Spitzer Announces State To Be Reimbursed Nearly $6 Million For Costs Of Lawsuit Against Tobacco Industry

Attorney General Spitzer announced today that the tobacco industry will reimburse New York State $5.9 million for the time that State attorneys spent working on the lawsuit against the industry.

The money represents the largest award of attorneys' fees ever won by the State. New York was part of a $206 billion nationwide settlement of the case involving 45 other states that was announced in November of 1998.

"Our lawsuit not only helped reform the way that Big Tobacco advertises and markets its products, but also requires the industry to pay $25 billion to New York State over the next 25 years," said Attorney General Spitzer.

"And now, this landmark fee award means that the State's taxpayers are being reimbursed 100% by the tobacco industry for the costs of our efforts to ensure that it no longer targets our children, as well as reimburses the state and its local governments for the costs of treating Medicaid patients for smoking-related illnesses."

The $5.9 million award represents 100% of New York's request for reimbursement for attorneys' fees dating back to January of 1997 when New York launched its suit. The Attorney General's Office and the state's outside counsel -- with the support of attorneys in numerous other state agencies -- successfully defeated dozens of motions filed by tobacco industry lawyers and produced over 3 million pages of documents.

By the time the case was over with the last appeal in July, 1999, approximately 75 attorneys in 20 different state agencies had spent over 17,000 hours working on the case.

As part of the Master Settlement Agreement (MSA) reached in November 1998, the tobacco industry agreed to reimburse the states, not only for the fees of outside counsel, but also for the time spent by government attorneys who had worked on the case.

Moreover, the tobacco industry agreed that the reimbursement should be based on the "market rate" that would be charged by private law firms, and not based upon the salaries of the attorneys involved. The tobacco industry transferred funds to the National Association of Attorneys General (NAAG), which has been reviewing the cost and fee proposals submitted by each state.

Of the $5.9 million in reimbursement to New York State, $5.44 million will cover the costs and time expended by attorneys and paralegals in the Attorney General's Office, and approximately $440,000 will reimburse 19 other state agencies -- including the Health Department, the Comptroller's Office, the Governor's Office and the Department of Taxation and Finance -- for the time spent by their attorneys.

New York is due to receive 80% of its award this week -- $4.7 million -- with the remaining 20% expected to be paid this Fall.

"The lawsuit against the tobacco industry was a monumental undertaking that required a tremendous amount of time and effort by dedicated attorneys throughout state government," said Spitzer. "And by now obtaining almost $6 million in reimbursement for our costs and fees, it means that this tremendous accomplishment has been achieved at no cost to our taxpayers."

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