VOL. 115 | NO. 26 | Thursday, February 8, 2001
Smoke, guns and class action suits come together at Rhodes College
Smoking guns, class action suits cross at Rhodes
By MARY DANDO
The Daily News
With a theme of "Smoke and Guns," the Meeman Center for Lifelong Learning at Rhodes College will present the 14th annual Institute on the Profession of Law, from 8 a.m. to 2:30 p.m. Monday in the Bryan Campus Life Center.
Dubbed "Legislation or Litigation: Congress, Courts and the Role of Lawyers," the seminar features a diverse panel of experts who will discuss the role of lawyers and class action lawsuits in the context of recent tort liability claims involving tobacco and firearms.
Perhaps the best known among the panelists is Richard "Dickie" Scruggs, senior member of Scruggs, Millette, Bozeman and Dent P.A. in Pascagoula, Miss. Scruggs is the lawyer most associated with winning a huge settlement from the tobacco industry.
He later was featured in the movie "The Insider."
Arguing against billion-dollar settlements in class action lawsuits will be fellow panelist, Michael J. Horowitz, senior fellow of the Hudson Institute in Washington, D.C. He was co-chairman of the working group on legal/tort policy during the Reagan administration.
The touchstone for discussion will be the controversial impact of litigation on the formation of public policy. Panelists will explore whether litigation threatens to supplant legislation.
Scruggs thinks what many legislative bodies, including Congress, have done is to send the toughest issues to the courts because they dont have the political will to deal with them.
"The courts have essentially become a safety net for major social issues," he said.
Scruggs believes part of the problem is institutional.
The federal government was set up to prevent one group from gaining too much power, he said, with three separate but equal branches of government and a built-in system of checks and balances.
"The tradeoff is it is an inefficient government. Its very difficult to get anything done. All they can do is pass laws around the edges. So, major social issues like tobacco or HMO reform have all been punted to the court by default," he said.
Horowitz agrees the courts are not the arena to settle major social issues.
"I would say as these class action rules allow you to bring lawsuits with tens and hundreds and billions of dollars of potential liability in one single case, were getting to a point where the tort process is replacing the legislature in terms of imposing taxes on consumers and reconfiguring the rules of the game," he said.
Much of Mondays discussion will probably center on the huge amount of fees trial lawyers are earning in these class-action lawsuits.
Scruggs is well suited to discuss the topic.
He first took on the asbestos industry in the 1980s, ultimately settling a suit on behalf of 4,200 direct clients and as co-counsel for 6,000 more. In the end, he landed about $300 million for the class and about $25 million for himself.
The most famous adversary in his career was the tobacco industry, which he took on with his Ole Miss classmate, Mississippi Attorney General Michael Moore.
In 1997, tobacco companies agreed to sharply limit their marketing and pay $368.5 billion over 25 years. In the tobacco case, Scruggs firm earned about $900 million in legal fees. Scruggs received about one-third of that.
His current fight is with six major managed care organizations.
The Mississippi lawyer defends the huge fees incurred from such mass tort cases.
"My response is had I just taken the fees we earned through asbestos and tobacco and gone off and bought a South Pacific island or something like that the criticism would have been fair. But, what the money enables me to do is to approach a level playing field with big industry," he said.
Few mention what the tobacco industry paid its lawyers far exceeds the money he and his colleagues earned from the case, Scruggs said.
"It seems to be okay to pay the defense lawyers hundreds of millions of dollars every year but its sort of dirty money when we beat the same guys," he said.
Until recent years trial lawyers were unable to mount litigation such as they had done against the asbestos and tobacco industries, Scruggs said.
"Without the tobacco money, we could not have mounted the HMO initiative. Its still a mismatch because there are only a handful of lawyers who made this sort of money and they cant handle every case. We made the money and reinvested it in issues that are important to the public," he said.
Referring to the financial outcome of these notable mass tort cases as "ransom settlements," Horowitz said he agrees with President Bushs proposal to limit the amount of fees charged in such cases.
"George W. Bush has got a proposal, which says in the case of lawyers in mass tort cases, we take the so-called "lodestar" figure and multiply it for up to six for the productive duplicate hours that lawyers spend. Thats more than enough money to create incentives for lawyers to take on tough cases," he said.
"I agree with the plaintiffs lawyers getting more than defense lawyers because they are taking a risk. What I am saying is its one thing to give six times what the defense lawyer makes, which may be reasonable if the lawyer took a lot of risk and did special work. Its out of the question to be awarding him 600 times. That money should be in the clients pocket not the lawyers pocket," Horowitz said.
Apart from the litigation vs. legislation issue in relation to tobacco and firearms, contingency fee reform, the laws role as a reflection of social values and the right to bear arms will be discussed.
Moderator for the institute will be Robert J. Grey Jr., vice president of LeClair Ryan of Richmond, Va. Other panelists include Rachana Bhowmik, staff attorney of the Legal Action Project at the Center to Prevent Handgun Violence; Ashley B. Coffield, president of Partnership for Prevention; William S. Ohlemeyer, vice president and associate general counsel for Philip Morris Cos.; and Stephen H. Wirls, assistant professor of political science at Rhodes.
Tuition is $375. Breakfast and lunch are included in the registration fee.
The institute is approved for five hours of dual continuing legal education in Tennessee, Arkansas and Mississippi. Call 843-3965, for information.