Lawyers Defend Right to State’s $88.5 Million

Attorneys who were granted a record $88.5-million award from California have denounced the state’s effort to overturn it, saying that state lawyers filed their papers after the deadline for seeking reconsideration, according to recently released documents.

At Gov. Gray Davis’ urging, state Atty. Gen. Bill Lockyer last week asked the panel of private arbitrators that granted the award to reconsider it. Leonard Simon, attorney for the San Diego firm of Milberg, Weiss, one of five firms that stand to share the $88.5 million, said in a response to the state that the deadline for filing the request was Dec. 11.

“That’s their argument,” said Lockyer spokesman Nathan Barankin. “We filed it on exactly the [correct] day.”

Unless the panel reconsiders its decision, the state apparently is obligated to pay the five law firms by Dec. 28. The $88.5-million award, granted in a closed-door proceeding, is thought to be the largest attorney fee ever granted in a case against the state. Davis sought the review, saying $88.5 million is excessive.

“However,” the private lawyers contended in their written argument, “nothing allows a party to renege on an agreement for binding arbitration because they are displeased by an award.”

The award stems from the state’s settlement this year of a lawsuit over a $300 fee charged to motorists who registered out-of-state vehicles in California during the 1990s. The state earmarked $665 million for refunds and to pay the lawyers.

In an unusual move, Davis pushed to have the issue decided by private arbitrators rather than by judges, believing the private panel would give the lawyers less than the private firms would receive if the matter was left to a court.

“The state agreed to binding arbitration,” the lawyers said. “ . . . They must live with the result.”