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Working In Background, Lawyer Reaps Fees In Opioid Case

Apr 10, 2019

Attorneys in the state’s sprawling opioid lawsuit have bragged that they slept on cots in their offices and went through millions of pages of evidence.

But one private attorney in the case, a former legislative leader, stands to make $5.6 million in the recent settlement against Purdue Pharma despite having no obvious role documented in court filings and little trial experience in cases like the one Attorney General Mike Hunter brought against Purdue and other drug makers.

Attorney Glenn Coffee’s firm in Oklahoma City is one of three outside law firms contracted by Hunter in the opioid case. Coffee is notified of every filing in the voluminous case, which is set to go to trial in Cleveland County at the end of May. And Coffee was among the officials in the room when Hunter announced a $270 million settlement with Purdue on March 26.

But a review of the publicly available court file shows little involvement by Coffee in the day-to-day work of the case, which was filed in June 2017.

Most of the courtroom appearances, briefs and motions were made by assistant attorney generals or lawyers for the other two outside law firms, Texas-based Nix Patterson LLP and Oklahoma City-based Whitten Burrage. Those firms will collect 90 percent of the $55.5 million in contingency fees (after a $4 million reduction to help pay for opioid addiction treatment).

Coffee is a former Senate Pro Tem and was a paid legal advisor to Hunter’s 2018 campaign. His law firm, Glenn Coffee & Associates, specializes in campaign finance and ethics laws. He declined comment for this story, saying he doesn’t do interviews while cases are active.

Hunter’s office said Coffee was brought into the state’s opioid lawsuit for his experience in complex business litigation.

“The teams have worked indivisibly and in tandem throughout the pendency of the case,” Hunter spokesman Alex Gerszewski said. “Work is assigned based on a variety of factors, including individual experience, knowledge, availability and expertise.”

Gerszewski did not specifically answer questions about whether Coffee took depositions, wrote motions, attended hearings or participated in settlement negotiations or discovery hearings.

 

Legal Contract Questioned 

Coffee’s involvement in the opioid case stands in contrast to his 12 years in the Senate, when he was among leaders pushing for lawsuit reform and advocating for caps on attorneys’ fees in class-action lawsuits. Those efforts didn’t bring about changes.

The issue of paying contingency fees to state-contracted lawyers surfaced again last year, when Hunter’s opponent in the GOP primary and runoff campaign, Tulsa attorney Gentner Drummond, questioned the state’s opioid contingency contract, suggesting politics was involved. He said the state should have competitively bid the contract instead of paying on contingency, meaning the lawyers get paid only if they win or a settlement is reached.

More than a dozen states use competitive bidding for outside legal services, but it’s not a requirement in Oklahoma. The federal government doesn’t allow its agencies to enter into contingency fee contracts.

Pursuit of Curbs, Transparency in Contingency Cases

In Oklahoma, the attorney general issues an annual report that includes a list of outside attorney contracts and the amounts paid. But the latest report does not include contracts with contingency fee arrangements.

In the opioid case, according to a fee breakdown in the contract, Nix Patterson gets 57 percent of the awarded attorney fees, Whitten Burrage gets 33 percent and Glenn Coffee & Associates gets 10 percent. That translates into $31.6 million, $18.3 million and $5.6 million. If settlements or judgments are reached with other opioid makers in the case, the same allocation percentages will apply.

In explaining Coffee’s role, Gerszewski noted the lawyer’s previous experience as former Gov. Mary Fallin’s attorney during settlement negotiations on a water case with the Chickasaw and Choctaw tribes. Coffee also represented the University of Oklahoma Health Sciences Center as it formed a nonprofit, OU Medicine Inc., to take over the OU hospital system from HCA Healthcare in February 2018.

“His experience in complex litigation and knowledge is unmatched and has been indispensable in this (opioid) case,” Gerszewski said.

Apart from the opioid case, Hunter and Coffee share a business relationship, with Hunter’s campaign renting an office from Coffee’s family business and Coffee advising Hunter’s 2018 campaign.

Attorney General Mike Hunter

The Hunter campaign paid Coffee more than $22,700 for legal services in the campaign, according to Ethics Commission reports. It also paid TVC Pro Driver, a Coffee family company, more than $5,000 for the rent of a small office in Oklahoma City.

Hunter said the office rental was done at market rate and the legal services contract was done at arm’s length.

Years of Contention Over Fees

As minority leader of the Oklahoma Senate in the mid-2000s, Coffee spearheaded a multi-year tort reform effort that included bills to place new caps on how much lawyers could receive from contingency fees.

His proposal would have replaced current state law that caps the fees at 50 percent of the total settlement. Instead, it would create a sliding scale in which contingency fees would be capped at 30 percent for judgments or settlements under $250,000, 20 percent for those between $250,000 and $1.25 million and 10 percent for those over $1.25 million.

In 2005, after seeing his latest attempt to push through changes fail, Coffee sent out a press release blaming Democrats and warning that businesses could leave the state because of its “legal climate” and the “real problem” of lawsuit abuse.

Former Oklahoma State Sen. Glenn Coffee testified in the political bribery trial for former Rep. Randy Terrill at the Oklahoma County Courthouse.
Credit Paul Hellstern / The Oklahoman

Coffee continued to advocate for the changes over years to no avail, including when Republicans took control of the Senate in 2008 and he became Senate leader. He even suggested pushing a state question in 2009 to ask voters to limit contingency fees.

Nothing resulted, and Oklahoma’s law has since remained unchanged.

But Coffee’s legislative failure ultimately made him a financial winner years later.

If Coffee’s plan had passed, outside attorneys in the Purdue settlement would be eligible for $27 million out of the $270 million settlement – less than half what they actually will get. And Coffee’s share – 10 percent of that amount – would be $2.7 million instead of the $5.6 million he will end up with.

How Much Is Too Much?

Since Coffee left the Legislature, other lawmakers have tried to limit contingency fees.

Sen. Nathan Dahm

  The latest attempt was last year when a bill was introduced by Sen. Nathan Dahm, R-Broken Arrow.

The proposal, similar to Coffee’s 2008 bill, would have set new limits on how much attorneys can make off contingency fees. In addition to proposing the same fee schedule as Coffee’s bill, Dahm’s would have capped total contingency fees for a case at $50 million.

Dahm said he and other Senate Republicans have worried about the large shares of the pie that attorneys come away with in a settlement or judgment.

Concerns date back to the 1990s, when Oklahoma was awarded $2.3 billion over 25 years as part of a multi-state settlement with the tobacco industry. Private attorneys for Oklahoma got $250 million.

Although Dahm said he isn’t aware of impropriety with the Purdue settlement, he felt the nearly $60 million awarded to the private lawyers was excessive.

“Personally, that was just too large for a lot of us,” he said, referring to concerns Senate Republicans related to Hunter during a closed-door caucus meeting the day after the settlement was announced.

But attorneys representing the state in the settlement noted there’s a big risk in taking the case on contingency: If you lose, you get nothing.

Oklahoma Watch is a nonprofit organization that produces in-depth and investigative journalism on important public-policy issues facing the state. More Oklahoma Watch content can be found at www.oklahomawatch.org.

Brad Beckworth, a partner with Nix Patterson, told the judge in a March 26 settlement hearing that almost a dozen lawyers spent time away from home, sleeping on cots or mattresses – or in one case in the closet – on the fourth floor of Whitten Burrage’s Oklahoma City office.

Altogether, his staff and lawyers from the other two firms worked thousands of hours on the case and have spent more than $10 million. He estimates with all the attorney and paralegal time involved in lawsuit, the fees amounted to between $500 and $550 an hour.

“(That amount) is a lot, it is,” Beckworth said. “But when you’re at risk and on a contingent basis, that’s a pretty low return.”