As Texas officials fight among themselves over a $15.3 billion settlement with cigarette makers, the tobacco companies warn any changes could snuff out the agreement.
Tobacco industry attorney Dan Webb said Thursday the largest monetary settlement in legal history could be canceled if the state modifies the deal so that $2.3 billion in private attorneys' fees go to the state first."That's unacceptable and that's no deal. We're not going to let the state of Texas screw this deal up in such a way that we have to pay more money," Webb said.
His comments came at the end of a daylong hearing on whether Attorney General Dan Morales had the authority to negotiate a payment plan giving a 15 percent cut of the settlement to five private attorneys who worked on the state's case.
The tobacco industry has agreed to pay the fees directly to the private attorneys, severing the money from the state deal. The cigarette makers worry that paying any of the fees into state coffers would raise the Texas payment higher than $15.3 billion and cause a ripple effect on other settlements. Mississippi and Florida, which settled earlier, indexed their deals to later state settlements.
But Gov. George Bush and seven legislators argue that Morales didn't have the power to cut the deal and, because the attorneys work for the state, the payments are state money.