Rendell

McGraw

HARRISBURG, Pa. (Legal Newsline) - The Pennsylvania Supreme Court currently has a chance to do something West Virginia's declined to in 2007.

It is there that Janssen Pharmaceutica is again challenging the contingent fee agreement reached by a government office and a private practice firm. There, attorneys for the company argue that Houston-based Bailey Perrin Bailey should not be able to represent the office of Gov. Ed Rendell.

The company has already tried it at least once, but the West Virginia Supreme Court declined to hear their appeal in 2007.

State Attorney General Darrell McGraw hired Barry Hill and Teresa Toriseva, law partners in Wheeling, to represent the State in a suit against Janssen. Janssen wrote that the two "purport(ed) to represent the Attorney General in pursuing claims against petitioners under the West Virginia Consumer Credit and Protection Act."

Attorneys for the company are making the same argument before the Pennsylvania Supreme Court, which voted to hear the appeal. They say counsel representing a government office should be motivated by justice, not money, and that BPB is controlling the decision-making instead of someone from the Office of General Counsel.

West Virginia Chief Deputy Attorney General Fran Hughes said that was not the case with Hill and Toriseva.

"There's no doubt in anybody's mind that we're in the driver's seat," Hughes said after the petition was voted down 4-1. "And when it gets to trial or negotiations, somebody in our office steps up to the plate. We're an intricate part of the trial. We're front and center."

Campaign contributions are another issue in the Pennsylvania case, just as they have been a frequent target for McGraw's critics.

BPB donated $75,000 directly to Rendell and $25,000 to the Democratic Governors Association while paying $16,000 for Rendell's air travel. Rendell recommended BPB to Attorney General Tom Corbett, who said the firm did not have enough evidence. Rendell then hired the firm to represent his office.

Contribution limits prevent direct donations nearing that amount in West Virginia, but Toriseva has given to McGraw in the past. She donated $1,000 in 2004 and hosted a fundraiser for him in 2008 in which he took in $14,000.

Toriseva's firm also hosted a fundraiser in June 2007, and McGraw took in $8,500 in donations.

Hill had not given to McGraw before the suit was filed but donated $1,000 in 2008. Toriseva was one of a pack of attorneys who split $3.9 million in fees from a case against Visa and MasterCard last year

Much of the settlement -- $11.6 million -- created three sales tax holidays on appliances that carried the "Energy Star" label and cost $2,500 or less.

Nearly half of the attorneys who gave to McGraw in 2008 had previously been chosen as special assistant attorneys general.

In 2008, Republican challenger Dan Greear made an issue of some of McGraw's appointments, especially ones given to Anthony Majestro and James Peterson as well as Jonathan Turak of Moundsville.

Majestro, Peterson and Turak each contributed $1,000 to McGraw's campaign. Also, members and family from Peterson's firm gave a total of $5,000 to the McGraw war chest. People at Turak's firm gave a total of $2,000.

Over the years, members of Peterson's firm have given more than $20,000 to McGraw's election efforts. Turak and Majestro's firms have also given to McGraw in the past

In 2004's settlement with Purdue Pharma, outside counsel took in $3.3 million of the $10 million agreement. Attorneys from several of those firms were contributors.

Critics of McGraw have called the practices "pay-to-play," which is what the Wall Street Journal called the Pennsylvania arrangement.

Bailey also gave $50,000 to Mississippi Attorney General Jim Hood, who hired BPB to pursue a claim against Eli Lilly & Co.

In Louisiana, another state BPB is representing in litigation, Bailey gave $20,000 to the state's Democratic Party last year. In Arkansas, which hired BPB for a suit against Janssen, he gave $70,000 to the Democratic Party in 2006.

"Think of the terms," Hughes has said about hiring outside counsel. "We don't know how long we want you to work, or how much it will cost you, or how much you'll be paid. The attorneys selected are highly skilled, and have the capital and the infrastructure to try large cases.

"Any judicial officer receives contributions from the bar, but Attorney General McGraw does not appoint special assistant attorneys general based on campaign contributions. Not many attorneys have the expertise to engage in antitrust litigation."

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