Pubdate: Thursday, December 17, 1998
Source: Associated Press
Author: Hunter T. George

TOBACCO CASE LAWYERS TO SHARE $221 MILLION.

Payments won't come from settlement with eight states.

OLYMPIA -- Private lawyers who helped eight states sue Big Tobacco will be
paid $221 million in legal fees under a settlement with the industry.

Seattle-based attorney Steve Berman said lawyers negotiated the fees last
week in the wake of the $206 billion national settlement between the
industry and 46 states. The next day, an arbitration panel awarded $8
billion to lawyers who negotiated separate multibillion-dollar settlements
for Texas, Florida and Mississippi.

"I'm thinking I made a bad deal," Berman joked Wednesday.

The $221 million will be shared among law firms that helped pursue lawsuits
against the industry in Washington, Oregon, Idaho, Montana, Alaska, Nevada,
Arizona and Vermont, Berman said. The industry will pay legal fees out of a
separate fund, so it will not affect the amount each state is due to receive
under the national settlement.

Four private firms that assisted Washington state's lawsuit will split the
biggest share -- $80 million, Berman said. The breakdown for attorneys in
the other seven states: $70 million in Arizona, $21.5 million in Oregon, $12
million in Nevada, $10.5 million in Vermont, $10 million each in Montana and
Alaska and $7 million in Idaho.

Scott Williams, a Washington, D.C.-based industry spokesman, confirmed the
figures and the states involved. He said legal fees for attorneys in the
remaining 38 states covered in the national settlement will go to
arbitration or be resolved through negotiations.

In Washington's case, the private firms' contracts with the state called for
$136 million in fees paid over 25 years, Berman said. The lawyers and the
industry settled on $80 million over five years, he said.

Berman will share that amount with Seattle attorney Paul Luvera and law
firms in South Carolina and Mississippi.

Berman noted that the usual contingency fee would amount to one-third of the
state's $4 billion share of the national settlement. The $80 million amounts
to about 2 percent.

Contrary to public opinion, Berman said, this was not easy money. The
industry had never lost a case when his law firm signed on in 1996.

"At that time, the industry had never paid a dime. A bunch of the firms that
brought suit against them had gone bankrupt," he said.

"My partners didn't want me to take the case. I had to agree to restrict my
hours on the case, which I didn't do. I basically threatened to leave the
firm if they didn't take the case. Other firms in town thought I was crazy,
that I was stupid.

"Now everyone thinks it was easy."

He said eight attorneys at his firm, which represented 14 states, recorded
50,000 billable hours.

The industry also is expecting legal bills submitted by state attorneys
general. John Hough, a senior assistant attorney general who supervised
Washington state's lawsuit, said agency officials expect to finish adding up
their bills by the end of the month.

"It will be several million dollars," Hough said.

Washington Attorney General Christine Gregoire paid for her lawsuit through
a litigation account funded by awards in previous antitrust cases, so legal
fees from the tobacco case will go back into that fund and not general state
coffers, Hough said.

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Checked-by: Rolf Ernst