Law Firms Sue Mass. for Tobacco Money
BOSTON (Reuters) - Two law firms that helped states win an historic $246 billion award from tobacco Thursday sued Massachusetts for failing to pay hundreds of millions of dollars the firms say they are owed under a 1995 fee agreement.
The two firms -- Brown, Rudnick, Freed & Gesmer and Lieff, Cabraser, Heimann and Bernstein -- say in the suit that the state has not handed over its share of the settlement money it agreed to pay them.
Under the 1995 deal, the state agreed to pay five law firms 25 percent of any award in the case.
Massachusetts' share of the overall settlement was $8 billion, said Karen Schwartzman, a spokeswoman for Brown, Rudnick. She said her firm's share was $460 million over 25 years, of which the tobacco industry was to pay $178 million directly and the state would pay the balance of $282 million.
The tobacco industry is making its payments on schedule, she said, but the state has not handed over any money.
``The commonwealth has not paid any of the $282 million it is supposed to pay,'' Schwartzman said. ``The attorney general thinks it is just too much money.''
Lieff, Cabraser is owed a comparable but slightly smaller amount by the state, Schwartzman said.
She said the fee was set by then-Attorney General Scott Harshbarger without consultation with the law firms.
``It's a lot of money but $8 billion is a grand slam home run,'' Schwartzman said. ``The only reason anyone is quarreling with the amount is that the lawyers did such a good job.''
Current Attorney General Tom Reilly called the suit ''absolutely disgraceful''.
``By anyone's standards they have received a day's pay. We have absolutely no intention of giving them one dollar more,'' Reilly told reporters on Thursday.