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A federal judge in Brooklyn has awarded nearly $38 million in legal fees to New York-based Dewey Ballantine for representing Blue Cross and Blue Shield in a suit against the tobacco industry — more than twice the amount of a jury verdict in the case last year. Judge Jack B. Weinstein of the Eastern District of New York said Dewey Ballantine tried the case with “uncommon skill” and deserved an award that covered nearly all the billable hours the firm reported to the court in the three-year case. He emphasized the import of the firm’s victory, which was the first successful claim by a third party — rather than smokers — under the New York State Consumer Protection Act. The judge rejected arguments from the tobacco companies that the fee should be capped by Dewey Ballantine’s contingency arrangement with Blue Cross, or at the very least, not exceed the $18 million awarded to the insurance company by a jury last June. He also dismissed claims that the award should be reduced because the lawsuit was only partially successful. The jury found that the tobacco companies, including Philip Morris, R.J. Reynolds and Brown & Williamson, had lied to the public about the dangers of smoking. But the jury also concluded that the companies had not committed fraud or violated antitrust laws. Blue Cross had sought about $10 billion in damages. Calling Dewey Ballantine’s fee request “conservative,” the judge wrote in Blue Cross and Blue Shield of New Jersey v. Philip Morris, 98 CV 3287 (JBW), that “the fees allowed are sufficient and no greater than necessary to attract excellent attorneys who will devote the resources appropriate to the case and other cases such as this.” He added, “There is no reason to reduce honest and valid claims.” Stressing the case’s potential to benefit society, the judge wrote: “This case could well have a deterrent effect, alerting potential future malefactors to the possibility of liability under [� 349 of New York Business Law], and perhaps convincing them (upon advice from their attorneys) to avoid entering into similar harmful tactics.” Attorneys for the tobacco companies did not return calls seeking comment on whether the ruling would be appealed. Vincent R. FitzPatrick, a partner at Dewey Ballantine, said it was “very rare” for his firm to take a case under a partial contingency arrangement. “We took it on in part because of the importance of the issue involved,” he said. Four partners, including himself, as well as one counsel and one associate, composed the main team, he said. FACTORS CONSIDERED Those attorneys and numerous associates compiled more than 144,000 billable hours over three years, with the core team spending 75 to 95 percent of their time on the lawsuit, FitzPatrick said. Dewey had sought more than $39 million in fees, but the judge subtracted $1.2 million for work done on unsuccessful claims. He also declined to award pre-judgment interest on the final award, which would have amounted to a few million dollars. The final award was $37.8 million. FitzPatrick said Blue Cross had made partial payments to the firm, but he declined to reveal the exact details of the original contingency arrangement. According to Judge Weinstein’s opinion, a portion of the fees were on contingency, with higher percentages for higher judgments. The final fee award will supersede the original agreement, effectively exempting Blue Cross from paying fees. Judge Weinstein said that while awarding attorney fees can “have the effect of punishing a losing party,” another objective “is to encourage suit.” He also noted that fee awards do not have to be proportionate to the amount of damages awarded, citing Wilson v. Car Land Diagnostics, 2001 WL 1491280, a Southern District case that awarded $10,000 in attorney fees, five times what the plaintiff won in damages. Weinstein said the tobacco companies did not challenge any of the factual statements in the affidavits that supported the fee, nor did they present evidence of their own. In arriving at the award, the judge said he considered the time and skill required in litigating the case, the complexity of the issues, the customary fee for the work, the results achieved, the lawyer’s experience and reputation, and the potential benefit to the client and to society. Paul J. Bschorr, Joseph Angland, Martha Talley and FitzPatrick were the four Dewey Ballantine partners assigned to the case. Michael C. Hefter, of counsel, and Heather K. McDevitt, an associate, rounded out the core team. Murray R. Garnick of Washington, D.C.-based Arnold & Porter represented Philip Morris and was lead counsel for the tobacco companies.

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