WASHINGTON -- Critics of the proposed tobacco legislation see them as "absolutely outrageous."
Plaintiffs' attorneys such as Cincinnati's Stan Chesley view them as a fair return for the considerable entrepreneurial risk and expense put forth by law firms such as his own.
The dispute is over fees -- the legal fees that trial lawyers might get if Congress passes a comprehensive tobacco policy bill this year.
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Significant events in lawsuits and regulations over tobacco in the United States:
1954 -- Industry faces first liability suit by lung-cancer victim. Suit dropped 13 years later.
1964 -- Surgeon General Luther Terry releases reports concluding that smoking causes lung cancer.
1965 -- Federal Cigarette Labeling and Advertising Act requires health warnings on cigarette packs.
1971 -- Broadcast cigarette ads are banned.
1972 -- Airlines ordered to create non-smoking sections.
1980 -- Surgeon general reports that smoking is major threat to women's health.
1981 -- Insurers begin discounts to non-smokers on life insurance premiums.
1984 -- Nicotine-based chewing gum approved as quitting aid. 1988 -- Smoking banned on short domestic flights. Surgeon general says nicotine is an addictive drug.
1990 -- Smoking banned on interstate buses and domestic flights of six hours or less.
1992 -- Nicotine patches introduced.
April 1994 -- Executives of seven largest U.S. tobacco companies testify to Congress that nicotine isn't addictive and deny manipulating nicotine levels in cigarettes.
August 1995 -- President Clinton plans to regulate tobacco with photo ID for buyers under 27 and ban on outdoor ads near schools and tobacco giveaways.
April 1997 -- A federal judge rules government can regulate tobacco as a drug. But advertising can continue.
June 1997 -- Landmark settlement on cigarette restrictions and tobacco makers' liability.
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Some of the numbers being thrown out are eye-popping -- $4,500 an hour, $7,000 an hour, $10,000 and even $92,000 an hour.
When debate started on the national tobacco bill late last month, conservative critics of the agreement, including members of the Tristate delegation such as Sen. Mitch McConnell, R-Ky., mentioned such numbers repeatedly.
They were estimates, based on settlement amounts reached against cigarette companies in various states so far, the number of lawyers involved and approximations of the number of billable hours invested. The $92,000-an-hour figure is what critics have estimated Texas lawyers will get as a result of their settlement.
"The national tobacco settlement has turned into the national lawyer-enrichment deal," Mr. McConnell contends.
But trial attorneys who played major roles in recent tobacco litigation consider the estimates ludicrous.
"I don't know anybody who is making that kind of money. I don't know anybody who is asking for that kind of money," said John Coale, a Washington attorney who worked with Mr. Chesley on the cigarette-addiction cases known as the Castano group.
Mr. Chesley added, "You don't hear these same Republicans criticizing entrepreneurs who get stock options."
The fee issue already has raised its head once and is expected to several more times as lawmakers struggle to enact a bill.
Shortly before the Memorial Day recess, the Senate voted 58-39 to defeat a proposal by Sen. Lauch Faircloth, R-N.C., to limit attorneys' fees under the tobacco bill to $250 an hour.
As debate moves forward, attempts are expected to limit tobacco-related fees to either $1,000 or $2,000 an hour.
The bill as it stands sets up a three-member arbitration panel to decide fee requests from lawyers.
The fees will be awarded not from the $516 billion called for by the legislation but from separate industry payments.
Among the factors to be considered are the amount and quality of work and the result of the cases, as well as time invested and the risk in initiating the anti-tobacco legislation.
Mr. Chesley said the arbitration panel suits him just fine. "I have no problem with it. Go to an independent arbitrator and let him tell me what my fee would be, not a congressman," he said. But even with arbitration, lawyers such as Mr. Chesley are likely to reap huge rewards because of the monetary scale of the tobacco bill.
Lester Brickman, professor of legal ethics at Cardozo Law School in New York, has become the leading source of information for critics of the trial lawyers involved in tobacco litigation.
Mr. Brickman has studied the McCain bill, named after Sen. John McCain, R-Ariz., and developed widely quoted estimates of the pot of money to be split among hundreds of lawyers nationwide.
When both Medicaid-related and personal injury cases are added together, Mr. Brickman projects, at least $3.8 billion to $5 billion will be awarded annually to lawyers in the next 25 years.
Additional amounts will be awarded to other lawyers, including the Castano group, a collection of more than 60 law firms, including Mr. Chesley's, that pursued smoking-addiction cases in 27 states. Mr. Chesley was one of the leaders of the group and was involved in negotiating the national tobacco settlement announced last summer.
Mr. Brickman estimates that Mr. Chesley's tobacco-related work could bring his firm a return in the hundreds of millions of dollars.
Trial lawyers who work on a contingency basis usually get anywhere from 20 percent to 40 percent of payments awarded.
Mr. Chesley responded, "I am not in a position to say what we may or may not get. Let an arbitrator decide."
Others call Mr. Brickman's estimates off base.
"I think they are nuts," said David Vladeck, director of litigation for the advocacy group Public Citizen.
"It is clear the lawyers will be well paid for this, but Brickman's estimates assume the attorneys will get every penny they ever wished for."
What riles Mr. Chesley is that those who are making a major issue of fees make no mention of the risk that firms such as his took when they first decided to go after Big Tobacco.
For Mr. Chesley, that moment came in February 1994 when he flew to New Orleans for a series of meetings with other prominent attorneys who had been called together by Wendell Gauthier, another of the nation's leading trial attorneys and one who had worked with Mr. Chesley on past cases, including the famous MGM Grand fire in Las Vegas.
In March 1994, they decided to initiate litigation against the tobacco industry on behalf of Dianne Castano of New Orleans, whose husband, Peter, died of lung cancer in 1993 at 47.
"Wendell called me and said, "Can we do something about going after the tobacco industry,' " Mr. Chesley said.
The Cincinnati attorney immediately began dispatching staff to New Orleans and other cities to work on tobacco cases.
At a minimum, he said, Castano-related firms have invested hundreds of thousands of hours.
"We came to the conclusion that the only way to take the industry on was to go after them full blow with the best attorneys in the country," Mr. Chesley said.
No one knew then that the industry would come to an agreement in 1997 to pay out hundreds of billions of dollars in exchange for at least limited protection from future lawsuits.
The June 1997 proposed settlement was the starting point for the McCain bill now under debate in the Senate.
"These guys, when they took on these cases, did so at enormous personal risk. These guys put their own personal wealth on the line," Mr. Vladeck of Public Citizen said.
Meanwhile, state attorneys general, led by Mississippi's Mike Moore, started initiating a separate round of lawsuits based on smoking-related Medicaid costs to the states.
Four years later, as the McCain bill raises the possibility of an industry payout of at least $516 billion to cover various tobacco-related issues, critics say normal contingency fee payments to lawyers will be so large as to be morally objectionable.
"This . . . is absolutely outrageous," Mr. McConnell said of the amounts lawyers could get.
Michael Horowitz, an analyst at the Hudson Institute, a Washington think tank, echoes the point.
"The sheer magnitudes we're talking about, where we are talking about billions of dollars of claims . . . I just think there has to be some ethical restraint here," Mr. Horowitz said.
When attorneys won an $11 billion settlement against the industry in Florida, the slice that went to attorneys was supposed to be $2.8 billion, causing one judge to express horror.
Judge Harold Cohen threw out the amount, saying it "simply shocks the conscience of the court. It is per se unreasonable." An appeals court overruled him.
Messrs. Brickman and Horowitz say they would like to see a cap of $2,000 an hour.
But no less a conservative than Sen. Orrin Hatch of Utah, the chairman of the Senate Judiciary Committee, said Congress should not get in the business of setting fees.
Without the Castano group and the litigation it initiated, he said, Congress would not even be debating a tobacco bill.
Mr. Hatch, a friend of Mr. Chesley's despite their opposite political leanings, said members of the Castano group have spent at least $20 million to $40 million of their own money.
"How can conservatives support setting fees in a free-market system? That is as bad as setting prices," Mr. Hatch said.
Mr. Chesley put it another way, "Nobody ever asked Bill Gates what is the hourly rate for his success."
