Judge urges settlement in tobacco fee legal fight

CHICAGO -- A Cook County judge denied a motion by the state Thursday to dismiss a lawsuit filed by attorneys seeking $900 million in fees from a settlement with the tobacco industry.

Judge James Henry said the motion was premature and that the state could pursue the matter after both sides have had a chance to explore the factual issues of the case. He also suggested the two sides consider solving their dispute outside court.

The dispute is over how much money the state must pay in legal fees from a $9 billion settlement with the tobacco industry that is to be paid out over 25 years.

Attorney General Jim Ryan hired several law firms when he joined the multistate lawsuit against tobacco companies to recover health-care costs associated with smoking-related illnesses. He promised them 10 percent of whatever the state won, but now says he expected a tougher, longer fight.

The state is standing by a ruling from a national arbitration panel awarding the firms $121 million, and said if they want more than that they'll have to go at the tobacco companies. The law firms have filed a lien blocking $80 million in tobacco money from the state while the fight continues.

Robert Clifford, a Chicago attorney representing one of the law firms, said he planned to move ahead with his case, which will include deposing Ryan, the Republican nominee for governor.

Both sides seemed amenable to the judge's suggestion about a settlement.

"Our door to discussion about settlement has always been open and remains open," Clifford said.

Jerold Solovy is the lawyer for the state.

"If the case can be resolved on terms favorable to the taxpayers then it should be resolved," he said.

Judge Henry said another issue -- the "500-pound gorilla" in the case, he said -- was whether the fees were "reasonable" under the rules of conduct for lawyers.