Opinion

State v. Brown & Williamson Tobacco Corp.

  • 18 S.W.3d 186
  • 2000 Tenn. LEXIS 194
  • 2000 WL 389455
Court
Tennessee Supreme Court
Filed
Apr 19, 2000
Status
Published
Author
Drowota
On the bench
Drowota, Anderson, Birch, Holder, Barker
Cited by
286 cases
Authority
More cited than 98.2%

concluding that “Mother’s inability to stay in one domestic violence program and her poor judgment in repeatedly returning herself and her children to her abuser” was evidence that “established a lack of parental abilities and a refusal to utilize available programs”

How later courts described this case

  • concluding that “Mother’s inability to stay in one domestic violence program and her poor judgment in repeatedly returning herself and her children to her abuser” was evidence that “established a lack of parental abilities and a refusal to utilize available programs”
  • holding intervention not appropriate where, assuming petitioner’s legal interest in the lawsuit, an alternate legal forum existed for the litigation of petitioner’s claims and petitioner’s ability to protect its interest was not impeded by denial of intervention
  • stating that an abuse of discretion occurs when “it affirmatively appears that the lower court’s decision has no basis in law ... and is therefore arbitrary, illogical, or unconscionable.”
  • holding that courts should not decide a case where “the controversy depends upon a future or contingent event, or involves a theoretical or hypothetical state of facts”

Written by the judges who cited it.

The opinion

IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

STATE OF TENNESSEE, ET AL. v. BROWN & WILLIAMSON TOBACCO

CORPORATION, ET AL. v. GREGORY BENNETT PERRY and STEVE

LLOYD CHAMPION, ET AL.

Consolidated Appeal from the Chancery Court for Davidson County

No. 98-3776-I Hon. Carol L. McCoy, Chancellor

No. 98-3771-II Hon. Irvin Kilcrease, Jr., Chancellor

Consolidated Appeal No. M1999-00455-SC-R11-CV - Decided April 19, 2000

FOR PUBLICATION

The issue in this appeal is whether two groups of individuals should be allowed to intervene

in a suit filed by the State of Tennessee against several tobacco product manufacturers. The State’s

suit against the tobacco defendants sought money damages, declaratory relief, and injunctive relief

in connection with the marketing and sale of tobacco products in Tennessee. The trial court

(Chancellor Irvin Kilcrease, Jr.) approved a settlement between the State and the tobacco defendants

and dismissed the State’s complaint. The trial court also rejected attempts to intervene in the State’s

suit by two groups of individuals, the first seeking damages from tobacco companies for increased

medical insurance premiums, and the second consisting of tobacco users seeking damages from

tobacco companies and their lawyers seeking attorney’s fees. The trial court (Chancellor Carol L.

McCoy) dismissed a declaratory judgment action filed by one of the groups of proposed intervenors.

Both groups of the proposed intervenors appealed, and this Court granted an expedited appeal under

Tenn. Code Ann. § 16-3-201(d). For the reasons explained hereafter, the trial courts are affirmed.

Appeal pursuant to Tenn. Code Ann. § 16-3-201(d) from Court of Appeals to Supreme Court;

Judgments of Trial Courts Affirmed

DROWOTA , J., delivered the opinion of the court, in which ANDERSON, C.J., BIRCH, HOLDER , and

BARKER, JJ., joined.

J. D. Lee and David C. Lee, Knoxville, Tennessee, for intervenors-appellants, Steven Lloyd

Champion, et al.

Gordon Ball, Knoxville, Tennessee, for intervenors-appellants, Gregory Bennett Perry, et al.

John A. Lucas, Knoxville, Tennessee, and Robert G. McDowell and James A. Delanis, Nashville,

Tennessee, for appellees, Brown & Williamson Tobacco Corporation, et al., John A. McReynolds,

Jr., Knoxville, Tennessee, for appellee Liggett Group Inc.

Paul G. Summers, Attorney General and Reporter; Michael E. Moore, Solicitor General; Russell T.

Perkins, Special Deputy for Litigation; Carolyn Underwood Smith, Assistant Attorney General,

Nashville, Tennessee, for appellee, State of Tennessee

OPINION

In this case the State of Tennessee filed suit against several tobacco product manufacturers

seeking monetary, declaratory, injunctive, and other relief in connection with the marketing and sale

of tobacco products in Tennessee. Upon approval by the trial court of a settlement between the State

and the tobacco defendants, the State’s complaint was dismissed. A group of individuals seeking

damages from tobacco companies for increased medical insurance premiums (collectively referred

to as the “Perry intervenors”) filed a declaratory judgment action and a motion to intervene in the

State’s suit. The declaratory judgment action was dismissed and the motion to intervene was denied.

A separate group of individuals consisting of tobacco users seeking damages from tobacco

companies and their lawyers seeking attorney’s fees (collectively referred to as the “Beckom

intervenors”) also filed a motion to intervene in the State’s suit. Their motion to intervene was

likewise denied. Both groups of proposed intervenors appealed to the Court of Appeals, which

consolidated the cases. The State subsequently moved this Court to assume jurisdiction of this

matter pursuant to Tenn. Code Ann. § 16-3-201(d) on the grounds that the case is of compelling

public importance in that it involves a substantial amount of State revenue.1 We agreed and assumed

jurisdiction over the case.

After carefully examining the record before us and considering the relevant authorities, we

conclude that the trial court correctly dismissed the declaratory judgment action filed by the Perry

intervenors, as well as their motion to intervene in the settlement action. Moreover, we conclude

that the trial court correctly denied the motion to intervene filed by the Beckom intervenors.

Accordingly, for the reasons explained hereafter, the trial courts are affirmed.

BACKGROUND

On December 21, 1998, the State of Tennessee filed suit in the Chancery Court of Davidson

County against Brown & Williams Tobacco Corporation, along with several other tobacco

manufacturers and trade associations.2 The State’s complaint included claims for relief under the

Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-101, et seq., the Tennessee Trade

1

This Court is authorized to assume jurisdiction over an undecided case pending in the

intermediate appellate courts when a “compelling public interest” is at stake, or when the case is “of

unusual public importance” and involves state taxes, the right to hold or retain public office, or

constitutional issues. Tenn. Code Ann. § 16-3-201(d).

2

The tobacco defendants named in the State’s complaint included Brown & Williamson

Tobacco Corporation; Liggett Group, Inc.; Lorillard Tobacco Company; Philip Morris Incorporated;

R.J. Reynolds Tobacco Company; United States Tobacco Company; United States Tobacco

Manufacturing Company, Inc.; and United States Tobacco Sales and Marketing Company, Inc.

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Practices Act, Tenn. Code Ann. § 47-25-101, et seq., and a claim for unjust enrichment. The State’s

claims were based on the alleged misconduct of the tobacco defendants in manufacturing,

distributing, and marketing of tobacco products in Tennessee. Among other things, the State alleged

that the tobacco defendants made unfair, deceptive, and misleading claims about the addictive nature

of nicotine, targeted young people in their advertising, misrepresented the health consequences of

using tobacco products, and imposed a significant financial burden on taxpayers who have supported

the medical costs of individuals dependent on financial assistance from the State because of their

addiction to cigarettes and smokeless tobacco products. The State sought declaratory and injunctive

relief, as well as money damages resulting from the State’s payment of medical expenses for tobacco

related diseases caused by the marketing, sale, and use of the defendants’ products. The State’s

complaint stated that the suit was brought by the State in its capacity as sovereign, not as a class

action on behalf of Tennessee residents. Thus, the State was not seeking relief on behalf of any

individual or party other than itself.

On the same day that the State filed suit, the State and the tobacco defendants submitted a

Master Settlement Agreement (“MSA”) to Chancellor Irvin Kilcrease for approval.3 Pursuant to the

MSA, the State is projected to receive approximately 4.8 billion dollars through the year 2025, and

annual payments in perpetuity thereafter in amounts expected to exceed 100 million dollars per year.

In addition to the cash settlement, the MSA grants various forms of injunctive relief, such as

enjoining the tobacco defendants from targeting youth or using cartoons in their advertising. The

agreement also bans outdoor advertisements and limits tobacco advertising in sporting events,

concerts, and similar activities. In exchange for the money and injunctive relief, the MSA provides

for the release of claims against the tobacco defendants. The State cannot begin receiving any

money under the MSA until the State achieves “state specific finality,” which means that all

litigation pertaining to the MSA in the State must be resolved. Tennessee is one of a small number

of states that has yet to achieve this status. Chancellor Kilcrease approved the settlement and

dismissed the State’s complaint against the tobacco defendants on the same day it was filed,

December 21, 1998.

On December 18, 1998, the Perry intervenors filed a declaratory judgment action in the

Chancery Court of Davidson County before Chancellor Carol McCoy, seeking to have their rights

under the MSA determined. Specifically, the Perry intervenors sought a declaration that the MSA

did not impair their ability to maintain a pending action against the tobacco defendants.4 Chancellor

3

The MSA, which is 147 pages long excluding numerous exhibits, was reached between the

tobacco industry and 46 states, along with the District of Columbia, Puerto Rico, the United States

Virgin Islands, American Samoa, the Northern Mariana Islands, and Guam. The four remaining

states previously reached agreements with the tobacco industry. No state has rejected the MSA. See

State v. Philip Morris, Inc., 686 N.Y.S.2d 564, 566 n.3 (N.Y. Sup. Ct. 1998), aff’d, 693 N.Y.S.2d

36 (N.Y. App. Div. 1999).

4

The Perry intervenors had pending a proposed class action suit against the tobacco

defendants in the Circuit Court of Coffee County. In their suit, the Perry intervenors sought to

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McCoy dismissed the declaratory judgment action on the basis of sovereign immunity, res judicata,

and her determination that the Perry intervenors were seeking an advisory opinion regarding the

impact of the MSA on their Coffee County litigation.

In addition to filing a declaratory judgment action before Chancellor McCoy, the Perry

intervenors filed with Chancellor Kilcrease a motion to intervene in the State’s lawsuit. The Perry

intervenors sought to challenge the fairness of the settlement and have the order approving it set

aside. They also sought declaratory relief regarding the impact of the MSA on their Coffee County

suit. Chancellor Kilcrease denied the motion to intervene because the Perry intervenors did not have

a protectable legal interest in the State’s suit. Therefore, the intervenors were seeking an advisory

opinion that would require the court to “indulge in speculation.”

The other group of proposed intervenors, the Beckom group, likewise filed a motion with

Chancellor Kilcrease to intervene in the State’s lawsuit against the tobacco companies. Like the

Perry intervenors, the Beckom intervenors sought to challenge the fairness of the MSA. However,

unlike the Perry intervenors, the Beckom intervenors sought to have liens imposed on the settlement

for attorney’s fees incurred in other litigation against tobacco companies.5 Chancellor Kilcrease

denied the motion to intervene based on lack of standing, sovereign immunity, and because the

underlying suit filed by the Beckom group on behalf of taxpayers was moot since the State had filed

and settled its own suit against the tobacco manufacturers. The trial court also found that a lien for

attorney’s fees was not proper because the lawyers seeking the fees were not counsel in the State’s

suit.

After their efforts to intervene failed in the trial courts, the Perry and Beckom intervenors

appealed to the Court of Appeals, which consolidated the cases. Thereafter, this Court assumed

jurisdiction of the case pursuant to Tenn. Code Ann. § 16-3-201(d) because the case is of compelling

public importance which involves a substantial amount of State revenue.

ANALYSIS

I.

We first address the trial court’s denial of intervenor status to the Perry and Beckom groups.

We begin by observing that “a lawsuit often is not merely a private fight and will have implications

on those not named as parties.” Michigan State AFL-CIO v. Miller, 103 F.3d 1240, 1245 (6th Cir.

1997). Believing that the State’s settlement with the tobacco industry implicated their interests, the

recover for the increase in medical insurance premiums they and thousands of others have

purportedly paid from 1953 to the present as a result of the tobacco industry’s marketing and sale

of tobacco products in Tennessee.

5

The Beckom intervenors had filed suit in Monroe County against various tobacco companies

to recover money spent by the State for smoking-related injuries. The case was removed to federal

district court, which dismissed it for lack of standing. The United States Court of Appeals for the

Sixth Circuit affirmed the district court decision.

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Perry and Beckom groups contend that they are entitled to intervene in the State’s lawsuit under

Tenn. R. Civ. P. 24, which provides for two types of intervention – intervention as of right and

permissive intervention. The applicable rules provide as follows:

24.01. Intervention as of Right. – Upon timely application anyone

shall be permitted to intervene in an action: (1) when a statute confers

an unconditional right to intervene; or (2) when the applicant claims

an interest relating to the property or transaction which is the

subject of the action and the applicant is so situated that the

disposition of the action may as a practical matter impair or

impede the applicant’s ability to protect that interest, unless the

applicant’s interest is adequately represented by existing parties; or

(3) by stipulation of all the parties. (Emphasis added).

24.02. Permissive Intervention. – Upon timely application anyone

may be permitted to intervene in an action: (1) when a 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. In exercising discretion the court shall consider whether

or not the intervention will unduly delay or prejudice the adjudication

of the rights of the original parties. (Emphasis added).

A party seeking to intervene as of right under Rule 24.01 must establish that (1) the

application for intervention was timely; (2) the proposed intervenor has a substantial legal interest

in the subject matter of the pending litigation; (3) the proposed intervenor’s ability to protect that

interest is impaired; and (4) the parties to the underlying suit cannot adequately represent the

intervenor’s interests. Grubbs v. Norris, 870 F.2d 343, 345 (6th Cir. 1989). The intervenor has the

burden of establishing all four of these elements or else the motion to intervene will be denied. Id.

In the case of permissive intervention, the party seeking to intervene must show that there is a

common question of law or fact between the intervenor’s claim and the main action. Tenn. R. Civ.

P. 24.02. Permissive intervention is generally not proper when the intervenor seeks to raise new

claims or issues against the existing parties. See Arizona v. California, 460 U.S. 605, 614 (1983).

The standard of review on appeal for the denial of intervention as of right is de novo, except

for the timeliness of the application which is reviewed under an abuse of discretion standard.

Michigan State AFL-CIO, 103 F.3d at 1245. The standard of review for the denial of permissive

intervention is abuse of discretion. Chaille v. Warren, 635 S.W.2d 700, 703 (Tenn. App. 1982). An

abuse of discretion exists when the reviewing court is firmly convinced that the lower court has

made a mistake in that it affirmatively appears that the lower court’s decision has no basis in law or

in fact and is therefore arbitrary, illogical, or unconscionable. See Ballard v. Herzke, 924 S.W.2d

652, 661 (Tenn. 1996); State v. Carter, 890 S.W.2d 449, 454 (Tenn. Crim. App. 1994).

In this case, both groups of would-be intervenors contend that the trial court erred in denying

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them the right to intervene under Rule 24.01. In support of their position, the proposed intervenors

focus on the possibility that the release provisions of the MSA might be used as a defense in their

respective suits against tobacco companies.6 They argue that they have a substantial legal interest

in the State’s suit which will be impaired or impeded because the MSA might be raised as a defense

in their pending suits if the tobacco defendants interpret the MSA’s release provision to encompass

the intervenors’ claims. The State takes the position that the MSA does not encompass the

intervenors’ private litigation and, therefore, the MSA has no impact on their ability to pursue their

claims against the tobacco companies. Not surprisingly, the tobacco defendants have chosen to take

a noncommital position on the issue, which “deeply concerns” the proposed intervenors that the

MSA might be used to “stifle or destroy” their pending claims by leaving those claims vulnerable

to dismissal. The intervenors are particularly concerned about the language in the MSA purporting

to prohibit actions brought by private persons “seeking relief on behalf of or generally applicable

to the general public.” The MSA, however, does not prohibit suits seeking “private or individual

relief for separate and distinct injuries.”

The contention of the intervenors that they have a substantial legal interest in the State’s suit

entitling them to intervene as of right is unconvincing. While the precise nature of the interest

required to intervene as of right has eluded exact definition, it is clear that the right does not include

a mere contingent, remote, or conjectural possibility of being affected as a result of the suit, but must

involve a direct claim on the subject matter of the suit such that the intervenor will either gain or lose

by direct operation of the judgment. See 3B Moore’s Federal Practice, p. 24-54 (2d ed. 1995); 67A

C.J.S. Parties § 75 (1978). Hence, intervention as of right is not appropriate to adjudicate legal

interests of an indefinite character, or hypothetical or speculative scenarios that may never come to

pass. See Harris v. Pernsley, 820 F.2d 592, 601 (3rd Cir. 1987). In this case, the question of

whether the intervenors’ claims asserted in their private lawsuits are released by the MSA is an issue

that will not arise unless and until the tobacco defendants in those cases raise the MSA as a defense,

which they have yet to do. As stated by one court, “[t]he mere possibility that the MSA may some

day be offered as a defense is not grounds for intervention. The language of the MSA, in

anticipation of separate litigation, contemplates that it may be offered as a complete defense, not that

6

The MSA provides for the release of claims against the tobacco companies by the

“Releasing Parties.” “Releasing Parties” is defined in the MSA as follows: “Releasing Parties means

each Settling State and any of its past, present and future agents, officials acting in their official

capacities, legal representatives, agencies, departments, commissions and divisions; and also means,

to the full extent of the power of the signatories hereto to release past, present and future claims, the

following: (1) any Settling State’s subdivisions . . .; and (2) persons or entities acting in a parens

patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer, or any other capacity,

whether or not any of them participate in this settlement, (A) to the extent that any such person or

entity is seeking relief on behalf of or generally applicable to the general public in such Settling State

or the people of the State, as opposed solely to private or individual relief for separate and distinct

injuries, or (B) to the extent that any such entity (as opposed to an individual) is seeking recovery

of health care expenses (other than premium or capitation payments for the benefit of present or

retired state employees) paid or reimbursed, directly or indirectly, by a Settling State.”

-6-

it will be a complete defense. At this juncture it cannot be determined if such anticipated defenses

may be employed or will be valid.” Missouri v. American Tobacco Co., No.76054, 2000 WL 29421

(Mo. Ct. App. Jan. 18, 2000). Attempting at this point to decide whether the proposed intervenors

will be bound by the MSA, and if so in what respect, would require addressing these questions in

the abstract and theoretical. Doing so would run afoul of the established rule that courts are not to

render advisory opinions, see Super Flea Mkt. v. Olsen, 677 S.W.2d 449, 451 (Tenn. 1984), or

decide abstract legal questions, see Lewis v. State, 347 S.W.2d 47, 49 (Tenn. 1961). The proposed

intervenors would have us render an advisory opinion, which we decline to do. We conclude that

the intervenors do not have a substantial legal interest in the State’s suit entitling them to intervene

as of right under Tenn. R. Civ. P. 24.01.

Even assuming for the sake of argument that the intervenors did have a substantial legal

interest in the State’s suit, intervention as of right under Rule 24.01 would still not be appropriate.

As stated above, one of the requirements to intervene as of right is that the would-be intervenor be

“so situated that the disposition of the action may as a practical matter impair or impede the

applicant’s ability to protect that interest.” Tenn. R. Civ. P. 24.01(2). While it may be that at some

point the MSA’s release provisions will be found to apply to the intervenors’ claims if raised as a

defense in their cases, the validity of those release provisions and their applicability to the

intervenors’ claims can be litigated in their other lawsuits. Those lawsuits provide the intervenors

with a forum in which to determine whether the MSA creates a defense to their claims. Thus, it

cannot be said that the State’s settlement of its suit against the tobacco companies will preclude the

intervenors from protecting their interests in their private litigation. Accordingly, we find that the

proposed intervenors are not entitled to intervention as of right because they do not have a

substantial legal interest in the State’s suit, and even if they had such an interest, the MSA does not

impair or impede their ability to protect that interest.

On the question of permissive intervention under Tenn. R. Civ. P. 24.02, we find no abuse of

discretion in the trial court’s denial of intervention. As noted above, if an intervenor’s claim or

defense contains a question of law or fact that is also raised by the main action, the requirement of

Rule 24.02 is satisfied and the trial court is afforded discretion to permit intervention. Ballard, 924

S.W.2d at 657. In exercising that discretion, the court must consider whether the intervention will

unduly delay or otherwise prejudice the rights of the original parties. Tenn. R. Civ. P. 24.02. Here,

it cannot be said that the trial court’s denial of permissive intervention had no basis in law or fact

or was otherwise arbitrary, illogical, or unconscionable, given that the proposed intervenors have a

forum to determine the impact of the MSA on their cases. Furthermore, asking the trial court in the

State’s suit to determine the impact of the MSA on the intervenors’ cases would be speculative since

the MSA has not been raised as a defense to the intervenors’ claims. Finally, the extent to which the

MSA’s release provisions bind private litigants is not an issue in the State’s case. Nor is it presently

an issue in the intervenors’ cases. Thus, the trial court acted properly in rejecting the intervenors’

motions for permissive intervention under Rule 24.02.

II.

In addition to filing a motion to intervene, the Perry intervenors filed a declaratory judgment

action in which they sought to have their rights under the MSA determined. Specifically, the Perry

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intervenors sought a declaration that the MSA did not impair their ability to pursue their action

against the tobacco defendants. Chancellor McCoy dismissed the declaratory judgment action on

the basis of sovereign immunity, res judicata, and her determination that the intervenors were

seeking an advisory opinion regarding the impact of the MSA on their private lawsuit.

A decision on whether to entertain a declaratory judgment falls squarely within a trial court’s

discretion, which has been described by this Court as “very wide.” Southern Fire & Cas. Co. v.

Cooper, 292 S.W.2d 177, 178 (Tenn. 1956); Hinchman v. City Water Co., 167 S.W.2d 986, 992

(Tenn. 1943); Newsum v. Interstate Realty Co., 278 S.W. 56, 57 (Tenn. 1925). Thus, the issue here

is whether the trial court acted arbitrarily in refusing to declare the rights of the Perry intervenors

under the MSA. See Southern Fire & Cas. Co., 292 S.W.2d at 178 ( “the action of the trial court in

refusing a declaration should not be disturbed by this, an appellate court, unless such refusal be

arbitrary”).

The primary purpose of the Declaratory Judgment Act is “to settle and to afford relief from

uncertainty and insecurity with respect to rights, status, and other legal relations . . . .” Tenn. Code

Ann. § 29-14-113. Although the Act is “to be liberally construed and administered,” id., we have

acknowledged that “certain limitations must be placed upon the operation of the statute.” Johnson

City v. Caplan, 253 S.W.2d 725, 726 (Tenn. 1952). For example, a declaratory judgment action

cannot be used by a court to decide a theoretical question, Miller v. Miller, 261 S.W. 965, 972 (Tenn.

1924), render an advisory opinion which may help a party in another transaction, Hodges v.

Hamblen County, 277 S.W. 901, 902 (Tenn. 1925), or “allay fears as to what may occur in the

future,” Super Flea Mkt., 677 S.W.2d at 451. Thus, in order to maintain an action for a declaratory

judgment a justiciable controversy must exist. Jared v. Fitzgerald, 195 S.W.2d 1, 4 (Tenn. 1946).

For a controversy to be justiciable, a real question rather than a theoretical one must be presented

and a legally protectable interest must be at stake. Cummings v. Beeler, 223 S.W.2d 913, 915 (Tenn.

1949). If the controversy depends upon a future or contingent event, or involves a theoretical or

hypothetical state of facts, the controversy is not justiciable. Story v. Walker, 404 S.W.2d 803, 804

(Tenn. 1966). If the rule were otherwise, the “courts might well be projected into the limitless field

of advisory opinions.” Id.

In this case, the Perry intervenors seek a declaration as to whether the MSA’s release

provisions affect their private suit pending in Coffee County. As previously pointed out, the MSA

has not yet been raised as an issue in that case. The issue will arise and be justiciable, if at all, when

the tobacco companies assert the affirmative defense of release in the Coffee County case.

Therefore, the trial court did not act arbitrarily in declining to render a declaratory opinion to assist

the intervenors in their other litigation or otherwise allay their fears as to what might occur in the

future. The dismissal of the declaratory judgment action was entirely proper.

III.

The final issue in this case involves the claim of the Beckom intervenors to attorney’s fees.

The Beckom intervenors are composed in part of lawyers who claim to have spent millions of dollars

fighting the tobacco industry in other cases in Tennessee and elsewhere. These lawyers seek to have

liens imposed on the MSA for attorney’s fees incurred as a result of their work against the tobacco

-8-

companies, claiming that the State benefitted from their past efforts. They argue that since the

tobacco companies agreed to pay the State’s attorney’s fees in its suit against them under the MSA,

this entitles the intervenors to receive from the tobacco companies the attorney’s fees generated by

their prior litigation. They further contend that they are owed attorney’s fees based on a theory of

implied contract and other equitable theories. The trial court found that a lien for attorney’s fees was

not proper because the lawyers seeking the fees were not counsel in the State’s suit. We agree.

Pursuant to the terms of the MSA, the tobacco companies agreed to pay attorney’s fees to

“private outside counsel, if any, retained by” the State, and who were identified in the MSA “as

having been retained by and having represented” the State. Thus, only attorneys hired by the State

and identified by the State in the MSA can make a claim for attorney’s fees under the MSA. The

attorneys seeking to intervene here were not hired by the State to represent it, did not in fact

represent the State in its suit, and are not designated in the MSA as having done so. Thus, they

clearly have no claim to attorney’s fees under the MSA. Similarly unpersuasive is the intervenors’

claim to attorney’s fees on equitable grounds, such as quantum meruit, implied contract, and other

theories. If the attorney intervenors in this case were allowed to claim fees under the theories being

asserted, then any lawyer who has been involved in litigation against a tobacco company could do

the same by merely claiming that their efforts have benefitted the State. Obviously, such a situation

cannot be sanctioned. Accordingly, we find that the intervenors’ claim to attorney’s fees is

controlled by the American Rule, which is firmly established in this state. See John Kohl & Co. v.

Dearborn & Ewing, 977 S.W.2d 528, 534 (Tenn. 1998). Under that rule, litigants pay their own

attorney’s fees absent a statute or an agreement providing otherwise. Id. It follows that the trial

court properly refused to permit those individuals seeking attorney’s fees to intervene in this case.

CONCLUSION

In view of the foregoing discussion, we conclude that the trial court properly denied the

motions to intervene and that the Perry intervenors’ declaratory judgment action was properly

dismissed. We have carefully considered the other claims of error made by the would-be intervenors

and find them to be without any merit.7 Accordingly, the judgments of the trial courts are affirmed.

Finally, we deny the intervenors’ motions to consider post-judgment facts.8 Costs of this appeal

7

Both groups of proposed intervenors, particularly the Beckom group, attempt to make much

of the fact that Chancellor Kilcrease stated at a hearing that he had not read the MSA before

approving it and was therefore unfamiliar with its provisions. The proposed intervenors fail to note,

however, that the Chancellor stated at a later hearing that he wanted “to correct the record right now

about that,” stating that he had in fact read the MSA and that his earlier comment about not reading

it was made in jest and taken out of context. We assume that counsels’ omission in this regard is the

result of oversight rather than any attempt to mislead the Court.

8

The Perry intervenors filed a motion pursuant to Tenn. R. App. P. 14 asking this Court to

consider a laches argument made by the State in a case pending in federal court where an individual

was seeking to intervene in that case. The motion does not request that we consider a post-judgment

fact, but merely a legal position taken by the State in another case, which we decline to do. Laches

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shall be taxed evenly between the Perry and Beckom intervenors.

is not even an issue in the present case. The Beckom intervenors likewise filed a motion to consider

the purported post-judgment fact that the MSA had been amended after its approval to designate an

out of state lawyer as one who provided legal services to the State and could therefore recover

attorney’s fees. The motion is moot given our resolution of the case. In any event, the motion does

not meet the criteria of Tenn. R. App. P. 14 for the consideration of post-judgment facts. The

Beckom intervenors have filed other motions to consider post-judgment facts which we have

considered and hereby deny.

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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