Once more into the breach, and once more into the question of the curiously silent provincial government and its choice of a St. John’s law firm to handle the province’s lawsuit to collect damages from tobacco companies.
The province isn’t saying how it picked the company, and it isn’t saying what it will pay. But out there in the great wide world, there’s plenty to read about tobacco lawsuits.
The Smoking and Health Action Foundation/Non-Smokers’ Rights Association had this to say in a 2009 report on tobacco lawsuits: “The litigation-enabling legislation that these provinces (including Newfoundland and Labrador) have passed is so strong that some legal analysts suggest that it ‘stacks the deck’ in favour of the provinces in a way that almost guarantees the provinces a successful outcome at trial. It has been estimated that tens, possibly hundreds, of billions of dollars are at stake.”
Many lawsuits against tobacco firms involve contingency deals with law firms who collect as much as 30 per cent of the total settlement — here, the government is reportedly looking for $1 billion. Do the math.
It’s an interesting amount of money, given the legal support from legislatures; almost as interesting as reading about how other provinces pick law firms.
Four years ago, the province of New Brunswick started the process of picking a firm for its tobacco lawsuits. Unlike here, that province issued a request for proposals for the work.
New Brunswick’s request for proposals covers a lot of ground: “Resources and Expertise — the proposal must indicate how the required financial and human resources and legal expertise to finance and conduct litigation of this magnitude exists within the firm. Clear evidence of the availability of such resources and legal expertise shall be one of the primary selection criteria. The successful law firm or consortium of law firms will demonstrate that it is of sufficient size to handle all of the possible demands of the proposed litigation on a timely basis.
“Key Individuals — each proposal should identify those lead lawyers within the law firm or consortium of law firms who will be responsible for playing key roles in the litigation team. A curriculum vitae or personal profile must be provided for each lead lawyer outlining their relevant background experience. At least one lead lawyer must be an experienced litigator who is resident in and actively practicing law in the province of New Brunswick.
“Contingency Percentage, Disbursements — the proposed contingency arrangement and the proposed method for payment and interest accrual, if any, on necessary litigation disbursements will also be one of the primary criteria for evaluation.”
It goes on — but you get the point. That kind of approach sounds reasonable, right?
Here, the province approached one firm and negotiated a deal — a deal the government refuses to reveal or even talk about.
The province has said it chose the firm it felt was best suited for the work, and added darkly that other firms in the province had done work for tobacco companies.
That kind of information could also have been included in a request for proposals — as New Brunswick did.
As a mandatory requirement for submitting a proposal, law firms had to provide “a signed statement confirming that the proponent is free from any conflicts of interest in pursuing this litigation.”
But even New Brunswick wasn’t the vanguard: consider the State of Maryland in 1995.
Its request for proposals required: “3. A statement concerning the firm’s suitability for involvement in and prior experience
with long-term, complex litigation, including the firm’s ability to engage in protracted litigation on a contingent fee basis, the firm’s technological resources, and any other specific attributes that indicate the firm would be capable, by itself or in conjunction with any other firms, to manage the contemplated litigation to successful conclusion. Prior involvement in major litigation against tobacco companies or entities of comparable size, sophistication and financial resources should be described.”
Maryland also wanted “an outline of a litigation plan, with rough estimates of the amount of time projected for each stage of litigation,” and “a detailed fee and litigation expense proposal,” among a number of other things.
But while it might be a start, even a request for proposals is not necessarily the whole solution for provinces wanting to keep deals above-board in a big-money universe.
The American experience
A paper prepared for the Washington Legal Foundation by Victor E. Schwartz — the chairman of — and Christopher E. Appel — an attorney in — the public policy group of the law firm Shook, Hardy & Bacon LLP, had this to say about the appointment of lawyers to take on tobacco cases in the United States: troubles emerge “when state attorneys general hire outside counsel to pursue litigation on a contingent fee basis.”
“Often such an arrangement is made without an open and competitive bidding process, a routine safeguard meant to assure that the state receives the best value. Even when state attorneys general issue a request for proposals, the selection standards can be quite lax. As a result, potentially lucrative government contracts have routinely been awarded to friends and traced to political supporters of the state attorney general.
“Examples of this ‘pay to play’ litigation system are prevalent and date back to what was the first major co-ordinated effort by state attorneys general and private contingency fee attorneys in multi-state tobacco litigation. In 1996, then-Texas Attorney General Dan Morales hired contingency fee lawyers to file his state’s tobacco litigation; four of the five hired firms had together contributed nearly $150,000 in campaign contributions to Morales from 1990 to 1995. … After hiring the firms, Morales reportedly asked them to make an additional political contribution of $250,000.
“Similarly, the five firms selected by former Missouri Attorney General Jay Nixon (now Governor) to handle the state’s participation in the tobacco litigation had contributed over $500,000 during the preceding eight years to Nixon and his political party. … Those firms eventually received $111 million in fees, an amount decried as ‘out of proportion to the work performed and the risk involved,’ given that Missouri was the 27th state to join the litigation, coming in only after the hard work had been done by other states and settlement was inevitable.
“These are but a few examples. In fact, by 1999, attorneys general in 36 states had entered contingency fee arrangements with 89 firms for up to a third of any judgment or settlement reached. … While the tobacco litigation has provided some of the most blatant examples of cronyism, contingency fee contracts between states and private lawyers continue to raise controversy and concern in numerous other areas today. “
What’s it all mean?
That there’s a lot of money at stake and that taxpayers are owed the most transparent and accountable contract award that the government can produce.
Did we get that here?
Russell Wangersky is The Telegram’s editorial page editor. He can be reached by email at: email@example.com.