Prominent Tobacco Attorney Philip Gerson Fights Discipline Case
The Florida Bar argues Gerson and co-counsel Steven Hunter should face a 30-day suspension for alleged conflicts of interest in a secondhand smoke case.
November 27, 2017 at 03:13 PM
5 minute read
Prominent Miami tobacco attorney Philip Gerson and co-counsel Steven Hunter are fighting the Florida Bar's argument that they should be suspended for 30 days for allegedly acting against clients' interests in a secondhand smoke case.
The bar argues Gerson and Hunter violated professional rules by filing a petition challenging a research foundation's use of settlement funds when the pair represented trustees and supporters of the foundation in individual lawsuits. The attorneys maintain the rules were murky, and they made their best effort to avoid conflicts.
“Because Gerson acted in accordance with a reasoned decision on a highly debatable issue, discipline is not warranted,” counsel for the Gerson & Schwartz founding partner argued in a Nov. 21 filing in the Florida Supreme Court. Hunter of Hunter Lynch Law in Miami also opposes suspension.
The bar is seeking more severe sanctions than the referee in the case, Miami-Dade Circuit Judge Michael Hanzman, who in January recommended an admonishment against the attorneys for violating a bar rule on conflicts of interest. If the Florida Supreme Court orders discipline, it would be a black mark on the reputation of two attorneys who have each practiced for more than four decades without facing professional discipline.
“Mr. Gerson has been not just a member of the Florida Bar for 45 years or so but an outstanding and contributing member of the bar,” said his attorney, David Pollack of Stearns Weaver Miller Weissler Alhadeff & Sitterson in Miami. “I think it would be a shame if a circumstance this unusual would mar his otherwise perfect disciplinary record and record of service to the bar.”
Gerson and Hunter were asked two decades ago to pursue individual cases against tobacco companies on behalf of nonsmoking flight attendants who claimed they got sick from years of exposure to cigarette smoke. Hundreds of progeny cases stemmed from a 1997 class settlement that did not directly compensate the flight attendants but allocated $300 million to a new nonprofit foundation to research smoking-related illnesses.
It was the first class settlement by the tobacco industry and was reached at a time when cigarette makers had not paid a penny in litigation to plaintiffs for smoking-related illnesses. State Medicare settlements would be signed the following year.
The Florida Bar argues the conflict of interest arose when the attorneys filed a petition claiming the foundation, the Flight Attendant Medical Research Institute, was misusing funds and asking the court to allow foundation funds to be disbursed directly to the progeny plaintiffs. The action was contrary to the interests of class members represented by Gerson and Hunter, according to the bar.
The petition was filed in 2010 after the individual lawsuits were largely unsuccessful and the plaintiffs attorneys decided to stop pursuing them, according to the referee's report. In those lawsuits, Hunter represented one of the foundation's trustees, flight attendant Alani Blissard. Gerson represented two flight attendants who were not trustees but contacted him to say they objected to any challenge to the foundation's work.
The lawyers were surprised by their clients' objections and withdrew as their counsel, they said. Blissard and another trustee successfully moved to disqualify the attorneys from representing class members seeking review of the settlement.
Hunter ”reasonably believed that his actions in attempting to put forward a mechanism allowing the presiding judge to make direct distributions to individual flight attendants was in furtherance of the desire of everyone involved in this litigation from its inception,” his attorney and law partner, Christopher Lynch, argued in a brief. Hunter did not respond to an interview request by deadline.
The referee's report said: ”While Gerson and Hunter were no doubt motivated, in part, by a desire to receive a fee and 'close out' hundreds of difficult — and possibly unwinnable — cases, their prime motivation was to secure judicial oversight of the foundation and obtain some monetary relief for clients.”
The bar argued the attorneys violated two conflict of interest rules: one for current clients and one for former clients. Hanzman found only the current client rule applied to the case and, although he recommended a guilty finding, he found the attorneys were negligent at worst.
Even a total dismantling of the foundation would not have caused any financial or legal harm to the nontrustee clients, and any conflict with the trustee clients was partially caused by their own decision to serve on the board for $60,000 salaries, the referee found.
The attorneys researched and asked around before deciding to file the petition, the referee wrote, and the question of whether the filing was directly adverse to nontrustee clients' interests was a “close call.”
“This case was — in this court's opinion — a proverbial black swan and outlier, both procedurally and substantively,” Hanzman wrote. “The referee is convinced that [Gerson and Hunter] are no risk to the public, or current and future clients, and that from this point forward they will be more — indeed far more — diligent in erring on the side of caution.”
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