Milberg et al v State

• Decision Date: 12 October 2000
• Docket Number: 99-1458
• Parties: MILBERG, WEISS, BERSHAD, HYNES, and LERACH, LLP; Niblock Law Firm; and Law Offices of Steven E. Cauley, P.A. v. STATE of Arkansas; Phillip Morris, Inc.; R.J. Reynolds Tobacco Company; Brown and Williamson Tobacco Corporation, Individually and as Successor by Merger to American Tobacco Company; and Lorillard Tobacco Company 99-1458 ___ S.W.3d ___ Opinion delivered
• Court: Arkansas Supreme Court

MILBERG, WEISS, BERSHAD, HYNES, and LERACH, LLP; Niblock Law Firm; and Law Offices of Steven E. Cauley, P.A. v STATE of Arkansas; Phillip Morris, Inc.; R.J. Reynolds Tobacco Company; Brown and Williamson Tobacco Corporation, Individually and as Successor by Merger to American Tobacco Company; and Lorillard Tobacco Company

99-1458 ___ S.W.3d ___

Opinion delivered October 12, 2000

Supreme Court of Arkansas

Appeal from Pulaski Chancery Court, Sixth Division; Mackie M. Pierce, Chancellor; affirmed.

1. Appeal & error -- failure to obtain ruling -- procedural bar. -- The failure to obtain a ruling from the trial court is a procedural bar to consideration of the issue on appeal.

2. Civil procedure -- intervention -- question of timeliness within trial court's discretion. -- A threshold question in determining whether intervention should be allowed is whether application was made in a timely manner; the issue of timeliness is a matter well within the sound discretion of the trial court and is subject to reversal only where that discretion has been abused.

3. Civil procedure -- intervention -- factors for determining timeliness. --A trial court must consider three factors in determining timeliness with respect to intervention: (1) how far the proceedings have progressed; (2) any prejudice to other parties caused by the delay; and (3) the reason for the delay.

4. Civil procedure -- intervention -- courts reluctant to grant intervention after final judgment. -- The record reflected that appellants' motion to intervene was not filed until approximately three weeks after the consent decree was entered, and the complaint in intervention was not filed until some six months later; the motion to intervene was clearly filed after the proceedings were completed and a final judgment was entered; Arkansas courts have shown a strong reluctance to grant intervention after final judgment.

5. Civil procedure -- intervention -- when post judgment intervention allowed. -- Post judgment intervention is generally allowed only upon a strong showing of entitlement by the applicant or a demonstration of unusual and compelling circumstances.

6. Civil procedure -- intervention -- delay from appellants' intervention would have prejudiced State. -- The delay that would have resulted from allowing appellants to intervene would have prejudiced the State by postponing its achievement of state-specific finality and, in turn, its receipt of settlement payments.

7. Civil procedure -- intervention -- delay from appellants' intervention would have resulted in potential prejudice to remaining states & governmental units. -- The supreme court concluded that the delay that would have been caused by allowing appellants' intervention would have resulted in potential prejudice to the remaining fifty-one states and governmental units that signed the settlement; to a large degree, receipt of payment by any one settling state was dependent upon the achievement of state-specific finality in the other settling states.

8. Civil procedure -- intervention -- chancellor did not abuse discretion in finding motion to intervene untimely. -- Given all the facts and circumstances of the case, the supreme court could not say that the chancellor had abused his discretion in finding that appellants' motion to intervene was untimely where appellants had not shown unusual or compelling circumstances that prevented them from seeking intervention prior to the time that final judgment was entered and had failed to show that the parties to the tobacco suit would not have been prejudiced by the delay caused by intervention.

9. Civil procedure -- intervention -- three requirements for intervention as matter of right. -- Three requirements must be met for intervention as a matter of right: (1) a recognized interest in the subject matter of the primary litigation; (2) an interest that might be impaired by the disposition of the suit; and (3) an interest not adequately represented by the existing parties; when these three requirements are met and timely application is made, intervention of right should be granted.

10. Civil procedure -- intervention -- when party has no interest to be protected by intervention of right. -- If a party seeking intervention will be left with the right to pursue an independent remedy against the parties in the primary proceeding, regardless of the outcome of the pending case, then the party has no interest that needs protecting by intervention of right.

11. States -- State Claims Commission -- exclusive jurisdiction over payment of State's just & legal debts. -- The Arkansas State Claims Commission has exclusive jurisdiction over payment of all just and legal debts of the State.

12. Civil procedure -- intervention -- appellants had no right to intervene where they had right to pursue claim elsewhere. -- Where appellants had the right to pursue their claim elsewhere, they had no right to intervene in the matter.

13. Civil procedure -- intervention -- when permissive intervention allowed. --Arkansas Rule of Civil Procedure 24(b) provides for permissive intervention (1) where a state statute confers a conditional right to intervene, or (2) when an applicant's claim or defense and the main action have a question of law or fact in common.

14. Civil procedure -- intervention -- permissive intervention discretionary. --Permissive intervention is discretionary, depending upon whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties; the supreme court will not reverse the trial court's decision unless there has been an abuse of discretion.

15. Civil procedure -- intervention -- chancellor did not abuse discretion in denying permissive intervention. -- Where appellants neither cited a state statute that conferred upon them a conditional right to intervene nor showed that their claim for attorneys' fees and the underlying litigation had a common question of law or fact, the supreme court could not say that the chancellor abused his discretion in denying permissive intervention.

16. Civil procedure -- intervention -- chancellor's decision not to allow appellants to intervene affirmed. -- The supreme court affirmed the chancellor's decision not to allow appellants to intervene, concluding that appellants had failed to show that intervention was warranted either by right or permission.

17. Judgment -- setting aside -- strangers to record have no standing. --Strangers to the record have no standing on which to base an application to vacate a judgment, unless so authorized by statute; thus, one not a party or privy to the action, or who is not bound by the judgment or prejudiced by it, may not apply to set aside the judgment.

18. Judgment -- setting aside -- attorney for party generally lacks standing. --An attorney for a party is generally regarded as lacking standing to set aside a judgment for or against his client even though the attorney's compensation may be dependent on the amount or terms of the judgment.

19. Attorney & client -- client may dismiss or settle cause of action without consulting attorney -- attorney may collect fee from settlement proceeds. --An attorney cannot compel his or her client to continue litigation; the client may dismiss or settle the cause of action without consulting the attorney; in ordinary litigation, such settlement would be subject to the contractual rights of the attorney in the proceeds of the settlement; in other words, an attorney retained by contract for a contingent fee may have a right to collect his fee from the proceeds of the settlement; however, he would not have a right to dictate the terms of the settlement or the amount.

20. Attorney & client -- attorneys' fees -- appellants' remedy. -- Where appellants' alleged client chose to settle the suit without designating any attorneys on Exhibit "S" of the Master Settlement Agreement, appellants' only available remedy was to attempt to secure fees from the proceeds of the State's settlement.

21. Judgment -- modification of decree -- court powerless to modify portion of decree based on settlement between parties. -- Absent a showing of fraud in the inducement of the original agreement, or unless both parties presently consent, the court is powerless to modify that portion of the decree based on the contract settlement between the parties.

22. Judgment -- setting aside -- chancellor's refusal to set aside consent decree for lack of standing affirmed. -- The supreme court affirmed the chancellor's refusal to set aside the consent decree for lack of standing where appellants were not parties or privies to the suit between the State and the tobacco companies and had no standing to attempt to set aside the consent decree for fraud or any other reason; where appellants were not bound by the consent decree, nor were their rights to attorneys' fees impaired or affected by the terms of the consent decree; where appellants were powerless to challenge their alleged client's settlement of the case; and where the chancellor had no more authority to modify the terms of the settlement agreed to by the litigants than appellants had authority to force their client to settle on their terms.

23. Constitutional law -- sovereign immunity -- jurisdictional. -- Sovereign immunity is jurisdictional immunity from suit.

24. Constitutional law -- sovereign immunity -- doctrine discussed. -- Article 5, § 20, of the Arkansas Constitution provides that "[t]he State of Arkansas shall never be made a defendant in any of her courts"; the supreme court has consistently interpreted this constitutional provision as a general prohibition against awards of money damages in lawsuits against the State and its institutions; the doctrine of sovereign immunity is rigid and may only be waived in limited circumstances.

25. Constitutional law -- sovereign immunity -- two ways in which claim may be surmounted. -- The supreme court has...