Ohio’s drug suit could be lawyer payday

The outside law firms hired by the Ohio attorney general’s office to pursue lawsuits against major drugmakers could walk away with $50 million.

The special counsels have agreed to work totally on a contingency basis. That means the state pays nothing up front, but the firms get a chunk of any payments required of the drugmakers when the case is resolved.

The contingency fees are on a sliding scale. The law firms get 5 percent — up to $50 million — of any settlement or court- ordered payments of more than $25 million. Of course, for the lawyers’ 5 percent share to equal $ 50 million, that means the overall payment would total a cool $ 1 billion.

But the smaller the settlement, the greater the special counsels’ share: 10 percent for $ 20 million to $ 25 million; 15 percent for $ 15 million to $ 20 million; 20 percent for $ 10 million to $ 15 million; and 25 percent of a sum under $10 million.

The firms retained by the state: Isaac Wiles, with offices in the Miranova building Downtown; McGowan, Hood & Felder of Mount Pleasant, South Carolina; Hagens, Berman, Sobol, Shapiro of Washington, D.C.; Mike Moore Law Firm of Flowood, Mississippi; and Davidson Bowie, also of Flowood.

Wait a minute ... Flowood, Mississippi?

The Jackson suburb is not exactly renown as the heart of complex legal expertise, you say?

Well, those two firms have major qualifications than none of the others have.

One already is suing the drugmakers over their role in the opioid epidemic. Mississippi Attorney General Jim Hood hired John Davidson, who works in a two- attorney office, to pursue a December 2015 lawsuit on behalf of his state.

The other, Mike Moore, was Mississippi’s attorney general in 1994 when the state filed the country’s first Medicaid lawsuit against the tobacco industry, which led to a $ 200 billion- plus settlement that benefited Ohio and most other states.

Interestingly, if the state’s outside lawyers do get a max payout of $ 50 million, no other part of state government has to approve it.

A little- known section of the Ohio Revised Code says that only if the attorney general gives outside counsel than $ 50 million would the payment need the approval of the State Controlling Board, a bipartisan panel of legislators headed by a gubernatorial appointee.

The city of Dayton, which filed suit against not only the drugmakers but also distributors and doctors accused of justifying the widespread use of opioids, also has a retention agreement based on contingency fees.

However, its scale is different, based on when any recovery of funds is made: it’s 20 percent of the total if it comes after briefings of motions to dismiss; 25 percent after summaryjudgment motions; 33 percent after the final pretrial hearing; and 40 percent once a trial begins.

There is no ceiling on what the outside lawyers can receive.

“We’re taking on one of the most-powerful, deep- pocketed, deceptive industries in the world for purposefully destroying the lives of Ohioans,” Dayton Mayor Nan Whaley said in a statement.

“It’s not costing taxpayers a penny to file and intensely pursue this lawsuit. It’s a win- win- win situation for taxpayers. We’re going to take these drug companies to court, make them raise their right hands and swear to God to tell the truth and nothing but the truth. And when that happens, taxpayers in Dayton, in Ohio and all over the nation will win.”

A Cleveland law firm hired by Dayton — Climaco, Wilcox, Peca & Garofoli — also was involved in the national tobacco litigation and other lawsuits against drug companies.

A New York firm, Napoli Shkolnik, has filed suits on behalf of families who have lost family members to drugs.