The state’s argument in an ongoing court battle with its tobacco lawyers, who claim they’re owed an additional $1.25 billion of the settlement, has already yielded a rare public criticism from a sitting judge about actions taken by the legislative branch.
“What the Legislature is now doing, I don’t personally approve of,” Suffolk Superior Court Judge Allan van Gestel said last week.
As part of a jury trial that began last week, the state Attorney General’s office has argued that paying the firms the money would reduce the tobacco lawsuit’s impact on improving public health in Massachusetts.
In response, attorney Robert Popeo, who represents the two law firms, wants to be able to tell the jury that the state has already diverted much of the money away from tobacco programs, deciding this year to use the entire $270 million annual payment for general budget purposes.
Since the beginning of the economic downturn, state funding for smoking cessation and treatment programs has decreased from $54.2 million in 2000 — the first year that the state received tobacco settlement money — to $5.8 million.
Van Gestel did not appear swayed, however, that actions taken by the current Legislature have a bearing on whether or not the lawyers are owed more money under an agreement signed in 1995.
The court case, which is expected to last six weeks, has put a renewed focus on Massachusetts’ role in the landmark tobacco lawsuit: how the state became involved in what then seemed to be a long-shot battle against a powerful industry, how the case evolved, and what it has done with its portion of the $246 billion master agreement.
The five law firms hired by the state in 1995 have already been awarded a $775 million fee, through a 1998 arbitration, which will be paid over 25 years by the tobacco companies. Two of the firms — Brown Rudnick Berlack & Israels and Lieff, Cabraser, Heimann & Bernstein — are suing the state for the additional $1.25 billion they say they are owed under a 25 percent contingency fee agreement they signed when hired.
The three other firms involved in the tobacco case have not joined the suit but would benefit from a positive outcome.
The state argues that paying the firms a full 25 percent of the $8.3 billion settlement would violate the standard of “reasonableness” that governs all contingency contracts, giving the firms $17,000 for each hour they spent on the case.
The trial is occurring at a time when Massachusetts, once heralded as a leader in tobacco cessation programs, has seen funding dwindle due to multi-billion-dollar budget deficits.
