Story last updated at 11:33 p.m. on Thursday, December 4, 1997
Tobacco charges debated More lawyers echo denials
By Randolph Pendleton
Times-Union senior writer
TALLAHASSEE - A lawyer for a South Carolina firm involved in anti-tobacco cases in Florida and 30 other states denied yesterday that there was anything improper about its relationships with other law firms as some lawyers have claimed.
Joe Rice, with the Charleston firm of Ness, Motley, Loadholt, Richardson & Poole, said his firm used help from five Texas law firms in the Florida case that resulted in a $11.3 billion settlement from the tobacco industry.
That settlement has sparked a fight over what 11 law firms should be paid in legal fees. The fees are expected to total at least $250 million and could exceed $1 billion.
The fees are to be paid by tobacco companies, under the terms of the settlement, which was upheld by a judge. Some of the law firms are appealing that ruling.
Tim Howard, a Tallahassee lawyer involved with the state's case, told a Senate committee Tuesday that a Texas firm that did no work on the case was in line to get $20 million in fees from it in violation of The Florida Bar rules. Howard also said some
of the state's attorneys in the case were involved in a nationwide cartel trying to control legal fees.
But Rice disputed Howard's claims, saying there were five Texas firms involved in the tobacco case, not one, and that they provided paralegal help, shared documents and supplied expert witnesses. He said he did not know how much money the Texas firms
would get. That depends on what happens in other state suits as well as the Florida case, he said.
Howard's allegations came amid the battle over legal fees among members of the state's ''Dream Team,'' the group of high-powered private lawyers the state assembled to go against the tobacco industry.
Rice said his firm works with others on litigation in many states and asks them to share in the cost.
His firm must commit $750,000 a year for five years in each state suit and must look to other firms to help share the cost.
''We pooled our financial resources,'' he said.
Rice said he did not believe it would be improper to accept financial help from another firm even if it did not provide work, though some legal scholars disagreed.
Stephen Gillers, professor of legal ethics at New York University law school, said there might be a problem if a firm just paid some money to another firm with the hope of sharing in profits.
''As a general rule, you don't let people invest in lawsuits,'' Gillers said.
Though Howard, who is under investigation by the Florida Department of Law Enforcement for loans made to state Inspector General Harold Lewis, questioned an agreement by the state's trial team awarding 46 percent of the fees to the Charleston firm and
one from Mississippi, Jacksonville lawyer W.C. Gentry said they earned the money.
Gentry, one of the state's trial lawyers, said the out-of-state firms had been involved in tobacco and asbestos litigation for years. He said they had the experience and resources that were necessary to win Florida's case, which was filed to recoup Me
dicaid money the state spent for smoking-related illnesses.
''Those guys were way ahead of the curve,'' Gentry said. ''They had thousands of documents.''
Gentry said the South Carolina firm ''had proof of what the industry knew, when it knew it and how it hid things.''
''They had 30 to 40 people working on documents,'' Gentry said.
He said the Mississippi firm, Scruggs, Millette, Lawson, Bozeman & Dent of Pascagoula, had extensive data on medical studies needed to establish how many cases of cancer and heart disease could be attributed to smoking.
Spending their own money, the two firms developed a formula for suing the tobacco industry and then carted it from state to state, forming alliances with state officials and local lawyers.
''We started this and we have been in it from the get-go,'' Rice said. ''We have had hundreds of people working on it, spent millions of dollars.
''I don't think there is anybody who would challenge that we carried more than 50 percent of the load in the [Florida] case.''
But the two firms also have their enemies. Some opponents said Ness Motley and Scruggs Millette are greedy opportunists - and worse.
''Tobacco owns them - what is the next question,'' said lawyer Bob Kerrigan of Pensacola, a ''Dream Team'' member who was once an ally.
''This is so obvious, they are in bed with tobacco. They are in bed with tobacco to get a national settlement and get paid billions of dollars,'' Kerrigan said.
But the firms dispute such claims and deny they are part of a ''cartel.''
''That's just a pejorative word - it's not a cartel,'' said Richard ''Dickie'' Scruggs, who runs Scruggs Millette. ''It's the same group of people who won the case. When do you go from being a crusader to a cartel?''
Gentry and Wayne Hogan, another Jacksonville lawyer from the trial team, said they had no involvement with any fee-sharing arrangements that the out-of-state firms may have had.
''We have no financial interest in any other state or national legislation,'' Gentry said.
A proposed national settlement would capture $368 billion from the tobacco industry and provide billions to law firms involved in litigation across the country.
Howard said he suspects that some of the Florida firms may benefit from the national settlement because of their relationships with the big firms that will share in those fees.
But Gentry and Hogan said there is no such deal with any of the Florida firms.
Robert Montgomery, another trial team members, said he shared Howard's concern about the dealings the out-of-state firms on the case had with the firms in Texas.
''There were side agreements,'' Montgomery said. ''I think it's
illegal and unethical. It was deception as far as I'm concerned.''
Times-Union staff writer Thomas B. Pfankuch contributed to this
report. Information also was used from the Knight-Tribune News Service.