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Manhattan Supreme Court Justice Charles E. Ramos’ unprecedented inquiry into the $625 million arbitration award to six law firms who handled New York state’s case against the tobacco industry produced an oral argument Thursday that was equally unparalleled — for its vitriol, much of it aimed at the judge. Ten minutes into the argument, Ramos ejected a prominent personal injury lawyer, Harvey Weitz, who had loudly proclaimed that he and his colleagues were being “sandbagged” by the judge. Within an hour, another top-echelon tort lawyer, Robert G. Sullivan, angrily walked out of the courtroom, complaining that Ramos had cut short his argument. During the two-hour argument, Ramos faced more than a dozen lawyers, all of them intent on dissuading him from his quest, announced in an order to show cause issued June 17, to examine the propriety of the fee award. With lawyers from the tobacco industry, New York state and the six firms all present, not a word of support was voiced for a continued inquiry. Instead, Ramos found himself the butt of pointed questions and complaints. Several of the personal injury lawyers angrily accused the judge of unnecessarily besmirching their reputations by publicly airing his concerns that their fee award may have violated the Code of Professional Responsibility’s proscription against excessive fees. At times the hearing took on an air of unreality, with lawyers imploring Ramos to drop his inquiry and to refer any concerns he might have to the state disciplinary authorities. The six firms with the most at stake in the proceeding had been awarded $625 million by an arbitration panel in April, 2001 for handling New York state’s lawsuit, filed in 1997, against the tobacco industry to recover its expenditures for treating smoking-related illnesses. New York’s case, and lawsuits brought by 45 other states, were settled in November 1998, with the industry agreeing to pay $208 billion to the states, $25 billion of which was slated for New York over the next 25 years. The award to the lawyers who represented New York was the seventh largest in the nation to be issued by the arbitration panel under a process set up by the nationwide settlement. According to a chart prepared by the New York group, their fees represented 2.5 percent of the state’s recovery, the fourth lowest of the 17 awards issued by the panel. In explaining his reason for opening the inquiry, Ramos pointed to information before the panel that showed the $625 million fee translated into $13,000 an hour for 41,000 hours of work. Of the six firms sharing the $625 million fee award, three are based in New York: Schneider, Kleinick, Weitz & Damashek, and Sullivan Papain Block McGrath & Cannavo, both with offices in Manhattan, each received $98.4 million. Thuillez, Ford, Gold & Johnson in Albany was paid $84.3 million. The remaining $343.8 million was split among Ness, Motley, Loadhoalt, Richardson & Poole, in Charleston, S.C.; the Scruggs Firm from Pascagoula, Miss., and Hagens & Berman, a Seattle firm. Thursday’s argument had been scheduled to examine whether Justice Ramos had jurisdiction to compel the parties to justify the award as not being contrary to “well established ethical and public policies.” In earlier proceedings, Ramos had suggested that he might have authority for the inquiry under the provision of the Civil Practice Law and Rules (CPLR) providing for review of arbitration awards or perhaps directly under the Code of Professional Responsibility. The first round of fireworks was triggered by Ramos’ suggestion that he had jurisdiction on yet another ground: that the case had been certified as a class action, with the class consisting of the state’s 62 counties. At one point, he told the throng of lawyers before him that the requirement that a judge review and approve a fee award in a class action was “a slam dunk.” Reacting to Ramos’ suggestion — raised for the first time at Thursday’s hearing — Weitz, a name partner at Schneider Kleinick, exclaimed that the plaintiffs’ lawyers were being “sandbagged.” Ramos ordered a court officer to remove Weitz from the courtroom. Only seconds earlier, the judge had warned Weitz that he was close to being held in contempt of court after he was heard telling Brian Shoot, who was presenting Sullivan Papain’s arguments on the jurisdictional issue, not to let the judge interrupt him. Sullivan, a name partner at Sullivan Papain, also clashed with the judge after Shoot raised a theme echoed by a number of lawyers: that by raising potential charges of attorney misconduct in a public forum, Justice Ramos was frustrating the confidentiality provision of the state law governing the disciplining of attorneys, which prohibits a public airing of a disciplinary complaint until the appropriate department of the Appellate Division determines that a public sanction is warranted. Sullivan complained about the “ongoing destruction of our reputations.” Though he did not directly accuse Ramos of leaking his order to show cause to the press, he said the “damage was done” when an article soon appeared in the New York Law Journal with the judge’s picture in the “middle” of the paper. Ivan Schneider, a name partner at Schneider Kleinick who like Weitz can claim a string of multimillion-dollar verdicts, said the judge had been “reprehensible” when he had compared the plaintiffs’ lawyers to the leaders of Enron, now in bankruptcy amid a web of claims financial finagling. When about a half hour later Sullivan returned to the Enron theme, Ramos cut him off, saying “I’ve given you more than an opportunity to vent.” Sullivan promptly left the courtroom, complaining on his way out that he had “spoken for about four minutes” and not been “permitted to finish.” Responding to the complaints, Ramos at least twice told the lawyers that during the hearing he had been informed that the file of the case had been kept in chambers and was not available at the county clerk’s office. If anyone made a phone call to the press, he said, it must have come from someone from that side of the room,” referring to the lawyers in front of him. Philip Damashek, also a name partner at the Schneider Kleinick firm, also accused the judge of using “innuendo” in “comparing me and my colleagues [to the leaders of] Enron.” “Where do I get my reputation back?” he asked, saying that the judge should “apologize.” Damashek and Sullivan both urged Ramos to file a complaint with the disciplinary authorities if he felt there was evidence of a violation. That would permit the matter to be handled confidentially, they asserted. Referring to Ramos’ remark that the $625 million fee might not pass the “the smell test,” Columbia Law School Professor Samuel Issacharoff, who represents Ness Motley and Hagens & Berman, reminded the judge that he could refer the matter to the disciplinary authorities even if there was not enough evidence before him to create an ethical obligation to do so. The vast majority of complaints come to the authorities from people who merely believe they have been aggrieved, he told the judge. At the conclusion of the hearing, Ramos gave the lawyers until Aug. 30 to either request him to review the fee award under the class action provision or file a motion contesting his authority to proceed under provisions found in Article 9 of the CPLR. During the argument, the lawyers made it plain that they would most likely contest the judge’s authority under Article 9. Repeatedly they told the judge that it was sufficient that Justice Stephen G. Crane, who approved the settlement in December 1998, had before him the procedures that established the nationwide arbitration system and ultimately led to the $625 million fee award. What was required, they argued, was approval of the process, not the actual award, which was issued more than two years later.

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