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Law Firm Could Be Big Winner in Tobacco Case
By Karen-Louise Boothe
January 19, 1998
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State Attorney General Skip Humphrey's lawsuit against big tobacco interests is going to trial. But critics of his contract with the firm that is arguing the case, the Minneapolis law firm of Robins, Kaplan, Miller and Ciresi, say that private lawyers could get rich at the expense of state taxpayers.

CRITICS SAY THE FIRM stands to earn as much as $1 billion if the state is awarded or settles on an amount of $4 billion. It's an estimate some think is conservative. If the firm divides up the $1 billion among the 63 partners, as is often the practice, each would get close to $16 million.

But lead attorney on the case, Michael Ciresi, says when the firm agreed to help mount the state's case, the lawsuit was a gamble. The firm risked mostly its own money - and no state money - in return for 25 percent of any award or settlement, plus expenses. He says no other Minnesota firm was willing to get involved.

Ciresi: In fact four months ago when I was speaking to a conference of attorneys I asked for a show of hands of who'd get involved, and not one raised their hands because of the risk in these kinds of cases.
The governor and his cabinet members, who favor a national settlement, have criticized the agreement. Commerce Commissioner Dave Gruenes is among those in the administration who called upon the office of the legislative auditor to review the arrangement. He says, Minnesotans deserve to know both the size and the details of the money the firm might collect.
Gruenes: Certainly the amount of time this firm has put in this case has been a lot, but the discussion over appropriate legal fees is appropriate to have. No one has envisioned a settlement or litigation of this magnitude, it's never been done before. I believe when people learn the state has contracted out, and upon a win or settlement the firm could get upwards of $1 billion, most people will think that's excessive.
The attorney general is not required to seek legislative approval of the agreement with the law firm. But Republican senator Sheila Kiscaden, who sits on the Legislative Audit Commission, says the administration and the legislature still have a right to know what size of bill is being run up by the law firm.
Kiscaden: And what kind of oversight do we have to monitor those expenses, because ultimately the taxpayer has to pay them? They either pay them directly, or they'll pay them by not having the revenue come to the state by any settlement or award that's given.
Humphrey says if the state wins the case, he'll ask the judge to add the law firm's fees to any damage award rather than deduct it from whatever the state and Blue Cross/Blue Shield wins. In addition, Michael Ciresi considers the estimated $1 billion that the governor and others have predicted the law firm would collect, to be early speculation.
Ciresi: it's premature to discuss attorney's fees with no result at this time. I will say this: those who have bandied about figures like $1 billion don't know what they're talking about. In fact, anyone who says $1 billion is a flat out a liar ... because that will never happen.
Critics argue their $1 billion estimate for the firm is not unrealistic. They point to a recent settlement in Texas that was four times that amount.

Humphrey stands to reap immeasurable campaign benefits from a successful suit. But he denies a political connection between his arrangement with the firm and his own gubernatorial aspirations. The firm has already contributed $4,000 to his campaign, and his critics say Humphrey is taking care of trial lawyers who - through the Minnesota Trial Lawyers Association PAC fund - strongly support DFL candidates.

But the president of the association, Carla Wahl, says the organization is bi-partisan. She adds, the agreement with the outside law firm is being politicized by Humphrey's gubernatorial foes.

Wahl: And I think it deflects from the responsibility which should be imposed on the tobacco industry and the tremendous efforts in Minnesota to rectify and protect the rights of Minnesotans. So I think the fee issue is really a red herring.
Humphrey says he's not motivated in this case by gubernatorial aspirations.
Humphrey: The political pundits who are friends of mine have said, "Well, Skip, that's a nice thing you're going to do. I hope you feel real good because you're done politically." The fact is, in terms of political timing, it just happened. Our first request for a court date was last January. The tobacco industry wanted it to start in December of next year. The court happened to say we'll start in January of 98 ... that wasn't done by Humphrey or the tobacco companies, it was done by the court.
The office of the legislative auditor is expected to complete its preliminary assessment of the attorney general's contract with the law firm by Tuesday, and decide whether to go ahead with a full-scale review.