Updated March 6

The U.S. Supreme Court on Monday declined to decide a pharmaceutical company's challenge to New Hampshire's hiring of private law firms to investigate manufacturers of opioid medications.

Endo Pharmaceuticals Inc., represented by Lisa Blatt of Arnold & Porter, argued the 14th Amendment's due process clause barred states from outsourcing an investigation and litigation of public claims “to private contingency-fee lawyers who have a substantial personal financial stake in the outcome.”

These arrangements, Blatt said in the petition for review, “hand the reins of government to private lawyers motivated by a potential bounty, depriving defendants of a neutral civil prosecutor devoted to seeking public justice—a due process violation of the most basic sort. What's more, the arrangements create a gross appearance of impropriety that diminishes the public's faith in the civil justice system.”

The New Hampshire Supreme Court had ruled the contingency fee arrangement was constitutional as long as a government lawyer retained control over the investigation and any litigation.

The New Hampshire attorney general retained plaintiffs firm Cohen Milstein Sellers & Toll in June 2015  “to represent it in an investigation and litigation of potential claims regarding fraudulent marketing of opioid drugs.” A second superseding agreement in September 2015 clarified that the retention of Cohen Milstein was to assist the attorney general in that office's opioid investigation.

Last year, Linda Singer, who was leading Cohen Milstein's work with New Hampshire, left the firm for Motley Rice, where she continues to work with New Hampshire. New Hampshire said the retainer agreement transferred with Singer to Motley Rice. Singer currently represents New Hampshire.

The state issued a subpoena to Endo in August 2015 seeking information that included Endo's opioid sales volume in New Hampshire and the company's effort to market opioids for chronic pain, according to Senior Assistant Attorney General Lisa English in her brief opposing high court review.

Endo refused to comply with the subpoena. New Hampshire sued in state court to enforce compliance. The state has taken no other legal action against Endo, English told the U.S. Supreme Court.

English told the justices that state attorneys general for decades have supplemented their limited resources by retaining outside counsel “to assist in investigating and litigating claims on behalf of the states against well-funded corporate defendants who do harm to the states and their citizens.” Courts consistently have upheld those arrangements, she said.

The U.S. Chamber of Commerce, represented by Laura McNally of Chicago's Loeb & Loeb, filed an amicus brief supporting the drug company. The Chamber argued that “the increasing frequency of these types of arrangements across no less than 36 states, as well as various local government entities, has fostered a lucrative cottage industry of bounty-hunter prosecutors, who offer states the promise of large paydays with no risk in exchange for the ability to personally profit from public civil enforcement.”

This story was updated to reflect that Cohen Milstein's retainer agreement with New Hampshire transferred last year to Motley Rice.

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