One Estimate of Tobacco Lawyer Fees: $18 Billion

Attorneys battling the tobacco industry could earn as much as $18 billion in fees if all the state contracts with lawyers were carried out to the letter, according to a law professor who testified Wednesday before an influential House panel.

While states suing the industry insist that will never happen, those astronomical figures set the tone for the hearing, at which both Republicans and Democrats criticized the fees that lawyers might receive.

The proposed $368.5-billion tobacco settlement, as it now stands, “will become a huge windfall for a few plaintiffs’ attorneys,” said Rep. Scott McInnis (R-Colo.). Said Rep. Edward G. Bryant (R-Tenn.): “The image of the greedy, self-serving lawyer is only enhanced by recent headlines” on a fight over $2.8 billion in fees in the Florida tobacco case.

The potential for huge legal profits for about 150 law firms involved in the proposed national settlement has been a rallying cry for GOP lawmakers since the deal was announced in June. Congress must approve the settlement, and several lawmakers, led by McInnis, already have introduced a bill that would cap the fees in the tobacco litigation at $150 an hour.

But Wednesday’s hearing made clear that Democrats, too, are concerned about the fees and that the payment issue, like so much else in the settlement, is complex.

Experts could not even agree on how much the fees would be under the current contracts with most of the 40 states suing the industry. Cardozo Law School professor Lester Brickman made the $18.6-billion estimate, while Massachusetts Institute of Technology economist Jeffrey Harris predicted the current value of the fees, to be paid over 25 years, is $8 billion.

Brickman and Alan Morrison, of the Public Citizen Litigation Group, disagreed in their testimony over whether it would be constitutional for Congress to set fees.

After the hearing, Rep. Barney Frank (D-Mass.) said the fee estimates “are too arbitrary” at this point to merit debate. The arbitration panel, he said, might work.