A Fight Over the Multi-Million-Dollar Fee Awards in the Tobacco Settlement
Lorillard Tobacco Company et
al v. Chester Willcox & Saxbe, LLP, et al, Case No. 2:04-CV-715.
The 1997
nationwide settlement of the renowned “tobacco fee” litigation resulted in an award
of $3.4 billion dollars in legal fees to the law firms that represented the
State of Florida in its claims against the defendant tobacco companies. Those
fees were to be paid out over 25 years, without interest, and their payment was
unsecured. A number of the Florida law firms chose to sell their portion of
that fee award for a discounted up-front payment of cash. After they did
so, a dispute arose between the purchasers of those fee awards and the Florida
firms over exactly what fees had been sold. That dispute resulted in an
interpleader action filed in federal court in Columbus, Ohio, in August
2004. Mr. Hill and his partner, Chris Weber, represented the purchaser of
the fee awards and the bank that served as the indenture trustee of the fee
awards as they were paid. The case was vigorously contested between the Florida
law firms (on one side) and the purchaser of the fee awards and the indenture
trustee (on the other side).
The contracts through which the Florida law firms sold their fee awards to the purchasers were extraordinarily voluminous and complex. Discovery was extensive, involving the production and review of hundreds of thousands of documents and multiple depositions. Multiple motions were filed, thoroughly briefed, and ruled upon. Florida counsel appealed two of the district court’s rulings against them to the United States Court of Appeals for the Sixth Circuit and, after seven long years of litigation, the case was finally settled.
Lester J. (“Ruff”) Fant was the representative of the purchasers of the Florida fee awards with whom Mr. Hill and Mr. Weber worked closely for those seven years. A graduate of Harvard Law School, Mr. Fant was formerly a partner and executive committee member at Sidley Austin LLP, while also serving as an adjunct professor at Georgetown University Law Center for seventeen years. Mr. Fant’s thoughts about that litigation and its outcome can also be seen under Endorsements.