Worried that Baltimore lawyer Peter G. Angelos stands to make a fortune from the state's multibillion-dollar litigation against tobacco companies, the Maryland Senate voted yesterday to cut his fee in the case by half.
The attempt to reduce Angelos' fee -- from 25 percent to 12.5 percent of any recovery -- came as the Senate gave preliminary approval to a bill aimed at improving the state's chances of winning the tobacco lawsuit.
The bill, which was proposed by Maryland Attorney General J. Joseph Curran Jr., seeks to undo the effects of a decision last year by the judge in the lawsuit -- a ruling that crippled the state's case.
But tobacco companies and some business groups are lobbying relentlessly against the measure, and some senators were expected to launch a filibuster today to kill the bill.
The House of Delegates has passed a weaker version of the legislation that does not address Angelos' fee.
For a bill to become law, the two chambers would have to resolve their differences before adjourning April 13.
The General Assembly action comes even as legislation advances in Congress that would impose a national settlement with the tobacco industry.
The Maryland lawsuit -- and the attorneys' fee provision outlined in the state bill -- likely would be made moot should the federal legislation be enacted.
Yesterday's voice vote by the Maryland Senate may have resolved a sticking point for some legislators -- the prospect that the Assembly, by helping the state, would be helping Angelos receive what could be hundreds of millions of dollars.
"This amendment goes a long way toward meeting the problems we had with the original legislation," said Sen. Leo E. Green, a Prince George's County Democrat and the bill's chief defender in the Senate.
Billions at stake
The Annapolis debate over Angelos' fee mirrors a nationwide controversy about attorneys reaping huge paydays in the legal battles between government and the tobacco industry.
Fee disputes in Florida and Texas -- which have gained multibillion-dollar settlements with tobacco companies -- have at times threatened to overshadow all other tobacco issues in those states.
Private lawyers in Florida's case, who had a contract entitling them to a 25 percent fee, went to court to try to collect $2.8 billion -- and lost.
A judge in November calculated that if the lawyers involved had worked 24 hours a day on the case, the fees they demanded would have amounted to $7,716 an hour apiece. Now the Florida fees are to go to arbitration.
The national tobacco settlement pending in Congress would also have an arbitration panel decide on reasonable attorney fees.
'King of torts'
Under a 1996 contract between Angelos and the state, his firm is to collect 25 percent of any recovery. The Senate adopted an unusually specific amendment yesterday that refers to Angelos by name and limits his fee to 12.5 percent.
Referring to Angelos on the Senate floor as "the king of torts," Green repeatedly praised the Baltimore attorney for taking the case two years ago -- when the prospects of winning a legal battle with the tobacco industry seemed remote.
Green suggested that the tobacco industry was working to try to force Angelos out of the case somehow -- perhaps by getting his fee cut substantially.
'Scared to death'
"If they can get Peter Angelos out of the ballgame, we have no chance," said Green. "He's the guy they're afraid of -- they're scared to death of him."
He added that Angelos was taking "a tremendous risk" by covering the costs of the litigation with no guarantee he will recover any fees.
But critics of the legislation pointed out that even with the reduction, Angelos stood to make a huge sum -- potentially hundreds of millions of dollars -- should the state prevail.
"We're talking about a lot of money," said Sen. Robert R. Neall, an Anne Arundel Republican who is a vocal opponent of the legislation and a leader of the possible filibuster.
Curran, the attorney general who is supervising Angelos' work in the tobacco lawsuit, said he was comfortable amending the legislation to limit Angelos' fee, even though under the contract he could have forced Angelos to renegotiate a lower figure.
But Curran said critics of Angelos' fee were assuming the state's case will be rock solid if the legislation passes.
"It's not won by a long shot," Curran said. "We may lose our case and he gets 12 percent of zero."
With the legislation, he added: "It gives us a chance to win. Without it, it would be quite difficult."
John A. Pica Jr., a lobbyist for Angelos, said Angelos had no problem with the amendment because he had intended for months to reduce his fee.
"Mr. Angelos has always agreed he would reduce the fee and the reduction would be substantial," said Pica, a former state senator.
Rumors of a deal
Underscoring the controversy the legislation has created, one key lawmaker, Sen. Walter M. Baker, pointedly left the Senate chamber when the bill came up for debate yesterday.
Baker, chairman of the Senate committee that considered the bill, angrily recused himself last week after rumors circulated that he had agreed to support the measure in exchange for Gov. Parris N. Glendening appointing his son or law partner to a judgeship.
Glendening and Baker denied such a deal, but Baker, a Cecil County Democrat, said he would have nothing to do with the bill to avoid any appearance of a conflict of interest.
During the debate, Baker sat alone in the Senate lounge.
Pub Date: 4/02/98