To fight soda tax suit, Philadelphia budgets $1.6 million for lawyers

Philadelphia Mayor Jim Kenney’s administration has budgeted $1.6 million to fend off a legal challenge from the beverage industry to the city’s recently approved soda tax. 

Prominent lawyers Mark Aronchick and Ken Trujillo, both former city solicitors, were selected this week to represent the city in its defense.

“The contracts still aren’t final, but they’ve agreed on a rate,” said Kenney spokesperson Lauren Hitt, in an email. “There is an $800,000 cap for both firms. This is a 50 percent discount off their normal rates, and they have also agreed to turn down several major cases in order to focus on the case.”

In court, the city was reportedly caught off-guard by one element of the challenge filed by industry lawyer Shanin Specter. The filing alleges that the levy violates a state provision requiring consumer goods eligible for food stamps – soda and other sugary drinks fall within this classification – to be tax-free.

Meanwhile, anti-tax opponents are grumbling that the selection of the two men constitutes a “no-bid” contract, and are alleging political influence is at play – even though no one would put their name next to the allegation.

City Solicitor Sozi Tulante had served as a partner at Aronchick’s law firm, Hangley Aronchick Segal Pudlin & Schiller, prior to his appointment. Trujillo, a tax lawyer by trade, and his firm, Chamberlain Hrdlicka, contributed $6,700 to Kenney’s campaign. Kenney inherited Trujillo’s campaign operation after the latter scuttled a short-lived mayoral run. Trujillo campaign manager Jane Slusser now serves as Kenney’s chief of staff.

While acknowledging that the contract was not competitively bid out – professional services are exempt under city charter – the Kenney administration rebuffed questions about the lawyers’ selection.

“Both Chamberlain and Hangley Aronchick were selected because they are uniquely qualified to handle the case and, unlike the majority of the big city law firms, they had no conflicts with existing soda industry clients,” Hitt said. “Both Trujillo and Aronchick are former city solicitors and, as a result, are extremely familiar with the relevant state and local law.”

She added that both men worked for large, nationally recognized law firms and had prior contractual relationships with the city that spanned multiple decades and mayoral administrations.

“Both attorneys are familiar to the Law Department attorneys and have worked well with them and will incorporate them into the litigation team,” Hitt said.