FILE – In this Feb. 25, 2020, file photo Kansas Attorney General Derek Schmidt discusses his office’s investigation of vaping products maker Juul Labs Inc., during an interview in Topeka, Kan. Schmidt is pushing a proposal that could prevent cities, counties and school districts from filing lawsuits against vaping companies and other big corporations. (AP Photo/John Hanna, File)
TOPEKA, Kan. (AP) — Business groups and Kansas’ Republican attorney general are pushing for a state law that could prevent cities, counties and local school districts from suing big corporations such as opioid and vaping products manufacturers.
Attorney General Derek Schmidt has worried that a raft of private lawsuits complicates efforts by states to broker broad legal settlements. An arm of the U.S. Chamber of Commerce contends that trial attorneys are pushing local officials into a wave a litigation amounting to a “shakedown.”
The proposal would give Schmidt’s office oversight of local officials’ decisions to hire outside attorneys, and it’s modeled after a law Texas enacted last year. The idea was among suggestions made by the U.S. Chamber’s Institute of Legal Reform in a report last year, and there are similar proposals in at least a few other states, including Arizona, Florida and Tennessee.
The Kansas measure faces opposition from local officials and the state’s Bar Association, and it has riled trial attorneys.
“It is a big business sponsored bill that is intended to basically give a pass to some of these huge corporations,” said Jon Kieffer, a Kansas City attorney involved in multiple lawsuits against vaping products maker Juul Labs Inc.
The Kansas measure would require any “public entity” to get a waiver from the attorney general’s office before hiring outside attorneys under contingency fee contracts, which pay the lawyers from the monetary damages won. The attorney general would have to determine that such a contract “would not impede legal interests of the state.”
More than a dozen Kansas counties and cities filed federal lawsuits against opioid manufacturers, and 11 local school districts represented by Kieffer’s firm are pursuing federal lawsuits against Juul. In both cases, the Kansas communities are part of a broader national wave of lawsuits.
“It’s a shakedown where they amass leverage through more volume,” said Harold Kim, the Institute for Legal Reform’s president. “Their strategy is to overwhelm defendants.”
The Kansas House Judiciary Committee has yet to vote on Schmidt’s proposal, but the chamber’s Republican leaders exempted it from deadlines that normally would have prevented it from being considered further by the GOP-controlled Legislature this year. They did that last week, the day after Schmidt and the attorneys general of 38 other states announced they are investigating Juul.
The Kansas Chamber of Commerce, the Kansas Farm Bureau and other agribusiness groups argued that Schmidt’s measure would make it easier to reach global legal settlements. Kim said such a law would combat a growing “revenue grab” by local governments and attorneys that makes the nation’s business climate less certain.
The institute’s March 2019 report also said payments to private attorneys reduces the funds available to cover actual damages — an argument Schmidt also has made. Schmidt said with the vaping investigation, the states are aiming for a broad solution, “not just sort of a whack-a-mole approach, community by community.”
“What I hope we can avoid is this race-to-the-courthouse approach where a large number of small-scale suits get filed and in order to reach a broad, national settlement, it’s necessary to deal with the billing practices of private plaintiffs’ bar,” he said in an interview.
Judiciary Committee Chairman Fred Patton, a Topeka Republican and an attorney, said he believes the state is likely to see a bigger recovery in a single lawsuit over, for example, vaping.
“If it’s a statewide concern — I mean, if every school district is suffering and every city’s suffering — then it may make some sense to have the attorney general file suit on behalf of everybody,” he said.
But Kieffer, whose firm is representing school districts across the nation in lawsuits against Juul, said the state doesn’t face the same problems or costs from companies’ misconduct.
For example, he said, schools are wrestling with extra costs that include hiring extra personnel or modifying their buildings to stop vaping. He said a state isn’t likely to face those costs and might not deal with the costs associated long-term health problems for years.
The Kansas Bar Association argued that allowing clients to commit to using part of their monetary damages to pay their lawyers ensures that everyone has access to the courts.
“We just come back to the fundamental principle of, when you do wrong, you need to be held accountable,” said Callie Denton, executive director of the Kansas Trial Lawyers Association.
By JOHN HANNA
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