Magazine article Newsweek

Spoils of Law: They Struck Gold - Then Fought. Call Them the Lawyers of the Sierra Madre

Magazine article Newsweek

Spoils of Law: They Struck Gold - Then Fought. Call Them the Lawyers of the Sierra Madre

Article excerpt

They struck gold--then fought. Call them the Lawyers of the Sierra Madre.

IT SOUNDED LIKE A LAWYER JOKE AT first. How do you ruin a lawyers' dinner? Start talking about cutting their fees. No one was laughing, though. The evening had begun pleasantly enough, on an August night in the ballroom of a Palm Beach mansion. Florida Gov. Lawton Chiles was dining with his "dream team" of trial lawyers working on the state's megalawsuit against the tobacco industry. Chiles had a surprise for the lawyers, but he waited to spring it until after the remains of the catered salmon and chicken dinner had been cleared from the table. Big Tobacco was ready to settle, and so was he--the very next day, in fact. It would be the industry's biggest capitulation and the largest out-of-court settlement in American legal history-S11.3 billion over 25 years, plus commitments including an industry-funded antismoking campaign aimed at children and removal of cigarette billboards near schools. Most of the lawyers were in shock when they and the governor toasted the deal; they had had no idea that a settlement was in the works. Then Chiles mentioned some changes in the way the legal fees would be calculated. As he rose from the table and left the room, Chiles urged the lawyers to keep talking. What they did was to start yelling.

It was the sort of problem a lot of people might wish for. At worst, none of the 11 lead lawyers stands to make less than $15 million, plus costs. Yet the free-for-all that erupted the night of Aug. 24 is still going on among the dozen law firms that represented Florida in the case. Accusations of betrayal and of grabbing for tobacco victims' money are flying-along with lawyer-filed liens on the settlement money and a lawyer-vs.-lawyer lawsuit. There's even a police investigation. The spectacle is attracting attention in Washington, where some congressmen are proposing to cap legal fees in tobacco cases. It would all seem awfully familiar to the late John Huston, whose 1948 film classic, "The Treasure of the Sierra Madre," showed the corrosive effects of a gold strike on everyone involved. "The dream team has become a nightmare team," says Fred Levin, the Pensacola lawyer who handpicked its members. "Everybody hates them; they hate each other."

Unlike the drifter heroes of "Sierra Madre," these Florida lawyers are men at the top of their profession. But they signed up to fight Big Tobacco under essentially the same terms as the film's prospectors who set off searching for gold-shouldering every bit of the risk. For the lawyers, that risk was daunting. Mounting major litigation costs millions. And when the attorneys joined the fight two years ago, Tobacco had been sued hundreds of times without paying any plaintiff anything. The strategy, as one Tobacco lawyer put it in an internal memo quoted in The Wall Street Journal in 1994, was an adaptation of Gen. George Patton's battlefield doctrine: "... the way we won these cases was not by spending all of [R.J. Reynolds's] money, but by making the other son of a bitch spend all of his." The only way to hire lawyers capable of taking on such a foe, the state figured, was to offer a contingency-fee deal. If they won anything for the state, their reward would be commensurate with their risk-25 percent of any recovery.

In at least one respect, the Florida lawyers have turned out to be even more fractious than Huston's gold-hunters. The prospectors don't start fighting until the gold appears; everyone gets along while the search is still on. The lawyers began falling out even while they were still preparing their case, splitting into pro-and anti-settlement factions. One side argued that it was better to settle with the tobacco companies than bankrupt them. The other wanted to go all the way. "I said, 'I've bankrupted corporations who've injured my clients before. That's what I'm in here for'," says Robert Montgomery, the 67-year-old trial lawyer now at the center of the post-settlement fight. …

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