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Six leaders of the Association of Trial Lawyers of America-New Jersey — who, packaged as ATLA-NJ’s team, won the bid to represent the state in the national tobacco litigation and reaped $40 million in fees — have quietly contributed $300,000 to the association. The contribution, from six firms, according to two sources with knowledge of the payment, was made last year after some ATLA members said they felt the leadership exploited their positions for personal gain. Those sources, along with other ATLA members, say the contribution was aimed at quelling a simmering controversy. The total fee to New Jersey’s counsel was $80 million, with half going to Ness, Motley, Loadholt, Richardson & Poole of Mount Pleasant, S.C., the firm that did all the substantive work. The remaining $40 million went to the six local firms’ lawyers, who had nothing to do with negotiations leading to the multibillion-dollar settlement. The $300,000 contribution represents less than 1 percent of that amount — a sum described by one former ATLA-NJ president as “paltry” in light of how the team was assembled and how the bid was made. One ATLA-NJ board member agrees, saying: “This was all pecuniary, all for personal gain. The leadership let the members down.” One of the two sources, along with a third, all active ATLA members who have served in leadership roles, say the association retained outside counsel to explore the possibility of going after the tobacco legal team for disgorgement of the fees. Those sources say the outside counsel reported that a case could be mounted based on claims of a breach of fiduciary duty or a conflict of interest. Christopher Placitella, ATLA-NJ’s current president who was part of the tobacco team — and, in fact, put it together during the April 1996 ATLA convention in Atlantic City — declines to confirm the $300,000 figure or to say whether the money went to the association, the ATLA-NJ Educational Foundation Inc. or to the group’s political arm, LEGAL-PAC. The donation was “voluntary, and is a private matter,” says Placitella, a partner with the Woodbridge, N.J., firm of Wilentz, Goldman & Spitzer. “A contribution was made out of the goodness of our hearts.” He declines to elaborate except to say, “Some of your information is incorrect.” Asked whether outside counsel were brought in to investigate, and whether they reported potential legal grounds to force disgorgement of the tobacco team’s $40 million fee, Placitella says, “I’m not admitting or denying anything.” Another member of the team, Donald Caminiti, echoes Placitella’s sentiments, saying it was a voluntary contribution made because “we are all longtime members of ATLA” who wanted to give the donation. He, too, declines to discuss the amount or any debate within ATLA. Asked about the retention by the association of outside counsel to try to recoup at least part of the fees, Caminiti, immediate past president at the time of the bid, says, “I have no comment at all.” THE ATLA IMPRIMATUR The team’s initial bid was put together just a week before bids were due in April 1996, with ATLA-NJ’s board approving the plan at the Atlantic City convention. “We’re looking for the most skilled trial lawyers, and those that are well-versed in mass tort litigation,” Placitella said at the time. When the bid was submitted to the state attorney general’s Office, it was with the imprimatur of ATLA-NJ’s educational foundation, according to Michael Testa, ATLA-NJ president at the time. It called for a 30 percent contingency fee, with 5 percent to go to the state’s charity-care system, which a year earlier had run out of money. The team assembled by Testa and Placitella, a nationally known mass-tort plaintiffs’ lawyer, consisted of the two of them, three of the four previous presidents and the incoming president. The lone recent past president not included was Marina Corodemus, who was by then a state court judge. Placitella at the time was a member of ATLA’s board and was on the executive committee. A seventh member of the initial team was Michael Ferrara, at the time vice chairman of LEGAL-PAC. Placitella said three years later that there was little time to put a team together given the impending deadline for submitting a bid. Though initially seven lawyers were listed on the local team by Testa, Robert Levinson, who at the time was chairing LEGAL-PAC, subsequently dropped off. He was a partner with past president Angel DeFilippo in Levinson & DeFilippo of Edison, N.J. Last year the two split, and Levinson joined the firm headed by Lee Goldsmith, the 1993-94 ATLA president. The firm is now Goldsmith, Richman, Levinson & Harz of Edison. Levinson and Goldsmith did not return calls for comment. In partnering with Ness Motley, the ATLA team joined forces with the leading national firm suing the tobacco industry. Led by Ronald Motley, one of the pioneers in the move to sue the states to recover Medicaid funding spent on smoking-related illnesses, the firm represented more than half the states that agreed to the master settlement in 1998. That settlement was between the tobacco companies and 46 states that will receive the $206 billion over 25 years. When four states that settled separately before the master settlement are included, the agreement reaches $246 billion. New Jersey, which was awarded $7.58 billion, has already received payments. Gov. James McGreevey has proposed a bond sale that would use the tobacco money to repay the principal and interest. NO HEAVY LIFTING In addition to Placitella; Goldsmith; Testa, a partner with Vineland, N.J.’s Basile & Testa; and Caminiti, a partner with Hackensack, N.J.’s Breslin and Breslin, the other two members of the state’s tobacco legal team are Ferrara, a partner with the Cherry Hill firm of Ferrara, Rossetti & DeVoto, and Harrison Gordon, a partner with West Orange’s Gordon and Gordon. Gordon was president-elect when the team was put together at the April 1996 ATLA convention. Ferrara, Gordon and Testa did not return calls seeking comment. Shortly after the bid was submitted, the attorney general’s office said it could not accept a bid from a nonprofit. So the bid was quickly reworked, dropping the ATLA foundation, with the contingency fee reduced from 30 percent to 25 percent. Placitella says he put the local team together with Ness Motley because of his close association with Motley. Joseph Rice, a top Ness Motley partner, led the plaintiffs’ national negotiating team. Ness Motley dispatched partner Susan Nial, who, with the aid of several associates, handled all the heavy lifting in the New Jersey suit, State v. R.J. Reynolds Tobacco Co., C-254-96. Nial conducted all the substantive arguments, filed all the substantive papers and handled all the serious issues before Middlesex County Superior Court Judge Jack Lintner. Ironically, Placitella, the lone local counsel most qualified to handle the litigation, along with the backing of his large firm, Wilentz Goldman, was bounced from the case on a conflict issue. The other remaining five local lawyers handled primarily ancillary matters, such as filing pro hac vice motions; assembling state documents; arguing the number of questions in interrogatories; drafting orders following argument by Nial; and handling consent orders and other household chores. One pro hac vice motion handled by local counsel on behalf of a Ness Motley associate carried a certification from the associate saying his presence was needed “because there is no local counsel having the necessary experience with tobacco litigation matters to fully and fairly represent the [state].” When queried in 2000, several of the local counsel said they did clock many hours, adding that their work-product did not show up in the file because they were sending it to Nial in South Carolina. The case itself never got far, compared with those in some other states, which helped push the industry into settlement. No interrogatories had been answered; no depositions had been taken; no expert reports had been filed; and the case was not close to a pretrial order. Two of the sources interviewed last week say the $300,000 contribution was discussed during an ATLA-NJ meeting at the Forsgate Country Club in Monroe Township during the first half of 2001, while DeFilippo was president, though it was not clear whether it was discussed before the full board or the executive committee in private session. DeFilippo, president until last June, did not return a telephone call seeking comment. Two sources also say Gerald Baker, a name partner with Baker, Garber, Duffy & Pedersen of Hoboken and ATLA-NJ board member, announced at that meeting that he would match the team’s contribution with a testamentary bequest of his own. Baker was out of the country last week and could not be reached for comment.

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