6/10/99
mbrown@agate.net
Mom and Dad - please let your sons and daughters grow up to be lawyers and work for the State of Maine.
And herein lies the advice.
Maine's Attorney General Andrew Ketterer belatedly joined into the national tobacco settlement. In April, 1997, Ketterer said he would not pursue an individual suit because his department of 47 lawyers didn't have the personnel or money for the litigation.
However, on June 18, 1998, just 14 months after declining to sue, Ketterer and Human Services Commissioner Kevin Concannon (who had remained silent on a lawsuit) held a press conference saying they would sue and had already filed in Kennebec County Superior Court.
Ketterer announced he had hired four outside lawyers and they had filed a 140-page complaint. The four lawyers were George Singal, James Kilbreth ( a former Maine assistant AG), Peter DeTroy III and Terrence Garmey. The firms represented were Verrill, Dana; Norman, Hanson and DeTroy; and Smith, Elliot, Smith and Garmey.
Ketterer said in an interview following the press conference that the lawyers would be working on a 13% contingency fee. The 140-page complaint leaned heavily on the massive discovery documents that Florida, Mississippi and other states that had already been filed in their lawsuits against the tobacco companies.
A Maine attorney familiar with and who had read Maine's complaint described it as "written in haste...and shy of legal craftsmanship."
Maine's complaint also benefited from the research of a Maine connection - former Maine AG Jim Tierney who headed up the State Tobacco Information Center (STIC) and who coordinated the legal actions of all states involved in the suits. Ketterer said Maine would not be compensating Tierney with any money.
Maine reportedly would receive $1.5 billion over the next 25 years and $61.5 million annually thereafter. The settlement is subject to judicial approval by the state courts in which the attorney generals filed suit. Final approval has been obtained in about 40 states equal to about 50% of the percentage shares of payments due.
The settlement becomes effective on the earlier of June 30, 2000, or the date on which final approval had been attained in courts of 80% of the settling jurisdictions.
Separate, however, is a fund to pay attorneys including outside counsel fees. The cap on outside attorneys.( i.e., such as those hired by Ketterer) is $75 million. These four Maine attorneys are now complaining that they haven't received their money. Ketterer says they are entitled to up to $75 million.
Are they? The time frame between Ketterer's announcement in April, 1997, that Maine would not join in a suit, and June,1998, that Maine would, is about 13 months. Remember that when Ketterer made the announcement that Maine would join, the 140-page Maine suit had already be filed.
So let's have a reality check on the cost of "legal work of about a year." There are 365 days minus 104 weekends days (no lawyer works weekends do they?) leaving 260 days. Assuming the ridiculous, that each lawyer worked eight hours a day on the suit, that's 8,320 hours., Collectively the lawyers say they are owed up to $75 million. That's about $9,000 per lawyer per hour!
One of the yet-to-be-paid outside counsels, James Kilbreth, says $75 million is "far less than the 33% that lawyers commonly earn in a lawsuit."
The settlement agreement states that outside counsel fees are to be determined by either arbitration or in accordance with a negotiated fee procedure.
The Maine Legislature dealt with the tobacco settlement for the state's hefty share which it has yet to receive. The Legislature in the Part 2 budget just passed established "The Fund for a Healthy Maine" and all moneys received by the state in the settlement be credited to the fund. The expenditure or transfer of the fund moneys to the state's General Fund cannot be made without specific legislative approval by the Legislature. That means the legislature can vote to do with the settlement billions for practically whatever purposes it chooses.
The lawyer fees are another matter. Clearly the fees demanded by Maine's four outside counsels in the tobacco settlement are patently ridiculous and opportunistically obscene by whatever legalistic armor the lawyers wear behind the bar.
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