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Plaintiffs Lawyers Tangle Over Billions in Tobacco FeesTexas settled a suit against tobacco companies 10 years ago for $17.3 billion, but a fight over attorney fees stemming from the settlement is going on in two courts. Brent Coon, a principal in Brent Coon & Associates, alleges he was a partner in Provost Umphrey when the state reached a settlement agreement with the companies, and he is entitled to part of the $3.3 billion that will be split among lawyers who represented the state. But some of the defendants named in Coon's suit have fired back, suing Coon.
Texas Lawyer2008-01-09 12:00:00 AM
The state of Texas settled its suit against tobacco companies 10 years ago for $17.3 billion, but a fight over attorney fees stemming from that settlement is going on in two separate courts.
In 1996, then-Texas Attorney General Dan Morales hired five attorneys -- including Walter Umphrey -- to represent the state in State v. American Tobacco Co., et al., according to the March 22, 1996, memorandum of understanding agreement between the state and the outside counsel. Umphrey is a partner in the Beaumont-based firm of Provost Umphrey.
On Nov. 2, 2007, Brent Coon, now a principal in Beaumont's Brent Coon & Associates, sued 10 defendants in U.S. District Court for the Western District in Austin. In his original complaint in Coon v. Umphrey, et al., he alleges he was a partner in Provost Umphrey in January 1998, when the state reached a settlement agreement with the tobacco companies, and he is entitled to a portion of the fees. The total amount of fees to be split among the lawyers who represented the state is $3.3 billion.
"Coon did not receive any of his scheduled attorney's fees payments despite Defendants obligation to pay those attorney's fees," Coon alleges in the complaint.
"This is a multimillion-dollar claim for back pay," Coon says in an interview.
As alleged in Coon's complaint, the defendants breached several agreements, all of which contain provisions for mandatory binding arbitration. He also notes that he has filed a complaint with the American Association of Arbitration (AAA) against the defendants.
Coon, who left Provost Umphrey in May 2001, is suing to compel arbitration in his fee dispute with the 10 defendants, which include Walter Umphrey P.C. and the Provost Umphrey Tobacco Partnership, and to obtain an audit of how the defendants have spent the tobacco fee money.
STATE COURT SUIT
But some of the defendants named in Coon's suit fired back on Dec. 14, 2007, suing Coon in the 172nd District Court in Beaumont. They allege in their original petition in Umphrey, et al. v. Coon that Coon improperly commenced arbitration with the AAA and they are seeking to stay that proceeding. The six plaintiffs in the state court suit include Walter Umphrey P.C., Provost Umphrey Tobacco Partnership and Provost Umphrey Law Firm.
The plaintiffs in Umphrey v. Coon also seek a declaratory judgment that amounts owed to Coon are subject to offset against amounts that Coon allegedly owes Provost Umphrey. Bryan O. Blevins, a Provost Umphrey partner, says the offset amount is the subject of an ongoing arbitration between Coon and the firm. Blevins says he cannot discuss that arbitration process because of confidentiality requirements. Bryan O. Blevins P.C. is a defendant in Coon v. Umphrey and a plaintiff in Umphrey v. Coon.
"It is a dispute between former partners," Blevins says of the state and federal litigation. "It should remain as private and confidential as possible."
Also on Dec. 14, 2007, the defendants in Coon v. Umphrey, et al. filed a motion to dismiss Coon's complaint for lack of subject matter jurisdiction. In the alternative, they are seeking to move the suit to Beaumont. Coon has until Thursday to file a response to the motion.