I
105TH CONGRESS
1ST SESSION
H. R. 2740
To limit attorneys’ fees in the tobacco settlement.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 24, 1997
Mr. MCINNIS (for himself, Mr. COX of California, and Mr. MCHALE) intro-
duced the following bill; which was referred to the Committee on the Ju-
diciary
A BILL
To limit attorneys’ fees in the tobacco settlement.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. FINDINGS.
Congress makes the following findings:
(1) Under the proposed settlement between the
tobacco industry and the various State Attorneys
General, the attorneys involved in negotiating the
settlement are entitled to reasonable fees.
(2) Under the proposed settlement, the tobacco
companies would pay $368,500,000,000 to be allo-
cated among various public health programs.
HR 2740 IH
(3) It is expected that of the total tobacco set-
tlement 
of 
$368,500,000,000 
as 
much 
as
$111,000,000,000 could be taken away from public
health programs for attorneys’ ‘‘contingency fees’’.
(4) Since no national settlement can take effect
without Congressional action to change existing law,
the approval of Congress is necessary for the terms
of the settlement, including the part relating to at-
torneys’ fees, to take effect.
(5) While the average annual gross receipts for
the 100 top-grossing law firms in America last year
was $18,000,000, a 30 percent contingency fee
would 
yield 
an 
average 
of 
approximately
$925,000,000 per law firm involved in the litigation
pending prior to the settlement.
(6) A casual decision at a young age to use to-
bacco products often leads to addiction, serious dis-
ease, and premature death as an adult. Nearly 90
percent of adult smokers began smoking at or before
the age of 18. Smoking rates among youngsters are
at their highest levels in 16 years. Every day an-
other 3,000 children and adolescents become regular
smokers. Therefore, the epidemic of youth addiction
has enormous public health consequences.
HR 2740 IH
(7) While attorneys are entitled to be paid for
their time and effort, the maximum possible amount
of moneys from any tobacco settlement should go di-
rectly to benefit public health, with the highest pri-
ority being given to efforts focused on persuading
children not to smoke rather than to awards leading
to unreasonable attorneys’ fees.
SEC. 2. LIMIT ON DIVERSION OF PUBLIC HEALTH FUNDS
TO ATTORNEYS.
(a) GENERAL LIMITATION.—Notwithstanding any
other provision of law, any attorneys’ fees paid in connec-
tion with the settlement of an action maintained by a
State against 1 or more tobacco companies to recover to-
bacco-related medicaid expenditures or for other causes of
action involved in the settlement agreement dated June
20, 1997, shall not exceed $150 per hour, together with
reimbursement of actual out-of-pocket expenses as ap-
proved by the court in such action.
(b) FEE
ARRANGEMENTS.—Subsection (a) shall
apply to attorneys’ fees provided for or in connection with
an action of the type described in such subsection under
any—
(1) court order;
(2) settlement agreement;
(3) contingency fee arrangement;
HR 2740 IH
(4) arbitration procedure;
(5) alternative dispute resolution procedure (in-
cluding mediation); or
(6) other arrangement providing for the pay-
ment of attorneys’ fees.
(c) REQUIREMENTS.—No award of attorneys’ fees
shall be made under any national tobacco settlement until
the attorneys involved have—
(1) provided to the Congress a detailed time ac-
counting with respect to the work performed in rela-
tion to any legal action which is the subject of the
settlement or with regard to the settlement itself;
and
(2) made public disclosure of the time account-
ing under paragraph (1) and any fee arrangements
entered into, or fee arrangements made, with respect
to any legal action that is the subject of the settle-
ment.
(d) EFFECTIVE DATE.—The limitation on the pay-
ment of attorneys’ fees contained in this section shall be-
come effective on the date of enactment of any Act enacted
in connection with the national tobacco settlement.
(e) REPORT.—Each attorney whose fees are subject
to this section shall, within 30 days of the date of the
enactment of this Act, submit to Committees on the Judi-
HR 2740 IH
ciary of the House of Representatives and the Senate a
comprehensive record of the time and expenses for which
the fees are to be paid. Such record shall be subject to
section 1001(a) of title 18, United States Code.
Æ