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New York’s Milberg Weiss Bershad Hynes & Lerach and San Francisco’s Lieff, Cabraser, Heimann & Bernstein are among 10 firms that will share $637.5 million in fees for their role in helping California cities and counties capture their share of a $206 billion settlement agreement with the tobacco industry. The Tobacco Fee Arbitration Panel announced Tuesday that private lawyers in California should be awarded the fees for the more than 130,000 hours they worked in helping cities and counties grab half the $25 billion awarded California in the master settlement agreement. The state takes the other half. That works out to approximately $4,904 per hour for the lawyers. The other firms to share the award, according to the Los Angeles Times, are San Francisco’s Bushnell, Caplan & Fielding; Santa Monica’s Greene, Broillet, Taylor, Wheeler & Panish; Newport Beach’s Robinson, Calcagnie & Robinson; Eisner & Hague of Los Angeles; McCue & McCue of San Diego; Cuneo Law Group of Washington, D.C., and the South Carolina firm of Ness Motley Loadholt Richardson & Poole. The panel made its decision Feb. 27 based on a hearing held at a Salt Lake City resort during the last week in September. A handful of unnamed tobacco companies will pay out the amount over an undetermined number of years. The panel has also found the tobacco industry responsible for paying out private legal costs in 14 other states and Puerto Rico. “The effort and achievement of private counsel were supported either by testimony at the hearing or in prior written submissions by an extraordinary array of retired California state and federal judges,” the opinion stated. Milberg Weiss and Lieff Cabraser assisted San Francisco in its prosecution of two of four cases against the tobacco industry. Milberg Weiss worked on the one private case, Cordova v. Liggett Group Inc., Case No. 651824, which was filed in San Diego County Superior Court. The fourth case was handled solely by the state attorney general’s office. The tobacco companies are required to jointly pay out $250 million annually in settlement costs, so it is not known how long it will take the law firms to capture their fees in full. “It’s possible that it’s 25 years; it’s possible that it’s longer; it’s possible that it’s shorter. It’s more accurate to say it will be paid out over time,” said Eric Berman, spokesman for the panel based in New York. H. Joseph Escher III, a partner in San Francisco’s Howard, Rice, Nemerovski, Canady, Falk & Rabin who represented R.J. Reynolds Tobacco Co., said the tobacco companies are not immediately effected by the panel’s decision. “If this number were $100 million or a billion it doesn’t make a difference, because it’s subject to annual cap,” Escher said. “I’m sure they’ve budgeted for it.” “They’re not unhappy,” he said of his clients. Nathan Ballard, a San Francisco deputy city attorney, called the amount “full and fair compensation to our outside counsel for their valuable work,” and pointed out that it amounts to only six percent of the amount the state is getting. “They really did a lot of the legwork,” he said of the city’s outside counsel. “Side by side with cities and counties they helped to prosecute these lawsuits that eventually led to the settlements.” The Tobacco Fee Arbitration Panel comprises John Calhoun Wells, the president of Wells & Co. and the chairman of the National Tobacco Arbitration Panels; Charles Renfrew, a former judge for the U.S. District Court for the Northern District of California, now in private practice; and Harry Huge, a partner in the Washington, D.C., office of Powell, Goldstein, Frazer & Murphy. The ruling was unanimous, but panelists weren’t uniformly happy about the fee amount. Renfrew wrote, “It is more than I would have awarded had I been the sole arbitrator. I join in the award, because I believe unanimity serves important and valuable purposes in these arbitrations.” But Huge countered in a concurring opinion, “This award is less than I would have awarded.” “The imagination, risk, and even daring of these counsel was in the face of inaction by a skeptical California attorney general and governor,” Huge wrote. “And the results achieved, both financial reward and public health benefits for the people of California, speak for themselves.

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