Greed On Trial
The question before the jurors was not whether legal fees amounting to $7,700 an hour were "unreasonable." It was whether the lawyer-plaintiffs should get $1.3 billion more
My favorite moment during last winter's $1.3 billion Massachusetts tobacco-fee trial came near the end, when Ronald Kehoe, an avuncular, white-haired assistant attorney general, was questioning the state's star witness, Thomas Sobol. Sobol was describing how his former law firm, Brown Rudnick Berlack & Israels, prepared in 1995 to sue Big Tobacco on behalf of the Commonwealth.
Sobol testified that to reduce its risk on what looked like a long-shot lawsuit, Brown Rudnick hired a bunch of cheapo "contract" lawyers, at $25 to $35 an hour, and also cut back on its pro bono commitment, redirecting $1 million worth of work to the anti-tobacco litigation.
KEHOE: Was the tobacco litigation seen by the firm as a form of pro bono activity in part?
ROBERT POPEO [Brown Rudnick's attorney, jumping out of his chair]: Objection, your Honor.
JUDGE ALLAN VAN GESTEL: Sustained.
Did Brown Rudnick view the anti-tobacco lawsuit, which would later pay out the largest legal fee in the Commonwealth's history, as pro bono work? I asked Sobol that question over hot chocolate at Johnny's Luncheonette, in Newton, Massachusetts. Both on and off the stand the forty-six-year-old Sobol cuts a bold figure, closely resembling Bruce Springsteen before the Boss started showing his age. For want of a better term, Sobol—not unlike Jan Schlichtmann, the Boston lawyer who litigated the toxic-waste case made famous in the book and movie A Civil Action—has star quality. In one of several tendrils linking the two cases, which were tried in the same downtown courtroom, Schlichtmann and Sobol were briefly colleagues, before quarreling over the—yes—fees in a high-profile class-action suit, unrelated to tobacco.
Sobol told me that some of his Brown Rudnick colleagues did view the tobacco project as pro bono work. "It wasn't considered 'real lawyering,'" he said, "because we were suing corporate America, not defending corporate America. And we weren't making any money on a day-to-day basis." He added, "But this was a fee transaction. We weren't rendering services for free."
No, not exactly. Brown Rudnick and four other firms representing Massachusetts had secured a 25 percent contingency fee in the tobacco litigation. And that litigation paid off hugely. In 1998 a master settlement agreement (MSA) between forty-six states and Big Tobacco awarded Massachusetts $8.3 billion over twenty-five years, in purported Medicaid losses resulting from smoking. The tobacco companies also agreed to pay the states' legal fees, in many cases relying on an arbitration panel to decide how much each legal team deserved. As the lead law firm for the Commonwealth, Brown Rudnick hit the jackpot. Having invested about $10 million in time and expenses, it won $178 million from the panel, which awarded Massachusetts, of all the states covered by the MSA, the highest legal fees—$775 million in all. In court the state noted that Brown Rudnick's chief of litigation, Frederick Pritzker (also the chairman of its ethics committee), had siphoned off $14 million for seventy hours of work: a rate of $200,000 an hour. Sobol, the lead lawyer, received $13 million. On paper each Brown Rudnick partner stood to make an average of $140,000 a year from this case alone.
But the big numbers equaled only 9.3 percent of the $8.3 billion award. Brown Rudnick asked the state for a compromise between the 9.3 percent and the promised 25 percent fee. Attorney General Thomas Reilly refused to pay a penny more than the arbitration award. Now Brown Rudnick and the four other firms were back in court, asking for the full 25 percent: $1.3 billion more in fees. Brown Rudnick and the others were actually making the tobacco companies look good.
The events that landed the lawyers in Judge van Gestel's cavernous Art Deco courtroom had not exactly heaped honor on either side. Lawyers for every state in the Union had collected unheard-of fees from the lawsuits that led up to the MSA; Big Tobacco had signed the agreement, which reimbursed the forty-six states for $206 billion worth of smoking-related medical costs, in exchange for protection from further litigation by the states. In Florida, one of four states that settled outside the MSA process, lawyers had also negotiated a 25 percent contingency fee; that fee equaled $2.8 billion, a sum that "simply shocks the conscience of this court," one Florida judge observed. A year after Florida settled, arbitrators awarded its eleven law firms an even larger fee: $3.4 billion—or an average of $300 million each.
The MSA fee arbitration resulted in the doling out of checks on a generous if unscientific basis. The first states to sue won a bonus for getting the ball rolling; the Massachusetts lawyers' $775 million (which amounted to an average of more than $7,700 an hour) reflected the state's role as one of the key participants. In other states lawyers lifted their fingers to the wind of public opinion and eventually settled for the arbitration awards, which were by any reasonable standard gargantuan. (Lawyers in Texas ended up accepting "only" $3.3 billion. They had asked for $25 billion—more than the state's settlement amount—but soon came around. The former Texas attorney general is in jail for trying to defraud the tobacco fund; but that, as they say, is another story.) Brown Rudnick and a co-plaintiff, the San Francisco partnership of Lieff Cabraser, Heimann & Bernstein, decided to sue for their full fees.
While the lawyers were grubbing, the state was hardly covering itself in glory. Scott Harshbarger, who as the Massachusetts attorney general signed the contingency-fee deal in 1995, ran for governor three years later. His opponent, the incumbent Paul Cellucci, made the "obscene" tobacco fees a campaign issue—as did Governor George W. Bush in Texas. In the heat of the campaign Harshbarger pulled Massachusetts out of the increasingly controversial MSA negotiations. He lost the election anyway, and the state joined the agreement. This allowed Cellucci and his Republican successors to feast on the multimillion-dollar settlement revenues.
By 2000 the word was out across the country that many states were squandering the vast sums raining down on them from the MSA. In theory the money was earmarked for medical care, or for anti-smoking education targeted especially at young people. In practice most legislatures used it for budget balancing or more exotic purposes. In Los Angeles some of the money was designated for improving wheelchair access on sidewalks; and then-mayor Richard Riordan proposed using some to settle abuse claims filed against the Los Angeles Police Department. In Massachusetts the governor and the legislature pillaged the tobacco awards in short order to balance the state budget.
Perversely, the tobacco money proved to be addictive. In 2003 the attorneys general of thirty-three states sided with Philip Morris against an Illinois court that wanted the company to post a $12 billion bond after it lost a huge class-action case. Philip Morris loudly proclaimed that posting the bond would bankrupt it, thus threatening its MSA payments to the states. The litigating lions saved the shorn tobacco lamb; at the behest of the states, the court reduced the bond to a more manageable $6.8 billion.
During the course of Brown Rudnick, et al. v. The Commonwealth of Massachusetts, in a sidebar conversation with Robert Popeo and the Commonwealth's lead attorney, Dean Richlin, the sixty-eight-year-old Judge van Gestel, an old-fashioned lawyer who referred to the law in wistful tones as a "learned profession," expressed shock at the states' plumping for Big Tobacco.
VAN GESTEL: That's, in my view, a very sad event, in that the states have to keep the evil empire, as it's been called, afloat.
RICHLIN: Exactly so.
VAN GESTEL: The next thing you know, the states will be having Joe Camel as the logo. I mean, I only meant that partly facetiously ... To me, it's an outrage.
The humorist Dave Barry had great sport with the tobacco litigation, noting,
[The states] are distributing the money as follows: (1) Legal fees; (2) Money for attorneys; (3) A whole bunch of new programs that have absolutely nothing to do with helping smokers stop smoking; and (4) Payments to law firms. Of course, not all the anti-tobacco settlement is being spent this way. A lot of it also goes to lawyers.
To sue the Commonwealth, Brown Rudnick hired the Boston firm Mintz Levin Cohn Ferris Glovsky & Popeo, perhaps best known for its partner Robert Popeo. A compact bantam of a man, the ferocious Popeo, who is sixty-five, once garnered a few moments of national fame by halting on camera a 60 Minutes interview with his sulfurous client John Silber, then the president of Boston University. Popeo likes high-profile clients (he recently represented Suzy Wetlaufer, the inamorata of General Electric's retired chief executive Jack Welch, when she was leaving her job as editor of the Harvard Business Review), and he is quite comfortable in a courtroom. The youngest of six children from an Italian-immigrant East Boston family, he comes by his flat vowels honestly. His hard-earned affluence notwithstanding, Popeo put on a credible still-a-man-of-the-people act for the jury and did his best to jolly up the judge.
At sidebar conferences Popeo and Richlin looked like Mutt and Jeff, with the tall string bean Richlin towering over his adversary. One might have expected the assistant attorneys general—Richlin and his boyish forty-two-year-old deputy, David Kerrigan, the head of the Commonwealth's Trial Division—to be outmaneuvered by their private-sector opponents. But the lawyering was well matched. At first glance the balding, dark-haired Richlin looks like an undertaker; but he proved to be a smooth operator in court. His boss and former law partner, Attorney General Thomas Reilly, had entrusted Richlin with delicate work before: monitoring the sale of the Boston Red Sox and the investigation of sexual abuse by Roman Catholic clerics. I had heard Richlin called "Tom Reilly's brain"—a backhanded compliment that falls wide of the mark. Reilly showed plenty of brains by giving his hot-potato cases to Richlin.
Both sides wanted a jury trial, because deep down neither fully trusted its case in the hands of Van Gestel, a veteran litigator and a business-law specialist. "The judge is just another lawyer—we had to get the public involved," Richlin told me during the trial. Popeo had a gut feeling that Van Gestel didn't like the plaintiffs' case, and said so to his face. "His feelings were clear from the outset," Popeo told me after the trial was over. "Look, I've known him for forty years, and I think he's a terrific judge, but the law is an industry now, not a 'learned profession.' When you start asserting that lawyers aren't entitled to their contractual rights, you're saying you want to put a cap on lawyers' earnings. He should not have done that."
Both sides retained jury consultants, who convened focus groups similar to those assembled by television networks and advertisers. The mock jurors heard the lawyers' proposed "clopenings"—abbreviated summaries of possible opening and closing arguments—and pushed buttons when they heard an argument they liked. "The state's obligation was a hot issue," Popeo told me. "Potential jurors wanted the state to keep its word." But he had a problem. His clients had already been paid more than most jurors could hope to earn in several lifetimes. "You were never going to convince anybody that $775 million wasn't enough," he said. "We had all the equities, they had all the emotions."
Across town, Brown Rudnick's case looked pretty strong to the state's attorneys, who had holed up in a small war room in an adjunct office overlooking North Station. They, too, commissioned focus groups, and polls as well. "We learned that 'a deal is a deal' is a very compelling argument for most people," Richlin recalls. "We had to break through that cognitive resistance. And worse yet, as lawyers for the state, we were representing ourselves. We had a huge credibility problem."
The polling showed that inveighing against "greedy lawyers" would prove counterproductive over the course of a long trial. Richlin had included a reference to the Brown Rudnick partners' $140,000-a-year take in a draft of his closing argument, but he took it out. "That wasn't going to win the case for us," he told me. "There were better ways to communicate the issue."
Ultimately, Richlin & Co. decided to educate the jury on the doctrine of "reasonableness," which means what it says: lawyers' fees should be reasonable. The problem was that 25 percent had seemed quite reasonable in 1995, when the state contracted to pay it, and when winning the case against Big Tobacco seemed a remote possibility. After all, many contingency fees are 33 percent or higher. Only after the lawyers scored their $775 million windfall could the case be made that they were not entitled to more. Kingman Brewster was once asked what he had learned during his years as a professor at Harvard Law School, and he shot back, "That every proposition is arguable." Whether the doctrine of reasonableness could be applied both at the time the contract was signed and at the time of payout provided for many hours of soporific debate in Van Gestel's courtroom.
One wintry day during the trial I struggled to match strides with the much taller Richlin as he walked quickly from the courtroom up Beacon Hill to the attorney general's office. He decided to make his case simple for me: "What we're saying, in essence, is 'It's too much money.'"
Jo Moore, a public-relations adviser to one of Tony Blair's Cabinet ministers, made publicity history by sending out an e-mail on September 11, 2001, saying that it was a good day to bury bad news. It is no accident, as the ever dwindling corps of Marxists like to say, that Brown Rudnick filed its claim against the state two days after Christmas of 2001. "LAW FIRM ASKS COURT FOR MORE TOBACCO MONEY," The Boston Globe reported demurely.
Although the trial would not start until November 3, 2003, much of the serious combat took place in the preceding twelve months. Some of the pretrial maneuvering seemed trivial. For instance, the state persuaded the judge to prevent Popeo from mentioning Boston's $14.7 billion "Big Dig," a downtown highway-and-tunnel-construction project, in court. While arguing for a summary judgment, Popeo had pointed out that even in the face of mounting cost overruns, the state wasn't welshing on its payments to the highway contractors. So why single out the tobacco lawyers? "The only thing [the anti-tobacco team] did wrong was succeed," Popeo argued—"a pretty good line," Richlin later admitted.
Van Gestel threw the Big Dig out of his courtroom and also granted Popeo's request to keep certain inflammatory phrases out of evidence. The formal-sounding "Plaintiffs' Motion to ... Preclude the Commonwealth From Introducing Any Evidence Regarding Private Counsel's Post-Contractual State of Mind on Reasonableness of the Fee" forbade Richlin to include any lawyers' statements that they considered the demands "'patently unethical,' 'f-ing absurd' or to make one 'look like a pig.'" These were in fact statements from Thomas Sobol and Frederick Pritzker that had cropped up in depositions. The same motion was also meant to exclude one of Pritzker's many inane pretrial observations: that the Brown Rudnick partners' $140,000 annual payoff was "not enough for anyone to retire on." Pritzker decided to repeat it on the witness stand anyway.
Each side fielded motions to knock out potential opposing witnesses. Richlin rejected two academics who were prepared to testify for the plaintiffs on the "risk paradigm"; they would have argued that Brown Rudnick's eighteenfold return on its $10 million investment in the tobacco litigation might have been duplicated in the venture-capital market. He may have done Popeo a favor, by shortening the plaintiffs' endless four-and-a-half-week presentation. "It seemed to me that the plaintiffs' lawyers' strategy was to be very thorough and tedious," the juror Craig Stevens, a mechanical engineer at the General Electric aircraft factory in Lynn, Massachusetts, told me. "It would take three, four, five days for a witness to tell his story, and then another witness told the same story all over again."
Popeo returned the favor by initially including Richlin on his witness list. As the No. 2 man in Reilly's office, Richlin could testify about his boss's decision not to pay Brown Rudnick any more than the arbitrators gave them. (Reilly could testify too, of course.) "As a tactic, it would be useful for them to put me on the stand and attack my credibility," Richlin told me. If it was a trick intended to get inside Richlin's head, it worked. Richlin offered to withdraw from the case entirely, but two weeks before the trial began Van Gestel granted a motion that kept him off the stand.
Richlin had a trick up his own sleeve. Only Brown Rudnick and Lieff Cabraser had filed suit for the extra fees; the three other law firms that had worked for the Commonwealth demurred. Invoking a provision of Massachusetts law, Richlin forced the three other firms to join Brown Rudnick and Lieff Cabraser at trial. Throwing these firms into the case accomplished two goals for the defense. First, instead of two firms, which would have sued for $564 million, there were now five firms suing for $1.3 billion; Richlin wanted the jury to hear the biggest numbers possible. Second, it was at the very least an annoyance to the lead plaintiffs to sit at the same courtroom table with co-plaintiffs who, if asked, would be happy to say that they opposed the case. "I never would have brought this lawsuit," said Joe Rice, a partner in Motley Rice, of Mount Pleasant, South Carolina. "We begged Brown Rudnick not to file the case." The original plaintiffs "went batshit," one state lawyer told me. A full month after the trial was over, Popeo could not contain his scorn for the "free riders" who had contributed not a penny to the plaintiffs' multimillion-dollar effort: "They don't want to look like 'greedy lawyers,' but they want all the benefits of the case. We did all their work for them."
The three firms' official line throughout the trial was that they had not decided whether they would take their share of any Brown Rudnick winnings. The sole partner willing to discuss this subject with me, however, answered my question about sharing the booty along the lines of Are you nuts? Of course we'll take the money.
I asked Richlin why he didn't put Rice, one of the architects of the master settlement agreement, on the stand and have him trash Brown Rudnick's case. For one thing, Richlin answered, just because Rice opposed the lawsuit didn't necessarily mean that he thought the 25 percent fee was unreasonable. And anyway, he said, "I had Tom Sobol."
In any complex litigation both sides have "bad facts" their lawyers need to avoid. In addition to its questionable use of tobacco-settlement money, the state had signed the contingency-fee deal not once but twice. Moreover, Harshbarger's office had, in 1998, defended the fee agreement to skeptical state officials, who had toyed with the idea of slashing the lawyers' cut to one percent.
As for the plaintiffs' bad facts, Brown Rudnick and Lieff Cabraser had both represented other states in the tobacco settlement for contingency fees lower than 25 percent. That was inconvenient. Another problem was that they had originally asked the arbitration panel for fees payable for twenty-five years. But because the tobacco companies had negotiated an annual cap on payments of legal fees to the states, Massachusetts's lawyers might not receive their full share of the payment in twenty-five years. So now Brown Rudnick was asking that the fees be paid in perpetuity. That demand seemed excessive to Francisca Evans, a juror who left the trial shortly before its completion for economic reasons: her employer, a large mutual-fund company, refused to keep her on the payroll, and she couldn't provide for her six-month-old baby and young daughter on the court's $50 per diem. "I had a problem with the lawyers' getting paid forever," she told me, "knowing that my family is surviving on fifty dollars."
Van Gestel, who indulged in occasional sardonic asides out of the jurors' hearing, confessed that he, too, found the fees at stake very large indeed. At one point he said to the lawyers, "Just for your own benefit, I get interested in this case from time to time, and I did the calculations last night, and I find that Mr. Pritzker's share is such that in thirty-five minutes he will make what the Commonwealth pays me for a year. That's an interesting number."
But the ultimate bad fact for the plaintiffs was the presence of Thomas Sobol, the One Just Man in the eyes of the state's lawyers. Popeo called Sobol a "bitter, disgruntled partner, not from one law firm, but two law firms"—he had briefly worked at Lieff Cabraser after leaving Brown Rudnick.
Sobol was the dream witness for the state. He had led all the private attorneys in the Massachusetts case, yet after the $775 million arbitration award—and he fared quite well in the division of the spoils—he had parted company with Brown Rudnick on the fee issue. His first significant disagreement with the firm came over allocation of its $178 million. Sobol had been hoping to use a portion of the money to endow public-interest work by the firm. Ultimately, that didn't happen. Worse yet, to his shock, Brown Rudnick awarded no bonuses to the associates, contract lawyers, and paralegals who had been part of his team and had been paid as little as $10 an hour.
The firm suggested that because Sobol left Brown Rudnick less than two years after the settlement award, he wasn't entitled to his full $13 million share of the tobacco swag. A contested $3 million went to charity, and in May of 2000 Sobol signed a separation letter that would later become a cause célèbre in the courtroom, mainly for the state's futile efforts to have the letter's restrictive provisions introduced into evidence. Brown Rudnick agreed that Sobol did not have to speak on behalf of any claims the firm might file against Massachusetts. For his part, Sobol would "not publicly oppose, disagree with, or advocate against [Brown Rudnick's] position."
A year and a half later Sobol read in the newspaper that Brown Rudnick and Lieff Cabraser were suing the state for the extra fees. One way or another, he was going to have to testify. In 2002, alone among the many lawyers named in the case, Sobol hired his own lawyer and filed an answer to his former firms' lawsuit. Buried at the end of a twenty-four-page document was Sobol's request that the court determine if the Brown Rudnick claim violated a rule of professional conduct that "bars a lawyer from charging or collecting a clearly excessive fee."
Lawyers are paid a great deal of money to read, say, 269 dull paragraphs. Sobol's request appeared in paragraph 268. Suddenly Sobol was showing up on everyone's radar. "He files a response that he didn't have to file, saying the fees may be unreasonable," Richlin said, explaining how the document caught his attention. "And he has his own lawyer. If he's so aligned with them, why does he need his own lawyer?"
Bells went off at Mintz Levin, too. Popeo summoned Sobol's lawyer and reminded him of the nondisparagement clause in the May 2000 letter—Sobol was putting his share of any additional tobacco proceeds at risk. Sobol responded that he wouldn't volunteer information, and that he couldn't be punished for telling the truth under oath. He was deposed for nine days, surrounded by lawyers constantly asserting privileges and filing objections.
Here was the real problem looming for Brown Rudnick: in the bloodless world of corporate law, Sobol was an unabashed crusader who exuded passion for his adopted causes. He hated the tobacco companies ("a true believer," one fellow lawyer called him, half admiringly), and he could communicate his loathing. Of all the witnesses I heard on the stand, only Sobol spoke heatedly about suing Big Tobacco. "The tobacco industry is as close to evil as you can get," he said. Sobol had no objection at all to collecting more money—so long as it came out of Big Tobacco's pocket. "When there is less smoking, there is less human misery," he testified. But he opposed taking the extra money from his former client, the state.
Richlin and his colleagues were confident that 90 percent of Sobol's deposition testimony would make it into the trial. "His answers were a treasure trove," Richlin said.
Trials are boring, and long trials are excruciatingly boring. Most days Van Gestel's vast courtroom was empty save for the lawyers, the jury, the judge, and we happy few, the handful of interested onlookers.
After a while I felt like a passenger on a cruise ship, perhaps headed for someplace interesting, but becalmed week after week in a windless (not exactly) Sargasso of mind-choking legal seaweed. There were a few brief moments around Christmastime when I could have told you what a "Lodestar cross-check" is (don't ask), or the proper role of a "19(a) defendant" (the three extra law firms were 19(a) defendants) in a Massachusetts courtroom.
My fellow passengers proved to be friendly, if cautious. A neighbor of mine, Betsy Burnett, was arguing the plaintiffs' case alongside her better-known partner, Popeo. She and I chatted occasionally, though for understandable reasons she was mostly in what a friend of hers called "lawyer mode" for the lengthy trial. The media-services engineer, Ian McWilliams, whose firm had wired the courtroom for jazzy, oversize screens on which the plaintiffs would display their exhibits, was also amiable, although he had been instructed not to talk to me. So had most everyone else. Case in point: Betsy has full, juror-head-turning blonde hair, and I wanted to identify its shade precisely. I asked a young lawyer for the Commonwealth what shade it was. She thought for a moment and answered, "Ash blonde. But that's off the record."
Frederick Pritzker, as Brown Rudnick's chief of litigation, showed up almost every day. For better or worse he had become the public face of the plaintiffs. He was amenable to chatting, although not to being quoted. The tightly wound litigator, once a tenacious upper-level squash player at the Harvard Club, turned out to be a comparatively impoverished Boston Pritzker, only tangentially related to the Chicago real-estate barons. Perhaps he needed another $8 million to remain competitive with his Windy City cousins.
When I first shook his hand, I remarked that he was the most reviled man in Boston, which evoked a knowing smile. Obviously intelligent, and a valued mentor to Sobol, Pritzker had evinced an almost uncanny ability to say silly things in public—he was the rare lawyer to fall victim to excessive-candor syndrome. In his pretrial depositions he had made an unfortunate allusion to not looking like a "pig" in pursuing additional fees. "'Pig' is probably the wrong and improper word that I used," Pritzker said the moment it escaped his lips. But it was too late. "PIGS AT THE TROUGH," read the inevitable headline of The Boston Globe's widely read "Downtown" column, which quoted from the leaked deposition.
In an interview with another Globe reporter, Pritzker made his observation that his partners' $178 million take was "not something that anybody can retire on." Van Gestel, as noted, had agreed to keep the remark out of the courtroom, but on the witness stand Pritzker blabbered on about how he had been misquoted and how he had been proved right: not one of his partners had retired since the tobacco award.
In court Richlin read out yet another embarrassing Pritzkerism from the deposition: when contemplating the tobacco suit, Pritzker had said, "I had dollar signs in my eyes, even back at that early stage. And I know that they were large dollar signs."
Pro bono work indeed!
The first week of the plaintiffs' case (which I missed) was taken up by Harshbarger's testimony. This was a smart opening demarche, because the earnest Harshbarger, the former president of Common Cause, is well regarded in Massachusetts. As the man who had approved the 25 percent contingency fee, he had nothing but praise for the law firms' excellent work, and his presence posed a special challenge for Richlin, who, as a top state official, could not overaggressively cross-examine his boss's Democratic predecessor.
I happened into court when the partners of Lieff Cabraser were furiously explaining away a bad fact—their secret negotiations with the Liggett tobacco company, which took place just as Massachusetts was signing the contingency-fee agreement. The state wanted to prove that if Harshbarger had known of Liggett's willingness to settle the states' medical claims, he might have negotiated a lower fee.
The following day I savored the testimony of the plaintiffs' first expert witness, introduced as Lawrence Fox, of the University of Pennsylvania Law School. (Later in the trial one of Fox's colleagues uncharitably noted that Fox was an adjunct faculty member, and not strictly speaking a professor.) Fox mentioned that he was a Philadelphia lawyer, though no one else in the courtroom seemed to make the connection to the famous Woody Guthrie song about "the great Philadelphia lawyer ... in love with a Hollywood maid." (Much ill befalls him.)
Fox sported a fruity-looking bow tie and addressed the jury in a booming, self-assured voice. He turned out to be what every expert witness is—a trained seal—only more so. Fox went so far as to say the 25 percent fee might be deemed too low; perhaps something like 33, 35, or 40 percent might have been more appropriate.
In one of many lengthy digressions Fox waxed eloquent about the possible fee structure of the royalties for Gone With the Wind, prompting a rare intervention from the courtly judge. "This is not Hollywood here," Van Gestel said. "We are not dealing with Hollywood cases, and we are not dealing with copyright cases ... I think Hollywood is a stretch from here."
Hearing this, Popeo jumped to his feet and called for a sidebar.
POPEO: I am concerned that your statements reflect a view that the jury will pick up on. I know your views of this case, and you are entitled to them. It may not be Hollywood, but these are lawyers and that is not at all—
VAN GESTEL: I appreciate your comment. I take it very seriously, and I apologize if I have done so.
I just think that Mr. Fox is one who kind of tends to ramble on, in my view, somewhat wildly. I have known Mr. Fox for many years. I hold him in very high regard. He knows a lot about ethical things.
We need to keep this case tied to this kind of case, and he is happy to go on and on. He would lecture for an hour if we let him ...
It isn't so much your questions. It's that the witness takes them as an opportunity to demonstrate how profound he is in the subject and—
POPEO: Experts sometimes do that.
They do. The plaintiffs' final expert witness was another legal megaphone—a tall, strapping law professor (a real professor) named Charles Silver, of the University of Texas. The co-director of the university's Center on Lawyers, Civil Justice, and the Media, Silver boasted of having advocated on behalf of the private lawyers in Texas who angled (unsuccessfully) for the $25 billion tobacco award. Silver was a card-carrying, University of Chicago-trained free-market guy: the price is what the market will bear, end of story. "I only know one tune," Silver told Richlin during cross-examination. The line worked quite effectively in Richlin's closing argument.
As with Fox, Van Gestel expressed reservations about the supremely self-confident Silver, although the judge carefully kept his remarks away from the jury. Betsy Burnett wanted Silver to talk about "hindsight bias"—the notion that the lawyers' fees looked excessive only when viewed with the benefit of hindsight. Richlin objected, on the grounds that Silver's training was in law and political science, not psychology. Again at sidebar the lawyers were treated to a dose of Van Gestel's skepticism.
VAN GESTEL: You know, obviously Professor Silver is a very bright man, and he's been to very good schools ... I don't know that that gives him the qualifications to talk about some psychological effect ...
BURNETT: I just want to make sure the record reflects it's not pop psychology. Some fellow won the Nobel Prize for talking about it ...
VAN GESTEL: He's not a psychiatrist. He's not a psychologist. He never practiced in those professions, and he's now going to give what sounds to me like a—tell the jury ... "Well, you have to understand, because I'm very smart about this and I've read a lot about it and I went to a good school and I read what some people who have won Nobel Prizes have said, and, therefore, you have to rule or discount what Scott Harshbarger said because—"
Silver influenced the course of the trial, although not in the way he intended. As part of his testimony he showed a slide of contingency-fee awards from a list that appeared in a trade publication called Class Action Reports; it was designed to show that what the plaintiffs asked was not unreasonable. Under cross-examination he admitted that his choice had been selective. He had not shown the jury the complete list. The omitted awards were well below 25 percent—some as low as 2.2 or 3.4 percent. Richlin put all the awards up on the jumbo screen, and the jurors remembered them. "That was very powerful," the jury forewoman, Jo-Ann Schwartzman, recalled to me. When the jury eventually decided to award the lawyers an extra 1.2 percent, for a total of 10.5 percent, she said, they used the Class Action Reports numbers to backstop their decision.
Schwartzman added that Silver's freebooting commitment to market capitalism rubbed her the wrong way: "I was concerned that Silver said the only way to motivate lawyers was to dangle more money in front of them. He was clear that that would be their sole motivation. That was heartbreaking." Later in our conversation she said, "Who wants to live in a world with that kind of do-or-die attitude, where there's no allowance for change, for humanity, or for reasonableness?" I asked if she was referring to Charles Silver's world. "Yes," she said. "The law is the rules, but justice is the spirit. The rules say we have only an hour for lunch"—our lunch meeting had extended well past the hour—"but we don't want to live in that world."
The plaintiffs' case dragged on, but Van Gestel was adamant that the trial not run past Friday, December 19. Two of the fourteen jurors had already quit the case: Francisca Evans and a woman who couldn't arrange child care during school snow days. The trial could not reconvene in the new year, because two more jurors would be leaving, one to return to school and another for a month-long nonrefundable trip to Africa. Popeo had painted Richlin into a corner. The state's lawyers had about a week and a half to present their case, and they had to ask the jurors to sit for extra sessions in the afternoons, risking their wrath.
In retrospect (this must be hindsight bias at work), everything went fine. Richlin's experts were no more or less convincing than Popeo's; they were merely paid less—$250 rather than $500 an hour. Richlin expected Sobol to be his star witness, and Sobol did not disappoint him. He was convincing on the stand, and he introduced all kinds of facts that proved to be significant. He said that he and Pritzker had thought a $1 billion award from the MSA would be a "home run"; the state eventually received more than eight times that. He confirmed that the $25-to-$35-an-hour contract lawyers racked up at least a fifth of the billable hours in the case—a fact the jury remembered. Furthermore, he repeated on the stand his deposition testimony that an additional $1.3 billion fee would be "patently unethical"—a quotation the jury was never supposed to hear, at least not from the lawyers.
Sobol also dropped an unexpected bombshell, testifying that Robert Lieff, of Lieff Cabraser, had told him the extra fees weren't worth suing over. "Mr. Lieff told me ... that he did not think it would be in the best interest of the firm to have to sue the Commonwealth," Sobol said. "Mr. Lieff said our lawsuit did not make this money, that he found it offensive for the two law firms to take full credit for those funds, and that it had been Joe Rice in connection with the master settlement agreement who had been negotiating for the industry, and that Brown Rudnick and Lieff Cabraser had gotten a free ride." Lieff flew in from San Francisco the next day to rebut Sobol, affording Richlin some effective rhetoric for his closing argument: "Mr. Lieff has testified consistent with his claim for millions, tens of millions, hundreds of millions of dollars to himself. Tom Sobol testified in a way that, if you accept it, you will bring him zero. Who are you going to believe?"
Popeo needed to tarnish Sobol in cross-examination, but he chose a curious tack. Wasn't it true, he asked, that Sobol entertained hopes of becoming a judge, and that supporting the Brown Rudnick fee claim might hurt his chances? Sobol answered yes. But his chances of becoming a judge with such powerful law firms aligned against him suddenly seemed very remote indeed.
At Johnny's Luncheonette I asked Sobol if he still hoped to become a judge. "That's not in my thoughts at this stage," he admitted. "I am concentrating on being a public-interest lawyer." He may be alone among public-interest lawyers in receiving about $100,000 every year from the tobacco companies—his share of the MSA settlement. Accompanying each check is a "reservation of rights" letter signed by Brown Rudnick's chief financial officer, Barry Berman. Translated into English, the letter says, Don't get too comfortable, pal; we may still sue you for testifying against us at that trial.
After Sobol's testimony, the trial wrapped up quickly. In his closing statement Popeo repeated the essential mantras of his case: "A deal is a deal, a promise is a promise, and a contract is a contract." He compared the state's not paying its legal fees to the Lottery Commission's not paying off a winning ticket—an unfortunate analogy that implied his lucky clients had hit a winning number. He railed against the state's "shameless intellectual dishonesty," and likened Richlin and his team of young lawyers to the attorneys for Big Tobacco, which angered them.
By comparison, Richlin seemed almost Lincolnesque, appealing to the better angels on the jurors' shoulders. "You have an important job," he declaimed, "and we who represent the Commonwealth have total faith and confidence that you will discharge your responsibilities." Van Gestel's carefully worded instructions were Van Gestelian. He reiterated his view that the law is "first and foremost a learned profession," evidence to the contrary notwithstanding. He expatiated on the doctrine of reasonableness in a manner favorable to the state (his instructions had been the subject of endless wrangling among the lawyers): "If there is a disagreement about the reasonableness of the fee, every client, including the Commonwealth, is entitled to a determination of reasonableness."
I have served on a jury, and in my experience nothing is more powerful than a Friday deadline. Not surprisingly, this jury announced its verdict before lunch on a Friday. A reasonable fee, it concluded, would be 10.5 percent. The cap on annual payments by the tobacco firms virtually ensured that the lawyers would never receive their full fee. Frederick Pritzker's grandchildren would have to go out and earn a living, just as their grandfather had.
It must have been a good decision, because both sides claimed victory, and neither party appealed the verdict. Brown Rudnick and Mintz Levin contended that they had won another $100 million in fees. "I don't have many cases with verdicts of $100 million," Popeo crowed. "If that's not a victory, you have great expectations." But Richlin's boss, Tom Reilly, pointed out that the extra money would probably never reach the lawyers, because the payment stream would be halted in 2025, before the full fee had been paid. "The state of Massachusetts doesn't owe a dime to the law firms," Reilly said. "They got what they deserved."
If Reilly runs for higher office, he may lose twelve potential votes—those of the jurors. When she read the quotation in the newspaper, JoAnn Schwartzman told me, "It all hurt. We had a very difficult job, and we weren't trying to make a political statement. We weren't trying to reward or punish anyone."
I've said the trial was boring, and it was. But it was the kind of ennui that commercial airline pilots describe—boredom punctuated by rare moments of intense concentration. During Silver's lengthy testimony Richlin introduced an excerpt from one of Silver's articles that spoke of the "war ... waged for control of the civil justice system."
RICHLIN: Sir, did you feel then that a war was being waged for control of the civil justice system?
SILVER: I felt then that the war was waged, and I know today that the war continues to be waged. It's being fought in this courtroom in front of this jury.
RICHLIN: You feel that what we are doing here is part of the war for the civil justice system, sir?
SILVER: Absolutely. I think you would have to be blind not to recognize the political overtones in this lawsuit.
I caught up with Silver on his cell phone while he was grading exams at a Starbucks in Austin. ("Mind-numbing agony," he confessed.) What, exactly, had he and Richlin been talking about? "Well, you have the trial lawyers on one side, and the insurance companies, the tobacco companies, and the other product defendants on the other side," he said. Richlin agreed, and was even willing to fill in some details of Silver's vision: trial lawyers are generous financial supporters of the Democratic Party, and their opponents in industry, as a rule, support Republicans.
Not for nothing did Joe Rice, a veteran of the asbestos and tobacco wars, donate to the presidential campaign of the Democratic Senator John Edwards, himself an accomplished plaintiff's lawyer. Likewise, Rice also opposed the recent failed effort by Senate Republicans to confiscate all legal fees collected after June 1, 2002, by plaintiffs and class-action lawyers. Officially proposed as the Intermediate Sanctions Compensatory Revenue Adjustment Act, it was nicknamed the "one-yacht-per-lawyer bill." Rice called the bill "the greatest attack on civil rights that's occurred in this century outside of racial [issues], obviously," according to The American Lawyer magazine.
The war never ends, this line of theorizing goes. Yesterday the lawyers bankrupted the silicone-breast-implant and asbestos industries. Today they have targeted cigarette and handgun manufacturers. Tomorrow, as everyone knows, they will take on the nefarious merchants of trans fat: McDonald's, Frito-Lay, Taco Bell.
The Richlin-Silver exchange made for great theater, and ever since I have been wondering: Did I sit in a courtroom off and on for six weeks watching lawyers battle for the heart and soul of our civil justice system? Was the case, as Popeo explained to me afterward, a unique test of the separation of powers, of the sanctity of the contract—indeed, of the integrity of the state?
Or was I simply watching some of the best litigators on the East Coast wrangle over astronomical sums of money—sums that few of us laypeople could even understand?
I think I know the answer.