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Attorney General’s new litigation scheme shows the “Buddy System” is still operating in Louisiana

BATON ROUGE – Despite fierce criticism from lawmakers and legal reform groups in recent years, Louisiana Attorney General James “Buddy” Caldwell is continuing his questionable practice of hiring outside attorneys to pursue litigation on behalf of the state, primarily relying on well-connected law firms that have donated tens of thousands of dollars to his political campaign.

The latest example comes out of the 19th Judicial District Court in East Baton Rouge Parish where Caldwell filed suit on behalf of the State of Louisiana against GlaxoSmithKline (GSK), accusing the pharmaceutical maker of attempting to block competition from a generic version of the company’s allergy drug Flonase.

Campaign finance research conducted by Louisiana Lawsuit Abuse Watch (LLAW) reveals five of the seven outside law firms hired by Caldwell to pursue the state’s case against GSK are campaign contributors.

Three of the firms have donated significant sums of money (as well as other support) to Caldwell’s past election campaigns:

  • Partners and close associates of Usry, Weeks & Matthews donated more than $100,000 in campaign contributions to Caldwell.

  • Shows Cali & Walsh LLP provided Caldwell with $15,000 in campaign contributions.

  • Morrow Morrow Ryan & Bassett gave Caldwell’s campaign $11,550 in donations.

In addition, T. Allen Usry, a name partner at Usry, Weeks & Matthews, and E. Wade Shows, lead partner at Shows, Cali & Walsh, served in leadership roles in Caldwell’s campaign.

Campaign finance records show two other firms involved in the litigation made smaller contributions to Caldwell: the Natchitoches-based firm Salim-Beasley, LLC donated $6,000 while the Baton Rouge-based firm Hammonds, Sills, Adkins & Guice, LLP donated just $200.

The private personal injury law firms Kanner & Whiteley, LLC and Meade Law, LLC are also involved in the case but have not contributed to Attorney General Caldwell.

The politically-connected firms that are involved in the litigation are just the latest example of the apparent “pay-to-play” system Caldwell has engaged in repeatedly over the years.  Together, Usry and Shows have benefited from more than 30 separate highly lucrative contracts with the Attorney General’s Office under Caldwell.  In addition, the New York Times recently noted that outside law firms partnering with Caldwell have made more than $54 million in legal fees since 2011.

The lawsuit against GSK is believed to be the first in which Caldwell has used outside attorneys since HB 799, sponsored by Rep. Stuart Bishop (R-Lafayette), was passed during the 2014 Louisiana Legislative Session. The law limits the attorney general’s ability to hire outside lawyers on a contingency fee basis, where the private attorneys receive a percentage of the state’s award.

While a 1997 ruling from the Louisiana State Supreme Court had made it clear that the attorney general did not have the authority to hire outside attorneys on a contingency fee basis, Caldwell employed a “work around” by using the courts to award attorneys’ fees.  This questionable practice was broadly criticized by lawmakers and legal reform groups, and it ultimately led to the passage of HB 799, which strictly prohibits the use of contingency fees by state agencies and limits the hourly fees that can be paid to outside law firms to a maximum fee of $500 an hour.  The legislation does not expressly prohibit Caldwell and his cronies from doing business all together.

Currently, it is unclear if the attorneys involved in the GSK litigation are working under a pseudo-contingency fee arrangement or if they have been contracted under hourly rates in accordance with the new law.  LLAW has filed a public records request with the Attorney General’s Office to obtain copies of the contracts. The request is pending.

Editor’s note: The following screen shots highlight recent results from the Louisiana Division of Administration’s LATrac Contract Search System, which should include all existing contracts between the Louisiana Department of Justice and the outside law firms currently working as special counsel on behalf of the state in the GSK litigation.

Attorney General’s new litigation scheme shows the “Buddy System” is still operating in Louisiana
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