Law firms to get $1.2 billion tobacco suit fee
LOS ANGELES (AP) - About 60 law firms - four of them in California - that worked to get the state $25.4 billion as part of a nationwide tobacco settlement will split $1.25 billion in fees, a national arbitration panel said Monday.
The three-person Tobacco Fee Arbitration Panel reached the figure after considering testimony and evidence presented by both tobacco manufacturers and the plaintiffs over a series of hearings last year following the November 1998 $206 billion settlement of the "Ellis" case.
"This is an abomination," said Mark Smith, a spokesman for Brown & Williamson Tobacco Corp., the nation's third-largest cigarette company. "These lawyers should be embarrassed," he said.
The suit was known as the Ellis case because the lead plaintiff was James Ellis, an Orange County, Calif., resident who contracted cancer after years of smoking. Joining him in the case was California's then-Lt. Gov. Gray Davis, who is now governor.
Arbitrators John Calhoun Wells and Harry Huge, who signed the majority opinion, said the lawyers' efforts were "an important contributor to a resolution of the tobacco war in the most populous state in the nation."
They had considered the risks the lawyers assumed, the complexity of the case, the amount of work performed and the attorneys' achievements, the majority said.
But Charles Renfrew, a former federal judge whom the tobacco industry nominated as arbitrator, issued a harsh dissent, saying the fee "truly shocks the conscience." The lawyers were improperly awarded for work they had done before the Ellis case, he said.
Many of the lawyers claimed they started working on litigation in 1994, two years before the case was filed.
"The award is well-deserved," said San Diego attorney Don Hildre, who said he had done nothing but tobacco work from 1994 to 2001. He said that the attorneys had collectively put in 400,000 hours.
The national settlement also banned tobacco billboards, and cigarette companies agreed to give up the use of cartoon characters, such as Joe Camel, in advertising campaigns.
The $1.25 billion in attorneys' fees will be paid in addition to the state's $25.4 billion share of the national settlement. It represents about 10 percent of the state of California's $12.7 billion slice of the award. The rest of the settlement goes to cities and counties representing about 85 percent of state residents that filed suit against tobacco companies.
Those suits, the Ellis case and one filed later by then-California Attorney General Dan Lungren were jointly settled in December 1998 in San Diego, where the cases had been consolidated for trial.
Four California law firms will share the award: Casey, Gerry, Reed & Schenk of San Diego; Daughert, Hildre, Dudek & Haklard of San Diego; Howarth & Smith of Los Angeles; and Robinson, Calcagnie & Robinson of Newport Beach.
The decision was the 19th ruling by the arbitration panel, which was created as part of the national cigarette settlement. The fees are to be paid out by the tobacco companies over the next 25 years.
Full vdetails on how the fees will be divided were not available, but John P. Coale, a spokesman for the attorneys said no firm would get more than 10 percent, meaning $125 million would be the top share.