Warning that the billion-dollar fee dispute between lawyer Peter G. Angelos and Attorney General J. Joseph Curran Jr. could produce a brutal "public bloodletting" in Maryland's legal community, a judge yesterday urged the two sides to try to reach agreement.
"If there was ever a case that cried out for some resolution between the parties, this is it," said Baltimore Circuit Judge Clifton J. Gordy. During Gordy's 15 years on the bench, Curran has served 12 years as attorney general and Angelos has emerged as the state's most successful plaintiffs' attorney, earning a fortune from thousands of asbestos cases.
Gordy spoke at the end of a four-hour hearing in which lawyers squared off over Curran's attempt to force Angelos to seek his fee for handling Maryland's tobacco lawsuit from cigarette makers. Neither man was present in court.
Arguing that Angelos has broken a public promise, Assistant Attorney General Lawrence P. Fletcher-Hill displayed an enlargement of a letter Angelos wrote Curran on April 23. "As I have previously stated," Angelos wrote, "I intend to seek maximum relief from the tobacco companies in regard to payment of attorney's fees, expenses and costs. In so doing, we hope to assist the state in maximizing its own recovery."
H. Thomas Howell, a lawyer representing Angelos, said Angelos changed his mind because he came to believe the arbitration process was rigged in favor of lawyers for the first three states -- Mississippi, Florida and Texas. Lawyers in those three states received more than $8 billion, but fees awarded by arbitrators since then have fallen off sharply.
Curran sued Angelos, the Orioles majority owner, this month, saying he had violated his contract by refusing to apply to an arbitration panel for his legal fee. That is required if the tobacco industry is to pay him.
Angelos is insisting that the state must pay him 25 percent of the $4.7 billion it is to receive under the national tobacco settlement, as required by his 1996 contract. If the state then wants to recoup part of that money from the tobacco industry, it can apply to the arbitration panel, he says.
If Angelos collects his fee from the state, he will be the first tobacco lawyer in any state to do so. Legal fees in other states have so far been collected exclusively from the tobacco industry.
The bitter fight between longtime Democratic allies has embarrassed their friends and divided the state's legal community. Gordy said a colleague on the bench told him the politically charged lawsuit would be "either a career-maker or a career-breaker" for him.
The case pits fundamental legal principles against one another. Angelos argues for the sanctity of contracts; Curran notes the rules of professional conduct for Maryland lawyers, which require that legal fees be "reasonable." Angelos defends the contingency fee system, in which a lawyer risks going unpaid but can win a huge payment; Curran relies on the attorney-client relationship and the client's right to decide how a case is handled.
Yesterday's hearing focused on the state's request for a court order directing Angelos to apply for fee arbitration, which Gordy said he hopes to rule on by Dec. 30. Whether or not Curran prevails in this first round, both sides expect that Gordy will have to oversee a full trial on whether Angelos has the right to collect 25 percent -- well over $1 billion -- or must accept a reduced, "reasonable" amount.
The hearing amounted to a dress rehearsal for a trial on the fee issue, tentatively scheduled for September.
Fletcher-Hill argued that all legal fees in the state, whether or not they are governed by contract, are subject to review by a court for "reasonableness." William F. Gately, Howell's partner, denied that, saying Angelos does not believe his fee is subject to any such test.
Gately said the requirement that fees be reasonable is designed to protect unsophisticated clients, such as a hypothetical "Widow Brown," against greedy and unscrupulous lawyers. But, he added, "You know who the Widow Brown is in this case? It's Peter Angelos."