Plan to Cap Attorney Fees in Tobacco Settlement up for Vote — Clifford Law Offices
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Plan to Cap Attorney Fees in Tobacco Settlement up for Vote

Chicago Daily Law Bulletin, 02/16/2000
By AARON CHAMBERS

SPRINGFIELD - Legislation designed to kill an attorney’s lien filed against Illinois’ expected $9.1 billion tobacco settlement was expected to pass a Senate committee Wednesday afternoon and move to the full Senate for debate.

Senate Bill 1885 was scheduled for consideration by the Senate Executive Committee Wednesday afternoon. With Senate President James "Pate" Philip, R-Wood Dale, a cosponsor, political insiders said, the bill was virtually guaranteed approval by Republican-controlled committee.

"I think that’s accurate," said Philip spokeswoman Patty Schuh, on Tuesday. "But I don’t think anything around here is guaranteed."

The expected $9.1 billion is the state’s share of $206 billion settlement, known as the Master Settlement Agreement, reached between the attorneys general of 46 states and the tobacco industry in 1998. Because of several variables, Illinois’ share may not be exactly $9.1 billion.

The firms that handled Illinois’ settlement efforts filed a lien action against the state’s share on Sept. 28. They cited their contract with Attorney General James E. Ryan, which promised them 10 percent of any settlement. If Illinois were to get $9.1 billion, the firm’s share would be $910 billion.

The lien claim was served a few days before a national arbitration panel awarded the attorneys $121 million in fees. The Tobacco Fee Arbitration Panel, which set fees for outside counsel retained by the states, ruled on Oct. 7 that although Illinois’ lead counsel, a Seattle firm, was active "on the national scene," the four firms collectively did "relatively little" to advance Illinois’ case. In re Attorneys’ Fee Application by Illinois Private Outside Counsel.

The four firms asserting the lien are Freeborn & Peters of Chicago; Hagens & Berman in Seattle; Barrett Law Offices of Lexington, Miss.; and Lieff, Cabraser, Heimman & Bernstein of San Francisco. (The Seattle firm was Hagens, Berman & Mitchell at the time of the settlement.) Freeborn & Peters is the firm of former U.S. Attorney Fred Foreman.

Schuh said there was concern among Senate Republicans, the legislature’s most conservative caucus, that the attorneys chose arbitration "and now they want [to have] their cake and eat it too."

"They chose arbitration, but when they didn’t get what they wanted out of arbitration, now they’re trying to file under the Attorney’s Lien Act," Schuh said.

But Chicago attorney Robert A. Clifford, who represents the firms, said Schuh’s comment "displays a complete misunderstanding of the fee responsibility of the tobacco industry under the [MSA]."

Clifford noted that the MSA required the tobacco industry to finance a special fund for attorney fees in addition to compensating the states. The awards made by the arbitration panel, Clifford said, did not supersede the contract the firms had with Attorney General Ryan.

"It was very clear, uncontradictably so, under all of the relevant agreement that any arbitration award would only serve as a credit against what was otherwise due under the contingency fee agreement," Clifford said. "For her to state otherwise is self-serving and completely distorts the facts pertaining to the written agreements."

Schuh dismissed Clifford’s comments. "Obviously, Mr. Clifford must represent his clients and their stake to millions and millions of dollars of which he would get his share," she said.

Senate Bill 1885 was introduced Feb. 8 as an amendment to the Attorney’s Lien Act - the law used to file the lien against the tobacco settlement. It would also invalidate any liens already filed against the settlement, according to its language.

The bill’s sponsor, Sen. John W. Maitland Jr., R-Bloomington, said he would ask the committee to vote on the proposal later Wednesday.

Clifford said neither he nor his clients would attend Wednesday’s committee hearing.


ATTORNEYS

Robert A. Clifford