Tobacco litigation: the legacy of Dan Morales

American-Statesman Staff

Sunday, January 27, 2002

• March 29, 1996: Texas sues tobacco industry, asking for $4 billion. Morales announces a legal team of five private law firms to be paid 15 percent of any award.

• Jan. 31, 1997: Morales secretly hires his former first assistant, Will Pryor, and Houston lawyer and longtime friend Marc Murr. Pryor later drops out of the deal.

• Dec. 2: Morales announces plans to leave politics after 1998.

• Jan. 16, 1998: Tobacco companies settle with Texas for $15.3 billion, later increased to $17.3 billion. Murr files claim for $520 million fee amid complaints from other lawyers that he did little or nothing in litigation.

• Jan. 22: U.S. District Judge David Folsom agrees with Murr's suggestion that a state arbitration panel decide Murr's fee. The judge, Morales and Murr are each to name a panel member.

• Sept. 29: State arbitration panel is convened, with Morales and Murr naming all three members. Folsom never names a representative, and Morales' opponents are not told of hearing. Morales supports Murr's claim for $520 million.

• Oct. 7: State panel awards Murr $260 million, but says Folsom must approve the award if Murr makes a claim against the state's $17.3 billion.

• Dec. 10: News of the $260 million fee leaks to the news media as Morales and Texas lawyers go to national arbitration to seek payment from the tobacco industry.

• Dec. 11: National panel awards Texas' five primary lawyers $3.3 billion to be paid by tobacco companies. The panel gives Murr only $1 million.

• Jan. 1, 1999: Morales leaves office and works for SBC Communications Inc. as a consultant.

• Jan. 12: State Attorney General John Cornyn announces an investigation into the tobacco case and lawyers' fees.

• Feb. 25: Cornyn moves to prevent Murr being paid $260 million fee from the state's $17.3 billion share.

• May 5: Cornyn accuses Morales of fabricating contracts to mislead the court and the state panel that recommended the $260 million.

• May 6: Murr drops his claim.

• May 20: Federal investigators subpoena Cornyn's records in Murr investigation. Murr and Morales deny wrongdoing.