Thursday, April 09, 2009

WSJ Reports on Governor Ed Rendell's Shady Dealing With Trial Lawyers

Yesterday's Wall Street Journal included a must read article exposing a potential inappropriate relationship between the Office of Governor Ed Rendell and the Houston based Law Firm of Bailey, Perrin and Bailey.

The State of Pennsylvania has filed suit against Jansen Pharmaceuticals, a subsidiary of Johnson and Johnson claiming the company improperly marketed their antipsychotic drug Risperdal for uses not approved by the FDA. Jansen denies the charges, but that's not the issue in the motion they've filed before the PA Supreme Court.

Jansen has challenged that the case is being prosecuted by Bailey, Perrin and Bailey (rather than the DA), who's founding partner, F. Kenneth Bailey made contributions to Gov. Rendell's 2006 re-relection campaign exceeding $90,000. Among them:
  • Airplaine travel valued at $16,100
  • $75,000 in direct contibutions
  • (and) 25,000 to the Democratic Governor's Association (which contributed more than $1 million to Rendell)
The Journal has an interesting timeline demonstrating the the relationship between Bailey's contribution and the process by which his firm was awarded the no-bid contingency fee contract. The award gaurentees the firm 15% of any judegment award. Better yet, the agreement bars the state from settling the case "unless the settlement also provides reasonably for the compensation of [Bailey Perrin] by [Janssen] for the services provided by the law firm under this contract."

The Court is expected to rule on the motion shortly. The WSJ offers its own two cents:

..but whatever the outcome, the episode is another example of why more states should reform the process for retaining outside counsel.

State prosecutors are supposed to be motivated by a sense of public responsibility for the interests of justice. Law firms have other motivations, and no-bid contingency-fee deals encourage lawyers with a financial stake in a case to try meritless claims or ask for exorbitant awards. That serves neither taxpayers nor justice, though in this case it sure did help Mr. Rendell's re-election campaign.

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