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Lawsuit Alleges Law Firm Leading Bexar County Opioid Litigation Committed 'String-Along Fraud'

Joey Palacios
Texas Public Radio
Martin Phipps, second from right, and his firm are leading Bexar County's Opioid Litigation. MG Marketing Says it is owed $344,000 by the firm for past work.

The San Antonio law firm representing Bexar County and more than a dozen other Texas counties in lawsuits against drug manufacturers is being sued for breach of contract and fraud.

MG marketing says Martin Phipps’ firms — which at various times since 2017 have been known as Phipps Anderson Deacon; Phipps Deacon Purnell; and Phipps Mayes — owe more than $344,000 in work done and costs incurred.

The suit was filed Friday in state district court in Tarrant County.

“You know the work was performed. You owed money. And now you got to pay for what's owed,” said Dave Wishnew, a lawyer representing MG.

According to court documents MG did the work that included direct mail, media campaigns and web and digital marketing for Phipps’ class-action lawsuit, as well as a few things for Martin Phipps’ bar Paramour, which is on the roof of his building near San Antonio’s downtown.

“The Firm confirms that it hired Marketrics (MG) to assist with marketing services related to the Syngenta Corn Litigation and paid Marketrics $4.2 million over the course of two years for those services,” said Gabe Ortiz, a lawyer with Phipps’ firm.

He disputed that the company was used for any other case or that it did work for Paramour. However, a former Paramour employee who wished to remain anonymous said the bar worked with MG.

One of the campaigns was against Syngenta AG, a massive company that cost farmers more than $1 billion when it released genetically modified seeds for use in the U.S. that were not approved by China — losing those farmers access to one of the largest corn export markets. The court approved $1.5 billion in payouts to farmers, much of which were released in 2020.

MG’s marketing materials were used to attract new clients in the case to Phipps’ firm. The work was completed in 2017.

The first year, 2016, invoices were paid on time, then things changed.

Screengrab from Court documents of email exchange between Martin Phipps and MG Marketing founder Matt Devlin
Screengrab from Court documents of email exchange between Martin Phipps and MG Marketing founder Matt Devlin

“Phipps claimed that PAD (Phipps, Anderson, Deacon) could only pay after certain cases, like the Syngenta corn litigation cases, settled,” said Wishnew in court documents.

But the payments never came. Then Phipps “feigned” the firm didn’t know what MG was, said Wishnew.

At this time Phipps’ Vice President of Marketing Jason Reichl — who hired MG — was ousted from the firm and accused of theft. Phipps would later sue him. The court documents in the case are sealed.

“The Firm repeatedly asked Marketrics to provide a complete accounting to support the alleged debt and, to date, Marketrics has been unable or unwilling to do so,” said Ortiz.

The court documents do include invoices. It wasn’t clear if Ortiz was saying they had never received them. Ortiz denied the firm had engaged in any kind of “string-along fraud” as the court documents allege.

“However, the Firm has evidence that Marketrics billed the Firm for goods that were never delivered and services that were never performed and intends to bring counterclaims against Marketrics to resolve this matter in court,” said Ortiz.

TPR reported last week that several former employees left citing an abusive work environment. Several mentioned that the firm was hit hard by the pandemic. The staff took pay cuts and the firm’s jet was repossessed.

Wishnew said the timing of MG’s lawsuit was unrelated to the ongoing controversy at the firm.

“The hope is that all of this bad press isn't going to make it harder for (MG) to ultimately get paid,” said Wishnew

MG Marketing has less than two dozen employees, and also has been negatively impacted by the COVID-19 pandemic.

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Paul Flahive can be reached at Paul@tpr.org