CASE NO: CL 95-1466 AH



    Individually and as GOVERNOR OF THE STATE OF FLORIDA,









  3. This cause came on the be heard before me on the 10th and 11th days of September, 1997 upon the Defendants' Motion in the Nature of Interpleader for Clarification of Settling Defendants' Obligations under the Settlement Agreement and upon the Plaintiffs' Motion to Quash Charging Liens.

  4. The Defendants' Motion in the Nature of Interpleader for Clarification of Settling Defendants' Obligations under the Settlement Agreement was resolved by this Court's Order of September 11, 1997. The Court reserved ruling on the remaining motion pe nding "settlement" discussions with Facilitator/Mediator, Hon. R. William Rutter, Jr. Said discussions having terminiated this week and having failed to resolve the dispute, it is

  5. ORDERED AND ADJUDGED the Plaintiffs' Motion to Quash Charging Liens be and the same is hereby GRANTED. It is further

  6. ORDERED AND ADJUDGED that any and all charging liens filed by private counsel retained to represent the Plaintiffs in this case be and the same are hereby QUASHED. It is further

  7. ORDERED AND ADJUDGED that all parties and counsel are directed to comply with all provisions contained in the Settlement Agreement filed in this case and dated August 25, 1997. No discovery or further hearings shall be conducted or held regarding a ttorneys' fees or costs.

  8. The case at bar is unique in the annals of legal history. The attorneys fee issue presented to the Court on September 10th and 11th, 1997 is unprecedented.

  9. Regarding attorneys fees in this case the Settlement Agreement of August 25, 1997 states:

  10. Settling Defendants agree to pay, separately and apart from the above, reasonable attorneys' fees to private counsel. If the Proposed Resolution or substantially equivalent federal program is enacted, the amount of such fees will be set by a panel of independent arbitrators with finality, subject to appropriate annual cap on all such payments and other conditions. In the absence of any such legislation enacting the Proposed Resolution or a substantially equivalent federal program, attorneys' fees i n connection with this litigation will be awarded in the same manner (subject to the appropriate annual cap and other conditions) by three independent arbitrators selected by the parties hereto...

  11. Separate and apart from the Settlement Agreement aforementioned and before litigation was commenced the private attorneys retained by the Plaintiffs in this case entered into a contract with the Plaintiffs for payment of attorneys fees. The contrac t which has been filed with the charging liens has many provisions. However, the "bottom line" regarding attorneys' fees is that 24% of the damages obtained by the Plaintiffs would be paid over to the private attorneys for their work in this case. The rec overy for the Plaintiffs in this case is estimated to be approximately 11.3 billion dollars which would entitle the Plaintiffs' private attorneys to approximately 2.8 billion dollars attorneys fees. The figure comes to over $233,000,000 (two-hundred-thirt y-three million dollars) per lawyer. These figures result form simple mathematical calculations. The private attorneys who have filed charging liens in this case demand compliance with their contract with the Plaintiffs notwithstanding the provisions of t he Settlement Agrement which they complain was entered into by their clients and the attorney general as co-counsel to their clients without their knowledge or consent. However, it should be noted that of the many privately retained lawyers representing t he Plaintiffs in this litigation that only some have filed charging liens at this time. Apparently the remainder of the private attorneys have accepted the terms of the Settlement Agreement.

  12. In order for the charging liens in this case to be enforced the contract for attorneys fees entered into between the private attorneys for the State and the State of Florida, its agencies and the Governor must be enforceable. It should be noted tha t no prior judicial approval has been given to the terms of the contract in this case. Considering the unprecedented amount of potential recovery in this case prior judicial approval certainly would have been advisable although not necessarily required. A potential of billions of dollars of attorneys' fees would warrant some judicial scrutiny. As officers of the Court, counsel might have looked to the judiciary for some guidance in this extraordinary matter. It should also be noted that a considerable amo unt of the damages recovered in this case are earmarked for the benefit of minors through programs to be instituted on minors' behalf. In the "usual" tort case involving minors, judicial approval is often obtained before a settlement becomes effective and various costs and attorneys fees are parceled out.

  13. Although the Plaintiffs have presented several arguments in favor of their motion, this Court finds the dispute in this case should be covered by Rules Regulating The Florida Bar, Rule of Professional Conduct, Rule 4-1-5 Fees for Legal Services. Al l parties and counsel seemed to have overlooked these Rules. I find the Rules are determinative of the motion in this case.

  14. Based upon the language in the preamble of the aforementioned Rules, Florida Courts have generally declined to use the Rules of Professional Conduct as a basis for invalidating contractual provisions. For example, see Lee v. Florida Dept. of In s.&Treasurer, 586 So. 2d 1185 (Fla. 1st DCA 1991) and Mark J. Kaufman P.A. v. Davis & Meadows P.A., 600 So. 2d 1208 (Fla. 1st DCA 1992)

  15. However, a recent decision by the Florida Supreme Court signals a move away from Florida's reluctance to give the Rules of Professional Conduct substantive effect. In Chandris v. Yanakakis 668 So. 2d 180 (Fla 1995), the Court expressly disap proved cases in which the District Courts held that contingency fee agreements which did not comply with the Rules Regulating the Florida Bar were enforceable. The Court noted that the Rules established governing contingency contracts were in place to pro tect the public interest and that a contract which violates an established public interest can be voided as against public policy.

  16. The Florida Supreme Court specifically held:

  17. ...Contracts that do not comply with this regulation offend public policy and are antagonistic to the public interests. A contract that contravenes an established interest of society can be found to be void as against public policy...

  18. Likewise, we hold that a contingent fee contract entered into by a member of The Florida Bar must comply with the rules governing contingent fees in order to be enforceable. We have determined that the requirements for contingent fee contracts are necessary to protect the public interest. Thus, a contract that fails to adhere to these requirements is against public policy and is not enforceable by the member of The Florida Bar who has violated the rule...

  19. Chandris at pp. 185-186

  20. While the contingency fee contract agreement in the instant case appears to comply with the rule governing contingrncy fee agreements themselves, Rules 4-1.5(a) and (d), implicitly given effect by Chandris explicitly prohibits enforcement of fee co ntracts which call for excessive fees.

  21. Rule 4-1.5 Fees for legal Services provides, in part, as follows:

  22. (a)Illegal, Prohibited or Clearly Excessive Fees

  23. An attorney shall not...collect an...clearly excessive fee...A fee is clearly excessive when: (1) after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee exceeds a reasonable fe e for services provided to such a degree as to constitute..an unconscionable demand by the attorney...

  24. (d)Enforceability of Fee Contracts

  25. Contracts or agreements for attorney's fees between attorney and client will ordinarily be enforceable according to the terms of such contracts or agreements, unless...clearly excessive as defined y this rule.

  26. (Emphasis added)

  27. Furthermore, Comments to the aforementioned rule state as follows:

  28. Disputes over fees

  29. Since the fee arbitration rule (Chapter 14) has been established by the bar to provide a procedure for resolution of fee disputes, the lawyers should conscientiously consider submitting to it. Where law prescribes a procedure for determining a lawy er's fee, for example, in representation of...a person entitled to a reasonable fee as part of the measure of damages, the lawyer entitled to such a fee and a lawyer representing another party concerned with the fee should comply with the prescribed proce dure...

  30. Normally, this Court would conduct an evidentiary hearing pursuant to Rule 4-1.5(d). Said rule directs the Court to take into account..."Factors to be considered as guides in determining a reasonable fee..."

  31. The litany of factors to be determined in a reasonable fee hearing are then considered. However, Rule 4-1.5( c) states:

  32. Consideration of All Factors

  33. In determining a reasonable fee, the time devoted to the representation and customary rate of fee need not be the sole or controlling factors. All factors set forth in this rule should be considered, and may be applied, in justification of a fee higher or lower than which would result from application of only the time and rate factors. {Emphasis added.}

  34. The Court emphasizes that without question the private attorneys representing the Plaintiffs in this case did an extraordinary and magnificent job. Some of the best lawyering this Court has ever experienced took place during the presentation of thi s case. Counsel are unquestionably entitled to handsome fees for their representation of the Plaintiffs in this case. Nevertheless, this Court must find that the fees earned by private counsel on this case cannot reach 2.8 billion dollars. Even considerin g all the factors set forth in Rule 4-1.5(d) and finding all these factors heavily weigh in favor of Plaintiffs' private counsel, a figure of 2.8 billion dollars must be unconscionable and clearly excessive. No evidentiary hearing could make a difference regarding this finding. Perhaps tens of millions or hundreds of millions of dollars might be reasonable but 2.8 billion dollars simply shocks the conscience of the Court. It is per se unreasonable.

  35. Simple mathematical calculation demonstrates why the Court need not conduct and evidentiary hearing.

  36. This case was filed on February 25, 1995 pursuant to a new and unique Florida Statue that became effective in July, 1994. This case actually "resettled" on August 25, 1997. No work could possibly be done on this case before July, 1994 since there was no law authorizing this type of lawsuit (the newly created cause of action) until July, 1994.

  37. Assuming legal work began in this case on July 1, 1994 and goes on continuously until the end of this year, i.e. December 31, 1997 (which has yet to arrive) then forty-two (42) months will have been expended on this case. Thirty (30) days per month at twenty-four (4) hours per day means 30,240 hours will have been expended on legal work in this case. This assumes work at twenty-four (24) hours a day every day possible since the law was erected. That means doing nothing else- no work, no sleep, no r ecreation, no eating, no travel, no holidays, no weekends, i.e., no other living except work on this case for forty-two (42) months continuously. If one considers 2,800,000,000 (2.8 billion) dollars attorneys fees claimed by private counsel and divides th e aforementioned sum by 30,240 hours of possible legal work the result would mean an hourly rate of $92,593 per hour. Each of the twelve private lawyers would receive $7,716 per hour.

  38. The Court finds these figure to be patently ridiculous. The actual hourly fee would probably be at least double $92,593 per hour or closer to $185,186 per hour when the realities of living are factored in (eating, sleeping, traveling, etc.). No evi dentiary basis can possibly exist for fees of that nature and this Court can never enter an order justifying such hourly rates on any ground.

  39. The Settlement Agreement aforementioned provides for a method of setting reasonable attorneys fees for the private lawyers representing the Plaintiffs in this case that comports entirely with Rules Regulating the Florida Bar, Rules of Professional Conduct. The Comment referencing Dispute over Fees states:

  40. Disputes over Fees

  41. ...Where law prescribes a procedure for determining a lawyer's fee, for example, in representation of... a person entitled to a reasonable fee as part of the measure of damages, the lawyer entitled to such a fee and a lawyer representing another party concerned with the fee should comply with the prescribed procedure.

  42. The prescribed procedure in this case is arbitration and as this Court stated in approving and ratifying the Settlement Agreement the provisions thereof are eminently reasonable.

  43. It must also be noted that despite the complaints of some of the Plaintiffs' private counsel, the Settlement Agreement entered into this case was signed in open court on the record on August 25, 1997 with the signers and private counsel present. The te rms were discussed openly and no one objected to the Court's entry of the Order Approving the Settlement Agreement at that time.

  44. In essence, private counsel for the Plaintiffs in this case may very well be entitled to and receive tens of millions and even hundreds of millions of dollars for representation of the Plaintiffs in this matter. However, 2.8 billion dollars simply cann ot be reasonable under any scenario argued by private counsel.

  45. The whole point and purpose of this lawsuit was to recover Florida taxpayer dollars. Plaintiffs' private counsel fought hard and valiantly for their clients. They should and will be recognized and reimbursed properly for their success. The dispute betw een counsel and certain parties in this case concerning legal fees is not about greed. The Court recognizes the sanctity of contracts and the private attorneys representing the Plaintiffs in this case are businessmen as well as lawyers. However, in additi on to being businessmen, the lawyers are also professionals who are officers of thie Court and by accepting the title of attorney in this State submit themselves to the Rules of Professional Responsibility. The disagreement here really comes down to resp onsibility. The "dream team" of private attorneys representing the Plaintiffs in this case are not members of a professional sports franchise but are officers of the Court and the people's advocate in this case.

  46. What may have seemed to be a reasonable and ordinary contract when this case began has now developed into an unconscionable one. It is not so much the formation of the contract but its enforcement, i.e., the collection of fees that is now without a rea sonable doubt excessive. It is therefore ORDERED AND ADJUDGED that all parties and counsel comply with the Settlement Agreement and that specifically:


  48. Done and Ordered at West Palm Beach, Florida this 12th day of November, 1997.

  49. Harold Jeffrey Cohen

  50. Judge, Circuit Court (Civil Division II)

  51. Copyright 1997, The New York Law Publishing Company. All Rights Reserved.
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