Tobacco lawyers to Mass.: we'll sue for the whole $2 billion

OverLawyered ^ | 11/4/03 | Walter Olson

[friendly]

Law firms Brown Rudnick Berlack & Israels and Lieff, Cabraser, Heimann & Bernstein now say they'll sue the state of Massachusetts for the whole $2 billion they say they're entitled to -- a 25 percent contingency share of the state's $8 billion tobacco-settlement booty -- rather than accept the measly $775 million they've been awarded in arbitration. The Associated Press says the firms "risk becoming poster children for attorney greed at a time when the profession is already under attack for high damage awards. 'This lawsuit is about greed and it's about selfishness. They should be ashamed of themselves,' said former Maine Attorney General James Tierney, who worked with attorneys general from around the country to help negotiate the $246 billion master settlement."

[friendly]

The economy of the USA would benefit massively from broadbased tort reform to protect us from Trial Lawyers, Inc. parasites. I

[Poohbah]

A contract is a contract.

The lawyers signed on for 25% of the final award. 25% of $8,000,000,000 is $2,000,000,000, not $775,000,000. The state is in default on its justly incurred debts.

If I were considering doing business with the Commonwealth of Massachusetts, this would convince me to not sign the contract.

[friendly]

More from the AP:

The private attorneys who helped Massachusetts win $8.3 billion as part of the 1998 tobacco settlement will square off against their former boss in court this week, seeking the full 25 percent contingency fee included in their original contract.

Although attorneys in every other state have agreed to accept less than what they were contractually owed from the massive tobacco settlement, Massachusetts' attorneys are trying to force the state to live up to the full terms of their agreement for a $2 billion contingency fee.

"This is a breach of contract," said Karen Schwartzman, an independent public relations consultant representing the two law firms -- Brown Rudnick Berlack & Israels, and Lieff, Cabraser, Heimann & Bernstein. "They achieved a spectacular result for the commonwealth, resulting in a huge settlement. There are matters of principle here."

Three other firms that worked for the state have not joined the suit, but could stand to benefit if the court rules in their favor.

The firms were already awarded $775 million through arbitration, but by taking the state to court, they stand to win an additional $1.25 billion -- for a full contingency fee of $2 billion.

But they also risk becoming poster children for attorney greed at a time when the profession is already under attack for high damage awards.

"This lawsuit is about greed and it's about selfishness. They should be ashamed of themselves," said former Maine Attorney General James Tierney, who worked with attorneys general from around the country to help negotiate the $246 billion master settlement. "All the other firms in all the other states waived their underlying contracts, but these people just want more."

Massachusetts Attorney General Tom Reilly, who will represent the state in Suffolk Superior Court this week, declined to comment Monday. Jury selection began last week and opening statements could begin as early as Tuesday.

Within the profession, there has been a conflicted response to the litigation.

"On the one hand, lawyers believe that contingency fees should be upheld. They put a lot of work into it at a time when no one thought they would get anything," said Paul Martinek, editor-in-chief of Lawyers Weekly USA. "On the other hand, they realize that making a stand here could be bad news for them in terms of their public image.

"Maybe this is a case where the law firm ought to suck it up and realize they are going to have to settle for less, as every other firm did."

In 1995, at a time when the tobacco companies had lost few lawsuits and few thought the states had much chance of success holding the industry liable for health costs for tobacco-related illnesses, the five firms agreed to represent Massachusetts in the multistate litigation against the industry in return for 25 percent of whatever the state won.

After the 1998 settlement, the states entered arbitration with the tobacco companies over the amount owed to the states' private attorneys. At the end of this process, it was determined that the tobacco companies would pay Massachusetts' attorneys $775 million over 25 years.

Tierney, who now teaches a course in multistate litigation at Columbia Law School, said there was a clear agreement at the time that the amount determined through arbitration would be the full amount that the lawyers for each state would receive.

Massachusetts' law firms have argued, however, that the state is responsible for the difference between the $775 million in fees they were awarded during arbitration, which will be paid by the tobacco companies, and the full $2 billion they are owed as a contingency fee.

Reilly has blasted this as an "absolutely disgraceful" request that would deplete the state's settlement fund, which has been used for children's health programs and tobacco cessation. Reilly said at the time that state law entitles attorneys to "fair and reasonable fees, but not excessive fees.

[Fee]

I am not a strong supporter of lawyers, however, the issue should be what was the agreement between MA and them? If MA agreed to the $ 2Billion dollar fee and backed out after the public was outraged, then the state is wrong. If there was no written agreement, then the lawyers have nothing to back their claims and are wasting valuable court time.

[Poohbah]

If there was no written agreement, then the lawyers have nothing to back their claims and are wasting valuable court time.

Believe me, EVERYTHING in dealing with a law firm and in dealing with a government entity is in writing.

Bottom line: I advise any business owner to refuse to do business with Massachusetts until this is settled in the attorneys' favor. They may stiff lawyers today; they will stiff every other contractor tomorrow unless this is stopped.

[Fierce Allegiance]

I am certainly not a fan of schlock lawyers & big settlements & jury awards, but the state should keep up it's end of the contract, or it deserves to be sued.

[friendly]

The entire tobacco scam was corrupt from day one. Connected shysters got hundreds of millions in cold cash, while many others lawyers who were not connected were shut out.

[DumpsterDiver]

... said Karen Schwartzman, an independent public relations consultant representing the two law firms... "There are matters of principle here."

I got a good laugh out of that!

[HEY4QDEMS]

"This is a breach of contract," said Karen Schwartzman, an independent public relations consultant representing the two law firms

Breach of contract awards often result in triple damages, the Commonwealth may be wise to take it on the chin and pay up.

[Blood of Tyrants]

One group of thieves calling another group of thieves greedy.

[chatham]

The Greed not only covers the lawyers but the State as well.

People are still dying in the hindreds of thousands from smoking , No Thanks to the State.

[Sgt_Schultze]

I agree, Mass. agreed to a 25% contingency and owes the money. But what jury in Mass. do you think will award the lawyers $2 billion after the state's lawyers finish talking about money lost for sick children, addicted minors and drug treatment centers. Heck, they might even suggest that awarding the full percentage might require tax increases to fill the gap for necessary services.

[From The Deer Stand]

The states sue tobacco companies because they know smoking causes illness and death. Why, then, don't smokers sue the states for permitting the legal sale and purchase of a product the states rightly admits damages and kills smokers?

[jmc813]

The lawyers signed on for 25% of the final award. 25% of $8,000,000,000 is $2,000,000,000, not $775,000,000. The state is in default on its justly incurred debts. If I were considering doing business with the Commonwealth of Massachusetts, this would convince me to not sign the contract.

Logically, I agree with you, but I honestly don't know which group of scumbags to support with my heart, the lawyers or the Massholes.

[jpl]

There's no honor among theives.

[Poohbah]

Logically, I agree with you, but I honestly don't know which group of scumbags to support with my heart, the lawyers or the Massholes.

Today, they steal from the lawyers.

Tomorrow, having set the precedent, they steal from every other contractor.

[billbears]

The economy of the USA would benefit massively from broadbased tort reform to protect us from Trial Lawyers, Inc. parasites.

Not in this instance. The state promised them this amount then they should sue. Matter of fact, break the state of Massachusetts, send them to the poorhouse. Considering the effect of this tobacco 'settlement' has had on the state of North Carolina, I have no sympathy for any state that joined in on this blatant attack and refuses to pay their attack dogs

[jmc813]

Tomorrow, having set the precedent, they steal from every other contractor.

Very true. Does this really surprise you coming from Mass?

[Dane]

One group of thieves calling another group of thieves greedy.

Well there is a reason why the phrase, "There is no honor among thieves" is a well used adage in life.

[agrace]

Really. I'm not sure which side is worse - the tort lawyers or the bureaucrats using the tobacco money to pave roads etc.