Boston jury awards lawyers millions, not billions, from tobacco settlement

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A Boston jury on Friday awarded nearly $100 million in additional fees to law firms that represented Massachusetts in the 1998 tobacco settlement, but rejected the firms’ claim to billions more.The jury agreed with the firms that they deserved more than the $775 million they are already slated to receive, but rejected a claim that they are due the amount owed under their original contract, which would have amounted to a total of $2 billion through 2025 and $6.4 billion through 2050.Under the jury’s decision, the firms were awarded 10.5 percent of the money the state will receive from the settlement through 2025, up from the 9.33 percent they are currently getting. The difference adds up to an extra $96.5 million, according to the law firms’ calculation.Robert Popeo, an attorney for the law firms, did not immediately return a call seeking comment.The jury deliberated for nearly two days following a six-week trial that detailed the intricacies of contract law and rehashed the history of the 1998 national settlement between the states and the tobacco industry.While the legal fees for the private attorneys involved in the case were controversial across the country, only in Massachusetts did it result in a lawsuit. It was the only state in which the fees remained unresolved five years after the settlement.Only two of the five firms filed the lawsuit, but all will benefit from the jury award.During the trial, attorneys for Brown Rudnick Perlack & Israel and Lieff, Cabraser, Heimann & Bernstein argued that the firms were entitled to a full 25 percent of the state’s proceeds, which could total $8.3 billion through 2025.Because they were willing to take on the enormous risk of suing an industry that had never previously lost a lawsuit, the firms were entitled to full payment, the attorneys argued. They also argued that the state of Massachusetts must live up to its word and be stopped from changing rules midstream.“A deal’s a deal” was Popeo’s repeated mantra.The state argued that paying the firms the full amount would be a violation of the standard of reasonableness that governs all legal fees.They called several former leaders of the Massachusetts Bar Association to the stand. They said that paying the firms the full amount would be unreasonable because of the unique nature of the tobacco settlement, which is paying states billions of dollars in perpetuity.The state also called to the stand a former partner at Brown Rudnick, who said that pursuing the additional millions was “patently unethical.”States received about $8 billion this year from a 1998 settlement between the industry and 46 states as well as an earlier settlement between the industry and four states.