The state is expected to receive about $117 million from tobacco companies for the upcoming budget year (which started July 1 ) as a result of the lawsuit settlement the state reached in 1998 with the cigarette makers.
During a 25 year period the state is scheduled to receive more than $4 billion from the tobacco companies as a result of the settlement to help pay the cost of treating smoking-related illnesses. But in reality, the settlement does not end in 25 years. The state, based on a formula, is supposed to receive payments – around $100 million annually – as long as the companies make money.
Most of the money goes into the state’s Medicaid program, but a portion also goes into smoking cessation efforts.
The lawsuit, filed by then-Attorney General Mike Moore, is perhaps the most high profile example of what is now a common practice of states, through their attorneys general, hiring private lawyers to pursue lawsuits – usually against large corporations.
While the lawsuit resulted in a national settlement, it was Moore who filed the first lawsuit against the cigarette companies on behalf of Mississippi.
Jim Hood, who succeeded Moore as attorney general, has continued the practice of hiring outside counsel. He currently has dozens of lawsuits pending filed with the help of outside legal counsel.
Hood is running for governor this year and four candidates are vying to replace him – three Republicans and one Democrat. A key issue in that race is whether the new attorney general will continue to contract with private attorneys to pursue large lawsuits.
The issue of hiring outside counsel has long been controversial with many in the business community criticizing the practice.
At least three of the four candidates running for AG – state Treasurer Lynn Fitch and Madison attorney Andy Taggart on the Republican side and ACLU/Mississippi Executive Director Jennifer Riley-Collins on the Democratic side – do not rule out the possibility of continuing the practice.
The fourth candidate – Republican state Rep. Mark Baker of Brandon – has been an outspoken critic of the practice and has unsuccessfully tried to pass legislation in past sessions to establish a special panel of the governor, lieutenant governor and secretary of state to approve any use of outside counsel to file lawsuits.
If such a law had existed in the mid 1990s when Moore filed his lawsuit against the tobacco companies, the panel most likely would have blocked that effort. Then-Gov. Kirk Fordice was an outspoken critic of the lawsuit and even filed a lawsuit to try to stop Moore. The lieutenant governor was Republican Eddie Briggs and the secretary of state was Democrat Dick Molpus. It is reasonable to assume Briggs would have sided with Fordice in stopping the lawsuit.
“This legislation by litigation must stop,” Baker said on his campaign web page. “Public policy of the state is determined through the legislative process and not by the unilateral whims of one person. The attorney general is the lawyer for the state, not the lawyer and the client and this virtually unchecked barrage of litigation against companies is killing our economy.”
Others say that outside counsel use might be appropriate to provide expertise and manpower.
Taggart said he does not believe the practice should be prohibited.
“Any attorney general has finite resources,” he said. “There will be cases of such magnitude and requiring such expertise that the attorney general needs to go outside his office for assistance,” Taggart said.
But Taggart said he dislikes the current practice of attorneys coming to the attorney general to shop cases. He said the attorney general should develop his or her own cases and then look for outside help if it is needed through a competitive bid process.
In a statement, Michelle Williams, a spokesperson for the Fitch campaign, said, “The default should be in-house counsel, of course, because it is usually the best, most efficient, and most cost-effective way. But, just like any law firm, if there’s a case that requires specialized knowledge and the people’s interests are better served with some outside expertise working alongside AG attorneys, Lynn Fitch won’t foreclose the option.”
And Riley-Collins, said, “ I will always ensure any lawyer or law firm working on behalf of Mississippians possesses the legal knowledge, skill, and capacity to provide the competent and zealous representation for complex litigation. When that expertise resides at home we will stay at home unless conflicts exist. When that expertise is outside Mississippi, we will reach outside for assistance to fulfill our duty to the people.”
Hood’s use of outside counsel has been labeled “a pay to play” scheme by many of his Republican opponents. In Hood’s 2007, re-election effort, his Republican opponent, found that Hood had received campaign contributions of more than $400,000 from attorneys who were selected as outside counsel by the AG’s office.
Hood continues to reply heavily on attorneys – some whom he has hired to work on lawsuits – for campaign contributions. A scan of current campaign finance reports finds multiple examples of attorneys donating to his campaign and being awarded contracts to sue on behalf of the state. The examples include Greenwood attorney A. Lee Abraham, former Gov. Ronnie Musgrove, former-AG Moore and others.
For instance, John Davidson, a Flowood attorney, was hired as outside legal counsel by Hood for his ongoing lawsuit against the opioid manufacturers. He contributed $10,000 to the Hood campaign last year.
The Abdalla Law Firm of Ridgeland received $6.7 million in legal fees for work to settle multiple lawsuits providing $26.6 million to the state in instances where companies were accused of bribing former Department of Corrections Commissioner Chris Epps to receive contracts with the state. Members of the Abdalla Law Firm are Hood’s contributors.
Before contracting with outside counsel. Hood said he considers the merits of the case and whether the attorney bringing the idea has the finances and expertise to pursue the case. The state does not provide any funds toward the outside counsel effort.
“If I were a Republican, they would call it privatization,” Hood said recently of hiring outside attorneys who are paid only if they win.
“We have 3,500 active cases. So many cases are farmed out to outside attorneys who never give me a dime,” he added.
Those cases run the gamut. They include cases with other attorneys general, against drug companies, such as those related to the opioid epidemic, to the lawsuit against Entergy, which he claims has overcharged customers for electricity, to a legal fight with Memphis about water rights in an aquifer.
During Hood’s tenure, $2.8 billion has been awarded to the state in lawsuits assisted by outside legal counsel. The private attorneys have received $121.1 million in fees and expenses or 4.3 percent of the total awarded to the state, according to information compiled by the office of Attorney General. Those numbers do not include the yearly payments to the state from the tobacco companies.
In the early 1990s, then-AG Moore was testifying in front of legislative leaders soon after filing the tobacco lawsuit. Rep. Charlie Capps, D-Cleveland, then the powerful Appropriations chair, known at the time for his cigar smoking and for often keeping an unlit cigar in his mouth when not smoking, warned Moore he had better not spend any state funds on the dubious and unwinnable lawsuit against the cigarette makers.
Moore did not. But the state still is spending the money he garnered from the litigation.