When the big tobacco settlement was first announced, Mississippi trial attorney Richard Scruggs admitted his fees might seem “a little obscene.” But that, he explained, was inevitable, since “we have to come up with a fair way to compensate everyone.”
Some lawyers, like Scruggs, stand to collect an astonishing 25 percent of their states’ payments. Even 3 percent of the total $368.5 billion settlement, which some attorneys characterize as perfectly “fair and reasonable,” would amount to an incredible $11 billion.
Not that such a windfall would be unprecedented. In the recent flight attendants’ secondhand smoking lawsuit, the tobacco industry agreed to pay $300 million to a research foundation — not the workers — and $49 million to the lawyers.
Already some states, which sold their legal souls (adjusting liability law to enhance their chances, for instance) for the prospect of a huge financial gain, are having second thoughts about attorneys’ fees. Florida agreed to give a quarter of its winnings to its lawyers, but reconsidered after negotiating an $11.3 billion settlement in August. Instead of paying the attorneys upward of $200 million each, Florida agreed with the tobacco industry to arrive at the eventual legal fees through arbitration.
State Judge Harold Jeffrey Cohen then called the attorneys’ demands “unconscionable and clearly excessive.” He estimated that the original fee accord would result in $7,716 per hour — 24 hours a day, every day, during the 42 months the case was pending — for the 12 lead attorneys. To most people that seems, well, a bit much.
Whatever the outcome in Florida, and several of the attorneys are still pushing for every penny they were originally promised, Congress should prevent a similar national looting spree. There are, in fact, good reasons to kill the entire deal.
It rests on dubious factual premises — by dying younger, smokers would actually lower government Medicaid expenses. It unfairly immunizes the industry — if tobacco companies should be liable for the harm caused by their products, then they should be liable in the future as well as the past.