Haines v. Liggett Group, Inc.

• Citation: 814 F. Supp. 414
• Decision Date: 26 January 1993
• Docket Number: Civ. A. No. 84-678 (AJL).
• Parties: M. Susan HAINES, Plaintiff, v. LIGGETT GROUP, INC., et al., Defendants.
• Court: U.S. District Court — District of New Jersey

814 F. Supp. 414

M. Susan HAINES, Plaintiff, v. LIGGETT GROUP, INC., et al., Defendants.

Civ. A. No. 84-678 (AJL).

United States District Court, D. New Jersey.

January 26, 1993.

Donald P. Jacobs, Budd Larner Gross Rosenbaum Greenberg & Sade, P.C., Short Hills, NJ, and Alan M. Darnell, Wilentz Goldman & Spitzer, Woodbridge, NJ, for plaintiff.

Alan S. Naar, Greenbaum Rowe Smith Ravin Davis & Bergstein, Woodbridge, NJ, and James V. Kearney, Pat Carty, Mudge Rose Guthrie Alexander & Ferdon, New York City, for defendant Liggett Group, Inc.

William S. Tucker, Jr., Joseph E. Kinsella, Stryker, Tams & Dill, Newark, NJ, for defendant Loew's Theatres.

Thomas Silfen, Arnold & Porter, Washington, DC, and John J. Mulderig, Brown & Connery, Westmont, NJ, and William Allinder, Shook, Hardy & Bacon, Kansas City, MO, for defendant Phillip Morris, Inc.

Alan Kraus, Riker, Danzig, Sherer, Hyland & Perretti, Morristown, NJ, and Robert C. Weber, John Strauth, Jones, Day, Reavis & Pogue, Cleveland, OH, for defendant R.J. Reynolds Tobacco Co.

OPINION

LECHNER, District Judge.

Currently before the court is the motion of Budd Larner Gross Rosenbaum Greenberg & Sade, P.C. ("Budd Larner") to withdraw as counsel for M. Susan Haines ("Haines"), plaintiff in the above-captioned matter.¹ For the following reasons, the motion is denied.

FACTS

A. Background

In the Spring of 1983, three New Jersey law firms—Budd Larner; Porzio, Bromberg & Newman ("Porzio"); and Wilentz Goldman and Spitzer ("Wilentz")—entered into an agreement (the "Litigation Agreement") whereby they agreed jointly to litigate cigarette-related health claims on behalf of smokers who developed lung cancer, allegedly from smoking. Edell Aff., ¶ 3; Moving Brief at 2. Ultimately, as a result of the Litigation Agreement, eight cases (the "Cigarette Cases") were filed against various cigarette companies, including: Cipollone v. Liggett Group, Inc., et al., No. 83-2864 (D.N.J.); Dewey v. R.J. Reynolds Tobacco Co., et al., 216 N.J.Super. 347, 523 A.2d 712 (Law Div.); Berko v. R.J. Reynolds Tobacco Co., et al., (N.J.Super.Ct.Law Div.), see 246 N.J.Super 348, 587 A.2d 667 (App.Div.1991); Barnes v. R.J. Reynolds Tobacco Co., et al. (N.J.Super.Ct.Law Div.), see 246 N.J.Super 348, 587 A.2d 667 (App.Div.1991); Smith v. R.J. Reynolds Tobacco Co., et al., No. L-059921-84 (N.J.Super.Ct.Law Div.); and the instant case, Haines v. Liggett Group, Inc., et al., No. 84-678 (AJL) (D.N.J.).² Edell Aff., ¶ 2; Moving Brief at 2.

The Litigation Agreement continued until March 1986, when Marc Z. Edell ("Edell") left Porzio to join Budd Larner. Edell Aff., ¶ 3; Moving Brief at 2. Thereafter, only Budd Larner and Wilentz litigated the Cigarette Cases, with the exception of Haines, the instant case. Edell Aff., ¶ 3. On 29 September 1988, Wilentz was disqualified in Haines by Magistrate Judge Ronald Hedges, as a result of a decision by the New Jersey Supreme Court in Dewey v. R.J. Reynolds Tobacco Co., 109 N.J. 201, 536 A.2d 243 (1988). Edell Aff., ¶ 3. Since 29 September 1988, Budd Larner has assumed sole legal and financial responsibility for this case. Moving Brief at 2.

In each of the Cigarette Cases, including the present case, Budd Larner, Porzio and Wilentz entered into contingency fee agreements with the various plaintiffs. Moving Brief at 15. Pursuant to these contingency fee agreements, the expenses of litigation have been borne exclusively by Budd Larner and the other law firms.³Id. According to Budd Larner, "no client has expended even a single dollar toward satisfaction of those costs; the expenses are recoverable only if plaintiffs prevail at trial—in which case those sums will be deducted from plaintiffs' share of the judgments." Id.

At the present time, of the original eight cases filed under the Litigation Agreement, Budd Larner remains as counsel only in the present case and possibly one other.⁴

B. The Parties and Claims

On 22 February 1984, this case was filed by Haines as administrator of the estate of Peter F. Rossi ("Rossi"). Edell Aff., Ex. F (letter to Magistrate Judge Joel A. Pisano, dated 2 October 1992) (the "2 Oct. 1992 Letter") at 1. The defendants (the "Defendants") in this case are Liggett Group, Inc. (the "Liggett Group"), Loew's Theatres, Inc. ("Lorillard"), Phillip Morris, Inc. ("Phillip Morris"), R.J. Reynolds Tobacco Co. ("RJR") and the Tobacco Institute.⁵ Id. at 1-2. Haines alleges, inter alia, that Rossi developed lung cancer and died on 28 May 1982 as a result of smoking cigarettes manufactured by Defendants.⁶ Id. at 2.

Haines alleges numerous grounds for recovery. First, Haines asserts a claim for "risk-utility" as to all Defendants. The essence of this claim is that the cigarettes manufactured by Defendants "were not reasonably fit, suitable or safe for their intended or reasonably foreseeable use because the dangers of smoking so outweigh their usefulness that a reasonably prudent manufacturer would not have sold them." Id. at 5.

Second, Haines asserts a claim for failure to warn against all Defendants. Id. Specifically, Haines alleges that, through their advertising and promotion of cigarettes prior to 1969, Liggett Group and Lorillard failed to adequately warn of the health consequences of smoking. Id. Haines also alleges under this claim that all Defendants "failed to adequately test, research and warn of the health consequences of smoking through means other than advertising." Id. at 6. Haines seeks both compensatory and punitive damages on the failure to warn claim. Id.

Third, Haines brings a claim for breach of express warranty as to all Defendants. Id. Haines alleges that Defendants made express promises or affirmations of fact that the cigarettes they sold to Rossi would not cause injury or harm, that these alleged statements were part of the bargain between Defendants and consumers like Rossi, and that Defendants' cigarettes used by Rossi failed to conform to the alleged affirmations of fact or promises made to Rossi and proximately caused his death. Id.

Fourth, Haines asserts claims in intentional tort—for fraud and conspiracy—alleging that Defendants "individually and in concert, concealed and intentionally failed to disclose significant and material information and data regarding the health consequences of smoking." Id. at 7. Moreover, Haines alleges that Defendants, "through their advertising, promotion, and other practices, distorted and otherwise misrepresented the health effects of smoking to the public." Id. Haines contends that Rossi, individually and/or as a member of the general public, relied on these alleged misrepresentations and omissions. Id. Haines seeks compensatory and punitive damages on these intentional tort claims. Id.

On 14 September 1992, by order of the Third Circuit, 975 F.2d 81, this case was reassigned from United States District Judge H. Lee Sarokin to this court. Id. at 4. On 16 November 1992, Budd Larner filed this motion to withdraw.

DISCUSSION

A. Arguments by Budd Larner For Withdrawal

Budd Larner argues it should be granted permission to withdraw from this case because litigation against the cigarette industry "has become an unreasonable financial burden." Moving Brief at 1. Budd Larner indicates that, although it has entered into "thousands of contingency arrangements over the years, . . . it has rarely, if ever, sought to be relieved as counsel because of litigation costs." Id. at 17.

Budd Larner insists "this is not a typical case." Id. Budd Larner argues:

This is a case that must be viewed in the context of the past ten years of litigation, which have demonstrated that the costs of litigating against the tobacco industry are far greater than anyone could have reasonably expected at the time the contingency contract was signed.

Id.

According to Budd Larner, the three firms have expended significant amounts of money and time in litigating these eight cases against the cigarette industry. Id. at 2. Specifically, Budd Larner states:

The firms have incurred approximately $1.2 million in out-of-pocket expenses (not including the costs of more than one million Xerox copies made in house), of which Budd Larner has paid more than $500,000. The firms have also spent well over $5 million in lawyer and paralegal time, of which Budd Larner was responsible for the largest share—approximately 75%.

Id. at 3; Edell Aff., ¶ 4(a).

Budd Larner does not specify how much money or time it has spent to date in litigating Haines.⁷ Nevertheless, Budd Larner suggests that "to approximate the costs of litigating the present case through trial, one need look no further than Budd Larner's experience in Cipollone."⁸ Moving Brief at 6, 15-16; Edell Aff., ¶ 6. According to Budd Larner:

From approximately the procedural point where Haines is today through trial, the Cipollone case cost more than $500,000 in out-of-pocket expenses and approximately $2 million in lawyer and paralegal time. There is no reason to believe that Haines could be tried any more quickly than Cipollone, which took four months to try.

Moving Brief at 7; see also id. at 16; Edell Aff., ¶ 6. In fact, Budd Larner predicts that trying Haines "might very well take longer" than litigating Cipollone because "Haines is not restricted to defendants' pre-1966 tortious conduct . . . and it includes a risk/utility claim by plaintiff." Moving Brief at 7; Edell Aff., ¶ 6.

Budd Larner also suggests that Cipollone should serve as a model for the type of post-trial activity that can be expected in this case. According to Budd Larner:

In Cipollone, almost half of the ten years since the case was filed was spent on post-trial matters. During that period, Budd Larner incurred approximately $150,000 in out-of-pocket costs and expended over $900,000 in attorney and paralegal time.

Moving Brief at 9; see also Edell Aff., ¶ 7.

As a final cost consideration, Budd Larner argues that "much remains to be done to prepare Haines for trial." Moving Brief at 7. Budd Larner...