State high court hears Angelos tobacco fee case

Circuit Court remand sought by state

law firm seeks $1 billion pay order

March 07, 2001|By Jay Apperson | Jay Apperson,SUN STAFF

The high-stakes battle over attorney Peter G. Angelos' fee in the state's tobacco settlement moved before the Maryland Court of Appeals yesterday, when a lawyer for the state said the dispute should be sent back to a Baltimore courtroom -- while Angelos' lawyer asked the high court to decide the case or send it to the Board of Contract Appeals.

"We believe it is time for this case to come to an end," William F. Gately, a lawyer for Angelos, told the appeals court judges. He said they have enough information to give Angelos what he's asking for: a quarter share of the state's $4 billion tobacco settlement based on his state contract.

But Ralph S. Tyler, a former deputy attorney general now representing that office in its dispute with Angelos, said the Court of Appeals has no basis to issue a final ruling. He asked the appellate court to order the Baltimore Circuit Court to decide what fee -- if any -- Angelos should receive.

Although the state argues that Angelos' firm breached its contract to represent the state in the tobacco case, he is seeking to enforce the contract provision that would pay him 25 percent of the settlement. The attorney general's office insists that a state law requiring all attorney fees to be "reasonable" dictates a smaller payment.

The seven-member Court of Appeals convened yesterday to hear oral arguments on whether a fair fee should be determined by the Circuit Court or the state Board of Contract Appeals, or whether the appellate court should put an end to the state's challenges to the contract. Lawyers in the case say they want to receive a final decision on the venue to avoid wasting time on a trial.

Lawyers for the state are preparing to seek legal fees for Angelos next month in New York under an arbitration procedure set up under the national tobacco settlement.

That mechanism for providing industry-paid fees has been a point of contention between Angelos and the state. The provision was intended to preserve settlement money for public purposes.

But Angelos, complaining that the arbitration panel would not pay him a fair fee, chose instead to collect on his original contract with the state. Maryland Attorney General J. Joseph Curran Jr. sued in Baltimore Circuit Court in December 1999, and asked a judge to order Angelos to apply to the arbitration panel for his fee. Baltimore Circuit Judge Clifton J. Gordy chose not to do so, so Curran applied for the tobacco industry to pay Angelos' fee.

In October, Gordy dismissed Curran's suit, ruling that the dispute should be heard by the state Board of Contract Appeals because the Angelos contract is subject to state procurement law.

Curran's office appealed that ruling, leading to yesterday's hearing.

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