Alabama’s BP contract to politically active firm only stipulates ‘reasonable’ attorneys fees

NEW ORLEANS - Despite vowing not to appoint outside attorneys to assist in state litigation in the Deepwater Horizon oil spill case, Alabama Attorney General Luther Strange, in a turnabout, named several private attorneys as deputy attorney generals, including members of the politically active Montgomery, Ala.-based firm Beasley Allen.

A contract between the firm and the State, obtained through an open records request made by Legal Newsline, shows the firm is set to make “reasonable” attorneys fees for its work.

In fact, according to the legal services contract report, the agreement is not a contingency contract even though it stipulates a rate of compensation of $0 per hour.

As it is not a contingency contract, no percentage is indicated in the agreement.

It simply says the firm will seek from the court recovery of costs, fees and expenses, and that compensation for work performed for Alabama and not considered common benefit work will be paid by any entity paying the State damages.

“Rhon Jones and Beasley Allen may be compensated for their efforts based on their time, expertise and contribution to the success of the litigation or negotiated settlement by applying to the court for reasonable attorney’s fees, costs and expenses at the conclusion of litigation or a negotiated settlement to be assessed against and paid by the parties responsible for the State’s damages,” the agreement says.

Any such fee is not a contingency fee, the contract says, nor shall it lessen the amount the State is to recover.

The firm agreed not to seek any fees or costs directly from the State of Alabama.

The contract was signed by Jones and Gov. Robert Bentley, who first appointed the firm before Strange’s proclamation that the State wouldn’t use outside counsel.

Bentley signed the agreement on Jan. 15.

A look at Beasley Allen’s campaign donation history at www.followthemoney.org reveals the law firm has provided politicians with nearly $1.5 million in campaign funds over the past two decades.

Meanwhile, the law firm has pursued an aggressive business strategy that has seen it be awarded contingency fee contracts to pursue civil litigation on behalf of several attorney generals’ offices throughout the country.

In what has become a staple in Beasley Allen’s business income, the law firm has pursued contracts to handle litigation on behalf of states against prominent corporations in which millions of dollars in awards are at stake.

Indeed, the firm’s efforts in pursuing such cases appears to have paid off, as in recent years it has been granted state contracts with Alabama, Alaska, Hawaii, Mississippi, Louisiana, Kansas, South Carolina and Utah, mostly in consumer actions concerning retail pricing anti-trust disputes – most notably against pharmaceutical corporations.

The firm’s business acumen was complimented in 2014 when it was included on the National Law Journal’s Plaintiffs Hot List, which noted it had performed “exemplary, cutting-edge work on the plaintiffs’ side.”

While its influence appears to be widespread, Beasley Allen’s clout is most prominent in its home state. In fact, the law firm’s ties to Alabama state government are historically very strong.

Beasley Allen’s founding partner Jere Beasley served two terms as Alabama Lieutenant Governor from 1971 to 1979 while noted segregationist Governor George Wallace was in office.

Beasley unsuccessfully campaigned to succeed Wallace as governor in 1978, and his strong connection to state government has continued – as recently as 2009 he served as campaign chairman in Artur Davis’s unsuccessful bid for governor.

Beasley has donated $600,000 to various politicians, including $100,000 that went to his younger brother, Alabama state Sen. Billy Beasley, who contemplated, but ultimately decided against, a 2010 run for governor.

In 2010, six Beasley Allen partners managed to keep the law firm’s name off of donor lists while funneling $606,000 through what critics called “an arcane maze,” including 52 separate donations to 30 political action committees (PACs), to the unsuccessful campaign of Democrat Deborah Bell Paseur for a seat on the Alabama Supreme Court.

But nowhere in recent years is Beasley Allen’s Alabama influence, and potential for income, more noted than when it comes to Deepwater Horizon litigation. Only days after the 2010 oil spill, the firm filed a class action lawsuit against BP and other corporations tied to the disaster.

Eventually Beasley Allen partner Jones landed a coveted spot as one of 17 members of the Plaintiffs’ Steering Committee (PSC) who were tasked with engineering a settlement agreement with BP.

As part of the settlement, the PSC, in a move that has been criticized by scores of other plaintiffs attorneys, guaranteed itself a $660 million dollar payout off the top in addition to a percentage of each claimant damage award.

The stake the PSC alone has been awarded for its oversight in the case has been estimated to be worth a combined $2.5 billion by conclusion of the case. That would make Beasley Allen’s portion alone worth around $150 million, not including damage awards it stands to receive for representing individual claimants.

In addition to being an integral part of the Deepwater Horizon class action lawsuit, Beasley Allen was hired by former Alabama Attorney General Troy King to assist in the state’s case against the oil giant.

Under that contract, Beasley Allen would have received 14 percent of what Alabama recovered from the Deepwater Horizon damage award.

Beasley Allen’s appointment to handle Deepwater Horizon matters on behalf the state came just after the oil spill occurred in 2010 – that same year the law firm was noted to have provided $765,900 to a group of  PACs that provided King with $240,000 in campaign funds.

King had previously appointed Beasley Allen as outside counsel for the Alabama Attorney General’s Office in lawsuits against 73 pharmaceutical accompanies, for which the firm received percentages of multimillion-dollar damage awards.

However, King lost to Strange in the 2010 Republican primary. Following his victory in the general election, Strange terminated Beasley Allen’s Deepwater Horizon representation on behalf of the State and noted that removing it from the equation would result in a significant savings for Alabama taxpayers.

While there is no history of donations to Strange’s campaign by Beasley Allen or its partners, the law firm did provide a $25,000 donation for the 2011 inaugural celebration for current Alabama Governor Robert Bentley. Bentley – in January of this year – appointed the Beasley Allen to provide representation for the Governor’s Office in the Deepwater Horizon matter.