HomeMy WebLinkAboutResolution - 2022-R0445 - Contingent Fee Contract for Legal Services 10.25.22Resolution No. 2022-RO445
Item No. 5.22
October 25, 2022
RESOLUTION NO. 2022-RO445
WHEREAS, the City intends to pursue claims for monetary damages, declaratory
relief, and other legal remedies ("Damages") against Netflix, Inc., Hulu LLC, Disney DTC LLC,
and other video service providers ("VSPs") as determined for non-payment of franchise fees as
required in the Texas Video Service Providers Act, Texas Utilities Code Sec. 66 (the
"Litigation"); and
WHEREAS, the City's desired outcome in the Litigation is to recover from the VSPs
Damages owed to the City for failure to pay franchise fees and obtain an order requiring the
VSPs to pay the franchise fees going forward, in addition to other relief allowed under the law;
and
WHEREAS, the VSPs deliver video programming to their customers via broadband
internet through wireline facilities located at least partially in the public right of way; and
WHEREAS, the VSPs do not pay franchise fees to the City as required in section
66.005 of the Texas Utilities Code; and
WHEREAS, the City has a substantial need of the legal services of counsel to represent
it in the Litigation; and
WHEREAS, the City requires legal counsel that specialize in complex litigation and
are highly knowledgeable and experienced in the legal issues surrounding the non-payment of
franchise fees by the VSPs; and
WHEREAS, the City now desires to enter into a contingent fee contract ("Contract")
for legal services with McKool Smith, P.C., Ashcroft Sutton Reyes LLC, and Korein Tillery
LLC ("Counselors") to represent the City in the Litigation; and
WHEREAS, Subchapter C of Chapter 2254 of the Texas Government Code ("Chapter
2254") requires that a political subdivision of the State of Texas, including the City, may enter
into a contingent fee contract for legal services only after: (i) the governing body of the political
subdivision has provided written notice to the public stating certain provisions enumerated
within Chapter 2254; (ii) the governing body of the political subdivision approved such contract
in an open meeting called, in part or in whole, for the purposes of considering such contract; and
(iii) the governing body of the political subdivision stated in writing certain findings made by
the governing body upon the approval of such contract; and
WHEREAS, before the contingent fee contract for legal services is effective and
enforceable, the City must receive approval of the Contract by the Office of the Attorney General
of Texas or the Contract is otherwise allowed under Tex. Gov't Code Ch.2254, as amended; and
WHEREAS, the City has caused notice of this resolution, this meeting, and certain
provisions enumerated within Chapter 2254 to be provided to the public in accordance with the
Texas Open Meetings Act and Chapter 2254; and
WHEREAS, the meeting at which this resolution is being considered is an open
meeting called, in part or in whole, for the purpose of considering: (i) the City's need for legal
counsel to represent it in the Litigation; (ii) terms of the Contract; (iii) the competence,
qualifications, and experience of the Counselors; and (iv) the reasons that the Contract is in the
best interest of the City and complies with Chapter 2254; and
WHEREAS, the City Council hereby finds and determines that the adoption of this
resolution is in the best interests of the residents of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK, TEXAS:
SECTION 1. That the recitals contained in the preamble hereof are hereby found to be
true, and such recitals are hereby made a part of this resolution for all purposes and are adopted
as a part of the judgment and findings of the City Council.
SECTION 2. That the City Council hereby finds that: (i) there is a substantial need for
the legal services to be provided in the Litigation; (ii) the legal services to be provided in the
Litigation cannot adequately be performed by the attorneys and supporting personnel currently
employed by the City; (iii) the legal services to be provided in the Litigation cannot reasonably
be obtained from attorneys in private practice under a contract providing only for the payment
of hourly fees, without regard to the outcome of the matter, because of the nature of the Litigation
and without imposing an unnecessary cost and burden on the City's finances; and (iv) the
relationship between the City or the City Council and the Counselors is not improper and would
not appear improper to a reasonable person.
SECTION 3. That based on the findings by the City Council described above, the City
Council hereby authorizes the City Manager to execute a legal services contract with McKool
Smith, P.C., Ashcroft Sutton Reyes LLC, and Korein Tillery LLC, approved as to form by the
City Attorney, effective only upon approval by the Office of the Attorney General of Texas or
as otherwise allowed under Tex. Gov't Code Ch.2254, as amended.
SECTION 4. That it is officially found, determined, and declared that the meeting at
which this resolution is adopted was open to the public and public notice of the time, place, and
subject matter of the public business to be considered at such meeting, including this resolution,
was given, all as required by Chapter 551 as amended, Texas Government Code.
SECTION 5. That the City will pay the Counselors a contingency fee and expenses in
accordance with the rates in Attachment A to this resolution and contingent upon the recovery,
if any, by the City in the Litigation.
SECTION 6. That this Resolution shall take effect immediately from and after its
passage in accordance with the provisions of the Charter of the City of Lubbock, and it is
accordingly so resolved.
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TRAY VA rA�rOR
ATTEST:
Reb ca Garza, City Sec-retk2�
APPROVED AS TO CONTENT:
W. Jarrett Atkinson, City Manager
APPROVED AS TO FORM:
Chad Weaver, City Attorney
ccdocs/RES.Contract-McKool Smith, P.C.
October 10, 2022
ATTACHMENT A
The fees for legal services provided by the Counselors in connection with the Litigation are
contingent upon the recovery by the City of Damages in the Litigation and will be paid out of
such recovery, if any, as follows:
If the City obtains a recovery and collection on behalf of the City before a trial or appeal, the
Counselors will receive attorneys' fees in the amount of Thirty Percent (30%) of the gross
recovery. If recovery for the City occurs after (1) the beginning of trial (at the beginning of
opening argument), or (2) upon appeal of any judgment, the Counselors will instead receive
attorneys' fees in the amount of the Thirty -Three and One -Third (33 1/3%).
The Counselors will advance all costs associated with the Litigation. The City agrees to
reimburse the Counselors for all reasonable costs out of its share of the gross recovery.
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Resolution No. 2022-RO445
AGREEMENT FOR PROVIDING
LEGAL SERVICES TO CITY OF LUBBOCK
IN CONNECTION WITH RECOVERY OF FRANCHISE FEES
The City of Lubbock, Texas ("City") and the law firms of McKool Smith, P.C., Korein
Tillery LLC, and Ashcroft Sutton Reyes LLC (collectively, "Counselors") enter into this
agreement ("Contract") to provide legal services on behalf of the City, its elected or appointed
officials and employees with such services regarding the matter below. The City and Counselors
shall collectively be referred to as the "Parties."
PROFESSIONAL LEGAL SERVICES
A. Counselors are hereby retained to provide legal representation to the City in
connection with litigation seeking damages, declaratory relief, attorneys' fees, interest and other
appropriate relief from Netflix, Inc., Hulu, LLC, Disney DTC LLC and other video service
providers ("Defendants") as may be decided for the non-payment of franchise fees ("Franchise
Fees," as referenced in Section 66.005, of the Texas Utilities Code, as amended) (collectively, the
"Litigation"). The services shall be referred to as "Professional Legal Services."
B. Counselors hereby agree to perform the Professional Legal Services necessary, in
accordance with the terms of this Contract. This Contract shall be administered on behalf of City
by its City Attorney. At the request of the City Attorney, Counselors will provide case status
reports, and will participate from time to time in both open and closed session briefings of the City
Council.
2. PAYMENT
For the performance of Professional Legal Services and advance of Costs by Counselors,
City agrees to pay Counselors on a contingency fee and reimburse costs out of any recovery as
detailed on Exhibit A which is incorporated herein.
3. RECITALS PURSUANT TO TEX. GOWT CODE CH. 2254
Counselors' further duties in compliance with Tex. Gov't Code Ch. 2254, as amended, are
set out in Exhibit A.
4. TERM
The term of this Contract shall begin 90 days after it is received by the Office of the
Attorney General of Texas ("OAG") pursuant to Tex. Gov't Code Ch. 2254, as amended, unless
it is not approved by that time. Once it is either approved by the OAG, or 90 days have passed, the
Contract shall continue until completion of the Litigation or terminated as provided herein. All
services under this Contract are to be completed timely and in the highest professional manner.
5. TERMINATION
A. The City Attorney may terminate the performance of services at any time, with or
without cause by giving at least ten (10) days written notice to Counselors. The notice must be
delivered by email and by certified mail with return receipt for delivery to the City.
1. Termination Without Cause: (i) if City terminates this Contract without
cause, Counselors shall be paid for the reasonable value of the legal services provided plus
reimbursement for all Costs incurred at the time of termination; (ii) if the City resolves the
Litigation through final settlement, award, or judgment, Counselors shall be paid
Attorneys' Fees pursuant to Exhibit A at the time a Recovery.
2. Termination with Cause: If Counselors fail to satisfactorily perform any
material obligation under this Contract, such failure constitutes a Default. If Counselors
fail to satisfactorily cure a Default within thirty (30) calendar days of receiving written
notice from the City specifying the nature of the Default, the City may terminate this
Contract for cause, in which case compensation and Costs due Counselors, if any, shall be
calculated considering the particular facts and circumstances involved in such termination,
and paid only out of any Recovery.
B. Counselors may withdraw as permitted under the Rules of Professional Conduct of
the State Bar of Texas. The circumstances under which withdrawal is permitted
include the following: (a) the City consents, (b) the City's conduct renders it
unreasonably difficult for Counselors to carry out the employment effectively, (c)
the City fails to pay Attorneys' Fees or Costs as required by this Contract; or (d)
Counselors determine it is not economically feasible for Counselors to perform the
Services. If Counselors properly withdraw from representing the City pursuant to
subparagraph (a)—(c) above or because it is required to do so by the Rules of
Professional Conduct, the City agrees to compensate Counselors for the reasonable
value of the legal services provided, plus reimbursement for Costs. The reasonable
value of legal services shall not exceed thirty-three and one-third percent (33.33%)
of the City's total recovery or, if reimbursed on an hourly basis, shall not exceed the
hourly rates provided in Exhibit A, Section 8.8. In such a situation, both Fees and
reimbursement of Costs will be paid by City to Counselors at the time a Recovery is
collected by the City. If Counselors withdraw from representing City pursuant to
subparagraph (d) above, Attorneys' Fees and Costs due Counselors, if any, shall be
calculated considering the particular facts and circumstances involved in such
withdrawal, and only out of any Recovery. Any disputes regarding the reasonable
value of such legal services or Costs shall be mediated by the Judicial Arbitration
and Mediation Services (JAMS).
6. VENUE AND GOVERNING LAW
This Contract is made subject to the Charter and ordinances of the City, as
amended, and all applicable laws of the State of Texas. This Contract is performable in
Dallas County, Texas, and venue for any legal action under this Contract shall lie in Dallas
County, Texas; and in construing this Contract, the laws and court decisions of the State.
Any disputes regarding the Contract including the reasonable value of legal services or
Costs shall be mediated by the Judicial Arbitration and Mediation Services (JAMS) before
any litigation is undertaken.
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7. NO REPRESENTATION OF ANY ADVERSE PARTY
Counselors acknowledge that they are not currently involved in any litigation in which it
represents a party who is adverse to the City, and Counselors agree that they will not undertake
any litigation adverse to the City or to an employee or officer of the City, except with prior
disclosure to and written consent by the City Attorney.
8. CONFLICTS
The City and Counselors acknowledge that other Texas cities and individual government
entities may seek to become named parties in the Litigation and be represented by Counselors. The
City recognizes that there may be potential conflicts or actual conflicts of interest if Counselors
represents other cities in litigation like the Litigation. The City understands that it would be to its
benefit for other parties to become named parties as it may enhance the case and lower the City's
expenses. Accordingly, the City has conferred with the City Attorney and has determined that it is
in its own best interests to waive all potential or actual conflicts of interest which may occur as a
result of Counselors representing other government entities in this or similar litigation. The City
therefore waives all such potential or actual conflicts of interest which may occur because of the
Counselors representing other government entities in this Litigation or similar litigation.
9. REPRESENTATION OF RELATED INTERESTS
Counselors shall have the right to represent other municipalities, or governmental
subdivisions in other video service provider franchise fee actions or similar litigation without the
consent of the City, subject to the Texas Disciplinary Rules of Professional Conduct ("Rules of
Professional Conduct") relating to conflicts of interest.
The City acknowledges and agrees that it is possible that disagreements and differences
may arise between and among Client Group in the future. The City further acknowledges that in
the event such differences do arise, Counselors cannot assist or be involved in their resolution, and
they agree not to seek Counselors' involvement or assistance in resolving any differences.
If the City and any other Client Group member cannot resolve their differences and
Counselors determine that those differences create a conflict of interest that would materially limit
their ability to provide competent and diligent representation to each Client Group member in this
Litigation, then the City agrees that Counselors may withdraw for cause from representing City as
necessary to resolve the conflict of interest. The City further agrees that Counselors may, at their
election, continue to represent other Client Group members after such withdrawal.
The City acknowledges that one of the necessary consequences of joint representation is
the sharing of confidential information concerning the subject matter of the representation where
the disclosure is for the benefit of the client. Counselors will treat as confidential and not disclose
confidential communications between Counselors and the City outside the Client Group. Except
for disclosure to the Client Group, all other confidential information about this Litigation provided
by the City will be protected, except to the extent required by applicable rules of professional
conduct or order of a court with proper jurisdiction. The City agrees that no such communication
or any other confidential information concerning this Litigation will be disclosed outside the Client
M
Group without the informed written consent of the Client Group member that made the
communication or disclosed the information. The City further agrees that material
communications or information that it provides to Counselors, including confidential
communications and information, Counselors may share with the other Client Group members.
The City acknowledges and agrees that if Counselors no longer represent it in this
Litigation as a result of Counselors' withdrawal because of a conflict of interest or other cause,
Counselors may nevertheless use any confidential information they have concerning this Litigation
to the advantage of the remaining Client Group members.
10. CONFLICT OF INTEREST
It is understood and agreed that the Counselors will notify the City in writing of the
potential for any conflict of interest in any legal matter or case within 24 hours of its discovery.
11. NOTICES
Except as otherwise provided in Section 14, any notice, payment, statement, or demand
required or permitted to be given under this Contract by either party to the other may be affected
by email and personal delivery in writing or by mail, postage prepaid. Mailed notices shall be
addressed to the parties at the addresses appearing below, but each party may change its address
by written notice in accordance with this section. Mailed notices shall be deemed communicated
as of three (3) days after mailing.
If intended for City, to:
Chad Weaver, City Attorney
City of Lubbock, Texas
P.O. Box 2000
Lubbock, Texas 79457Email: gweaver@mylubbock.us
If intended for Counselors, to:
Steven Wolens
McKool Smith
300 Crescent Ct., Ste. 1500
Dallas, TX 75201
Email: swolens@mckoolsmith.com
Steven M. Berezney
Korein Tillery LLC
505 N. 7th Street, Ste. 3600
St. Louis, MO 63101
Email: SBerezney@KoreinTillery.com
Austin R. Nimocks
Ashcroft Sutton Reyes LLC
919 Congress Ave., Ste. 1325
Austin, TX 78701
Email: animocks@ashcroftlawfirm.com
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12. LEGAL SERVICES SPECIFICALLY EXCLUDED
Counselors do not agree to provide any representation beyond that described in Section
I.A. above. If the City wishes to retain Counselors to provide any legal services not provided under
this Contract, a separate written agreement between Counselors and the City will be required.
13. AUTHORITY OF COUNSELORS
Counselors may execute, at his/her option, all reasonable and necessary court documents
connected with the handling of the Litigation. If the City Attorney gives Counselors sufficient
notice of documents he/she wishes to jointly sign with Counselors, Counselors will undertake good
faith efforts to accomplish same.
14. ATTORNEYS' LIEN
Counselors will have a lien to the fullest extent of Texas law for attorneys' fees and costs
on all claims and causes of action that are the subject of its representation of the City under this
Agreement and on all proceeds of any recovery collected (whether by settlement, Court judgment,
or otherwise).
15. COMMUNICATIONS
The City designates Chad Weaver, the City Attorney, or any other person designated by
the City Attorney as the authorized representative of the City to direct Counselors. Correspondence
will be forwarded to him at cweaver@mylubbock.us. Counselors designate Steven Wolens to be
the primary individual to communicate with the City regarding the subject matter of Counselor's
representation of the City under this Agreement. Correspondence will be forwarded to him at
swolens@mckoolsmith.com.
16. NO ASSIGNMENT
Counselors shall not sell, assign, transfer, or convey this Contract, in whole or in part,
without the prior written consent of the City Attorney.
17. COUNTERPARTS
This Contract may be executed in any number of counterparts, each of which shall be
deemed an original and constitute one and the same instrument. If this Contract is executed in
counterparts, then it shall become fully executed only as of the execution of the last such
counterpart called for by the terms of this Contract to be executed. Any signature delivered by a
party by facsimile or electronic transmission (including email transmission of a PDF image) shall
be deemed to be an original signature hereto.
18. CAPTIONS
The captions to the various clauses of this Contract are for informational purposes only and
shall not alter the substance of the terms and conditions of this Contract.
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19. ENTIRE AGREEMENT: NO ORAL MODIFICATIONS
This Contract (with all referenced Exhibits, attachments, and provisions incorporated by
reference) embodies the entire agreement of both parties, superseding all oral or written previous
and contemporary agreements between the parties relating to matters set forth in this Contract.
Except as otherwise provided elsewhere in this Contract, this Contract cannot be modified without
written supplemental agreement executed by both parties.
20. MISCELLANEOUS
City recognizes that no result has been guaranteed by Counselors, and that this Contract is
not based upon any such promise or anticipated result. City further acknowledges that it is
exclusively responsible for all personal liability, or potential liability, awarded against it by a court
because of a claim, counterclaim, protest suit, or otherwise, and that by undertaking to represent
City pursuant to this Contract, Counselors assume none of City's joint and/or individual liability.
21. AUTHORITY TO SETTLE LITIGATION
City does not relinquish authority or responsibility through this Contract to settle the
Litigation. City has the sole authority to settle the Litigation on behalf of the City and its citizens,
and Counselors shall inform the City Attorney of all settlement offers.
22. APPROVAL BY THE OFFICE OF THE ATTORNEY GENERAL OF TEXAS
The Parties agree that this Contract is not effective until approved by the Office of the
Attorney General of Texas ("OAG") or as otherwise allowed under Tex. Gov't Code Ch. 2254, as
amended.
23. COMPLIANCE WITH CERTAIN STATE LAW
1. Anti -Boycott of Israel. Each Firm certifies that it is not currently engaged
in, and agrees for the duration of this Agreement not to engage in, the boycott of Israel as
defined by Section 808.001 of the Texas Government Code.
2. Anti -Boycott of Energy Companies. Each Firm certifies that the Firm is not
currently engaged in, and agrees for the duration of this Agreement not to engage in, the
boycott of energy companies as defined by Section 809.001 of the Texas Government
Code.
3. Anti -Boycott of Firearm Entities or Firearm Trade Associations. Each
Firm certifies that the Firm does not have a practice, policy, guidance, or directive that
discriminates against a firearm entity or firearm trade association, or will not discriminate
against a firearm entity or firearm trade association for the duration of this Agreement, as
defined by Section 2274.001 of the Texas Government Code.
4. Certification of No Business with Foreign Terrorist Organizations. For
purposes of Section 2252.152 of the Texas Government Code, Each Firm certifies that, at
the time of this Agreement neither Firm nor any wholly owned subsidiary, majority -owned
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subsidiary, parent company or affiliate of Firm, is a company listed by the Texas
Comptroller of Public Accounts under Sections 2252.153 or 2270.0201 of the Texas
Government Code as a company known to have contracts with or provide supplies to a
foreign terrorist organization.
EXECUTED this the 25th day of October 2022.
ATTEST:
4464-y-fml
Rebecca Garza, City Secretary
APPROVED AS TO FORM & LEGALITY:
44a--A�4�
Chad Weaver, City Attorney
CityAtt:Chad/Contracts-Agreements/McKool Smith, P.C.
October 10, 2022
COUNSELORS
C L H, P.C.
St en D. Wolens
KOREIN TILLERY, LLC
Steven M. Berezney
SUTTOK REYES LLC
I
Austin R.
CITY OF LUBBOCK, TEXAS
W. J Atkinson, Cit ager
October 25, 2022
Date
7
EXHIBIT A
COMPENSATION AND COSTS
1. Compensation ("Attorneys' Fee(s)").
The employment of Counselors will be on a contingency fee basis. Specifically, if the City
obtains a recovery and collection on behalf of the City before a trial or appeal, Counselors will
receive attorneys' fees in the amount of Thirty Percent (30%) of the Gross Recovery. If recovery
for the City occurs after the beginning of trial (at the beginning of opening argument) or 2) upon
appeal of any judgment, Counselors will instead receive attorneys' fees in the amount of the Thirty -
Three and One-third percent (33 1/3 %) ("Attorneys' Fee(s)" or "Contingency Fee(s)"). This
Attorneys' Fee is not set by law but is negotiable between the City and Counselors.
Counselors shall be entitled to such Contingency Fees regardless of whether the recoveries
are a result of an accounting, settlement, judgment, litigation, ordinance, legislation, voluntary
payment, credit, refund, adjustment, offset, reduction in future charges, protest suit, or some other
method or source. Counselors' Contingent Fee shall be allocated among City and any other
participants in the recovery in proportion to the gross amount of that recovery by each participant.
City and Counselors acknowledge that the litigation may result in the payment of either or
both of Franchise Fees for periods before the effective date of any final court judgment, settlement
agreement, or other document establishing the right to a recovery (such effective date hereafter
referred to as the "Effective Date" and such Franchise Fees for periods before the Effective Date
hereafter referred to as "Historical Franchise Fees") and Franchise Fees for periods on or after the
Effective Date ("Prospective Franchise Fees").
City and Counselors also acknowledge that resolution of the Litigation might discount
Historical Franchise Fees for Prospective Franchise Fees. If the amount of Historical Franchise
Fees paid from a source by judgment, agreement, or otherwise is less than the sum of what that
source would have paid, in full, in Franchise Fees for all fiscal quarters preceding the Effective
Date (the "Benchmark Franchise Fees"), then Counselors shall be entitled to Attorneys' Fees in
the amount of 33 1/3 % of the gross amount of that source's payments of Prospective Franchise
Fees until the total Franchise Fees paid by that source equal the Historical Franchise Fees.
However, Counselors shall not, in any circumstance, collect from the City more than 33 1/3% of
the City's total recovery.
The sole contingency upon which the City will pay Fees to Counselors is a recovery and
collection on behalf of the City, whether by settlement, court judgment, or otherwise.
2. Gross Recovery.
The term "Gross Recovery" shall include, without limitation, the then present value of any
monetary payments agreed or ordered to be made and the fair market value of any property or
services agreed or ordered to be made and the fair market value of any property or services agreed
or ordered to be transferred or rendered for the benefit of the City by the adverse parties to the
Litigation or their insurance carrier(s), whether by settlement, court judgment, or otherwise.
If payment of any part of the relief to the City will be in the form of property and services
("In Kind"), the value of such property and services for purposes of calculating the Gross Recovery
shall be calculated based on the present value, as of the time of the settlement or final court
judgment, of the In Kind relief to be received thereafter. The Attorneys' Fees for the value of the
In Kind relief shall be paid out of any initial lump -sum payment by the defendants. If the initial
lump sum payment is insufficient to pay the Attorneys' Fees in full, the balance will be paid from
subsequent payments on the recovery before any distribution to the City.
If the Parties disagree with respect to the value of any In Kind relief, they will proceed as
follows: Within thirty (30) days each party will select an appraiser qualified to conduct an appraisal
of the value of the In Kind relief. Each Party's selected appraiser will thereafter meet and confer.
If resolution of the dispute is not reached within sixty (60) days of the initial meet and confer, the
appraisers will select a third qualified appraiser within fifteen (15) days. The third appraiser's
valuation will be final and binding on the Parties.
Notwithstanding the foregoing, if there is no monetary recovery and the City receives In
Kind relief, Attorneys' Fees will be based on the value of the In Kind relief, which will be
determined through the mutual agreement of the Parties. If the Parties disagree with respect to the
values of any In Kind relief, they will proceed with an appraisal process as set forth above. If there
is no monetary recovery, all Attorneys' Fees and Costs due to Counselors under this Contract shall
be paid from the City's funds at the time of recovery and collection.
3. Costs.
It will be necessary for Counselors to incur and advance certain court costs and other types
of expenses for the City ("Costs"). These Costs and other expenses may include, but are not limited
to, the following: filing and service fees; costs of investigative services; travel expenses (including
air fare, ground transportation, vehicle mileage, lodging, and meals); deposition expenses and
court reporters fees; outside trial services providers; trial equipment rental and operation fees;
preparation of exhibits and graphics; the costs of briefs and transcripts on appeal, and
miscellaneous copying, postage, shipping, and courier expenses. In addition, it will be necessary
to employ expert witnesses and Counselors, with prior approval from the City, may employ and
pay these expert witnesses, and such expenditures shall be included within Costs.
The City agrees to reimburse Counselors for all reasonable Costs out of its share of the
Gross Recovery, after the payment of Attorneys' Fees specified in Sections 1 and 2 above.
The City understands that Counselors may incur certain expenses, including, for example,
expenses for travel, experts, and copying that jointly benefit multiple cities in the Litigation. The
City agrees that Counselors may allocate such expenses among such cities based on their pro rata
share of the relief obtained, or on any other reasonable basis of which all affected clients are fully
informed.
In some instances, it may be necessary for Counselors to retain special outside counsel to
assist on matters other than prosecuting the City's claims. Examples of such instances include: a
defendant may seek bankruptcy protection; a defendant may attempt to fraudulently transfer some
of its assets to avoid paying the City's claim; a complex, multi -party settlement may require an
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ethics opinion from outside counsel; or a separate lawsuit may need to be filed against a
defendant's insurance company. The City agrees that Counselors, with written permission of the
City, may retain such special outside counsel to represent the City when Counselors deem such
assistance to be reasonably necessary. In such an instance, the fees of such special outside counsel
shall be advanced by Counselors, shall be deemed a part of Costs, and as such shall be reimbursed
to Counselors by the City from its share of the Gross Recovery provided that (1) the City finds that
such costs were reasonable, proper, necessary, and were actually incurred on behalf of the City,
and (2) such costs were in compliance with, and do not exceed, the rates and limits provided in
Section 8.8 of Exhibit A. If there is no recovery, Counselors will be solely responsible for payment
of the Cost.
McKool Smith, P.C.'s (McKool) obligation to incur and advance Costs, on behalf of (a) the
City, and (b) all other Texas municipalities, or government subdivisions joined in the Litigation
(regardless of whether they are later severed or dismissed from the Litigation) or with similar
claims represented by Counselors is capped at a total of $480,000. All Costs over and above
$480,000 that would otherwise be advanced or incurred by McKool will be advanced and incurred
by Korein Tillery LLC.
4. Application for Attorneys' Fees.
The City and Counselors intend to seek an order for payment by Defendants of the City's
Attorneys `Fees and Costs (as defined in Sections 1-3 above), if the City prevails, in whole or in
part, in the Litigation. The City agrees to use its best efforts to support any such application.
If the amount of the Attorneys `Fees awarded and collected from a court order regarding
Attorneys `Fees and Costs exceeds the amount called for under the contingency fee calculation in
Section 1 of Exhibit A, Counselors shall be entitled to the amount of the Attorneys' Fee awarded
and collected from the Defendants as a reasonable fee, in lieu of payment by the City of the
Attorneys' Fee. If, however, the amount of the Attorneys' Fee awarded and collected from a court
order regarding Attorneys' Fees and Costs is less than the amount as calculated under the
Contingency Fee, Counselor's Attorneys' Fee shall remain as calculated by the Contingency Fee
calculation in Paragraph 1 of Exhibit A, and, in that instance, the City may direct that the statutory
attorneys' fee award be paid directly to Counselors by the Defendants, and the City shall pay the
difference between the Contingency Fee and the attorneys' fee awarded out of the City's recovery
in the Litigation.
Reasonableness.
The City and Counselors have discussed the reasonableness of the contingency fees
provided for in this Contract, as opposed to an hourly rate, a fixed fee, quantum merit, or some
other possible basis for calculating the Attorneys' Fees to be paid to Counselors. The City and
Counselors agree that under all the circumstances a contingency fee is the most reasonable and
equitable way to compensate Counselors in light of the effort required, the risks to be undertaken
in the Litigation, and other applicable factors. The City and Counselors further understand that the
substantial effort required will not be compensated if there is no recovery. Therefore, the City
agrees that it will not contest the reasonableness or fairness of this contingency fee contract.
10
6. Possible Efforts of Defendants to Invalidate Agreement.
The City and Counselors are aware that, in the past, defendants in litigation involving
public entities have challenged and sought to invalidate contingency fee arrangements between
public entities and outside counsel. The City and Counselors believe that any such challenges to
this Contract would lack merit and that this contingency fee arrangement as set forth above is valid
and in the public interest. The City agrees to join Counselors in opposing any such challenge.
However, if this contingency fee contract is found to be invalid, Counselors agree to continue to
represent the City. Under said circumstances, if there is a recovery, Counselors shall be
compensated based on the reasonable value of its legal services and will be reimbursed for Costs.
If there is no recovery, the City will owe nothing for Attorneys' Fees or Costs.
7. Division of Attorneys' Fees.
Counselors may divide the Attorneys' Fees received for the legal services provided under
this Contract with other attorneys or law firms retained as associate counsel and approved by the
City in writing. The terms of the division, if any, will be disclosed to the City. The City is informed
that, under the Rules of Professional Conduct of the State Bar of Texas, such division may be made
only with the City's written consent after a full disclosure to the City in writing that a division of
Attorneys' Fees will be made, the identity of the lawyer or law firms involved, the basis upon
which Attorneys' Fees will be divided, and of the terms of such division. The City will not
unreasonably withhold approval of associate counsel recommended by Counselors or
unreasonably refuse to consent to a proposed division of Attorneys' Fees among counsel.
8. Recitals Pursuant to Tex. Gov't Code Ch. 2254.
8.1 Counselors shall keep current and complete written time and expense records that
describe in detail the time and money spent each day in performing the contract, as
required under Tex. Gov't Code § 2254.104(a).
8.2 Counselors shall permit the governing body or governing officer of the City, the
attorney general, and the state auditor, or other officials as appropriate, to inspect
or obtain copies of the time and expense records at any time on request, as required
under Tex. Gov't Code § 2254.104(b).
8.3 On conclusion of the matter for which Counselors were obtained, Counselors shall
provide the City with a complete written statement that describes the outcome of
the matter, states the amount of any recovery, shows the Counselors' computation
of the amount of the contingent fee, and contains the final complete time and
expense records, as required under Tex. Gov't Code § 2254.104(c). The complete
written statement required under this section is public information subject to
disclosure under Tex. Gov't Code § 2254.104(d).
8.4 All time and expense records required herein are public information subject to
required public disclosure under Texas Government Code Chapter 552.
Information in the records may be withheld from a member of the public under
Section 552.103 only if, in addition to meeting the requirements of Section 552.103,
the City Attorney determines that withholding the information is necessary to
II
protect the City's strategy or position in pending or reasonably anticipated
litigation. Information withheld from public disclosure shall be segregated from
information that is subject to required public disclosure. Public disclosure may not
be withheld, and is required, regarding the written statement required by Tex. Gov't
Code § 2254.104(d).
8.5 Any subcontracted legal or support services performed by a person who is not a
contracting attorney, partner, shareholder, or employee of Counselors is an expense
subject to reimbursement only in accordance with Tex. Gov't Code § 2254.105(4).
8.6 The method for payment of litigation and other expenses and, if reimbursement of
any expense is contingent on the outcome of the matter or reimbursable from the
amount recovered in the matter, whether the amount recovered for purposes of the
contingent fee computation is the amount obtained before or after expenses are
deducted, as required under Tex. Gov't Code § 2254.105(3).
8.7 The amount of the contingent fee and reimbursement of expenses under the
Contract will be paid and limited in accordance with Tex. Gov't Code
§ 2254.105(5).
8.8 Counselors' contingent fee is limited to the lesser of 1) the contingent fee set forth
in paragraph 1. above or 2) four times Counselors' base fee, as that term is used in
Tex. Gov't Code § 2254.106.
Because of the expected difficulties in performing the work under this Agreement,
the amount of expenses expected to be risked by Counselors, the expected risk of
no recovery, and the expected long delay in recovery, a reasonable multiplier for
the base fee in this matter is four. Counselors' reasonable hourly rate for the work
performed under the Agreement is $990 an hour for principals and partners of any
members of the three Counselors `firms, $855 for of counsel/senior counsel, $795
an hour for senior level associates practicing 10 years or more; $550 per hour for
other attorneys, and $325 per hour for paralegals or law clerks consistent based on
the reasonable and customary rate in the relevant locality for the type of work
performed and on the relevant experience , demonstrated ability, and standard
hourly billing rate, if any, of the person performing the work, as required under
Tex. Gov't Code §2254.106(a). These rates apply to the subcontracted work
performed, if any, by an attorney, law clerk, or paralegal. The base fee will be
computed pursuant to Subchapter C, Chapter 2254 of the Texas Gov't Code by
multiplying the number of hours the attorney, paralegal or law clerk worked in
providing legal or support services for the City times the reasonable hourly rate for
the work performed by the attorney, paralegal or law clerk. The base fee is
computed by adding the resulting amounts. The computation of the base fee does
not include hours or costs attributable to work performed by a person who is not
employed by Counselors.
12
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
1of1
Complete Nos. 1- 4 and 6 if there are interested parties.
OFFICE USE ONLY
Complete Nos.1, 2, 3, 5, and 6 if there are no interested parties.
CERTIFICATION OF FILING
Certificate Number:
1 Name of business entity filing form, and the city, state and country of the business entity's place
of business.
2022-955157
Ashcroft Sutton Reyes LLC
Austin, TX United States
Date Filed:
11/14/2022
2 Name of governmental entity or state agency that is a party to the contract for which the form is
being filed.
City of Lubbock
Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
2022-RO445
To provide legal representation to the city in connection with litigation seeking damages, declaratory relief, attorneys' fees, interest
& other appropriate relief.
4
Name of Interested Party
City, State, Country (place of business)
Nature of interest
(check applicable)
Controlling
I Intermediary
Ashcroft, John
Austin, TX United States
X
5 Check only if there is NO Interested Parry. ❑
6 UNSWORN DECLARATION
My name is Austin R. Nimocks and my date of birth is
My address is 919 Congress Ave., Ste. 1325 Austin TX 78701 USA
(street) (city) (state) (zip code) (country)
I declare under penalty of perjury that the foregoing is true and correct.
Executed in Travis County, State of Texas on the 14th day of November 20 22
(month) (year)
Signature of authorized agent of contracting business entity
(Declarant)
Forms provided by Texas Ethics commission www.ethics.state.tx.us Version V3.5.1.eb87ef42
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
lofl
Complete Nos. 1- 4 and 6 if there are interested parties.
OFFICE USE ONLY
Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties.
CERTIFICATION OF FILING
Certificate Number:
12022-954002
i Name of business entity filing form, and the city, state and country of the business entity's place
of business.
Korein Tillery, LLC
Saint Louis, MO United States
Date Filed:
11/10/2022
2 Name of governmental entity or state agency that is a party to the contract for which the form is
being filed.
City of Lubbock
Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
2022-RO445
To provide legal representation to the city in connection with litigation seeking damages, declaratory relief, attorneys' fees, interest
& other appropriate relief.
4
Name of Interested Party
City, State, Country (place of business)
Nature of interest
(check applicable)
Controlling
Intermediary
Tillery, Stephen
St. Louis, MO United States
X
5 Check only if there is NO Interested Party. ❑
6 UNSWORN DECLARATION
My name is and my date of birth is
My address is
(street) (city) (state) (zip code) (country)
I declare under penalty of perjury that the foregoing is true and correct.
Executed in County, State of on the day of , 20
(month) (year)
i
Signature of authorized agent oVontracting business entity
(Declarant);
corms provided by Texas Ethics Commission www.ethics.state.tx.us Version V3.5.1.dlb92728
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
lofl
Complete Nos. 1- 4 and 6 if there are interested parties.
OFFICE USE ONLY
Complete Nos.1, 2, 3, 5, and 6 if there are no interested parties.
CERTIFICATION OF FILING
Certificate Number:
1 Name of business entity filing form, and the city, state and country of the business entity's place
of business.
2022-954323
McKool Smith, P.C.
Dallas, TX United States
Date Filed:
11/10/2022
2 Name of governmental entity or state agency that is a party to the contract for which the form is
being filed.
City of Lubbock, Texas
Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
2022-RO445
to provide legal representation to the city in connection with litigation seeking damages, declaratory relief, attorneys' fees, interest
& other appropriate relief.
4
Nature of interest
Name of Interested Party
City, State, Country (place of business)
(check applicable)
Controlling
Intermediary
Moore, Ashley
Dallas, TX United States
X
Johnson, Christopher
New York, NY United States
X
Fritz, Michael
Dallas, TX United States
X
Cruciani, Gary
Dallas, TX United States
X
Sochia, David
Dallas, TX United States
X
Manley, Robert
Dallas, TX United States
X
Campbell, John
Austin, TX United States
X
5 Check only if there is NO Interested Party. ❑
6 UNSWORN DECLARATION
My name is and my date of birth is
My address is 300 Crescent Court, Suite 1500 Dallas TX 75201 USA
(street) (city) (state) (zip code) (country)
declare under penalty of perjury that the foregoing is true and correct.
Executed in Dallas County, State of Texas on the10th day of November20 22
(month) (year)
Signature of authorized agent of contracting business entity
(Declarant)
Forms orovided by Texas Ethics Commissinn www_pthirs ctatp tY i is varein , vo r; , Al ti0l)700