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A Times EditorialTobacco and torts
© St. Petersburg Times, published December 19, 1998 The Republican-dominated Legislature already has tort reform on the agenda, and this breathtakingly excessive award is likely to increase the momentum behind the bill. It's almost disgusting to think of such riches going to a few people who gave relatively little time and expertise to "earn" them. Although the attorney fees will come from the tobacco companies that will pay them over the next 10 to 25 years, and not from the state's $13.1-billion tobacco settlement, receiving billions of dollars in fees for a case that never went to trial is utterly unconscionable. Attorney General Bob Butterworth and the late Gov. Lawton Chiles, who died suddenly the day after the arbitration award was announced, initially agreed to a 25-percent contingency fee arrangement. Florida's contract with its hired legal team made no provision for a cap on hourly fees or a step-down provision to reduce the fee percentage as the value of the settlement increased. Lucky for the state that the Florida Supreme Court later ruled that in order for the agreement to be enforced, the lawyers would have to sue the state and then get the Legislature to pass a claims bill for any amount over $100,000. Since the lawyers knew they didn't stand a chance of getting much beyond a token payment from the Legislature, they rested their hopes on the terms of the tobacco settlement itself. To get out of having to pay the 25 percent contingency fee, Butterworth and Chiles had negotiated a provision into the tobacco settlement directing that the attorneys be paid "reasonable" fees by the tobacco companies, pursuant to arbitration. Two out of three members of the arbitration panel decided Friday that "reasonable" meant astounding. The panel gave the lawyers a 10-percent contingency fee plus a "success multiplier" based on factors such as the risk assumed by the lawyers and the settlement results. That formula produced the $3.4-billion result, slightly more than the lawyers had even asked for. The rumblings in Tallahassee are already beginning. Last year's tort reform bill, which included a cap on punitive damages, was vetoed by Chiles. Next year, with a Republican in the governor's chair and the excessive tobacco fees award still fresh, expect even more limits on lawyer profits to make it into the final bill. Ideas being kicked around include value-added attorney fees that would limit the application of contingency fees to only that amount of the judgment or settlement directly attributable to the lawyer's work, and a requirement that a substantial portion of punitive damage awards be donated to the state. There is a need for tort reform in Florida, but the temptation will be for Republican lawmakers to go hog wild and push through a law that would leave consumers without reasonable protections in liability cases. If that happens, Republicans will be indebted to a handful of tobacco lawyers for putting a face on greed.
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n arbitration award that gives Florida's litigation "Dream Team" $3.4-billion for its work in settling the state's case against big tobacco is a cause of celebration among those nine lawyers and two out-of-state law firms who are splitting a dream jackpot. It's the rest of the profession -- and Florida consumers -- who may wind up paying a price.
