***OT***Lawyer fees in tobacco settlement.
I guess I have a problem understanding English. Or maybe it's my math that ain't so good. How can the lawyers in Texas collect $25 billion in fees as their cut in the tobacco settlement, when the tobacco companies have only agreed to pay Texas $17.3 billion over the next 25 years?
$25 billion seems like more than 25 % of $17.3 billion.
And even if you say that the payments will continue beyond the next 25 years, which increases the value of the settlement, does that mean the Texas lawyers should be paid $25 billion?
I've got a great idea. Pay the lawyers $100 each year for the next 25 years. And then increase that amount to $200 each year for the next 25 years. That sounds more fair, and reasonable, than paying the Texas lawyers $25 billion.
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interactive.wsj.com
December 8, 1998
Plaintiffs Attorneys for Texas Request
$25 Billion Fee Award in Tobacco Case
By SUEIN L. HWANG
Staff Reporter of THE WALL STREET JOURNAL
Plaintiffs attorneys for the state of Texas, who won a large settlement from
the tobacco industry last summer, have requested that an arbitration panel
award them $25 billion in legal fees.
In a closed-door meeting Saturday in New York, people who were present
say, the Texas attorneys presented formulas to support their case that the
five law firms that represented the state should be paid nearly 10 times the
$2.6 billion they had asked for just last month.
The three-member arbitration panel, which is considering legal-fee awards
for big tobacco-case settlements in Texas, Mississippi and Florida, is
scheduled to rule Thursday. They will decide how to divide legal fees in the
state cases, which sought to recover the public-health costs of treating
smoking-related illnesses.
In the Texas settlement, the tobacco industry has initially agreed to pay
$17.3 billion over the next 25 years. But the lawyers, meeting with
arbitrators who are set to finalize fee awards, pointed out that payments will
extend beyond just a quarter century, in perpetuity, in fact, and that the total
settlement is valued closer to $100 billion, adjusted for inflation and other
factors. As such, they argued that their cut ought to be 25% over the next
50 years, or $25 billion.
The lawyers representing the state of Texas are Walter Umphrey, Harold
Nix, John O'Quinn, Wayne Reaud and John Eddie Williams. None could be
reached for comment late Monday.
The Texans are part of a parade of lawyers laying claim to legal fees arising
from the $35 billion settlements of the Texas, Florida and Mississippi
Medicaid lawsuits. Over the weekend, in a high-stakes meeting held at the
New York Palace Hotel in New York, arbitators heard the final round of
presentations from plaintiffs lawyers around the country.
Although cigarette makers are barred by settlement terms from objecting to
any fee requests by the lawyers representing Texas, Mississippi or Florida,
officials in the tobacco camp say they were shocked by the request. The
demand also infuriated lawyers of Florida, who themselves requested $4.5
billion in legal fees, and Mississippi, which didn't specify an amount but
asked it not be paid less than any other state, according to people present at
the arbitration-panel meetings.
The gist of the argument: The lawyers were so essential to the tobacco
industry's surrender that they deserve to be paid a whole lot more.
Another petitioner was Richard Daynard, a Northeastern Law School
professor and longtime antitobacco activist who worked with plaintiffs
lawyers in the Florida case. Last Saturday, Mr. Daynard tapped David
Boies, his former brother-inlaw and a top litigator representing the Justice
department in its lawsuit against Microsoft Corp., to help make his case. "I
was appointed as counsel in the case," says Mr. Daynard, referring to the
Florida litigation. He added that he never received any payment from Florida
for his services.
Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.
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