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Judge orders pay for state's tobacco lawyers

The judge overseeing Florida's $11-billion tobacco settlement on Friday ordered $50-million be paid immediately to the state's private attorneys _ likely igniting a constitutional battle.

At the same time, the state dropped its final claim against cigarette makers which could have sought further restrictions on advertising _ a move one of the private attorneys called an unnecessary concession.

Palm Beach Circuit Judge Harold Cohen authorized the release of the $50-million over the objections of the state, which maintained the Legislature has to appropriate any disbursement of the $750-million already paid by tobacco.

Cohen's order was stayed late Friday night by the 4th District Court of Appeal, which was considering an appeal of the order.

"I'm not trying to engender any type of constitutional crisis, but I think this is an issue that needs to be resolved," Cohen said.

Cohen's ruling sparked a rush to the phones by private attorneys seeking the wire transfer of funds before the 4 p.m. close of business _ and by state attorneys who filed an immediate appeal.

That appeal brought one stay, which was vacated, before the appeals court stayed the order for the weekend. No other moves were expected at least until Monday, said Kim Tucker, the state's deputy general counsel.

Attorneys have been feuding over fees since the state resolved its case against the tobacco industry Aug. 25. The settlement provides for "reasonable" attorneys fees to be paid by tobacco and determined by arbitration.

However, the attorneys' original contingency fee contract called for a 25 percent cut of whatever the state recovered, and about half the private attorneys want to be paid under their contract, not by arbitration.

Cohen has ruled that the attorneys must proceed with arbitration, but in the meantime ordered the state and tobacco to each put up $50-million so the lawyers _ who have been working three years without pay _ could get some money. The state will be reimbursed by the tobacco industry for its share.

The state is not happy with that arrangement, which was modeled after Texas' settlement with cigarette makers. Florida claims the Constitution prohibits any of the tobacco funds from being used without lawmaker consent.

Meanwhile, the state dismissed its final count against the industry which could have sought further restrictions on marketing and advertising. The settlement had allowed the state to again go after cigarette makers if a national deal is not reached by June 1998.

That count was touted in August as a concession by tobacco. But the industry was using the issue to hold up legal finalization of the deal, which is necessary before the state can use the money.

At the core of the case was the pursuit of sensitive industry documents.

However, those documents appear to be among the 39,000 released in Minnesota and this week onto the Internet by Congress, attorneys for the state and tobacco said, making it unnecessary to continue the appeal, Doran said.

Steve Krigbaum, an attorney representing the tobacco industry, said the part of the suit dropped Friday was part of a national trend toward specific individual claims against the industry by states, unions or other groups being rejected or dropped.

"It's not a state-specific issue, it's a national issue," Krigbaum said. "The cigarette industry doesn't want kids to smoke, and they want that addressed on a national basis."

Still, attorney Andy Berly, who represented Florida and other states, said he was disappointed Florida was dropping its fight. If Florida had continued and been successful, it could have stripped the industry of its claim the documents are covered by attorney-client privilege. That battle will now have to be waged elsewhere.

In exchange for the state dropping its final count, the tobacco industry agreed to dismiss its claim against the state's Department of Corrections, which at one time manufactured cigarettes.