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  •   Angelos to Cut Fee in Tobacco Suit

    By Charles Babington
    Washington Post Staff Writer
    Thursday, April 2, 1998; Page D01

    Peter G. Angelos, millionaire owner of the Baltimore Orioles and chief lawyer in Maryland's lawsuit seeking billions of dollars from cigarette makers, agreed yesterday to cut his fee in half in exchange for legislation intended to improve the state's chances of winning the suit.

    Angelos's concession could cost him many millions of dollars if Maryland prevails in the case, which seeks compensation for the billions the state has paid over the decades for Medicaid recipients with smoking-related diseases. But by dropping his contingency fee to 12.5 percent of whatever the state may collect -- down from the original 25 percent -- Angelos still stands to collect as much as $375 million from the $3 billion judgment that several observers say is possible.

    That huge sum still troubles some lawmakers. But the 12.5 percent solution satisfied many others who had said a 25 percent cut was politically unacceptable.

    Embracing Angelos's offer to write the 12.5 percent fee into law, the Maryland Senate tentatively approved a measure that would allow him to prove his case without bringing smoking victims to the stand and without having to answer arguments that they contributed to their illnesses by choosing to smoke. A final Senate vote is scheduled today, but it is unclear whether Senate leaders can reach a compromise with the House of Delegates, which passed a significantly different version of the measure last week.

    "I think now there is momentum," said Maryland Attorney General J. Joseph Curran Jr. (D), a key backer of the legislation. Angelos did not return phone calls to his office seeking comment.

    Lobbyists for tobacco companies and other business groups -- who fear they could become future lawsuit targets -- have denounced the legislation as an unfair effort to change the rules in the middle of a case. The legislation essentially would overturn a court ruling that said Maryland must prove its case victim by victim, bringing to the stand Medicaid patients who suffered from smoking.

    Instead, the Senate version would allow the state to use statistics on smoking and health to argue that a given number of Medicaid recipients suffered a given amount of medical damages.

    "If the Senate bill passes, there's almost no need for a trial," said Dennis C. McCoy, a lobbyist for cigarette maker Philip Morris Cos. "It's just a bunch of computer printouts," he said, with virtually no means for tobacco lawyers to counterattack.

    Anti-smoking groups had worried that public distaste over the potentially huge fee for Angelos -- who made his fortune by representing asbestos victims in lawsuits -- was drawing attention away from the case's health issues and creating a potential villain to rival that of the tobacco companies.

    Curran said Angelos offered "by far the best" proposal for handling the tobacco litigation when the state sought bids in late 1995. Angelos agreed to pay all the pretrial and trial costs, which have reached about $5 million even though the trial date is a year away.

    In return, he would receive 25 percent of any state award -- which could mean nothing if the state lost the suit. In 1995 and 1996, Curran said, few people thought states could win such suits, and 25 percent was a reasonable contingency fee.

    "If you look back four years ago, this was an impossible dream, this was Don Quixote," Curran said in an interview yesterday.

    Now that some states have won large judgments, and the tobacco industry is considering a huge national settlement, Maryland's prospects are brighter and Angelos's fee reduction is justified, he said.

    James E. Tierney, a former Maine attorney general who now advises states filing such suits, agreed.

    "I would say 25 percent was the norm" when Angelos was hired, he said. He praised Angelos's compromise, saying it will provide political justification for some lawmakers to vote for the bills.

    © Copyright 1998 The Washington Post Company

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