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Friday, December 6, 2019

Texas AG not approving contingent contracts signed before Sept. 1 - numerous opioid contracts weren’t approved prior to HB 2826

Attorneys & Judges

By David Yates | Nov 21, 2019

Simon
Simon

DALLAS – Due to a recent change in the law, the Texas Attorney General’s Office is not approving contingency fee contracts signed before Sept. 1, calling into question the future of opioid agreements that were signed but not approved before the change.

Until just a few months ago, Texas trial lawyers could solicit local governments for litigious purposes and then send contingency fee contracts to the Comptroller’s Office for approval.

That changed on Sept. 1 – the date HB 2826 went into effect, a law designed to bring transparency to how local governments go about hiring law firms and place contract approval in the hands of the attorney general.

Under the prior law, the Comptroller’s Office was charged with approving contingent fee contracts entered into by local governmental entities.

The new law requires local governmental entities to provide notice and negotiate with well-qualified attorneys, instead of just hiring those who solicit them, which raises the question: what happens to contingent fee contracts that were signed prior to Sept. 1 but failed to gain comptroller approval?

Before the law went into effect, at least 19 Texas counties failed to have their opioid contracts approved by the comptroller, according to documents obtained by The Record.

A half dozen of those unapproved contracts belong to counties that hired Simon Greenstone Panatier, a Dallas law firm specializing in toxic torts and pharmaceutical litigation.

And it appears Simon Greenstone has since been scrambling to have the AG’s Office grandfather their cases in to avoid the new law’s requirements.

The Record obtained documents showing that on Sept. 26, JoDee Neil, a Simon Greenstone attorney, emailed the AG’s Office, inquiring if anyone was free to “chat” about the firm’s county contracts.

“We have noticed some clerical errors and are seeking to remedy the errors, but we are not sure whether to submit to the Comptroller or the AG,” she writes.

Records show Assistant Attorney General Michael Neill replied a few minutes later, attaching information about the submission process in his email.

Here’s what JoDee had to say next: “Thanks Michael, Do you have access to approved contracts at the Comptroller’s office? One of the issues is we suspect some of our contracts might have been approved, but we don’t have the final copy. Do you have access to those files or do I need to go back to the Comptroller?”

Michael responded by telling her to check with the comptroller.

Five days later, JoDee emailed Michael again, specifically wanting to know if her firm was now subject to the new law or grandfathered in, records show.

“I was going through the submission packet yesterday,” writes JoDee. “Maybe you can answer a question for me – since these are retroactive contracts, do we still need to go through the notice period and subsequent finding requirement of 2254.1036? Or are we grandfathered in?”

Records from the Comptroller’s Office show Simon Greenstone does not have approved contracts on six counties, Bee, Dimmit, Kendall, McMullen, Shelby and Trinity.

Opioid lawsuits are on file for all six of the counties.

In four of the counties, Bee, Dimmit, Kendall and McMullen, there is no record of contract submission at all to the Comptroller’s Office.

As far as the other two counties, Shelby and Trinity, the contracts were submitted but there is no record of approval.

On Oct. 2, JoDee sent another email to Michael, inquiring as to whether the six counties in question “will be grandfathered in.”

“If we don’t have to do the Commissioner’s Court Notice Procedure, we can submit these ASAP,” she writes. “Clearly the other step would require much longer.”

The email chain between JoDee and Michael ends there, and the firm hasn't exactly been forthcoming on the status of the contracts.

The Record reached out Jeffrey Simon, a partner at Simon Greenstone, to find out if the “retroactive contracts” were now void and if the six counties in question had to provide notice before rehiring his firm.

Here’s Simon reply: “Thank you for your inquiry. We respectfully disagree with key parts of the legal analysis you’ve provided below, but will refrain from debating them in this forum.”

While Simon’s response fails to give a yes or no answer, Michael Neill has been pretty clear with his response to others seeking to have the AG’s Office approve contracts that were signed prior to Sept. 1.

On Sept. 25, San Patricio County emailed the AG’s Office seeking approval of its opioid contract, according to documents obtained by The Record.

“I have a contingent fee contract that needs to be approved by your office which is attached,” writes Tamara Cochran-May, San Patricio County attorney, in an email. “I missed the deadline to send it to Comptroller so all wording follows what was required by the Comptroller. Please advise if you need additional information.”

A month later, Michael Neill sent the following reply to her: “Ms. Cochran-May, We received your request to approve the contract between the County of San Patricio and the law firms of Phipps Deacon Purnell PLLC and Joel H. Thomas.

“This contract was signed on November 7, 2018. HB 2826, which amended the Texas Government Code and gives our office authority to approve certain contingent fee contracts for political subdivision, went into effect on September 1, 2019. HB 2826 applies only to a contract entered into on or after the effective date of HB 2826.

“As such, the OAG cannot approve the submitted contract.”

Records show Michael Neill pretty much had the same thing to say to other counties trying to have their pre-Sept. 1 contracts approved.

So in a nutshell, the counties that missed the deadline to have the comptroller approve their opioid contracts may have to submit new ones to the AG’s Office.

The AG’s Office could not comment on the potential approval or denial of future opioid contracts, but did confirm, however, that the office was not able “to approve or deny” any contract entered into before Sept. 1.

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Organizations in this Story

Harris County District CourtDallas CountyTexas Attorney GeneralPHIPPS ANDERSON DEACON LLPSIMON GREENSTONE

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