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by jon l. shebel, president & ceo
The Masters Of
Hypocrisy
A few years ago, our state ran a tourism campaign with the slogan, "Florida: The
rules are different here." Turns out, it's true.
With the settlement of Florida's much celebrated lawsuit against tobacco companies, the
12 private plaintiff attorneys hired by the state to litigate the suit were told that they
would not receive the 25-percent contingency fee as outlined in their contract.
I never thought I'd feel sympathy for trial lawyers but there is one fact I cannot
ignore: They belong to an unpopular group and top state officials are using that
generalized dislike to justify the breaking of promises. It's a predicament all too
familiar to business people.
In November, Palm Beach County Circuit Court Judge Harold J. Cohen ruled that the
25-percent contingency contract would result in unreasonable fees. Now, I happen to agree
with him, but what's important is that "whoever" negotiated the contract on
behalf of Gov. Lawton Chiles believed otherwise. They were willing to sign a contract
obligating the state to payment of that fee, and there are other "unusual"
provisions in the contract.
The governor and attorney general recently filed a motion in Judge Cohen's court
indicating they will conduct an investigation of the circumstances surrounding the
negotiating of the contract. Good for them!
Florida Bar rules allow a judge to throw out a contingency fee contract if he decides
the result is inordinately high fees. The rule sounds like a reasonable way to protect
plaintiffs and defendants alike from greedy trial lawyers. The only problem is it
undermines the inviolability of contracts, a pillar of the rule of law that has already
taken damaging blows from our modern tort system.
The problem is with contingency fees in general. They often bear no relation to the
severity of an injury, the risk involved in suing, or the time involved in litigating the
suit. Contingency fees establish a wholly arbitrary price schedule. The private lawyers
worked assiduously on the state's behalf to inflate the settlement by pursuing, among
other things, racketeering charges against the tobacco companies, and even threatened to
"go after" their lawyers. Because they performed well, the state feels justified
in breaking its contract with them.
Let me reiterate that I have no sympathy for the plaintiff lawyers. This episode has
been disgusting from its beginning with the sneak passage of the Medicaid Third-Party
Liability Act, to its end with this unseemly scramble for cash.
Let me also issue a warning to all Florida businesses.There is a fight brewing with
some, but not all, trial lawyers over the repeal of the law that enabled the suit. That
goes a long way to explaining why only five of the 11 lawyers contested the state's breach
of their contract. Six of those lawyers were willing to settle for a smaller (though still
generous) slice of the pie, probably in the belief that more would be coming their way in
future lawsuits under the third-party Medicaid law.
The events of the last four months have proven, yet again, that there is no honor among
trial lawyers. In the midst of this public squabbling, it would be easy to indulge in the
emotion Germans call schadenfreude, the pleasure felt at someone else's misfortune.
Doing so would be a false consolation. There is little joy in watching the other side
fall prey to an unprincipled government that will pursue its narrow ends at any cost.
In Florida politics today, children have become the reasons for a number of ventures.
Many have applauded themselves for pursuing the tobacco litigation for the sake of
Florida's children. Then they said they fought payment of the 25-percent contingency fee
for the sake of the children.
For all our sakes, let us hope the children ignore the message lurking in this
disgraceful affair: that deception, hypocrisy, and tyranny are permissible if people can
convince themselves that their motives are pure. Children should all be taught that the
end does not justify the means.
Now as we approach the end of this mess where the governor and attorney general were
doing what they thought was in the best interest of the state, while some of those around
them were apparently planning on taking as many cookies out of the jar as possible for
their own personal use, let us just be thankful that we have a Florida Department of Law
Enforcement, a Federal Bureau of Investigation, a U.S. attorney, and a state attorney who
have proven they will go after corruption.
Let's all wish them well and assist them in every way we can to determine the facts so
they can prosecute the appropriate individuals to the fullest extend of the law.
As one high-ranking law enforcement official recently stated, "This investigation
will go wide and deep and I will follow it all the way ... to wherever it leads."
Let us hope that in the end we can tell our children that their government keeps its
word and those who do wrong pay the price. Those are two of the most important things we
can teach our children.
Jon L. Shebel is president
& CEO of Associated Industries of Florida and affiliated corporations.
Jan/Feb 1998 -- Florida Business Insight, PO Box 784, Tallahassee, Fla. 32302
(850)224-7173, insight@aif.com |
