N.J. lawyer sues Angelos for cut of tobacco suit pay

Orioles owner says consultant agreed to accept flat fee

February 23, 1999|By Scott Shane | Scott Shane,SUN STAFF

In what could become a messy fight over huge fees in Maryland's tobacco lawsuit, a pioneer of cigarette litigation has sued Baltimore attorney Peter G. Angelos, saying Angelos is trying to cheat him of his fair share.

Marc Z. Edell, a New Jersey attorney and consultant to Angelos on the case, says his experience in winning the first jury verdict against the tobacco industry more than a decade ago brought credibility and crucial documents to Maryland's lawsuit.

"They were partners, co-counsel in this venture," said Mitch Baumeister, Edell's attorney in this legal brawl, for which every lawyer has his own lawyer.

"Mr. Edell has devoted himself to this case at the expense of other work. All he wants is a fair fee."

Edell's suit, filed in federal court in Newark, N.J., charges Angelos with fraud and breach of contract.

He says he deserves a substantial, unspecified share of what conceivably could be a $1 billion fee to Angelos' Baltimore law firm, which contracted in 1996 to handle Maryland's case in return for 25 percent of any settlement or jury award.

The tobacco companies agreed under the national settlement reached in November to pay Maryland $4.2 billion, plus inflation, over the next 25 years.

Baumeister said Edell and Angelos had essentially a "handshake" agreement to split the fee fairly.

"Maybe Marc was a little too trusting," he said.

Not too trusting, too greedy, according to Angelos. In a statement released by his attorney, William F. Gately of Towson, Angelos said his firm is prepared to pay Edell a minimum of $500,000, the fee guaranteed under an agreement between Edell and the Angelos firm.

"At some point downstream, when [Edell] apparently sensed that there might be a potential for substantial fees, he sought to participate on a contingent basis," seeking a percentage of whatever the Angelos firm would get, the statement said.

"This proposal was rejected. There is absolutely no basis for Mr. Edell's allegation that he was defrauded [or even misled].

"His suggestion to that effect is outrageous and we will respond to this particular allegation in every appropriate way," said the statement from Angelos, majority owner of the Orioles.

Others seeking a share

Edell, who filed his suit Feb. 8, may not be the only legal consultant ready to go to court for a share of the payout.

Richard A. Daynard, another veteran strategist of the war on tobacco, says he is still negotiating his share of whatever fee the Angelos firm receives.

He has engaged his own attorneys -- including David Boies, who is preoccupied at the moment pursuing the U.S. government's antitrust case against Microsoft -- but has not filed a lawsuit.

Daynard said his agreement with the firm was for an hourly rate plus an unspecified "fraction" of any fees won.

"The discussion was never over whether I would get a fraction, only what the fraction would be," he said.

Early in the battle

Both Edell and Daynard were fighting the tobacco companies many years ago, back when Angelos was earning his fortune suing asbestos makers on behalf of ailing shipyard workers.

Edell was lead lawyer for lung cancer victim Rose Cipollone, winning an unprecedented $400,000 judgment in 1988. The tobacco companies won on appeal, after Edell and his associates had spent millions fighting in court.

Industry documents he obtained during that case played a crucial role in the more recent litigation.

Daynard, a law professor at Northeastern University in Boston, started the Tobacco Products Liability Project, charting a legal strategy against the industry.

He is widely recognized as a key theorizer of the legal assault on cigarette makers.

When Angelos sought the Maryland contract, he cited both of his consultants' credentials as an important asset.

Baumeister said that while Edell put many hours into the Maryland lawsuit, "it's not a question of time."

"He brought to the table a database of 10 years of knowledge of the tobacco industry," Baumeister said.

Daynard, too, said he and Edell brought crucial knowledge of their formidable opponent to the Angelos firm.

"We knew where the bodies were buried and what they looked like," he said.

The fee fight, which resembles similar disputes in Florida and Texas, has begun even before Angelos' application for payment has come before a three-member arbitration board set up under the tobacco settlement.

The tobacco industry agreed to pay the fees, which go to private lawyers hired to provide legal muscle to state attorneys general, separately from the states' payments.

Fee cut rejected

Though last year the General Assembly ordered Angelos' 25 percent fee cut in half to 12.5 percent, Angelos has taken the position that he never agreed to the reduction and still has a valid contract for 25 percent.

Rather than taking his fee out of Maryland's money, however, he has agreed first to seek payment from the tobacco industry under the arbitration plan.

Lawyers for the first three states to undergo arbitration -- Mississippi, Florida and Texas -- were awarded more than $8 billion, or about 25 percent of those states' total share of the settlement.

That result, vehemently protested by the tobacco industry's representative on the arbitration panel, suggests that Angelos has some chance of receiving $1 billion.

The fees will be paid out over many years, however, because the industry managed to insert into the settlement a $500 million annual cap on what it must pay the lawyers for all the states.

Baumeister, who says he first met Edell in 1980 when the two were courtroom opponents, acknowledged that the dispute may not sit well with a lawsuit-jaundiced America.

"We were reluctant to file a suit, because the public will see it as just two more lawyers fighting one another," he said.

Pub Date: 2/23/99

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