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Chiles tells law firms: Choose us or tobacco

Law firms that get business from both the state of Florida and tobacco companies will have to make a choice.

Gov. Lawton Chiles has already cut off contracts with two prestigious law firms that have represented tobacco companies in proceedings against the state.

Now his staff is identifying the lawyers and lobbyists whose firms are representing tobacco companies in lawsuits involving the state. Those firms that also represent the state in other matters should recognize their conflict of interest and withdraw, said Chiles' general counsel, Dexter Douglass, in a letter Monday to Inspector General Harold Lewis.

If the firms don't voluntarily withdraw, the state will have them discharged in cases where it is practical and Attorney General Bob Butterworth agrees, Douglass said.

It's the latest wrinkle in a steadily escalating war between the state and the tobacco industry.

Action against the firms comes as state officials prepare to sit down this week in formal mediation sessions with the chief executive officers of several tobacco companies the state sued last year. The state is attempting to recover the $400-million a year it spends treating Medicaid patients who suffer from smoking-related illnesses.

Among those affected by Chiles' decision: former state Supreme Court justices Arthur England and Alan Sundberg, who have represented tobacco giant Philip Morris in proceedings against the state. England is with Greenberg Traurig Hoffman Lipoff Rosen & Quentel in Miami and Sundberg is with Carlton Fields Ward Emmanuel Smith & Cutler's Tallahassee office.

"They should have advised us of the conflict and withdrawn from representing the state," Douglass said Monday.

England did not return a telephone call Monday. Sundberg, in California on business, sent word.

"The governor has a right to employ whatever lawyers he wishes to represent him," said Sundberg in a statement relayed by law partner Nancy Linnan.

The action could greatly turn up the heat in the war between Chiles and tobacco companies. Many of the big law firms with Tallahassee offices have lobbyists or lawyers representing tobacco companies and also represent the state.

How many law firms could be affected _ or how much they receive from the state _ could not be determined Monday afternoon. But the impact could easily amount to millions of dollars.

Greenberg Traurig, a Miami firm with offices a block from the Capitol, represents the Board of Administration, which invests the state's $40-billion pension fund. Officials at the agency could not immediately determine how much they have paid to the firm in recent years. But a spokesman for Comptroller Bob Milligan said the firm has received more than $44,000 in fees for representing other agencies in the past three years. Those are considered far less lucrative than the pension-fund contract.

Carlton Fields has been paid $1.4-million in legal fees over the past three years, according to Milligan's office. The firm handles land transactions and tax matters for the governor and Cabinet.

Many private law firms derive thousands of dollars each year representing state agencies in bond issues, real-estate transactions and lawsuits.

On Monday afternoon, Chiles sat down with reporters to talk about the tobacco fight and mediation sessions that begin Wednesday.

"This is an opportunity to look the chief executives in the eye and let them know how good we think our case is and how determined we are to pursue our case," Chiles said.

Chiles and Attorney General Butterworth will come face to face with the tobacco executives in a Palm Beach courtroom. Retired Circuit Judge David Strawn will preside over the sessions, which will not be open to the media or the public.

Butterworth said state laws governing mediation in civil suits make the sessions private. No transcript will be taken of the sessions, and the parties are not free to discuss what goes on. The sessions are designed to force the adversaries to settle without a long and costly trial.

Circuit Judge Harold J. Cohen ordered the state and tobacco companies to the mediator's table after scheduling a trial for August 1997.

Florida is one of 10 states that has filed suit against tobacco companies over the health implications of smoking. In addition to seeking the $400-million a year that the state spends on Medicaid patients, Florida wants tobacco companies to stop advertising campaigns that target young people. Butterworth said he expects 15 more states to soon file similar suits.

Chiles said he doesn't know what will come of the mediation sessions, but he is prepared to remain as long as the industry's chief executive officers stay at the table. Mediation sessions are scheduled to continue Thursday and Friday and resume in late August if both sides are making progress.

If the state and tobacco executives cannot reach agreement on issues involved in the suit, the mediator will declare an impasse and send the case back to court for trial.

Chiles noted that many factors, including presidential politics, could affect negotiations. If tobacco companies decide they can't defeat efforts to have tobacco sales regulated by the Food and Drug Administration, they might decide to come to the table, said Chiles, "with an offer to clean up their act."