Texas’ aggressive litigation strategy is paying off for several law firms as they rack up substantial fees for their involvement in the state’s high-profile lawsuits against major U.S. corporations. Recent records show that two prominent law firms, Chicago-based Keller Postman and Dallas-founded McKool Smith, collectively billed the Texas Attorney General’s office a staggering $142.6 million for their work on the state’s 2022 consumer privacy lawsuit against Meta Platforms, the parent company of Facebook.
This lawsuit, which resulted in a groundbreaking $1.4 billion settlement with Meta in July, has been hailed as one of the largest settlements ever achieved by a single state in U.S. history.
The fees, which include $93.3 million for Keller Postman and $42.6 million for McKool Smith, reflect the intense resources invested in the case. Together, the firms reported billing 42,600 hours at an average rate of $3,100 per hour. Zina Bash, a Keller Postman partner and former senior counsel to Texas Attorney General Ken Paxton, commented that the Meta settlement “is the largest settlement achieved by a single state in U.S. history.”
While private law firms being hired on a contingency fee basis is not unusual in high-stakes cases, Texas has taken this strategy to new heights in recent years. Since 2018, the Texas Attorney General’s office has signed contracts with at least 15 law firms, enabling the state to tackle major legal battles against some of the largest corporations in the U.S.
On Wednesday, Texas filed new lawsuits against 3M, Corteva, and DuPont, alleging the companies hid the health and environmental risks of toxic “forever chemicals” known as PFAS. This case, handled by attorneys from Mark Lanier’s Lanier Law Firm and Kelley Drye & Warren, seeks to hold these corporations accountable for allegedly deceiving Texans by selling products without disclosing critical safety information.
Attorney General Paxton made it clear that Texas will continue to hold companies accountable. “We are taking action to penalize these companies and hold them responsible for deceiving Texans into buying consumer products without vital information,” he said.
Despite the large payouts, the Texas Attorney General’s office emphasizes that state law governs contracts with outside counsel, ensuring that fees remain reasonable and in line with the work performed. This year alone, Texas has turned to outside law firms for cases involving significant public interest, such as the lawsuit against asset managers BlackRock, Vanguard, and State Street for allegedly manipulating energy prices through climate activism.
Contracts with these firms have resulted in fees as high as $3,780 per hour or 10% of Texas’ potential recovery. As of now, Texas has signed contracts with a wide range of firms, including Norton Rose Fulbright, which was hired for a biometric privacy lawsuit against Google. Like the Meta case, Texas alleges that Google unlawfully collected biometric data from millions of Texans without their consent, a claim the tech giant has denied.
This trend reflects a broader shift toward state-led efforts to hold corporations accountable for their actions, especially in cases involving consumer protection, environmental harm, and corporate misconduct. The success of these efforts, particularly the historic Meta settlement, may encourage other states to explore similar legal strategies.
Timothy Lytton, a professor at Georgia State University, commented on the growing role of state attorneys general in corporate litigation. “This could mark the beginning of a new chapter in how states address corporate wrongdoing, leveraging civil liability and consumer protection laws to drive accountability.”
In another significant case, DaVita Inc. is in the process of finalizing a settlement with former executive Dennis Kogod, who blew the whistle on the company’s alleged violation of federal anti-kickback laws. Kogod and his attorneys are seeking $14.1 million in attorney fees for their extensive work on the case, which involved over 30,000 hours of litigation. DaVita, however, has contested the fee demand, claiming it is unreasonable given the scope of the settlement.
This case underscores the growing legal costs and stakes associated with corporate accountability, especially in high-profile whistleblower lawsuits.
Texas’ recent legal victories, including the landmark Meta settlement, reflect a rising trend of state-led litigation against major corporations. The state’s strategy of contracting with private law firms on a contingency basis has proved lucrative, resulting in massive legal fees but also in historic settlements that serve as a warning to corporate wrongdoers. As states continue to push for corporate accountability, the legal landscape for U.S. businesses may be facing significant changes.
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