rejecting the contract, Minton said: “We find that the Committee and Secretary Landrum did not act arbitrarily in deciding to cancel the contract between the OAG (Office of Attorney General) and the Morgan & Morgan team.”
The Supreme Court reversed a lower court ruling that said Beshear could hire outside attorneys without approval from Bevin’s administration.
Minton also rejected Beshear’s argument that allowing the contract’s cancellation would turn the attorney general’s office into an “empty shell.”
“Nothing in the MPC (Model Procurement Code) precludes the OAG from bringing this suit on behalf of the Commonwealth itself,” he wrote. “Time and again, the OAG has proven itself capable of handling complex legal matters using the resources the Commonwealth provides it.”