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HomeMy WebLinkAboutMINUTES - 09101996 - C99 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA Adopted this Order on SPptPmhP-r 10, 199(; by the following vote : AYES: Supervisors Rogers, Bishop, DeSaulnier, Torlakson, Smith NOES: None ABSENT: None ABSTAIN: None SUBJECT: Approving Second Contingency Fee Agreement and Addendum No . 1 to Contingency Fee Agreement in Tobacco Litigation WHEREAS, the County of Contra Costa joined in litigation initiated by the City and County of San Francisco against the t tobacco industry to enjoin certain practices, including the marketing of cigarettes targeted at minors; and WHEREAS, the Board of Supervisors previously authorized the County Counsel to retain the law firm of Lieff, Cabraser, Heimann & Bernstein to co-counsel said litigation on a contingency fee basis, whereby the law firm will advance all expenses in the litigation, with the sole contingency upon which the County will pay compensation for their services and reimburse expenses being recovery and collection of moneys in the litigation by way of settlement or judgment, with the County Counsel retaining the right to add additional law firms under the retainer agreement; and WHEREAS, the County Counsel, San Francisco City Attorney, and Lieff, Cabraser, Heimann & Bernstein have decided to clarify that the law firm will not be entitled to any share of any award of civil penalties by entering into a second, similar contingent fee agreement covering the specific claims that the County is asserting which may result in the collection of civil penalties, as well as by executing an addendum to the existing fee agreement to the same effect; Now, therefore, it is by the Board ORDERED that : The Second Engagement and Contingency Agreement and Addendum No. 1 to Engagement and Contingency Agreement are APPROVED and the County Counsel is AUTHORIZED to sign both documents . I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. Attested: (�� %O /99,4 PHIL BAfCHELOR, Clerk of the Board of Supervisors and County Administrator By: Deputy(91 VLD: ld Orig. Dept: County Counsel (Vickie Dawes) cc: Health Services Department County Administrator TL:a:\tobaco2.ord OW ADDENDUM NO. I TO ENGAGEMENT AND CONTINGENCY AGREEMENT The Engagement and Contingency Agreement between the County of Contra Costa and Special Attorneys, dated July 22, 1996 ("the Agreement"), is hereby amended as follows: 1. Section I.. A. of the Agreement shall be amended to read as follows: A. The Special Attorneys are retained to provide legal services to the County Counsel for the purpose of seeking injunctive relief, monetary relief and other relief against tobacco industry companies and related entities ("defendants") in litigation arising from the advertising, marketing, promotion, sale and/or distribution of cigarettes ("the Litigation"). 2. Section II. C. of the Agreement shall be amended to read as follows: C. Compensation on the foregoing contingency shall be the Special Attorneys' reasonable disbursements in the Litigation, plus 20% of any recovery collected by the Special Attorneys in this litigation up to $25 million, and 15% of any recovery in excess of the first $25 million, provided that if any additional entities become plaintiffs in this litigation represented by Special Attorneys,and/or if any recovery is collected by the Special Attorneys on behalf of the County and/or co-plaintiffs on Business & Professions Code claims pursuant to the Second Engagement and Contingency Fee Agreement dated August_, 1996, such percentages shall apply to the aggregate recoveries on behalf of all such plaintiffs on all claims, exclusive of any civil penalties; provided further, however, that any entities that make voluntary contributions to finance the Litigation shall, in the discretion of the City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action, be reimbursed first in amounts equal to their respective contributions. As used in this paragraph, the term "recovery" shall not include amounts awarded or ordered to be paid as attorneys' fees and costs. If the Special Attorneys recover moneys in the Litigation, but in an amount that does not exceed the disbursements in the Litigation, such moneys shall be used to reimburse disbursements. In no event shall Special Attorneys share in any award of civil penalties. 3. Section II. F. of the Agreement shall be amended to read as follows: F. The claims that the County intends to assert in the Litigation provide for the payment of attorneys' fees and costs to the County. The County intends to seek an order for payment of its attorneys' fees and costs should it prevail, in whole or in part, in the Litigation. If the Court in the Litigation awards attorneys' fees, such fees shall be paid to the Special Attorneys to the extent that the award is based on services furnished by the Special Attorneys, provided that to the extent that such fees come from the recovery, e.g., under a common fund theory, Special Attorneys shall not receive any greater payment than they are entitled to under Sections II.C. and II.D., above. However, any attorneys' fees that are awarded by the Court for Special Attorneys' I N:\LIT\ELAPORTE\TOBACCO\ADDEND-1\CONTRACO.I ST-9-AUG-96 services and collected in the Litigation shall be deducted from any fees payable to the Special Attorneys by the County pursuant to this Section II, paragraphs B, C and D, above. If the Court awards expenses and costs in the Litigation, such amount shall be applied as directed in this Agreement. The County Counsel and the Special Attorneys are aware that the tobacco industry has previously challenged and sought to invalidate contingency fee arrangements between certain states and outside counsel engaged in litigation to recover their tobacco-related medical expenditures. The County Counsel and the Special Attorneys believe that such challenges lack merit and that this contingent fee arrangement is valid. However, in the event that this contingent fee arrangement is found to be invalid, the Special Attorneys agree to continue to represent the County and advance expenses with the understanding that Special Attorneys will be paid only such attorneys' fees and expenses as are awarded for their services by the Court or recovered as reasonable fees and expenses for their services. 4. Except as expressly amended by this Addendum No. 1 to the Agreement, the Agreement and its attachments shall remain in full force and effect in accordance with their terms. Dated: Auguste 1996 CONTRA COSTA COUNTY VICTOR J. WE AN County Counsel SPECIAL ASSISTANT CITY ATTORNEYS: `j Dated: , 1996 Richard M. Heimann, Esq. Individually and on behalf of Lieff, Cabraser, Heimann& Bernstein, LLP a-Q� J- CaLnc�—, Dated: �� , 1996 Elizabeth J. Cabraser, Esq. Lieff, Cabraser,.Heimann& Bernstein, LLP 2' NAL1T\ELAP0RTE\T03ACC0\ADDEND-1\CONTRACO.1 ST-9-AUG-96 CiCJ � sc� � �� Dated: /o , 1996 William B. Hirsch, Esq. Lieff, Cabraser, Heimann& Bernstein, LLP Dated: 6410 , 1996 Robert J. Nelson, Esq. Lieff, Cabraser, Heimann &Bernstein, LLP 3 N:\LIT\ELAPORTE\TOBACCO\ADDEND-1\CONTRACO.1 ST-9-AUG-96 JOINT PROSECUTION AND CONFIDENTIALITY AGREEMENT 1. Purpose of the Joint Prosecution and ConfidentialityAgreement (a) Governmental entities, governmental agencies, non-profit organizations and/or individuals have initiated and/or are considering initiating litigation against companies, individuals and trade organizations affiliated with the tobacco industry and/or the sale of tobacco products. The purpose of this Joint Prosecution and Confidentiality Agreement ("Agreement") is to enable the counsel and their respective clients who are parties to this Agreement to share and exchange information in connection with that litigation or any administrative or legislative proceedings that arise from or relate to the same subject matter, while maintaining the confidential nature of such information and any attorney-client privileges and/or work product protection afforded such information. The parties to this Agreement have determined that they share common interests, purposes and claims in connection with this litigation and any related proceedings and consider this Agreement essential to the full investigation and effective prosecution of their claims. 2. Joint Prosecution Information (a) All information which is exchanged between parties to this Agreement and which is. otherwise protected under the attorney-client privilege or work product doctrine shall be referred to . as Joint Prosecution Information. Joint Prosecution Information includes all written and oral communications, as well as documents, writings and recordings, as those terms are broadly defined in California Evidence Code section 250 and Rule 1001 of the Federal Rules of Evidence. (b) The parties to this Agreement intend that Joint Prosecution Information may be exchanged among them without any waiver or compromise of any attorney-client privilege or work- product doctrine. The parties to this Agreement agree that Joint Prosecution Information shall be treated and maintained as protected, privileged, confidential information. 3. Disclosure of Joint Prosecution Information (a) Any party to this Agreement may disclose Joint Prosecution Information to any other party to this Agreement, regardless of whether the disclosure is between counsel (including those individuals assisting counsel), between counsel (including those individuals assisting counsel) and client or between clients. 354.ros Joint Prosecution and Confidentiality Agreement (b) The parties to this Agreement further acknowledge that there shall be no disclosure of Joint Prosecution Information, other than as described in paragraphs 3(a) and.3(e), without the consent of the party who originally provided the information, or as required by law(and subject to the notice provision described in paragraph 3(c)). (c) Any party to this Agreement who receives a subpoena,discovery request or Public Record Act request under state laws or any similar local ordinances from any person or entity (including any party to this Agreement) seeking discovery or production of any Joint Prosecution Information shall immediately notify all parties to this Agreement and shall not surrender any Joint Prosecution Information(except such information originated by the subpoenaed or subpoenaing party) without permitting all other parties to this Agreement an opportunity to protect their interests by motion in an appropriate court. (d) Notwithstanding the common interests, purposes and claims among the parties to this Agreement, nothing in this Agreement shall be construed to require any party to this Agreement to disclose privileged or work-product information which that party determines not to disclose. Likewise, any privileged or work product information which a party to this Agreement came into possession of independent of any other party to this Agreement may be disclosed to any third party without application of the terms of this Agreement. (e) If any party to this Agreement enters into a settlement with the defendant, such party shall not disclose Joint Prosecution Information obtained under this Agreement without the express written permission of all parties to this Agreement. If any party to this Agreement enters into a settlement agreement with the defendant, nothing in this Agreement shall create a conflict of interest to require the disqualification of any Counsel from the representative of their respective clients. 4. Violation of this Agreement (a) The parties to this Agreement acknowledge that disclosure of any Joint Prosecution Information in violation of this Agreement will cause the parties to this Agreement to suffer irreparable harm for which there is no adequate legal remedy. The parties to this Agreement further acknowledge that immediate injunctive relief is an appropriate and necessary remedy for the disclosure of any Joint Prosecution Information in violation of this Agreement or the threatened 354.TOB - 2 - Joint 2 - Joint Prosecution and Confidentiality Agreement disclosure of any Joint Prosecution Information in violation of this agreement. 5. Withdrawal from this Agreement (a) Any party to this Agreement may withdraw from it upon giving express written notification to every other party to this Agreement. Once a party to this Agreement has given express written notification of withdrawal from the Agreement, the Agreement shall no longer operate as to the withdrawing party, but shall continue to protect all Joint Prosecution Information covered by this Agreement and previously disclosed to the withdrawing party. (b) A withdrawing party shall, to the extent permitted by law, immediately return all Joint Prosecution Information including originals and duplicates, and any other documents or 1 records which contain or reveal Joint Prosecution Information, to the party who provided the information. (c) The withdrawal of a party from this Agreement shall have no effect upon the applicability.or enforceability of this Agreement as between all other parties to the Agreement. (d) , Each party to this Agreement acknowledges that the party is obligated to withdraw, and agrees to withdraw, from the Agreement immediately when, in good faith, the party reasonably believes a commonality of interest no longer exists between that party and any-of the other parties to the Agreement. 6. Destruction or Return of All Joint Prosecution Information (a) Within sixty (60) days after formal termination of all proceedings relating to the litigation described in paragraph 1(a), each party to this Agreement shall, to the extent permitted by law, destroy or return all Joint Prosecution Information including originals and duplicates, and any other documents which contain or reveal Joint Prosecution Information, to the party who provided the information. 7. Miscellaneous Provisions (a) This Agreement memorializes earlier oral agreements and incorporates any.prior written agreements between or among any of the parties to this Agreement, according to which Joint Prosecution Information may have been exchanged. This Agreement shall apply to any such Joint Prosecution Information which may have been previously shared among parties to this Agreement 354.TOB - 3 - Joint 3 - Joint Prosecution and Confidentiality Agreement prior to their execution of this Agreement. (b) This Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same agreement. (c) This Agreement shall be governed by the laws of the State of California. IN WITNESS THEREOF, Counsel have executed this Agreement as of the dates set forth below. DATED: , 1996 • ounsel for DATED: , 1996 Counsel for 354.TOB - 4 - Joint 4 - Joint Prosecution and Confidentiality Agreement T SECOND ENGAGEMENT AND CONTINGENCY AGREEMENT This AGREEMENT is made this ,0 day of August, 1996 in the County of Contra Costa, State. of California, by and between the County of Contra Costa ("the County" ) acting through Victor J. Westman, its County Counsel ( "the County Counsel" ) and the law firm of Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, California, retained as Special Assistant County Counsels ( "Special Attorneys" ) . Whereas, unfair, unlawful and deceptive acts and practices by the tobacco industry harm the California public, including but not limited to minors; Whereas, _the County Counsel plans to -bring a claim in the name of the people of the State of California against cigarette companies and related entities, pursuant to his authority to protect the public under the California Business and Professions Code; Whereas, any litigation involving tobacco-related industries is likely to entail numerous complex factual and legal issues; n:\lit\elaporte\tobacco\contfeeb\contraco.bsp Whereas, any such litigation will require the expenditure of substantial resources by any private attorneys retained to assist the County; Whereas, the County Counsel seeks to limit the expenditure of the County' s resources in any such litigation; now therefore County Counsel and Special Attorneys AGREE AS FOLLOWS : I . SCOPE OF SERVICES/CASE HANDLING A. . The Special Attorneys are retained to provide legal services to the County Counsel for the purpose of seeking injunctive and other relief, including disgorgement of profits but excluding civil penalties, against tobacco industry companies and related entities ( "defendants") in litigation pursuant to Business and Professions Code Sections 17200, et sect. , and 17500, ELL sea. , arising from the advertising, marketing, promotion, sale and/or distribution of cigarettes ("the Litigation") . The parties intend this agreement to govern the County' s claims under Business and Professions Code Section 17500, et s_aq. , rather than the Engagement and Contingency Agreement 2 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p dated July 22,1996, insofar as they differ. B. The County Counsel, as the chief legal officer of the County, together with the San Francisco City Attorney and the County Counsel and City Attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action, retains final authority over all aspects of the Litigation. C. As provided herein, the Special Attorneys are authorized to take appropriate l-egal steps to prosecute the Litigation as it pertains to liability, injunctive relief and restitution/disgorgement of profits and participate in any settlement negotiations . The County Counsel shall designate a member or members of his staff to monitor, review and participate as counsel in the prosecution of all aspects of the Litigation and to prosecute the Litigation as it pertains to civil penalties . The Special Attorneys shall consult in advance with, and obtain the prior approval of, the San Francisco City Attorney, who in turn shall consult with the County Counsel as well as the county counsel and city attorneys of any other r 3 n:\lit\elaporte\tobacco\contfeeb\contraco.bsp J 1F counties and cities which join as plaintiffs and retain Special Attorneys in this action, concerning all substantive matters related to the Litigation, including, but not limited to, the complaint and dispositive motions, selection of consultants and experts, and whether the Special Attorneys may represent additional co-plaintiffs in the Litigation. Special Attorneys shall inform the County Counsel or his designee in advance of all significant meetings with third parties that concern or potentially affect the Litigation. Regular status meetings shall be held as requested by either the County Counsel or the Special Attorneys . D. The Special Attorneys shall provide the County Counsel with copies of all correspondence, pleadings, and discovery requests and responses related to the Litigation. E. The Special Attorneys shall communicate with the County' s departments through the County Counsel unless alternative arrangements are made in advance among the Special Attorneys, the County Counsel and the department (s) . Where written communications from the Special Attorneys to state 4 n;\lit\elaporte\tobacco\contfeeb\contraco.b&p agencies are authorized, the County Counsel shall be provided with copies of those communications . F. The Special Attorneys shall provide sufficient resources, including attorney time and capital for payment of expenses, to prosecute the Litigation faithfully and with due diligence . Legal services under this Agreement shall be performed only by competent personnel under the supervision and in the employment of Special Attorneys or retained by Special Attorneys as consultants with the approval of the San Francisco City Attorney,, after consultatioL,with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action. Prior to executing this Agreement, the Special Attorneys shall provide to the County Counsel or his designee a specific written description of the actual attorney and paralegal resources that the firm will devote to the Litigation. Any change in this commitment shall be made only with the prior written agreement of the San Francisco City Attorney, after consultation with the County Counsel as well as the county 5 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action. G. The San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which Join as plaintiffs and retain Special Attorneys in this action, retains the right to add not more than five firms as additional Special Attorneys in this Litigation, who shall share in such compensation, if any, as is provided to Special Assistants pursuant to Section II of this Agreement . In the event that the Special Attorneys are unable to agree on the terms under which . the new firms shall share in the compensation, the San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action, shall decide and such decision shall be final and binding on all the Special Attorneys . In addition, the San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain 6 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p Special Attorneys in this action, retains the right to add as many attorneys and firms as she chooses who agree to participate on a pro bono publico basis, without sharing in the percentages of any recovery provided in Section II .C. , below, or seeking court-awarded fees payable from the recovery of damages or penalties, e.g. , under a common fund theory. However, such pXQ bono counsel shall be eligible on the same basis as the Special Attorneys to recover their reasonable disbursements as provided under Section II .B . and Section II . C. , below, and may seek court- awarded fees payable by defendants in addition to any recovery. H. The Special Attorneys agree that in the event that additional attorneys or law firms are retained to participate in the Litigation as Special Attorneys, the San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action, may determine in her discretion to appoint an Executive Committee to oversee the day-to-day conduct of the Litigation. The Executive Committee shall include : a designee of the County Counsel; Richard M. Heimann, Esq. (or designee) ; and 7 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p any additional members that the San Francisco City Attorney designates, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action. The San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action, retains the right to determine the number and membership of the Executive Committee . I . The San Francisco City Attorney, after consultation with the County Counsel as well as the county . counsel and city attorneys of any other counties and cities which join as plaintiffs and .retain Special Attorneys in this action, retains the right to designate lead counsel and lead trial counsel in the Litigation on the claims for injunctive relief and restitution/disgorgement of profits. The County Counsel, together with city and county counsel for any co-plaintiff cities and counties, shall prosecute this Litigation as it pertains to civil penalties . In her sole discretion, after consultation with 8 n:\lit\elaporte\tobacco\cont£eeb\contraco.b&p the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action, the San Francisco City Attorney may require that during the time period that any firm is designated as a lead counsel, it shall devote at least the equivalent of two full-time attorneys to the Litigation on an ongoing basis and such additional, attorney and paralegal resources as she deems appropriate from time to time to meet the needs of the Litigation. J. . The Special Attorneys agree to maintain contemporaneous time and expense records . The Special Attorneys shall submit quarterly statements to the County Counsel setting forth for that period the hours and services devoted to the Litigation, and all disbursements . Where disbursements are made by Special Attorneys which also benefit other clients of Special Attorneys in other, similar litigation, only the portion of such disbursements fairly and properly allocable to plaintiffs in this action shall be claimed as reasonable expenses of prosecuting this action. 9 n:\lit\elaporte\tobacco\concfeeb\contraco.b&p K. Audit and Inspection: The Special Attorneys agree to maintain and make available to the County Counsel accurate books and accounting records relative to its activities under this Agreement . The Special Attorneys will permit the County Counsel to audit, examine and make excerpts and transcripts from such time and expense records, payrolls, records of personnel and other documents and data related to in whole or in part matters covered by this Agreement . The Special Attorneys shall maintain such data and records in an accessible location and condition for a period of no less than one (1) year after final payment under this Agreement . II. CONTINGENT FEE AGREEMENT A. The Special Attorneys shall advance all expenses in the Litigation, including payment of reasonable travel expenses for travel by the County Counsel' s designated staff on the Litigation following advance consultation with Special Attorneys . The County is not liable to pay any of the expenses of the Litigation, whether such expenses are attorneys' fees, costs or other amounts, except as provided in the remaining 10 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p paragraphs of this Section II (B, C, D, E, F and G) . The repayment of costs and other expenses is contingent upon a recovery being obtained. If no recovery is obtained, the County owes nothing for costs and other expenses. B. The sole contingency upon which the County shall pay compensation to the Special Attorneys is the recovery and collection by the Special Attorneys on behalf of the County of moneys in the Litigation, whether by settlement or judgment . C. Compensation on the foregoing contingency shall be the Special Attorneys, reasonable disbursements in the Litigation, plus 200 of any recovery collected by the Special Attorneys in this litigation up to $25 million, and 150 of any recovery in excess of the first $25 million, excluding civil penalties, provided that if any additional entities become plaintiffs in this litigation represented by Special Attorneys and/or if any recovery is collected by the Special Attorneys on behalf of the County and/or co-plaintiffs in litigation pursuant to the Engagement and Contingency Fee Agreement, dated July 22 , 1996, such percentages shall apply to the aggregate recoveries, exclusive of civil penalties, on behalf of all such plaintiffs; 1 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p provided further, however, that any entities that make voluntary contributions to finance the Litigation shall, in the discretion of the City Attorney, be reimbursed first in amounts equal to their respective contributions . As used in this paragraph, the term "recovery." shall not include amounts awarded or ordered to be paid as attorneys' fees and costs . If the Special Attorneys recover moneys in the Litigation, but in an amount that does not exceed the disbursements in the Litigation, such moneys shall be used to reimburse disbursements . In no event shall Special Attorneys share in any recovery of civil penalties pursuant to Business and Professions Code Sections 17206 and/.or 17536 . D. Notwithstanding paragraph II .A. above, the County shall pay no higher percentage for compensation of the Special Attorneys than is paid by any other co-plaintiff that the Special Attorneys represent in the Litigation or any other county and/or city that the Special Attorneys represent on a contingent fee basis . E. As used in this Agreement, the term "disbursements" shall include reasonable travel expenses, telephone charges, copying charges, fax charges, deposition 12 n:\lit\elaporte\tobacco\contfeeb\ccntraco.b&p costs, investigator costs, messenger service costs, mediation expenses, computer research fees, medical or nursing consultation fees, expert fees, other consultation fees and all other reasonable out-of-pocket costs incurred in the Litigation. Reasonable costs do not include mark-ups above actual costs, meals not connected with travel or costs of transportation between Special Attorneys' residences and offices or disbursements for travel expenses and accommodations that exceed the usual and customary business rate charged in the locality where such expenses are incurred. F. Plaintiffs intend to seek an order for payment of their attorneys' fees and costs should they prevail, in whole or in part, in the Litigation. If the Cburt in the Litigation awards attorneys' fees, such fees shall be paid to the Special Attorneys to the extent that the award is based on services furnished by the Special Attorneys; provided that, to the extent that such fees come from the recovery, e.g. , under a common fund theory, Special Attorneys shall not receive any greater payment than they are entitled to under Sections II .C. and II .D. , above. However, any attorneys' fees that are awarded by the Court for 13 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p Special Attorneys' services and collected in the Litigation shall be deducted from any fees payable to the Special Attorneys pursuant to this Section II, paragraphs B, C and D, above. If the Court awards expenses and costs in the Litigation, such amount shall be applied as directed in this Agreement . The County Counsel and the Special Attorneys are aware that the tobacco industry has previously challenged and sought to invalidate contingency fee arrangements between certain states and outside counsel engaged in litigation to recover their tobacco-related medical expenditures . The County Counsel and the Special Attorneys believe that suQh challenges lack merit and that this contingent fee arrangement is valid. However, in the event that this contingent fee arrangement is found to be invalid, the Special Attorneys agree to •continue to represent the County and advance expenses with the understanding that Special Attorneys will be paid- only such attorneys, fees and expenses as are awarded for their services by the Court or recovered as reasonable fees and expenses for their services . G. In the event that the Litigation is resolved by settlement under terms involving the provision of goods, services 14 n;\lit\elaporte\tobacco\contfeeb\ccntraca.b&p or any other "in-kind" payment, the County Counsel agrees to seek, as part of any such settlement, a mutually agreeable monetary settlement of attorneys fees and expenses . The County Counsel agrees to consult with the Special Attorneys prior to making a recommendation to the Board of Supervisors regarding settlement or dismissal of legal proceedings . III. GENERAL REQUIREMENTS A. The Special Attorneys shall attach to this Agreement a copy- of the resumes of Elizabeth J. Cabraser, Richard M. Heimann, William B. Hirsch, Robert J. Nelson, and all other key personnel assigned by the Special Attorneys to handle the Litigation. The Special Attorneys shall replace or remove key personnel only upon.'. the prior written approval of the San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action. 15 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p 1 A J B. The County acknowledges that by this Agreement Special Attorneys are retained as attorneys and that neither Special Attorneys nor their members or employees thereby become officers or employees of the County. Special Attorneys shall be deemed at all times to be independent contractors and shall be wholly responsible for the manner in which they perform the services required of them by the terms of this Agreement . Special Attorneys shall be liable for any act or acts of their own, or their agents or employees, and nothing contained herein shall be construed as creating the relationship of employer and employee between- the County and ',Special Attorneys or their agents and employees . C. Assignment : This Agreement may not be assigned by the Special Attorneys . The Special Attorneys are' expressly employed because of their unique skills, ability and experience and therefore it is understood that no substitution or assignment may be made unless the San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which 1Gn \lit\elaporte\tobacco\contfeeb\c nt,aco.b&p join as plaintiffs and retain Special Attorneys , in this action, expressly approves such substitution or assignment . D. The Special Attorneys are prohibited from subcontracting this Agreement or services unless such subcontracting is agreed to in writing by ,the San Francisco City Attorney, after consultation with the County Counsel as well as the county counsel and city attorneys of any other counties and cities which join as plaintiffs and retain Special Attorneys in this action. No party on the basis of this Agreement shall in any way contzact• on behalf .of or—in the name of the other party of this Agreement . Any violation of this provision shall confer no right on any party and shall be void. E. Insurance: Special Attorneys will maintain in force, during the full term of this Agreement, insurance in the following amounts and coverage : 1 . Workers' Compensation, with Employers' Liability limits not less than one million dollars ($1, 000, 000) each accident . 17 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p 2 . Commercial General Liability Insurance with limits not less than one million dollars ($1, 000, 000) each occurrence . Combined Single Limit for Bodily Injury and Property Damage, including Contractual Liability, Personal Injury, Products and Completed Operations . 3 . Business Automobile Liability Insurance with limits not less than one million dollars ($1, 000 , 000) each occurrence combined Single Limit for Bodily Injury and Property Damage, including Owned and Non-owned and hired auto coverage, as applicable . 4 . Professional Liability Ifisurance with limits not less than one million dollars ($1, 000, 000) each claim with respect to negligent acts, errors or omissions, and any deductible not to exceed two hundred fifty thousand dollars ($250 , 000) each claim.- The Special Attorneys certify that the services that the Special Attorneys will be performing in connection with the Litigation are covered by their firm' s Professional Liability Insurance . 18 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p F. Commercial General Liability and Business Automobile Liability Insurance policies shall be endorsed to provide the following: 1 . Name as Additional Insured the County, its Officers, Agents, and Employees . 2 . That such policies are primary insurance to any other insurance available to the Additional Insureds, with respect to any claims arising out of this contract, and that insurance applies separately to each insured against whom claim is made or sui_t, is brought . G. ALL POLICIES SHALL BE ENDORSED TO PROVIDE: Thirty (30) days advance written notice to the County of cancellation, non-renewal or reduction in coverage . H. Certificates of insurance, satisfactory to the County, evidencing all coverages above shall be furnished to the County before commencing any operations under this Agreement, with complete copies of policies upon the County' s request . 19 n:\lit\elaporce\tobacco\contfeeb\contraco.b&p I . Approval of the insurance by the County shall not relieve or decrease the liability. of the Special Attorneys . J. Indemnity: The Special Attorneys shall take full responsibility for their work and shall bear all losses and damages directly resulting from it if the result of professional malpractice . The Special Attorneys shall assume the defense of, indemnify and hold harmless the County and its officers, representatives, agents and employees from all claims, loss, damage, injury, and liability of every kind, nature and description gaused by the willful ,and intentional misconduct or negligence of the Special Attorneys . Such negligence shall include, but not be limited to, any negligence of the Special Attorneys in connection with acts, errors or omissions by the Special Attorneys' agents, employees or subcontractors arising out of performance under, or any action taken in furtherance of, this Agreement . Nothing in this paragraph shall limit any right or remedy otherwise available to the County under law. It is understood and agreed that the indemnification provided above shall not apply to the extent of any negligence of the County and its officers, representatives, agents and employees . 2 0 n:\lit\elaporte\tobacco\contfeeb\contraco.bsp K. Liability of The County: The County' s obligations under this contract shall be limited to the payment of the compensation provided for in this Agreement . Notwithstanding any other provision of this Agreement, in no event shall the County be liable, regardless of whether any claim is based on contract or tort, for any special, consequential, indirect or incidental damages, including, but not limited to, lost profits, arising out of or in connection with this Agreement or the services performed in connection with this Agreement., L. During the term of this Agreement, the Special Attorneys shall promptly provide a statement describing any criminal investigation relating to, or material litigation asserted against, the Special Attorneys' firm or members of the firm. M. Each California Special Attorney firm .shall certify in writing, under penalty of perjury, that the firm has 2 1 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p fully complied with the laws of the California and the County, if applicable, relating to payment of taxes . N. The Special Attorneys shall list and describe any litigation or representation ever undertaken by their firm or its members on behalf of any member of the tobacco industry. O. Conflicts of Interest: The Special Attorneys shall avoid conflicts of interest and shall comply with all applicable professional conduct standards . The Special Attorneys shall not represent a party involved in a Claim, dispute or transaction of any kind which would create a conflict of interest for counsel or the County Counsel unless and until the Special Attorneys have informed the• County Counsel of the proposed representation and received his .written approval to proceed. Special Attorneys state that they are familiar with provisions of Section 87100 et seq. of the Government Code of the State of California, and certify that they do not know of any facts which constitute a violation of those sections . P. Termination: 2 2 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p 1 . Without Cause: The County Counsel may terminate this Agreement as to any Special Attorneys, without cause and without penalty, by providing the Special Attorneys with written notice of termination delivered to it at least fourteen (14) calendar days before the effective date of termination. 2 . For Cause : If any Special Attorneys breach any material term or condition of this Agreement , or fails to perform or fulfill any material obligation required by this Agreement, then the County Counsel may give notice to the Special Attorneys of his intent to terminate or suspend those Special Attorneys by providing at least seven (7) calendar days written notice of an intent to terminate or suspend. If the Special Attorneys do not substantially cure or correct such breach or failure to perform or fulfill any material obligation within seven (7) calendar days after receipt of such written notice from the 23 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p County Counsel, or within such longer period as the County Counsel might prescribe in writing, then the County Counsel may thereafter terminate the Special Attorneys or suspend the Special Attorneys . In any event, the County Counsel reserves the right to terminate immediately any Special Attorneys who are (a) disbarred or suspended in any jurisdiction, (b) indicted by a grand jury, or (c) convicted of a felony. 3 . Consequences—of Termination: If any Special Attorneys are terminated for cause, such Special Attorneys shall not be entitled to compensation or reimbursement of any kind under this Agreement . If any Special Attorneys are terminated for reasons other than "cause" , such Special Attorneys shall be entitled (1) to be reimbursed reasonable out-of-pocket costs that they incurred, but only if and to the extent and at the time such amounts would otherwise be payable pursuant to Section II, above, and (2) to be paid such compensation as 2 4 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p t might be payable to them in accordance with this Agreement and any fee sharing arrangement among them and any additional Special Attorneys, but only if, and to the extent and at the time, compensation is payable to the Special Attorneys from any recovery in the Litigation pursuant to Section II of this Agreement . Q. Confidentiality: The Special Attorneys understand and agree that, in the performance of this Agreement, the Special Attorneys may have access to private or- confidential information, including confidential patient medical information, which may be owned or controlled by the County and that such information may contain proprietary or confidential details, whose disclosure to third parties may be damaging to the County•or prohibited by law. The Special Attorneys agree that such information shall be held in confidence and used only in performance of the Agreement and shall not to be furnished to others by Special Attorneys except as authorized by the County Counsel or as required by law. R. Notice to the Parties : All notices and copies of documents to be given by the parties hereto shall be in writing 2 5 n:\lit\elaporte\tobacco\contfeeb\contraco.bip and served by depositing same in the United States Post Office, postage prepaid and registered as follows : TO THE COUNTY COUNSEL: Office of the County Counsel 651 Pine Street, 9th Floor Martinez, CA 94553 Attention: Vickie Dawes 2 6 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p TO SPECIAL ATTORNEYS : Lieff, Cabraser, Heimann & Bernstein, LLP Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, California 94111 S . Forum and Choice of Law: Any actions arising out of this Agreement shall be governed by the laws of California, and shall be brought and maintained in San Francisco Superior Court, which shall have exclusive jurisdiction thereof, except that any action concerning issues that solely affect the County and do not affect other counties or cities that have joined in the Litigation shall be brought and maintained in Contra Costa Superior Court, which shall have exclusive jurisdiction thereof . T. . If any provision of the Agreement is found to be illegal, unenforceable, or void, then the parties shall be relieved of all obligations under that provision, provided, however, that the remainder of the Agreement shall be enforcedto the fullest extent permitted by law. The headings used herein are for reference and convenience only and shall not be a factor in the interpretation of this Litigation. 2 7 n:\lit\elaporte\tobacco\contfeeb\contraco.b&p U. This Agreement may not be modified, nor may compliance with its terms be waived, except by written instrument executed and approved by the County Counsel or his designee and by authorized representatives of all parties to be bound or affected thereby. V. Entire Agreement : This contract sets forth the entire Agreement between the parties, and supersedes all other oral or written provisions . 2 O p n:\lit\elaporce\tobacco\contfeeb\contraco.b&p J IN WITNESS WHEREOF, the County Counsel and the Special Attorneys have executed this Agreement on the day and year first written above . COUNTY OF CONTRA COSTA: ICTOR J. jzS&P County Counsel SPECIAL ASSISTANT CITY ATTORNEYS : Richard M. Heimann, Esq. Individually and on behalf of Lieff, Cabraser, Heimann & Bernstein, LLP El'i.zabeth J. Cabraser, Esq. Lieff, Cabraser, Heimann & Bernstein, LLP William B. Hirsch, Esq. Lieff, Cabraser, Heimann & Bernstein, LLP Robert J. Nelson, Esq. Lieff, Cabraser, Heimann & Bernstein, LLP 2 9 n:\lit\elaporte\tobacco\contfeeb\contraco.bsp ti RESUMES OF SPECIAL ATTORNEYS ELIZABETH J. CABRASER, born Oakland, California, June 23, 1952, admitted to bar, 1978, California and U.S. District Court,Northern District of California, 1979; California Supreme Court, 1978. Also admitted to: Northern, Eastern, Central and Southern Districts of California; Second, Third, Fifth, Sixth,Ninth, Tenth and Eleventh Circuit Courts of Appeals; United States Tax Court, 1979; District of Hawaii, 1986; District of Arizona, 1990. Education: University of California at Berkeley (A.B., 1975); Boalt Hall School of Law, University of California (J.D., 1978). Author: "Mandatory Certification of Settlement Classes," 10 Class Action Reports 151 (1987); "The Applicability of the Fraud-On-The-Market Theory to 'Undeveloped' Markets: When Fraud Creates the Market," 12 Class Action Reports 402 (1989); "How To Streamline Complex Litigation: Tailor a Case Management Order to Your Controversy," 21 The Brief 12 (ABA/TIPS Summer 1992); "Mass Tort Class Action Settlements," 24 CTLA Forum I I (Jan./Feb. 1994); "Do You Know the Way from San Jose? The Evolution of Environmental and Toxic Nuisance Class Actions," Class Actions &Derivative Suits, ABA Section of Litigation (Spring 1994). Member: American Law Institute; American Bar Association: ABA Tort and Insurance Practice Section (TIPS), ABA Section of Litigation Committee on Class Actions & Derivative Skills; Chair, Subcommittee on Mass Torts; California Constitution Revision Commission; National Center for State Courts Mass Tort Conference Planning Committee; Association of Trial Lawyers of America, Women Trial Lawyers Caucus; Consumer Attorneys of Califoriiia; Bar Association of the Fifth Federal Circuit; California Women Lawyers; Association of Business Trial Lawyers; Bar Association of San Francisco, Vice President, Securities Litigation Section. National Association of Securities & Commercial Attorneys (NASCAT); Bay Area Lawyers for Individual Freedom;"Lawyer- Delegate, Ninth Circuit Judicial Conference 1992-1995;Northern District of California.Civil Justice Reform Act(CJRA)Advisory Committee, and Advisory Committee on Professional Conduct. RICHARD M HEIMAAW, born Miami, Florida, August 23, 1948; admitted to bar, 1972; Pennsylvania, 1974, District of Columbia; 1975, California, U.S. District Court,Northern District of California and U.S. Court of Appeals,Ninth Circuit; 1980, U.S. Court of Appeals, Second Circuit; 1986, U.S. District Court, District of Hawaii. Education: University of Florida (B.S.B.A., with honors, 1969); Georgetown University (J.D., 1972). Member, Georgetown Law Journal, 1971-1972. Member: Pennsylvania Bar Association; State Bar of California. Mr. Heimann served as Deputy District Attorney and Acting Assistant District Attorney for Tulare County, California, in which capacity he tried 25-35 jury cases. As a Public Defender in Philadelphia, Pennsylvania(1972-74)he tried 10-20 jury cases and over 50 non jury criminal cases. As a private attorney,.Mr. Heimann has tried over 30 civil jury cases, including complex cases such as the successful FPI/A reg tech securities class action trial. J LCH\SPECIAL.LCH - I - WILLIAM B. HIRSCH, born Los Angeles, California,May 19, 195 1; admitted to bar, 1983, California; U.S. District Court,Northern District of California; U.S. District Court, District of Hawaii (1991). Education: University of California at Santa Cruz(B.A., with highest honors, 1973); Princeton University (M.A., 1975); Harvard University (J.D., 1983). Member: Bar Association of San Francisco; State Bar of California; Barristers Club of San Francisco; California Trial Lawyers Association;National Association of Securities and Commercial Law Attorneys (Executive Committee, 1991-1994); ACLU of Northern California Lawyers' Counsel (Steering Committee, 1993-94). Honors: 1995 Trial Lawyer.of the Year Award, awarded by Trial Lawyers for Public Justice. Frequent lecturer on product liability and mass tort class actions. ROBERT J. NELSON, born New York,New York, October 20, 1960; admitted to bar, 1987, California; 1987, U.S. District Court, Central District of California; 1988,U.S. District Court,Northern District of California; 1988, U.S. Court of Appeals, Ninth Circuit; 1995, U.S. Court of Appeals, Sixth Circuit. Education: Cornell University (A.B., cum laude 1982); London School of Economics (General Course, 1980-81);N.Y.U. School of Law(J.D., 1987). Member, Phi Beta Kappa, Cornell. Member, College Scholar Honors Program, Cornell. Root- Tilden Scholarship Program,N.Y.U. School of Law. Order of the Coif, N.Y.U. School of Law. Articles Editor,New York University Law Review. Author: "To Infer or Not to Infer a Discriminatory Purpose: Rethinking Equal Protection Doctrine," 61 New York University Law Review 334, 1986. Judicial Clerk, Judge Stephen Reinhardt, Ninth Circuit Court of Appeals, 1987-1988. Assistant Federal Public Defender,Northern District of California, 1988-1993. Legal Research and Writing Instructor, University of California-Hastings College of the Law, 1989-1991. Faculty Member, Stanford Advocacy Skills Workshop, 1994 to present. Member: State Bar of California; Association of Trial Lawyers of America. LW\SPECIAL.LCH - 2 -