NCPA - National Center for Policy Analysis

Tobacco Companies Battling Lawyers Over Fees

June 16, 1999

After cigarette makers failed to object to fee requests by lawyers in Mississippi, Florida and Texas last year, an arbitration panel picked by both sides handed the industry a staggering $8.2 billion bill -- the largest legal tab in U.S. history.

This time around, Massachusetts lawyers want about $2 billion in legal fees over 25 years and the industry has decided to fight.

  • Tobacco companies will contend before an arbitration panel today that the lawyers deserve only about $26.4 million.
  • The $206 billion agreement the companies signed with 46 states in November 1998 specifically allows them to object.
  • Tobacco companies contend the Massachusetts lawyers are only entitled to a tiny fraction of what they are seeking because they piggybacked most of their case on work done earlier by lawyers for other states.
  • Lawyers for Texas and Florida are taking sides in the Massachusetts dispute with the tobacco companies, because they are worried that a big fee settlement there will dilute annual payments to themselves, observers report.

The tobacco firms contend that plaintiffs' lawyers should have to back up their requests with detailed time records -- information the lawyers aren't volunteering.

The Massachusetts fight will set the tone for fee arbitration in 37 other states. Lawyers for eight states have already accepted smaller fees with payments spread out over five years, bypassing arbitration.

Source: Milo Geyelin, "Fat Legal Fees In Tobacco Cases Face Challenge," Wall Street Journal, June 16, 1999.


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