Butt Ugly

Minnesota's deal with Big Tobacco was supposed to be worth $6 billion. But what if the golden goose lays an egg?

Thomas Neuville anticipates a different scenario. "At some point I bet these tobacco companies will pull the plug," the state senator says. "It's not unheard-of for huge industries to file for Chapter 11 reorganization. The airline industry is big, too, and ten, twelve years ago a lot of the airlines went into bankruptcy. It doesn't mean that we won't have cigarettes. What it means is that they'll reorganize and buy back all their equipment and plants at pennies on the dollar and go back into business with a clean slate."

Whatever effect such developments might have on the State of Minnesota, they'd have no bearing whatsoever on Robins Miller Kaplan & Ciresi's ability to collect its legal fees. Unlike the long-term deal the firm crafted for the state (which calls for payments to continue in perpetuity), Robins Miller's fee--which netted the firm a No. 1 ranking in profits per partner in a 1999 survey by the magazine American Lawyer--will be paid in full a few months from now.

As Richard Daynard sees it, that's only fair. "It was a spectacular job of lawyering, which produced spectacular results," says the law professor. "I wouldn't defend every fee that's been awarded to the trial lawyers nationwide, but by forcing the release of industry documents, Minnesota did more for public health than any other state. They were entitled to a spectacular fee."

Rand Carlson

Not surprisingly, Thomas Neuville disagrees. "The lawyers that represented the state did a better job of protecting themselves than the state," he scoffs. "The tobacco companies settled because they knew they could preserve the option of filing for bankruptcy in the future and they kept the settlement at a level they knew they could pass on to consumers. In the end, I think the net recoveries to the state will be much less than expected, and then people will say we really did get ripped off."

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