Critics see former Beaumont attorney's contract with Pennsylvania governor as 'pay to play'

Marilyn Tennissen Apr. 13, 2009, 10:27am

A former Beaumont attorney may lose out on millions in legal fees if the Pennsylvania Supreme Court removes him from a suit against a pharmaceutical company on allegations his contract for legal fees has the appearance of a "pay to play" scheme.

F. Kenneth Bailey, who worked for a decade at Provost Umphrey in Beaumont, was hired by Pennsylvania Gov. Ed Rendell to represent the state against Janssen Pharmaceuticals.

The state seeks to recover Medicaid expenses from Janssen for the anti-psychotic drug Risperadal on the grounds the company improperly marketed the drug for "off label" uses.

As reported by Legal Newsline, Janssen wants Bailey's Houston law firm, Bailey Perrin Bailey, removed as the state's counsel because the firm was awarded the no-bid contingency fee contract for the job around the same time Bailey donated almost $100,000 to Rendell's reelection campaign in 2006.

The contract continues to make headlines in Pennsylvania and was the subject of a Wall Street Journal editorial last week as critics call Bailey's no-bid agreement with the Pennsylvania governor a "sweetheart deal."

In particular, the contract specifies that BPB will receive up to 15 percent of any settlement and provides that the state is barred from settling for nonmonetary relief "unless the settlement also provides reasonably for the compensation of [Bailey Perrin & Bailey] by [Janssen] for the services provided by the law firm under this contract."

Bailey may have honed his skills at navigating large-scale litigation and fee agreements during his decade at Provost Umphrey. According to the BPB Web site, he was with the Beaumont firm from 1983 to 1994 and devoted his practice to mass torts and personal injury cases in which he often represented unions.

Bailey also settled "two famous class actions" while at Provost Umphrey, the Wanda Jenkins Class Action in 1986 and Cimino Class Action in 1991. Those cases helped open the door to the "settlement of thousands of asbestos related claims for numerous firms throughout Texas," the site states.

From Provost Umphrey, Bailey went to Houston and founded the Williams Bailey Law Firm LLP, where he focused on cases involving asbestos, silicosis and benzene and represented thousands of plaintiffs in several pharmaceutical cases.

Perhaps the biggest feather in Bailey's cap came in 1997 when he was named one of five lawyers to represent the state of Texas against tobacco companies. The state reached a $17.5 billion settlement with the companies in 1998, which meant $3.3 billion in attorneys' fees for Bailey and the rest of the "Tobacco Five."

But that settlement also sparked questions of the attorneys' involvement in a "pay to play" scheme in Texas. Texas Attorney General Dan Morales was indicted in 2003 on federal charges that he solicited around $1 million in political contributions from lawyers he was considering hiring for the tobacco lawsuit.

A few years later, Bailey's name came up again in connection with fundraising in Ohio. According to a 2007 article in the Columbus Dispatch, Ohio Attorney General Marc Dann hit up BPB for donations to the Democratic Attorneys General Association, of which Dann was hoping to be named chairman.

The law firm gave $25,000 to the DAGA in 2005, and then landed a contingency fee contract to represent Ohio in suits against three pharmaceutical companies.

Had Bailey or his attorneys given more than $1,000 directly to Dann, they would have been banned from receiving contracts in Ohio, as the state prohibits officeholders from awarding large contracts to donors who gave more than $1,000 in the previous two years.

In the current case in Pennsylvania, Janssen is arguing it is inappropriate for the state to delegate authority to a private law firm with a financial stake in the outcome of the case. Lawyers representing the state should be neutral, the motion argues.

Bailey first met with Pennsylvania Attorney General Tom Corbett in 2005 about pursuing a Risperdal suit, but a spokesman from Corbett's office stated that the AG was "not impressed with the presentation Bailey made, or the evidence Bailey presented," and decided not to retain the firm.

More News