Law And The Judiciary

Billions For Anti-Tobacco Lawyers

Critics of the recent tobacco settlement are raising objections on a number of grounds. Exorbitant lawyers' fee are one point of contention.

The deal granted cigarette makers immunity from future class-action suits and caps damages in individual suits. In exchange the tobacco companies would pay $368.5 billion to the federal government over a period of 25 years. Some $193 billion of the total would be divided up among the 41 states which participated in the suits, as reimbursement for smoking-related Medicaid expenses.

But it's the fees that are grabbing headlines: the 300 or so lawyers from 89 law firms representing the states stand to reap fees upward of $14.5 billion.

  • In Florida, lawyers' fees come to 25 percent of that state's $11.3 billion settlement, or $2.8 billion -- an average of $200 million per attorney or roughly $14,000 per hour, assuming the lawyers spent every waking hour on the case for 42 months.

  • Of the 41 states, only Maine paid its trial lawyers on an hourly basis -- and the attorneys general of California and Colorado handled their states' cases without benefit of a single trial lawyer.

  • In November, a Florida Circuit Court judge stated that the $2.8 billion in fees "simply shock the conscience of this court."

In Congress, bills have been introduced to limit the lawyers' fees to $125 or $150 per hour. Interestingly, the attorneys got the tobacco companies to agree not to oppose any of the attorneys' fees.

Critics are also concerned that states used tort lawyers as de facto deputy attorneys general. Others, however, including a spokesman for Ralph Nader's group Concerned Citizen, argue limiting attorneys' fees could violate the Fifth Amendment's prohibition on taking private property without "just compensation."

Source: Matthew Scully, "Will Lawyers' Greed Sink the Tobacco Settlement?" Wall Street Journal, February 10, 1998.


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