Law Journal Extra!

States v. Big Tobacco

Tobacco Fee Arbitration Panel Goes to Work

Fees in Florida, Texas and Mississippi to be the first decided

Law Journal Extra
December 4, 1998

By Melissa J. Kozlowski

  1. Now that a $206 billion settlement has been signed by tobacco industry leaders and state attorneys general across the country, there's the little matter of the legal bill.

  2. A special Tobacco Fee Arbitration Panel, assembled as part of the settlement, is currently at work deciding on appropriate attorneys' fees for the as-of-yet undetermined number of lawyers involved in the mammoth settlement.

  3. The fees, which are subject to an annual aggregate cap of $500 million, are to be paid by the tobacco companies and are separate from the states' financial recovery in the settlement.

  4. As part of the settlement, the tobacco industry has agreed to pay "full, fair and reasonable claims," and to forego an appeal of what the panel decides. The panel will not be limited to an hourly or lodestar rate analysis.

  5. However fees in this case have already become a sore point.

  6. In two of the first states to settle, Texas and Florida, attorneys have objected to their fees being wholly outside the settlement and demanded contingency fees. Florida lawyers want 25 percent of their state settlement, with their Texas counterparts asking for 15 percent.

  7. According to Senator Lauch Faircloth, R-NC, who proposed a cap of $125 per hour for tobacco settlement attorneys, the contingency fees would garner lawyers upwards of $100,000 per hour due to the large size of the settlement.

  8. "The American people, for whom this settlement was ostensibly negotiated, certainly prefer to see tobacco settlement funds directed toward health care rather than the further enrichment of a small number of litigators," Faircloth said in a written sta tement. "Their rapacious claims to settlement monies belie the contention that the trial lawyers acted to curtail teenage smoking and to help senior citizens in need of health care."

  9. Fees for attorneys who handled the Florida, Texas and Mississippi settlements will be discussed by the panel first. Initial review of those states is expected to be completed by the end of the year, with arbitration in other states expected to continu e into 1999, according to panel spokesman, Eric Berman. Review will be private, but decisions will be public.

  10. The panel that will consider the Florida, Texas and Mississippi settlements:

  11. Chairman John Calhoun Wells, a national dispute resolution expert and former Director of the Federal Mediation and Conciliation Service.

  12. The Honorable Charles B. Renfrew, former U.S. District Court Judge and Deputy Attorney General of the United States is the second arbitrator, chosen by the tobacco industry.

  13. Harry Huge, a Washington D.C. based attorney chosen by the state of Florida.

  14. Texas Law School Dean W. Frank Newton, nominated by the state of Texas.

  15. Mississippi chose an Oxford, Mississippi-based attorney, Jack Dunbar.


Curriculum Vitae of John Calhoun Wells
Curriculum Vitae of Charles B. Renfrew
Curriculum Vitae of Harry Huge
Curriculum Vitae of W. Frank Newton
Curriculum Vitae of Jack F. Dunbar
Tobacco Settlement
State by State Schedule of Payments

Related Sites

National Association of Attorneys General home page

See Also...

That $10 Billion Fee
Product Liability Law Practice Area

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