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Lawyers' tobacco fees reflect their risks, costs

Thursday, September 9, 1999

One tobacco firm decries 'first-class compensation for a second-class effort'

By Crystal Kua

Star-Bulletin

The amount of attorneys' fees awarded in a case should reflect the kind of work that was done and the amount of risk taken, Hawaii lawyers say.

In the case of $90.2 million awarded by an arbitration panel as fees to private law firms representing the state in litigation against the tobacco industry, the amount appears to be in line with the facts of the case, they said.

"The whole deal is that as a state we get enormous value from the work (the private lawyers) did on the case," said Honolulu attorney Janice Kim, past president of Consumer Lawyers of Hawaii.

The fees will be paid directly by the tobacco industry and are separate from and in addition to Hawaii's recoveries of $1.38 billion as part of a multistate settlement with the tobacco companies.

But not everyone is happy with the amount awarded, which is final and can't be appealed.

Brown and Williamson Tobacco Corp. decried the the amount of the fees, calling it "first-class compensation for a second-class effort," according to a statement released by the company.

"Hawaii's private counsel did not devote the time and effort to the state's case -- or take the kind of risk -- to support a fee award of this magnitude," the statement said.

'As a state we got enormous

value from the work (the lawyers)

did on the case.'

Janice Kim

HONOLULU ATTORNEY

But the Tobacco Fee Arbitration Panel, which awarded the $90 million, found otherwise.

Hawaii's outside lawyers assumed the role of private attorneys general, taking on litigation on behalf of "activist" Hawaii Attorney General Margery Bronster, who had limited staffing and resources.

The panel determined the amount by multiplying the number of hours spent on the case -- an estimated 40,000 hours -- by a rate of $410 per hour multiplied by 5.5, deemed a "substantial multiplier" by the panel that was based on several factors.

The panel found that the private lawyers representing Hawaii bore "important risks" and advanced $7.6 million in costs. "They expended these sums at a time when the risk of ever seeing a recovery was very substantial," the panel said.

Attorney Bob Toyofuku said a number of factors go into determining attorneys' fees.

"Whenever you look at fees that are very high, you look at the amount of attorneys involved, the amount of hours and the work put in," Toyofuku said. "When you look at the results the attorneys got for the state, it's pretty darn good considering we're a small state."

Toyofuku is familiar with the facts of the tobacco case because he lobbied the Legislature on behalf of the Coalition for a Tobacco Free Hawaii to see that 25 percent of the tobacco funds be spent on tobacco prevention programs.

Kim said attorneys' fees are determined case by case, but the amount of the awarded fees should be looked at separately from the facts of the case and the kind of service provided by the attorneys. "You can never take it out of context."

When told of Brown and Williamson's statement, Honolulu attorney Gary Galiher replied, "They're just sour grapes. ... I would consider the source."

The Hawaii team was led by Galiher of Galiher DeRobertis Nakamura Ono Takitani.

He said without the help provided by the private attorneys, there probably would not have been a state case. "If it weren't for us, the attorney general could not have brought this case."

Senior Deputy Attorney General Charles Fell, who assisted Bronster in the case, said the arguments of the arbitration panel was persuasive in determining the amount of the attorneys' fees.

The panel had previously determined compensation for private attorneys representing states that included:

  • Florida, where attorneys will receive $3.4 billion in compensation. The state will recover $13.2 billion.
  • Texas, which will receive $3.2 billion in lawyers' fees while the state will recover $17.3 billion.
  • Mississippi, where attorneys will receive $1.4 billion while the state will get $4.1 billion.

Other Hawaii firms involved in the case included Cronin, Fried, Sekiya, Kekina & Fairbanks and Stephen Goldsmith of Maui.

The fees will be paid over an estimated 20 years, Galiher said.