Legal Fee Tracker: Meta case yields Texas-size fees as more firms ink state contracts
By David Thomas and Mike Scarcella
Dec 12 (Reuters) -Texas' appetite for litigation has been keeping several law firms busy working for the state in high-profile lawsuits against major U.S. companies.
Chicago-founded Keller Postman and Dallas-founded McKool Smith billed the Texas attorney general's office a combined $142.6 million last month for their work on the state's 2022 consumer privacy lawsuit against Facebook parent Meta Platforms META.O, documents show. The case led to a $1.4 billion settlement with Meta in July.
McKool Smith and Keller Postman contracted with the state to spearhead the lawsuit in exchange for a cut of a successful recovery. The requested payout - $93.3 million for Keller Postman and $42.6 million for McKool Smith - works out to an average of $3,100 per hour for 42,600 hours the firms combined said they invested in the case.
Zina Bash, a Keller Postman partner and former senior counsel to Texas Attorney General Ken Paxton, in a statement called the Meta accord the "largest settlement achievement by a single state in U.S. history."
It isn't uncommon for states to hire private law firms to handle large, complex cases using contingency contracts. In the case of Texas, Paxton's office has signed outside counsel contracts with at least 15 law firms since 2018, according to state records.
Tapping attorneys from Mark Lanier's Lanier Law Firm and Kelley Drye & Warren, Texas on Wednesday sued 3M, Corteva and DuPont for allegedly concealing health and environmental risks of toxic PFAS "forever chemicals."
Paxton said the state is "taking action to penalize these companies and hold them accountable for deceiving Texans into buying consumer products without vital information." The companies did not immediately respond to requests for comment.
"We are honored to bring our expertise to this arena as well," Lanier said in an email. Lawyers at Kelley Drye did not immediately respond to a request for comment.
Texas's contracts with outside counsel are governed by state law that protects against unreasonable fees, a spokesperson for Paxton's office said.
Last month Texas turned to outside counsel to sue asset managers BlackRock, Vanguard and State Street for allegedly violating antitrust law and driving up energy prices through climate activism. BlackRock and State Street have called the lawsuit baseless. Vanguard did not respond to a request for comment.
Contracts with Paxton's office show that Tony Buzbee's Buzbee Law Firm and Cooper & Kirk stand to receive success fees of up to $3,780 per hour or 10% of Texas' potential recovery in the case.
Other firms with open contracts with the state include Norton Rose Fulbright, which Texas hired in January 2022 for a biometric privacy lawsuit against Alphabet's GOOGL.O Google. Like the settled case against Meta, the lawsuit claims Google unlawfully collected the biometric privacy data of millions of Texans without their consent. Google has denied wrongdoing.
Norton Rose Fulbright's 2022 agreement with Texas shows it could collect as much as $3,780 an hour or 27% of any successful recovery. Norton Rose partners representing the state did not immediately respond to a request for comment.
--DaVita Inc on Monday said in court papers that it has reached a settlement in principle in a dispute over attorney fees with a former company executive who blew the whistle on the company's alleged violation of federal anti-kickback laws.
DaVita in July paid $34.4 million to the U.S. government to settle claims that it violated the False Claims Act by paying kickbacks to doctors in exchange for referring their patients to the company's dialysis centers. DaVita made no admission of liability.
Dennis Kogod, a DaVita executive who sued the company under the FCA's whistleblower provision, received an award of $6.37 million from the federal government, the Justice Department said.
Kogod and his lawyers at Constantine Cannon also sought $14.1 million in attorney fees from DaVita, arguing they are entitled to fees after spending more than 30,000 hours litigating the case.
DaVita's lawyers at Sidley Austin countered that the company's settlement only involved a "small subset" of Kogod's claims. The company also said Kogod's fee demand "reflects a lack of any reasonable billing judgment."
In their joint Tuesday filing, DaVita and Kogod said they were still finalizing the settlement terms but were expecting to finish by Dec. 31. They asked U.S. District Judge Philip Brimmer to pause the case proceedings until Jan. 10.
Lawyers for Kogod and DaVita did not immediately respond to requests for comment.
(Legal Fee Tracker is a weekly feature exploring attorney compensation awards and disputes in class actions, bankruptcies and other matters. Please send tips or suggestions to D.Thomas@thomsonreuters.com.)
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Reporting by David Thomas
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