I missed the story last week. In my column, I made reference to a disagreement between the law firms of Phipps Mayes and Watts Guerra over a proposed settlement of a massive lawsuit against companies who have amassed billions aggressively marketing deadly opioids as non-addictive pain killers.
I missed a more fundamental controversy – not the tension between Phipps Mayes and Watts Guerra, but the cauldron of controversy within the firm of Phipps Mayes itself.
The day after my column appeared, attorney T.J. Mayes posted a brief but blazing notice that he had quit the firm the week before “after I became convinced without a shred of doubt that Martin Phipps is a crook and a serial abuser of women.”
Mayes’ post gave no details, but he did say he had “turned over appropriate documents to the relevant agencies.”
Mayes shared more disturbing details with the San Antonio Report’s Shari Biediger here. Such as that he was joined by five other employees departing the firm after they wrote Phipps a letter questioning his mental and emotional stability and accusing him of “hostile aggression, sadism, misogyny, … and an insatiable desire for revenge.”
Bexar County Judge Nelson Wolff has indicated the firm’s future role in the litigation will be reviewed. This should be done by an independent and trusted outside attorney and should be made public. The review should also examine how Phipps won the contract in the first place.
Under state law, large counties can hire outside attorneys to prosecute lawsuits, but the outside attorneys must be selected by the county attorney or, in counties such as Bexar that don’t have a county attorney, by the district attorney. The Commissioners Court was required to approve the selection made by then-DA Nico LaHood, which it did in early October 2017.
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The contract was signed on Jan. 19, 2018, when LaHood was in the middle of a tough primary race.
It may be that LaHood and the commissioners court were impressed by Phipps’ boasts of having earlier bludgeoned a major agricultural firm into a $750 million settlement for selling tainted seeds to rice farmers. More on that in a minute.
It may also be that LaHood knew Phipps to be a generous man.
After being selected by the county but before the contract was finalized, Phipps reportedly held a fundraiser for LaHood at his law firm’s elegant offices near the San Antonio Museum of Art.
And on Feb. 8, exactly 20 days after the opioid litigation contract was signed, LaHood’s campaign received two checks from Phipps, each for a stunning $50,000.
LaHood at the time told the San Antonio Express-News the $100,000 contribution had nothing to do with his recommending Phipps for the contract.
“I have never let a contribution influence a decision. Period,” LaHood said.
As a citizen, you have the right to believe him. You may also believe accepting such a large contribution from someone you just recommended for a contract that could be worth millions is not the best way to inspire public confidence.
Voters’ trust in LaHood was measured when he lost his the primary to challenger Joe Gonzales by nearly 20 points, though I doubt the $100,000 contribution was the only factor.
Phipps does have experience in mass litigation. In a press release last September when he added Mayes to the firm’s name, Phipps claimed credit for securing a $750 million settlement on behalf of thousands of rice farmers who said they had been damaged by Bayer CropScience.
“After Phipps won two jury trials in Arkansas, Bayer settled all of Phipps’s cases for the $750 million – the largest state court agricultural global settlement in American history,” Phipps said in his press release.
A casual reader might think Phipps won a settlement of $750 million. He didn’t. That was the total amount Bayer agreed to pay to settle claims from thousands of farmers represented by hundreds of attorneys in lawsuits spanning a number of states..
A number of federal judges also disagreed that Phipps’ two Arkansas state trials played a major role in paving the way for the settlement, as was made clear in a ruling by a three-judge appeals panel in St. Louis supporting the findings of a federal district judge.
When a large number of lawsuits are filed against a company on behalf of alleged victims in multiple jurisdictions, the lawsuits are often consolidated into a single federal court. The judge in that court will often appoint a leadership group of “beneficial lawyers.”
The lead lawyers take on the burden of coordinating the schedule and agree to share with all the attorneys the testimony they take in depositions of experts and defense and plaintiff witnesses. This is far more efficient than having all of the witnesses and experts deposed by hundreds of lawyers.
For this extra work a special fund is established by the judge to compensate the lead attorneys for their extra work. In the rice case, Phipps was not on the leadership team, but he felt his victories in Arkansas state courts had helped bring Bayer to its knees. He sued to receive more than $13 million from the $72 million in the fund for the beneficial lawyers on the lead team.
A retired federal judge was appointed as a “special master” to determine how the fund should be allocated. The special master found that Phipps benefited from the work of the lead attorneys by, among other things, having a representative attend depositions they conducted and a “bellwether trial” they won.
The special master found on the other hand that Phipps’s work had “been performed in [his] client’s interest and not for the common good,” and there “was never any attempt to co-ordinate Phipps activities with those of Lead Counsel.”
The judge in the case agreed with the special master, and added that Phipps’s “conduct may have actually interfered with the progress of the case and the settlement” because, for instance, the court “was twice required to consider requests for sanctions when the Phipps Group improperly attempted to solicit as clients plaintiffs who were already represented by other counsel.”
Ethical rules require that lawyers contact clients of other attorneys only through those attorneys.
The federal judge also found that there was “no basis in law or fact” for Phipps’s boast that its state-court lawsuits pressured Bayer to settle.
It wouldn’t have been difficult for LaHood or other county officials to learn that Phipps was exaggerating his role in the $750 million rice settlement. All of the findings above are laid out in the appellate decision, which was one of the top articles when I Googled “Martin Phipps and rice lawsuit.”