New documents uncovered through an open records request provide fresh details about the millions of dollars a San Francisco law firm stands to gain if it prevails in a controversial climate lawsuit targeting oil and gas companies. These revelations raise even more questions about the Minnesota attorney general’s mysterious engagement with this particular law firm for the state’s climate lawsuit, as the records disclosed that their relationship was made official months before any notice was made public. What’s motivating this curious lack of transparency? Let’s dive in.
Sher Edling, the California law firm representing many of the municipalities and states that have filed climate change lawsuits against energy companies, could potentially earn hundreds of millions of dollars representing the state of Minnesota in its own climate tort case.
In response to an open records request, the Minnesota Office of Management and Budget was compelled to release a copy of the agreement between the state attorney general’s office and Sher Edling. The document details the significant financial stakes in the case and raises important questions about how and why Sher Edling was hired by the state.
A Potential Windfall for the Lawyers
The contract between the Minnesota attorney general’s office and Sher Edling shows that the agreement was made on a contingency fee basis, meaning that the law firm will only receive a sizeable amount of the damages awarded should it win or settle the case. This is similar to agreements that outside law firms representing the states and municipalities in a majority of other climate change lawsuits have reached. And, as with other agreements, Sher Edling’s contract with Minnesota could pay out in the millions of dollars:
“Subject to the modifications provided in [sic] paragraphs 7 below, payment for legal services covered by this Agreement shall be based on the following contingency fee percentage of the dollars recovered in this case: Special Attorneys shall be paid 16.67% of the first $150 million recovered, and 7.5% for any portion greater than $150 million. The recovery of fees is based on a percentage of the net sum recovered by the State of Minnesota, after deducting reimbursable costs…” (emphasis added)
In other words, that’s about $25 million if $150 million were recovered – plus 7.5 percent should the state be awarded anything over that amount.
When announcing the lawsuit last summer, Minnesota Attorney General Keith Ellison was coy about how much money the state could receive in a settlement. He refused to put a dollar figure on the damages he was seeking but told reporters, “[I]t’s going to be a lot.” Ellison then likened the case to Minnesota’s 1998 settlement with the tobacco industry, in which the state received $7 billion.
If Sher Edling helps the state to receive a similar-sized settlement in this case, the law firm could take home up to $538 million.
Why The Secrecy with Sher Edling?
Court documents first revealed that Sher Edling was working with Ellison’s office in late December 2020, when filings made by the attorney general’s office requested that the firm’s managing partners and namesakes, Vic Sher and Matt Edling, be allowed to appear on behalf of the state in this case.
While this was the first public acknowledgement of Sher Edling’s involvement in the case, the contract shows that they had been working with the attorney general’s office since September. This tight-lipped approach demonstrates a continued lack of transparency from the attorney general’s office regarding the genesis of this lawsuit. As the contract between the two parties lays out clearly, by the time those court documents were filed in December, Sher Edling had already been involved in Ellison’s case for several months.
Though the contingency fee agreement clears up some questions about what Sher Edling stands to gain from the lawsuit, questions as to why the Minnesota attorney general’s office thought it was necessary to hire the firm in the first place – and why it tried to keep the agreement under wraps – remain unanswered.
AG Ellison: I Need Attorneys. Bloomberg: What About My Guys?
In the agreement, one of the reasons cited by Ellison’s office for hiring an outside law firm to support the state’s climate lawsuit is because the Minnesota attorney general office doesn’t have the manpower to bring the case on its own. Or, so it claims. According to the agreement:
“WHEREAS, climate change is a growing economic, environmental, and public health crisis that has been exacerbated by defendants’ campaign of deception; WHEREAS, the Minnesota Attorney General’s Office does not have sufficient resources to pursue an action to combat the climate change crisis or defendants’ campaign of deception on its own.” (emphasis added)
However, Ellison’s office has been receiving help on this specific front for more than a year.
In 2019, the Minnesota attorney general’s office hired two Special Assistant Attorneys General from the New York University School of Law’s State Energy & Environmental Impact Center. Initially funded by a $5.6 million grant from billionaire environmentalist Michael Bloomberg, the program supports state attorneys general in “defending and promoting clean energy, climate and environmental laws and policies.” In practice, law fellows from the program have supported climate litigation targeting energy companies in several attorneys general offices, such as New York, Washington, D.C. and Massachusetts.
When applying to receive SAAGs from the program in March 2019, Ellison stated that his office was “supporting state-led efforts to investigate Exxon Mobil” – one of the defendant companies in Minnesota’s climate lawsuit – and expressed his hope that the office could “expand its role” with the fellows’ help. (emphasis added)
Ask and you shall receive: Peter Surdo, the first SAAG Ellison’s office received, began working for Ellison’s office in June 2019. Leigh Currie, the second SAAG Ellison’s office was granted from the NYU program, started to work for the office in September of that year. And, apparently, these two immediately went to work on the state’s climate lawsuit.
Speaking at an event after the announcement, Michael Noble, executive director of the local green group, Fresh Energy, which actually lobbied Ellison’s office to file a climate lawsuit against energy companies in the first place, gushed over how involved the two SAAG’s were on Minnesota’s climate lawsuit:
“Attorney General Keith Ellison started considering this possibility as early as the fall of 2019, and attorney Leigh Currie and Pete Surdo have basically been working on this full-time over the last few months.” (emphasis added)
In turn, Ellison was effusive in his praise of the activist group, thanking Fresh Energy for their “excellent, excellent work” when announcing his office’s climate change lawsuit.
Turning to San Francisco for Experts on Minnesota Law
In its contract for Sher Edling, the Minnesota attorney general explains that one of the reasons that the office is turning to the San Francisco-based firm to litigate the climate lawsuit is because of their expertise:
“The specific experience of the individual attorneys identified by Special Attorneys to handle this Case in the Special Attorneys’ Response to Request for Qualifications is material to the Attorney General’s decision to select them.”
However, it isn’t clear what expertise two California attorneys have in Minnesota consumer protection law. While Sher Edling has brought several climate change cases on behalf of municipalities and states across the country, they have yet to win any. Moreover, the two have no experience whatsoever in Minnesota consumer protection law, which is what the state’s climate lawsuit rests on. Knowing this, one is led to think that Attorney General Ellison may very well be placing his eggs in the wrong basket.
Additionally, Ellison already has staff dedicated to pursuing consumer fraud cases. According to its budget numbers, the state attorney general’s office is one of the top ten largest law firms in the state and has handled complex litigation successfully against major companies in the past. That being the case, it’s curious what “experience” Ellison is looking forward to Sher Edling drawing on in the case because it sure doesn’t seem like it’s the law at its core.
Keeping The Contract Under Wraps?
In an attempt to potentially avoid scrutiny, Ellison’s office did not willingly make its contract with Sher Edling available to the public – an act of obfuscation that runs contrary to the principles of transparency that are supposed to govern the process of hiring outside counsel when the state – and its taxpayers – could be on the hook for fees if the case is unsuccessful.
Minnesota has “sunshine” legislation that requires legislative approval of most contingency fee contracts. For example, when the attorney general’s office filed a lawsuit against JUUL in December, its initial press release mentioned that two law firms had been hired as outside counsel and explained the process by which the contract was approved.
However, it took a public records request and subsequent litigation before the attorney general’s office released its contract with Sher Edling. What’s more, despite the contract now being available to the public, Ellison’s office has yet to post its agreement with Sher Edling on its website or otherwise publicly announce his partnership with the law firm.
The connections between Vic Sher and Ellison aren’t new—the two appeared together on a panel discussion – which was hosted by Michael Noble’s Fresh Energy – focusing on climate litigation more than a year ago. This existing, public relationship raises the question: Why go to so much trouble to hide this contract?
More Questions Remain
The release of the contract between the Minnesota attorney general’s office and Sher Edling answers the key question of how much Sher Edling stands to earn should the state win or secure a settlement in its climate lawsuit. At the same time, it brings about more unanswered questions: Why didn’t Ellison make the contract public when they initially retained Sher Edling in September? Why hasn’t Sher Edling represented the state since the beginning? Why didn’t Ellison’s office make a public statement when it brought the California firm on? What makes Sher Edling qualified to represent Minnesota?
The bottom line is that something simply doesn’t add up when it comes to the arrangement between the Minnesota attorney general’s office and the involvement of outside attorneys, whether in the form of Bloomberg-funded lawyers or the law firm Sher Edling. What is clear is the national involvement by outside parties coming into Minnesota to push a particular agenda that will have no impact on climate change but will enrich the trial lawyers driving the case.
