Losers and Winners
Tobacco Road Not Gold for All
- The Dec. 11 arbitrators' award of $8.2 billion in fees to tobacco plaintiffs' lawyers is very good news for the handful who represented the states of Mississippi, Florida and Texas--not to mention several Gulf Coast yacht dealers. But it
would be a mistake to assume that everyone who fought Big Tobacco is in line for Big Money.
- Lawyers belonging to the Castano group, a consortium of 65 plaintiffs' firms coordinating tobacco class actions across the country, have so far recovered no fees, in spite of the $100,000 that each firm contributed to join. Representatives of the grou
p helped lobby, unsuccessfully, to persuade Congress to enact a $368.5 billion global tobacco deal reached June 20, 1997. If Congress had blessed that deal, the Castano lawyers could have expected big fees.
- "They backed the wrong horse," said Richard F. Scruggs, of Scruggs, Millette, Lawson, Bozeman & Dent, in Pascagoula, Miss., one of the lawyers with a claim to a chunk of the $8.2 billion.
- Wendell Gauthier, of Gauthier, Downing, LaBarre, Beiser & Dean, in Metairie, La., organizer of the Castano group, predicts that some of the cases will succeed and thus justify the firms' investment of money and time.
- Richard A. Daynard, the Northeastern University School of Law professor who is a veteran anti-tobacco activist, asked arbitrators for fees for his work on the Florida case, represented by former brother-in-law David Boies, of Armonk, N.Y
.'s Boies & Schiller L.L.P. The arbitrators ruled that they lacked jurisdiction over his claim, leaving him empty-handed.
- Professor Daynard also says Mr. Scruggs promised him 5% of the fees earned by his firm and by the Charleston, S.C., firm Ness Motley Loadholt Richardson & Poole P.A. from the state lawsuits. Taken together, the two firms represent the lion'
s share of states that sued the tobacco industry. Mr. Scruggs said he never made any such promise.
- Then there is Patrick J. Coughlin, of San Diego's Milberg Weiss Bershad Hynes & Lerach. Mr. Coughlin sought fees from the arbitrators for his firm's work in the Mangini litigation in California, which targeted the Joe Camel ad
s of R.J. Reynolds Tobacco Co. He said his firm spent $3 million in expenses since 1991 pursuing the case, which many say helped lead to Joe Camel's retirement. The arbitrators awarded a relatively modest $8 million.
- "I was devastated," said Mr. Coughlin.
- And do not forget the legions of state lawyers who worked on the tobacco litigation for respectable, but far-from-astronomical, wages. Among lawyers in the Texas attorney general's office assigned to that state's lawsuit, for example, the top salary w
as $82,000 per year.
- According to calculations by Lester Brickman, a professor at Yeshiva University, Benjamin N. Cardozo School of Law, who was hired as an expert to oppose an earlier Texas fee application, the state's outside lawyers made more than $82,000 in an
--Bob Van Voris