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Vol. 72, No. 10, October
1999 |
Letters
The Wisconsin Lawyer publishes as many letters in each
issue as space permits. Please limit letters to 500 words; letters
may be edited for length and clarity. Letters should address
the issues, and not be a personal attack on others. Letters endorsing
political candidates cannot be accepted. Please mail letters
to "Letters to the Editor," Wisconsin Lawyer,
P.O. Box 7158, Madison, WI 53707-7158, fax them to (608) 257-5502,
or email them.
Sound Off on Tobacco Settlement
Ms. Nancy Thome in her August
letter to the editor offers, "kudos for a job well done"
to the attorneys who represented Wisconsin in the litigation
against the tobacco industry. I disagree.
The tobacco settlement will be paid almost entirely out of
revenues generated by the future sale of cigarettes. Thus, rather
than dealing any sort of knockout punch to the tobacco companies,
the settlement virtually guarantees 20 years of continued existence,
with a vastly reduced threat of any real legislation that might
conflict with the terms of the settlement. As a result, those
who continue to smoke actually will pay the funds received by
the state and the astronomical legal fees. Statistics indicate
that this group will be those least able to afford it, as the
population of smokers gets poorer.
The attorneys representing Wisconsin accomplished no public
good. Even the premise that smokers consume more medical services
than nonsmokers (which purportedly is why the tobacco companies
owed anything to the state) has been proven false. Smokers actually
consume fewer funds, due to their shortened lifespans. Many of
the dollars spent on the diseases of old age, pensions, Social
Security, and Medicare are saved by the states and the federal
government. The aggravating thing is that the states and their
attorneys knew this when they accepted the settlement that enriches
them while promising that the ravages of tobacco will remain
with us.
William J. Mullins
Downers Grove, Ill.
In the August issue, State Bar President-elect Gary
Bakke responded to a letter from Nancy Thome on the tobacco
fee controversy. Our firm represents the three legislators, Sen.
Fred Risser and Reps. Frank Boyle and Mary Hubler, who successfully
challenged the fee demand of the three law firms involved in
the tobacco litigation. Pardon me for accusing the State Bar
president-elect of plagiarism, but he has used the arguments
from Bob Habush and Dan Rottier almost verbatim as they attempted
to justify their fee demand based on 20 percent of the recovery
to be paid to Wisconsin as a result of the multi-state negotiation.
The three firms were not part of the settlement negotiations
and, as it turns out, Wisconsin would have received almost the
same amount of damages had it not filed suit because the distribution
of the money was based on a formula with population as the most
important factor. Had the three firms been permitted to collect
20 percent, their fee would have been a staggering $40,000 per
hour.
I believe that the State Bar president-elect should investigate
the facts before responding in print. He writes, "Others
feel equally strongly that the plaintiff's lawyers had a
valid contract to undertake a very large risk." He apparently
is unaware of the fact that Judge Daniel Moeser declared that
"contract" invalid because it did not comply with section
14.11 of the Wisconsin Statutes, which defines the process for
hiring special counsel. One would think that the attorney general,
the governor, and three law firms could have followed the statute,
but they did not.
Equally important, I would think that the State Bar president-elect
would question the selection process when the state finds it
needs outside counsel. While Mr. Habush and the governor's
counsel assert there was a "bidding process" and that
several unnamed firms declined to represent the state because
of the risks, there is no evidence of any bidding process whatsoever
and there was no RFP. Two established firms, Lawton & Cates
and Warshafsky, Rotter, Tarnoff, were not only willing to take
the risks but had worked pro bono on the matter for six months
when they were dropped in favor of the governor's private
counsel and Whyte Hirschboeck. In fact, Mr. Warshafsky offered
to handle the entire matter for 2 percent of the settlement while
the three firms were demanding 20 percent.
It is also disturbing that the three law firms selected are
major contributors to political campaigns. While it is legal
to contribute to the campaigns of the governor or the attorney
general, the appearance of favoritism raises issues that the
Bar and its new president should be concerned about. Mr. Bakke
says, "No one questioned this arrangement when it was made."
The reason no one questioned it was that it was done in secret.
When I first saw the contract my response was to immediately
tell the media it should be cancelled.
Mr. Bakke asserts "this suit was a long shot," apparently
relying on the assertions of the three law firms. The fact is
settlement discussions were underway when the complaint was filed
and the firms had an escape clause and could have withdrawn any
time. When the fees were challenged, Bob Habush stated publicly
that nearly 50,000 hours had been devoted to the case. Then,
under pressure from major newspapers that filed an Open Records
suit, the three firms suggested that 27,000 hours was more like
it. Finally, when pressed, they eliminated law clerk and paralegal
time and the attorney hours dropped to roughly 21,000. Had they
been awarded their normal hourly rate as attorneys in civil rights
cases are, the fee would have been under $6,000,000 - a
long way from the $75,000,000 they now seek from the tobacco
defendants.
Mr. Bakke restates the Habush comparison with Michael Jordan,
Oprah Winfrey, and corporate CEOs. Needless to say, Mr. Jordan
has a better jump shot. But more to the point, Michael Jordan
and Oprah Winfrey are in the private sector and they get what
the market provides. The three law firms were in the shoes of
the attorney general, representing the citizens of Wisconsin,
and the "contract" called for the taxpayers to foot
the bill. Attorneys are regulated by Supreme Court rules, Oprah
Winfrey is not. The analogy to sports and entertainment "stars"
demeans our profession.
While Mr. Bakke can "clearly see the magic of a contingent
fee in the appropriate case" it is never appropriate for
the State of Wisconsin to enter into contingent fee agreements.
The State of Wisconsin can well afford to pay expert witnesses,
travel costs, deposition expenses, and other costs associated
with trial. They do it every day. Wisconsin is not an indigent
plaintiff seeking damages against a big corporation. And, of
course, our statutes demand that lawyers hired by the state be
paid fixed fees.
Our supreme court in 1917 expressed our philosophy in Ellis
v. Frawley, et al., 165 Wis. 381, 366:
"Attorneys are entitled to good pay, for their work is
hard; but they are not entitled to fly the black flag of piracy.
Such contracts as are here in question tend to make the lawyer
forget his duty as a minister of justice and convert him
into a mere grubber for money in the muck-heaps of the world."
(Emphasis added.)
All lawyers have suffered from this outlandish fee demand.
We must thank three legislators who stepped forward and successfully
challenged them. But the story is not over yet.
Ed Garvey
Madison
I respect Mr. Garvey's right to disagree with any opinions
that I express. I do ask, however, that he respect my right and
ability to form my own opinions. I can assure him that I do my
own thinking; that no member of the tobacco litigation team has
ever contacted me about fees; that I have not plagiarized anything
because I have never seen or been advised of the position taken
by plaintiffs' counsel.
Let us not lose sight of the two larger, and ultimately more
important, issues that I intended to raise. First, in many if
not most circumstances, attorneys do the profession and their
clients a disservice when they charge solely by the hour. Second,
attorneys should be encouraged to contract fees with a client
on the basis of the value of the services.
Gary L. Bakke
State Bar president-elect
New Richmond
Millennium Begins Jan. 1, 2001
Recent articles in the Wisconsin Lawyer have shown
that its authors (like most others) have fallen into the "Millennium
Trap." News reports and articles have repeatedly referred
to Jan. 1, 2000, as the beginning of the new millennium. This
is simply not true.
A century has 100 years. The first year of the first century
started with the year 1 and ended with the year 100. You must
complete the hundredth year to complete the century. Likewise,
you must complete the thousandth year (the year 2000) to complete
the millennium. The year 2000 is therefore the last year of the
current millennium. Jan. 1, 2001, is the first year of the new
millennium.
Cal R. Tillisch
Wausau
Correction to WFDL Article
The article, "The
Wisconsin Fair Dealership Law's Territorial Imperative"
in the August Wisconsin Lawyer contained two incomplete
sentences.
The last sentence on page 15 should have read, "This
amount included projected sales from Morley-Murphy's
Wisconsin location as well as its locations in Iowa and Minnesota."
This sentence concludes the paragraph.
The first sentence of the next paragraph, which begins on
page 16, should have read, "Zenith argued that awarding
damages for future lost profits on sales from Morley-Murphy's
Iowa and Minnesota locations was an extraterritorial extension
of Wisconsin law in violation of the "dormant commerce clause,"
which is the limitation, implied by the U.S. Constitution's
delegation to Congress of the power to regulate commerce among
the several states, on a state's authority to regulate commerce
outside its borders.10" The remainder of the paragraph is
correct.
The editors regret the error.
WL Editors
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