Judge: Kentucky governor can't force law firm to repay money

By MarketsAssociated Press

Kentucky's Republican governor cannot force a law firm to give back $4 million it got for negotiating a settlement on behalf of the state with the maker of OxyContin, a judge ruled Monday.

Kentucky sued Purdue Pharma, makers of the addictive opioid-based prescription painkiller, in 2007. The case languished in the courts for nearly 10 years before former Democratic Attorney General Jack Conway settled the case for $24 million at the end of 2015, just a few days before he left office.

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As part of its contract with the state, the Louisville-based law firm then known as Dolt, Thompson, Shepherd & Kinney was owed 16 percent of that settlement, plus expenses. But the contract had inadvertently expired months prior to the settlement. Andy Beshear, who replaced Conway as attorney general, issued the firm a new contract to correct the mistake. Conway then joined that firm, which changed its name to Dolt, Thompson, Shepherd & Conway.

Bevin has criticized the contract, accusing Beshear and Conway of colluding to award his new firm a multimillion-dollar payout on his way out of office. Beshear said he was just honoring a valid contract the state had with a private business, noting both the attorney general's office and the law firm had continued to operate as if the contract were in place even though it had expired.

On Monday, Franklin Circuit Judge Thomas Wingate sided with Beshear. He said the state had a lawful contract with the firm, and to not honor that deal would "violate the laws of equity in the Commonwealth."

"We clearly expected that would be the ruling. The lawsuit was ridiculous," said Tyler Thompson, the firm's registered agent.

The lawsuit was brought by the Kentucky Finance and Administration Cabinet, which is part of Bevin's administration. Spokeswoman Pamela Trautner said the cabinet is disappointed with the ruling and indicated it would appeal.

"We respectfully disagree with the court's analysis and look forward to the appeal," Trautner said.

Thompson said Conway did not profit from the settlement when he joined the firm. He also said he did not know Conway when he joined the firm, saying any allegation that they hired him to obtain the settlement money was "ludicrous."

This is one of a number of lawsuits involving Bevin and Beshear, who have been at odds with each other since both men took office. Beshear is a potential candidate for governor in 2019, when Bevin would be eligible to run for re-election.

The two men can't even agree on how to best tackle the opioid crisis. Kentucky has been one of the states most impacted, having one of the highest drug overdose death rates in the country. Beshear has hired outside law firms to help him sue opioid makers and distributors. But the Bevin administration sought to cancel that contract, saying Beshear had not followed proper procedures.

A judge had urged the two sides to work together. When no agreement was reached, a judge ruled last week Bevin could not stop Beshear from hiring the law firms.