TOBACCO CASE LAWYERS AWARDED BILLIONS IN FEES

DALLAS -- Attorneys who helped Texas, Mississippi and Florida settle
their lawsuits against the tobacco industry will receive almost $8.2
billion in fees, an amount believed to be the largest ever awarded in
the United States.

A divided three-member arbitration panel announced yesterday that five
private attorneys in Texas will receive $3.3 billion. The 11-firm team
that worked on the Florida case was awarded $3.43 billion, and the 13
Mississippi team was awarded $1.43 billion.

The lawyers will receive the payments over at least 10 years, but
perhaps as long as 25 years.

The payments, decided by a national arbitration panel in Washington,
are about 19 percent of the record $17.3 billion settlement in Texas,
about 25 percent of the $13 billion settlement reached in Florida and
about 35 percent of the $4 billion reached in Mississippi.

The states had all reached settlements from their lawsuits against
tobacco companies for health care costs for smokers.

John Calhoun Wells, chairman of the arbitration panel, said the board
recognized the awards are "very substantial."

But Wells said that without the lawyers "there would be no
multibillion dollar settlements for the states to reimburse
tobacco-related health expenses and provide funds for educational
efforts to reduce youth smoking."

Charles B. Renfrew, the arbitrator appointed by the tobacco industry,
dissented from the opinion. He called the awards "excessive and
incomprehensible."

"I am concerned that the sheer size of the fees awarded will raise
questions as to the integrity of the proceedings here and undermine
public confidence in the profession and in the legal system
generally," he wrote.

He said while the attorneys achieved "truly incredible" results for
the states, "there are limits even in these cases as to the amount the
attorneys should be paid."

Lawyers who worked on the cases were pleased, but state officials and
at least one tobacco company criticized the size of the award.

"It sounds fair to me," said Pensacola, Fla., attorney Robert
Kerrigan, who will get a 6 percent share of the Florida award, or more
than $200 million.

Brown & Williamson Tobacco Corp. said the awards are
"obscene."

"When we reached a settlement with each of these three states, we
agreed to pay 'reasonable compensation' to the lawyers representing
the states. The award of $8.1 billion defies anyone's definition of
'reasonable,"' the company said.

Texas Gov. George W. Bush also was unhappy.

"I will never understand and never agree that five private law firms
should collect more than $3.3 billion for working less than two years
on a case that was settled before it went to trial," Bush said. "The
fee seems totally out of proportion for the work performed."

Seth Moskowitz, a spokesman for RRJ Nabisco, said his company wasn't
commenting on the fee.

The three states and Minnesota had all reached settlements with the
tobacco companies prior to a national for $206 billion deal with the
remaining 46 states.

Checked-by: Rich O'Grady