ANNAPOLIS – The nation’s biggest tobacco firms, led by Philip Morris Inc., on Wednesday questioned the constitutionality of Maryland’s decision to hire a private lawyer in its attempt to recover $16 billion in health care expenses from tobacco-related illnesses.
The Maryland Court of Appeals heard the companies’ case after a Talbot County Circuit Court denied their request to bar the attorney general from retaining renowned tort attorney and Baltimore Orioles owner Peter Angelos on a contingency basis. Under the contract, Angelos would receive 25 percent, or up to $4 billion, of any damages awarded in the case.
It is against both the federal and Maryland constitutions for the attorney general to compensate private lawyers out of a state settlement without first getting the General Assembly to appropriate the funds, argued John H. Lewin Jr., an attorney for Philip Morris.
Lewin asserted that the lower court ruling approved hiring “what is, in essence, a bounty hunter.”
But Deputy Attorney General Carmen M. Shepard noted that, regardless of how Angelos is paid, several other groups would take a piece of any settlement.
“Those items of value will probably face a number of `owners of interest,'” including the federal government and, possibly, tobacco customers themselves, she said.
Judge John C. Eldridge added that money collected in the case conceivably could be considered private until its net proceeds are handed over to the state.
“Why isn’t [the state] entitled to the monies less a 25 percent fee?” he asked Lewin. “Why are they state funds prior to the deduction? They are not in the treasury.”
Lewin responded that damages sought by the state are the state’s property from the moment awarded, no matter who wins them in court. After the state gets the money, he reasoned, the Legislature could decide to appropriate legal fees as it saw fit.
The lawsuit currently is pending in a Baltimore City Circuit Court.
Judge Alan Wilner commented that it may not be appropriate to consider the source of Angelos’ fee until the issue actually comes up.
“Doesn’t [the legal question of how he is paid] ripen at such a time that we decide to pay him?” he asked.
In response to concerns raised in Philip Morris’ legal briefs that Angelos will be biased by the fact that he is paid only if he wins, Shepard told the court that her office has the reins of the case tightly in hand.
“The attorney general remains the lawyer of record in this case,” she said. “There’s no question of who is in charge.”
Shepard afterward dismissed Lewin’s concerns about constitutionality of the Angelos deal.
She said Philip Morris intends to keep Angelos from representing the state altogether in hopes that the attorney general’s office will not be able to finance the health care lawsuit on its own.
Frank Mann, public information officer for the attorney general’s office, said the state’s legal costs were expected to be “well over $5 million.” What Philip Morris wants, Shepard said, “is to invalidate the contract” with Angelos. “I don’t think they have the best interests of the Maryland constitution in mind.” -30-