As Texas Attorney General, Ken Paxton often touted the litigation brought by his office against big tech giants. However, the potentially lucrative contracts awarded by Paxton to outside law firms to handle litigation against Google and Facebook could come at a high cost to Texas taxpayers. One of the beneficiaries of these contracts is Zina Bash, the former Senior Counsel in the Office of the Attorney General who now works as a Partner of the Chicago-based law firm Keller Postman.
Founded in 2018, Keller Postman, formerly known as Keller Lenkner, specializes in representing plaintiffs in mass tort, mass arbitration, and class action lawsuits. According to Keller Postman’s website, the firm has represented over 1.4 million clients and obtained recoveries of over $500 million.
Subscribe to The Texas Voice
Have every new edition of The Texas Voice sent direct to your inbox
Keller Postman’s contractual relationship with the Attorney General’s office began in late 2020, as Bash was preparing to leave Paxton’s office. Bash submitted a resignation e-mail to the Attorney General’s office on December 31, 2020, which states that she had informed Paxton of her resignation on December 3, 2020, and that he had asked her to stay on until the end of the year. Bash’s resignation e-mail also informed the office that her last day in the office would be January 4, 2021.
The contract between Keller Lenkner and the Office of the Attorney General related to the Google litigation was signed by Ken Paxton and Keller Lenkner Partner Ashley Keller on December 16, 2020. On February 3, 2021, Keller Lenker issued a press release announcing that Bash had joined the firm as a Partner.
In addition to opening the firm’s Austin office, Bash’s profile on Keller Postman’s website states that she “founded the Public Institutions practice” at the firm and “helps oversee the firm’s mass actions.”
After Bash was hired by Keller Lenkner, Travis Lenkner, who was then managing partner of the firm, told the Southeast Texas Record, “The Office of the Attorney General hired Keller Lenkner without any involvement from Zina Bash and before we ever spoke with Zina about joining our firm. And Zina did not work on the Google case while serving in that office. After Zina announced her departure—and after we had already been retained—we reached out to her because she is an accomplished lawyer and a wonderful person whom several of us have known for more than a decade. Zina then consulted the career ethics officer in the Office of the Attorney General, who confirmed that no legal or ethical bar prevented her from becoming a partner here. We are thrilled to have Zina as part of our growing team.”
In addition to Keller Lenkner, the Office of the Attorney General also retained the Houston-based Lanier Law Firm to handle the litigation against Google. The decision by Paxton to hire outside law firms to handle the litigation against Google raised eyebrows by some. Jeff Mateer, who served as First Assistant Attorney General under Paxton until he resigned from the office after alleging wrongdoing by Paxton, told the Associated Press in 2021, “At the time I left, there was no intention of hiring outside counsel.”
Keller Lenker was again retained by the Attorney General’s office in 2022 to pursue litigation against Meta, the parent company of Facebook. The contract, signed by Paxton on February 14, 2022, designated Bash and Ashley Keller as “lead counsel” from Keller Lenkner on the Facebook litigation. Paxton also retained the Dallas-based law firm McKool Smith to assist with the Meta litigation.
In addition to having been a senior aide to Paxton, Bash’s father has also been a significant donor to Paxton’s campaigns. Dr. Lawrence Gelman, Bash’s father and a prominent physician in Hidalgo County, donated $25,000 to Paxton in 2016, $10,000 to Paxton in 2021, and an additional $10,000 to Paxton in 2022.
The contracts between Keller Postman and the Office of the Attorney General are contingent-fee contracts, meaning that the law firm will only be paid in the event of a financial recovery. According to Texas law, any payment under the contracts will consist of the lesser of the contractual contingent-fee percentage or a formula, known as a lodestar formula, that is based on hours worked by the firm, the hourly rate of the person performing the work, and a “reasonable multiplier” to account for “any expected difficulties in performing the contract, the amount of expenses expected to be risked by the contractor, the expected risk of no recovery, and any expected long delay in recovery.”
Both of Keller Postman’s contracts with the Office of the Attorney General contain a contractual contingent fee of 11 percent of any net recovery and a lodestar multiplier of four.
Texas law requires the base rates used to calculate the lodestar formula for an attorney’s fee award to be the “reasonable and customary” rate for the type of work being performed and the person performing the work.
Keller Postman’s contract for the Meta litigation lists base rates of $945 per hour for work performed by a “Partner, Shareholder, and/or Attorney with 9+ years of litigation experience”, $650 per hour for work performed by “Of Counsel, Senior Associate, and/or Attorney with 6+ years of litigation experience”, $450 per hour for work performed by “Associate (but not Senior Associate),” $275 per hour for work performed by attorneys who are classified as “Document Review Specialists,” and $200 per hour for work performed by paralegals.
With the contract entitling Keller Postman to a lodestar multiplier of four, the firm stands to be paid as much as $3,780 per hour for work performed under the contract.
While the base rates charged by Keller Postman under the contract for work performed by senior attorneys appear to be in line with rates charged by the firm in other litigation, the $275 base rate for document review attorneys does not appear to be a “reasonable and customary” rate as required by Texas law.
A review of job postings for document review attorneys by The Texas Voice showed several job postings advertising document review attorney jobs paying hourly rates ranging from $23 to $40 per hour. Keller Postman’s contract for the Meta litigation could potentially see Texas taxpayers paying as much as $1,100 per hour for work performed by document review attorneys.
The lodestar multiplier of four that Keller Postman is entitled to under its contracts with the Office of the Attorney General also appears far more than what the firm sought in other litigation.
In 2021, Keller Lenkner was part of a group of law firms in a class action lawsuit against the alcohol delivery service Drizly. In that case, the Plaintiffs’ firms, including Keller Lenkner, sought a lodestar multiplier of 1.77. On June 30 of this year, Keller Postman sought a lodestar multiplier of 1.65 in a lawsuit against the online learning website Udemy. These represent multipliers far below the lodestar multiplier of 4 that the firm is entitled to under its contracts with the Office of the Attorney General signed by Paxton.
Under state law, the Attorney General must make a finding that “the legal services 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 matter for which the services will be obtained or because the state governmental entity does not have appropriated funds available to pay the estimated amounts required under a contract providing only for the payment of hourly fees” before the office may enter into a contingent-fee contract for legal services.
Even though large law firms routinely handle complex commercial litigation cases on an hourly fee basis, Paxton made findings in both the Google and Meta litigation that a contingent-fee contract was needed because the legal services could not be reasonably obtained on an hourly fee basis, as opposed to a finding that his office did not have sufficient appropriated funds available to pay outside law firms an hourly fee basis.
Had Paxton made a finding that his office did not have appropriated funds available to pay for the legal services on an hourly fee basis, the Legislative Budget Board would have been required to ratify the finding. However, since Paxton instead made the finding that an hourly fee arrangement could not be reasonably obtained, Paxton was able to avoid having to seek Legislative Budget Board ratification.
Despite only being in business since 2018, Keller Postman has attracted significant controversy since its launch.
In 2019, the firm was disqualified from a lawsuit against Uber after Federal Judge Edward Chen found an impermissible conflict between the firm and Uber. The firm found itself disqualified from a lawsuit against Facebook in 2021, unrelated to the Texas litigation against Meta after Federal Judge Lucy Koh found that the firm had violated the California Rules of Professional Conduct by failing to implement appropriate ethical safeguards after hiring an attorney who previously worked on legal matters for Facebook at his previous firm.
In 2021, Keller Lenkner was singled out by the American Tort Reform Association in its “Judicial Hellholes” report. The report highlighted the firm’s work on mass arbitration actions and raised several potential ethical issues concerning the firm’s mass arbitration work.
Earlier this year, Keller Postman was the subject of two lawsuits filed in Federal Court in El Paso alleging that the firm was responsible for illegal telemarketing calls to cell phones. The lawsuits allege that the telemarketing calls solicited legal representation by Keller Postman in connection with litigation involving water contamination at Camp Lejune. Keller Postman quickly settled both cases.
While neither of the lawsuits alleged a cause of action for barratry against Keller Postman, one of the lawsuits did raise the question of the ethics of the telemarketing, alleging “Keller hired anonymous Joe Doe telemarketer(s) to place solicitation phone calls because Keller is barred by ethics from directly placing unsolicited phone calls on their own behalf.”