National Lawyer Enrichment Program

Taxing Middle and Lower Income Families to Enrich Attorneys

Sen. John McCain (R-AZ)The U.S. Senate passed an amendment as part of Senator John McCain's National Tobacco Policy and Youth Smoking Reduction Act to pay attorneys as much as $4,000 per hour for their work in bringing lawsuits against tobacco companies.

That's right ... you read right! $4,000 an hour!

Provisions of the proposed tax legislation allows families to be taxed in order to pay plaintiffs attorney's as much as $4,000 an hour to pursue tobacco related lawsuits. The amendment to the tobacco bill limits attorney's fees in a declining scale that ranges from $4,000 an hour for action before 12/31/94, to $500 an hour for the most recent action.

Rather than spending huge amounts of money on children's health or health in general, the way has been cleared for a small group of trial lawyers to be enriched with massive fees charged through tobacco related litigation.

This National Lawyer Enrichment deal will not make attorneys instant millionaires. . . . Some of them will become BILLIONAIRES!

Sen. Orrin Hatch (R-Utah) defended trial lawyers ability to collect these huge fees, calling them the "last bastion of freedom."

Republicans sought to ease this massive enrichment of attorneys by limiting them to only $1,000 an hour! Yep, that's right, $1,000 an hour! While that may be a whole lot less than $4,000/hr., it's still a whole lot more than most people earn in a week.

Apparently, Congress agrees that lawyers should earn these ridiculous fees. Senators voted down an amendment proposed by Sen. Lauch Faircloth (R-N.C.) which proposed to cap the fees of trial lawyers involved in tobacco litigation to $250 per hour. Sen. Mitch McConnell (R-Ky.) called the cap "more than a fair wage." Without a limit, he said, the Senate could help to create "an exclusive club of trial lawyer billionaires."

Eliot Spitzer
NY State Attorney General
Eliot Spitzer

Following the defeat in Congress of Sen. John McCain's National Tobacco Policy and Youth Smoking Reduction Act (S. 1415), 46 state attorneys general led by Eliot Spitzer and major tobacco manufacturers sat down and ironed out the Master Settlement Agreement (MSA), based on the same plan that had already been rejected by Congress. It was in effect, a new national sales tax on cigarettes, the cost estimated at $240 billion over the first 25 years.

Private lawyers representing 40 states in their suits against the tobacco industry stand to get more than $14.7 billion over 25 years. Four national firms - based in Seattle, Mississippi and South Carolina - stand to reap the most. Together, these firms represent two dozen of the states and could reap the lion's share of $10 billion in fees from those states.

What each lawyer is paid has been kept private, in accordance with the 1998 Master Settlement Agreement. Only the total amount awarded lawyers by each state were made public.

What the Master Settlement Agreement essentially created was a national government/tobacco cartel that harmed both consumers and small businesses by increasing cigarette prices and restricting competition. It was a backroom deal between state governments and big tobacco companies.

State attorneys general came out winners as they expanded their own power. Trial lawyers associated with the state lawsuits were also BIG winners.

Analyses by a watchdog group show that some lawyers were paid more than $15,000 per hour. Individual firms that originated the lawsuits and were subsequently used by many states, reportedly will reap as much as $3 billion. Private attorneys in Texas, Mississippi and Florida made out like bandits, fleecing tobacco companies, smokers and taxpayers for $8.2 billion in legal fees -- billions more than the lawyers themselves had demanded!

What About Families and Children?
The losers in the Master Settlement Agreement were the taxpayers and small businesses. The direct financial burden (higher cigarette prices) went to smokers, many of them low-wage earners. Small tobacco companies were encumbered with annual escrow payments designed to “level the playing field,” followed in subsequent years by a growing list of onerous mandates.

Sadly, many Republicans who were elected with the mandate of no new taxes has joined the effort to steal more of your money. They have been forced to by the successful PR campaign slogan, "Big Tobacco or Kids?" Never mind truth! Liberals would have you believe that anyone opposing their efforts of the government takeover of another American industry and their welfare state caring for your children is necessarily supporting youth smoking. How ridiculous, but effective.

``Republicans and all right-thinking American strongly agree with the president's concerns about children and smoking. Republicans hold a zero tolerance policy when it comes to the underage sales of tobacco to America's kids. What we see time and again from the Clinton-Gore Administration, however, is a get-rich-quick scheme for trial lawyers that leave children behind. Trial Lawyers are making untold tens of millions of dollars a lawsuit while not focusing on a single aspect of helping our children fight the temptation to begin smoking. It's no wonder trial lawyers have been rewarded so generously by this administration. Al Gore has received more money from trial lawyers than any other candidate running for president in American history -- almost $650,000 last week alone. Mr. President, let's put children first and not fat-cat trial lawyers money-grubbing for Al Gore's presidential campaign.'' - Republican National Committee Chairman Jim Nicholson

Prosecution for profit.
The vulture mentality of trial lawyers can now use the court system as a legal playground for the purpose of extortion of funds from targeted defendants. Today it is tobacco, tomorrow will be a different target, take your choice. They will use the billions of dollars they get from a tobacco bill to file suits against other industries creating a nightmare in our legal system. That's their track record and that's their plan.

Already, we have seen utility companies, financial institutions and pharmaceutical companies the target of multi-state lawsuits to extort more money from legitimate businesses.

It wasn't that long ago that lawyer greed was behind forcing Dow Corning into bankruptcy by thousands of unfounded plaintiff claims that Dow´s silicone breast implants caused health problems. The company acquiesced, and settled the billion dollar claims against it. Later, an independent panel of 13 scientists concluded that silicone breast implants do not cause any major diseases. The study, conducted by the Institute of Medicine at the request of Congress, is only the latest in a series of research studies concluding that there is no scientific evidence to support the breast implant lawsuits.

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