Payment application is setback for Angelos; Curran seeks money from tobacco industry

In perhaps the oddest twist so far in their battle over legal fees in Maryland's tobacco lawsuit, Attorney General J. Joseph Curran Jr. struck another blow yesterday against Peter G. Angelos -- by asking the court to pay him more than $5.2 million and praising his firm's aggressive legal work.

The payment, meant to be a down payment on Angelos' ultimate fee, was necessary to permit the state to file an application to have that fee paid by the tobacco industry. The 49-page fee application filed yesterday, which will go to a three-member arbitration panel, speaks highly of the Angelos firm's work and asks for a "generous award" to compensate the firm.


But Angelos' lawyers had urged Curran not to file the application. They fear that if the arbitrators award a relatively small fee, their judgment could later be used against Angelos in his legal contest with the state for a billion-dollar fee.

"They're interested in getting a half-baked, phony, bogus fee award they can use in court against Peter Angelos," William F. Gately, an attorney representing the multimillionaire plaintiffs' lawyer and Orioles owner, said last night.


Deputy Attorney General Carmen M. Shepard said that was not the case.

"We want a generous award. We want the award to be as big as possible," she said.

Under the rules of the national tobacco settlement in November 1998, lawyers for the states or the states themselves can apply for a legal fee to be paid by the industry. The provision was designed to preserve the $246 billion settlement -- more than $4.6 billion of which is to go to Maryland over the next 25 years -- for anti-smoking programs and other public purposes.

In more than 30 states, lawyers have accepted industry-paid fees, either by negotiating directly with the industry or by filing for fee arbitration. But Angelos, who initially said he would apply for arbitration, later refused to apply and instead demanded that the state give him 25 percent of its settlement, as called for in his 1996 contract. That would be more than $1 billion.

Curran sued in December, asking Baltimore Circuit Judge Clifton J. Gordy to order Angelos to apply for fee arbitration. Gordy declined and set a trial for next year to decide on a fair fee. Curran decided to go ahead and file for fee arbitration in the name of the state.

"We think there's a pile of money to be recovered from the tobacco industry," said Shepard. "The Angelos firm won't go get it. As the state's lawyers, we think we should go get it."

The standoff creates an awkward situation for both sides.

In the fee dispute, Curran has accused Angelos of breaching his contract and violating his duty to his client under the rules of legal ethics.


But in yesterday's fee application, he describes in detail the Angelos firm's energetic pursuit of the state's tobacco lawsuit, describing all the secret documents the firm helped uncover and all the tobacco industry executives it deposed.

At times the praise seems grudging, or is applied to "the Maryland team" rather than the Angelos firm. Wary of his delicate position, Curran also filed a separate motion yesterday asking Gordy to prevent Angelos from using the language of the fee application against the state in their court fee dispute.

Angelos would presumably benefit if the arbitration panel awards a large fee.

Angelos had offered to "put on a Cecil B. DeMille production on our dime" before the arbitration panel, Gately said -- if Curran had consented to wait until their fee dispute was settled by the courts. Now, Gately said, he did not know whether the firm would ultimately assist with a presentation before the arbitration panel.

The fee application will be decided, probably within a few months, by three arbitrators: the chairman, John Calhoun Wells, a veteran mediator chosen by the tobacco industry and several law firms representing the states; Charles B. Renfrew, a former judge who was chosen by the industry; and a third member to be chosen by Curran.