[Congressional Record Volume 144, Number 77 (Monday, June 15, 1998)]
[Senate]
[Pages S6324-S6326]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL TOBACCO POLICY AND YOUTH SMOKING REDUCTION ACT
The PRESIDING OFFICER. Under the previous order of the Senate, we
will now continue with the consideration of S. 1415.
The Senate continued with the consideration of the bill.
The PRESIDING OFFICER. The Senator from Washington.
Mr. GORTON. Mr. President, parliamentary inquiry: May I send an
amendment to the desk without asking unanimous consent some pending
amendment be set aside?
The PRESIDING OFFICER. The Senator may send up the amendment without
consent.
Amendment No. 2705 To Amendment No. 2437
(Purpose: To limit attorneys' fees)
Mr. GORTON. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Washington [Mr. Gorton] proposes an
amendment numbered 2705 to amendment No. 2437.
Mr. GORTON. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the end of the pending amendment, add the following:
SEC. LIMIT ON ATTORNEYS' FEES.
(a) Fees Covered by This Section.--Notwithstanding any
other provision of law, or any arrangement, agreement, or
contract regarding attorneys' fees, attorneys' fees for--
(1) representation of a State, political subdivision of a
state, or any other entity listed in subsection (a) of
Section 1407 of this Act;
(2) representation of a plaintiff or plaintiff class in the
Castano Civil Actions described in subsection (9) of Section
701 of this Act;
(3) representation of a plaintiff or plaintiff class in any
``tobacco claim,'' as that term is defined in subsection (7)
of Section 701 of this Act, that is settled or otherwise
finally resolved after June 15, 1998;
(4) efforts expended that in whole or in part resulted in
or created a model for programs in this Act,
shall be determined by this Section.
(b) Attorneys' Fees.
(1) Jurisdiction.--Upon petition by the attorney whose fees
are covered by subsection (a), the attorneys' fees shall be
determined
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by the last court in which the action was pending.
(2) Criteria.--In determining an attorney fee awarded for
fees subject to this section, the court shall consider--
(A) The likelihood at the commencement of the
representation that the claimant attorney would secure a
favorable judgment or substantial settlement;
(B) The amount of time and labor that the claimant attorney
reasonably believed at the commencement of the representation
that he was likely to expend on the claim;
(C) The amount of productive time and labor that the
claimant attorney actually invested in the representation as
determined through an examination of contemporaneous or
reconstructed time records;
(D) The obligations undertaken by the claimant attorney at
the commencement of the representation including--
(i) whether the claimant attorney was obligated to proceed
with the presentation through its conclusion or was permitted
to withdraw from the representation; and
(ii) whether the claimant attorney assumed an unconditional
commitment for expenses incurred pursuant to the
representation;
(E) The expenses actually incurred by the claimant attorney
pursuant to the representation, including--
(i) whether those expenses were reimbursable; and
(ii) the likelihood on each occasion that expenses were
advanced that the claimant attorney would secure a favorable
judgment or settlement;
(F) The novelty of the legal issues before the claimant
attorney and whether the legal work was innovative or modeled
after the work of others or prior work of the claimant
attorney;
(G) The skill required for the proper performance of the
legal services rendered;
(H) The results obtained and whether those results were or
are appreciably better than the results obtained by other
lawyers representing comparable clients or similar claims;
(I) The reduced degree of risk borne by the claimant
attorney in the representation and the increased likelihood
that the claimant attorney would secure a favorable judgment
or a substantial settlement based on the progression of
relevant developments from the 1994 Williams document
disclosures through the settlement negotiations and the
eventual federal legislative process;
(J) Whether this Act or related changes in State laws
increase the likelihood of the attorney's success;
(K) The fees paid to claimant attorneys that would be
subject to this section but for the provisions of subsection
(3);
(L) Such other factors as justice may require.
(3) Effective date.--Notwithstanding any other provision of
law, this section shall not apply to attorneys' fees actually
remitted and received by an attorney before June 15, 1998.
(4) Limitation.--Notwithstanding any other provision of
law, separate from the reimbursement of actual out-of-pocket
expenses as approved by the court in such action, any
attorneys' fees shall not exceed a per hour rate of--
(A) $4000 for actions filed before December 31, 1994;
(B) $2000 for actions filed on or after December 31, 1994,
but before April 1, 1997, or for efforts expended as
described in subsection (a)(4) of this section which efforts
are not covered by any other category in subsection (a);
(C) $1000 for actions filed on or after April 1, 1997, but
before June 15, 1998;
(D) $500 for actions filed after June 15, 1998.
(c) Severability.--If any provision of this section or the
application of such provision to any person or circumstance
is held to be unconstitutional, the remainder of this section
and the application of the provisions of such to any person
or circumstance shall not be affected thereby.
Mr. GORTON. Mr. President, there is at least an informal
understanding that there will be a debate on this amendment tomorrow
for approximately 1 hour. With the kind indulgence of my friend and
colleague from Minnesota, I am going to simply give a brief explanation
of this amendment now so Members who are watching, or staffs who are
watching, will understand its general subject matter.
Twice during the course of this debate we have debated the subject of
limitations on attorneys' fees. On both occasions I have voted to table
those amendments, not because I felt that limitations on attorneys'
fees in connection with tobacco litigation and legislation were not
appropriate, but because I felt that the amendments themselves were
unfair. This amendment is a third attempt to provide some limitations
in a manner that I, at least, believe to be considerably more sensitive
and more fair to the attorneys who have been involved in that
litigation. I hope under those circumstances it will be given
reasonably careful consideration by my colleagues.
We are dealing with litigation that is literally unprecedented, I
think, in the history of the United States, with the potential of
immense recoveries on the part of various States interfered with and
amended by the legislation that we are considering here on the floor.
Under those circumstances, the possibility that attorneys' fees would
be awarded in the billions of dollars--perhaps even in the billions of
dollars to some individual firms, but certainly in the order of nine
digits to many individuals and individual firms--is a matter that I
think greatly disturbs the majority of the American people and many, if
not most, members of the bar. Those attorneys' fees have been subject
to much criticism from the outside, and there should be a way to see to
it that they are dealt with fairly.
The difficulty with the two earlier amendments, in my view at least,
was that they treated all lawyers, all attorneys who were involved in
tobacco litigation--past, present, and future--in exactly the same
fashion. Yet it is obvious that, if we look at the history of this
controversy, the initial litigation and the ideas for that initial
litigation that were brought forth some time ago, in the early 1990s,
were developed by a group of tremendously gifted and imaginative
attorneys at a time at which the odds on their success, looking at it
from the beginning, would have been judged to have been very small.
They have shown great skill, great persistence; they have spent, in
many cases, a great deal of their own and their law firms' money; and I
think the reward they have earned is considerably larger than awards
that will be earned by those who got into this litigation very late in
the game when it was obvious that the litigation was going to be
settled for large amounts of money or litigated successfully; not to
mention those who will bring tobacco-related litigation in the future
when, under the terms of this bill, and many State legislative acts, it
will be almost impossible for an attorney to lose a tobacco case.
As a consequence, the fundamental approach of this amendment is to
say that for those who were in this litigation early--that is, before
the end of the year 1994--attorneys' fees can be up to $4,000 an hour--
a huge amount of money beyond any question, a mind-boggling amount of
money, but nevertheless considerably less than many of these attorneys
will get in the absence of such legislation, on the basis of percentage
contingent fees.
Moreover, like other amendments in this connection, that is a
ceiling, not a floor. The courts, in this case, will make a
determination considering all of the same items that have been outlined
in previous decisions of the U.S. Supreme Court and in previous
amendments on this subject. So when a judge determines that amount is
too much, the judge may reduce the amount below that hourly fee but
under no circumstances may go above it.
The second category of attorneys will be those who were involved in
this litigation after 1994 but before early last year. Their ceiling
will be half the amount of the pioneers, or $2,000 an hour. And certain
other attorneys who worked on developing the ideas that went into this
case will fall into that category as well.
The next clear date is when the Liggett Tobacco Company agreed, in
effect, to turn state's evidence to settle the matter and to admit its
liabilities and admit, generally speaking, the liabilities of the other
tobacco companies. Those who got into the litigation after that were
almost certain winners--almost certain winners. They did not run the
risks that earlier attorneys did, and their maximum fee under this
amendment will be $1,000 an hour. That will, in fact, be somewhat less
than the maximum recovery under the last Faircloth amendment, because
while it stated the sum of $1,000 an hour, it allowed for recovery of
costs over--considerably over and above the actual costs incurred in
the litigation.
Finally, after the beginning of this debate here, assuming that this
debate, of course, ends up in actual legislation, tobacco litigation
will be almost like Workmen's Compensation litigation in all of our
State courts, and the limit there is $500 an hour under this amendment,
half that in the last Faircloth proposal. Again, these are limits,
these are maximums, but they are maximums set in a different way than
they were in the other two amendments, reflecting the actual risks, the
actual
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imagination, the actual work that went into the litigation and, for
that matter, into the legislation itself.
I am not certain this is a totally perfect proposal of this nature,
but I think it is highly reasonable. I think it is highly generous. I
think it meets the views of people in the United States as a whole who
do not think the lawyers in this case should become billionaires out of
it. And it will husband the actual recoveries, whatever those
recoveries may be and however they are derived, far more for the
purposes of the litigation and the legislation itself than relatively
unlimited contingent fees would do.
That is a brief explanation and a justification of something that I
hope meets with the support of those who have felt that there ought to
be limits on those attorneys' fees, but that they should be somewhat
lower and those on the other side, who, like I, have voted against
these previous limitations on the grounds that they weren't sensitive
enough and for at least some people were not high enough. I would like
to bring people together on this so that at least this particular
element of this debate can be brought to a successful conclusion.
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