STAN CHESLEY COULD HARDLY believe what he was hearing. It was Thursday, May 14, 1998, a night when most of the country was tuning in to the final episode of Seinfeld. Chesley, comfortable in his luxury suite in Washington, D.C.'s Willard hotel, wasn't watching. Instead, he was talking with his longtime friend and colleague Wendell Gauthier- the New Orleans trial lawyer who had risen to national prominence as leader of the Castano group, a coalition of trial lawyers that had brought the first nationwide class action against Big Tobacco. Just down Pennsylvania Avenue from the hotel, Congress appeared poised to pass the McCain bill, legislation that would force the tobacco industry to pay out $500 billion, a good chunk of which would go to settle claims brought by Gauthier, Chesley, and other Castano lawyers. And yet Gauthier had more on his mind than just tobacco. As Chesley listened, he laid out his vision for another massive piece of tort litigation-this one targeting the makers and sellers of guns.

Chesley was skeptical. The group had just spent five punishing years pursuing the tobacco industry, a fight that had cost tens of millions of dollars and tested the stamina of even the most veteran trial lawyers in the group. Gauthier said that he understood Chesley's concerns; he too had been doubtful at first. He acknowledged that the gun industry was not a true "deep pocket" and agreed that the tobacco wars had been hard on the Castano coalition. But the suit fit with Gauthier's notion of the plaintiffs bar as a de facto fourth branch of government, one that achieved regulation through litigation where legislation failed. And as Gauthier saw it, if there was one industry that rivaled Big Tobacco in throwing around its legislative clout on both the state and federal level, it was the gun industry and its allies in the National Rifle Association. For more than an hour Gauthier worked to convince Chesley that gun litigation should be the Castano group's next big thing. "What these guys have gotten away with," Gauthier told his colleague, "is criminal." Chesley agreed to think it over, even while harboring serious reservations about how Castano members would react. He recalls wondering: Is anyone really going to line up behind this?

Just over five months later, on October 31, 1998, Gauthier filed a suit against the gun industry on behalf of the city of New Orleans, the first shot in what has become a fusillade of litigation against gun makers. As of May 14 nine municipalities-New Orleans; Chicago; Miami-Dade County; Atlanta; Bridgeport; Cleveland; Cincinnati; Detroit-Wayne County; and St. Louis-had filed actions. Five more cities-Boston, San Francisco, Philadelphia, Los Angeles, and Newark-are strongly contemplating filing their own suits. Gauthier predicts that hundreds of cities may eventually join in the litigation. And, as gun litigation's most conspicuous triggerman, Gauthier has taken on the role of the happy warrior: promising that he and his team of trial lawyers can do what Congress has not-namely, bring the domestic arms industry to heel. In the months since filing the New Orleans suit, Gauthier has appeared on all the major television networks and in the pages of The Wall Street Journal and The New York Times declaring that he and his fellow Castano attorneys are the gun industry's "worst nightmare," a well- financed team of opponents who will never stop until they've achieved victory. A recent article in The New Yorker even credited the group with guiding the national agenda.

But the reality of Gauthier's jihad against gun makers, and the reality of the clout and cohesiveness of the Castano group, is more complicated than the press clippings suggest. Though Gauthier and Chesley became converts to the cause, many other lawyers within the Castano group have not. Indeed, at this point the affiliation of superstar plaintiffs lawyers-split by differences and tens of millions of dollars in the red after years of fruitless tobacco litigation-is hardly the juggernaut it's made out to be. One prominent plaintiffs attorney even goes so far as to label Castano a "paper tiger."These days, who's in and who's out of the gun litigation explains a lot about the group's current state of affairs, and sheds light on the risk and complexity of such large-scale plaintiffs projects. When Gauthier filed the New Orleans complaint, he hinted at how few allies he had at that point, signing the pleading "Personally and for all other participating Castano Tobacco Attorneys." As one gun industry defense attorney put it: "It's the strangest signature line I've ever read."

FOR SOME CASTANO LAWYERS, THE first they heard of the gun litigation was when they picked up their morning paper or turnedon the evening news and saw Gauthier standing next to New Orleans mayor Marc Mortal at a press conference. Since filing the New Orleans action, though, Gauthier has been working hard to get his Castano troops in line. In December he gathered the group in Chicago to brief members and then pitch their services to mayors and city attorneys. In January a day long follow-up meeting was held in New Orleans, where Gauthier stressed that the scale of gun litigation was nothing like what members had experienced with tobacco. Gauthier has asked member firms for an initial commitment of $50,000, with only $2,500 required up front-by comparison, in tobacco, the firms anted up $100,000 to join. "This isn't going to be anything like as expensive as the tobacco litigation," says attorney Maury Herman, who heads the Castano group's finance committee. Herman says that he has signed a personal guarantee to secure an initial $50,000 on a $500,000 line of credit extended to fund the gun litigation.

Gauthier and Castano firms to join the gun effort with a committment of $50,000 and only $2,500 up front. But even at these low prices half the firms have decided not to sign up.

Even at these relatively cheap prices, many of the Castano firms have decided not to sign up for the gun group. According to a roster of attorneys supplied by Castano's administrative coordinator, and based on interviews conducted with group members, just under half the group has chosen not to join the Castano gun litigation. "Honestly, it probably would have been better if guns had not been identified with the group at all," says one Castano lawyer who has opted into the gun litigation but who admits that the Castano name carries a lot of baggage. Some attorneys, such as Turner Branch of Albuquerque and Will Kemp of Las Vegas, both of whom serve on the tobacco group's executive committee, think the litigation isn't as viable in their part of the country. "Those cases will never fly out here," explains Branch. "In the West, a gun rack and an open can of beer in the truck are both considered sacred, and we're not going to try and change these cowboys." It's much the same story in Indianapolis, where Castano attorney William Riley says that it seems that "every other truck has a bumper sticker 'God, Guns & Guts: Let's Keep All Three.' " Other Castano attorneys, such as charter member Ralph Knowles, Jr., of Atlanta, think that it's unwise for Castano to take on the gun industry before it'o finished with tobacco litigation. "The cause is noble, and I wish them luck, but I've got enough on my plate," says Knowles. He adds that he is generally on "hiatus" from Castillo work. (Robert Redfearn, a New Orleans-based Castano member who is widely respected within the group for his abilities and low-key demeanor, is supporting the gun effort, but concedes that many members wish that the group had waited until after the tobacco fights were over to take on guns.)

Other group members are going for guns-but not as part of the Castano effort. Elizabeth Cabraser has long been a central figure in Castano and has served on its executive committee. She says that her firm is representing Boston and negotiating to represent Camden, New Jersey, in gun cases-but not as part of the Castano team. Apparently Cabraser's representation of California municipalities in the tobacco litigation created a rift between her and the Castano group. (The split was exacerbated on April 9, when her firm filed a new nationwide class action on behalf of cigarette smokers injured by tobacco products, a move that Castano members view as a slap in the face.) "Cabraser wants to have it both ways-still be in Castano and have her firm represent competing clients," says Castano attorney John Coale. In a phone message, Cabraser declined to discuss the internal divisions of Castano, saying that she does not wish to "give aid and comfort to the other side."

Gauthier appears to be unfazed by such defections, and is confident that he can win over doubters to the gun cause. "It's still early," he says. "I'm going to get everybody on board eventually." That may be. But some members' reluctance to follow Gauthier's lead Ito gun litigation is rooted in Castano's history of tobacco litigation and how the organization is run. The group took its name from Peter Castano, a lawyer in New Orleans who died of lung cancer at age 47 after 30 years of heavy smoking. Gauthier had been a close friend of Castano's since their law school days. After he died, Castano's wife, Diane, asked Gauthier to go after the tobacco industry. Using as a model the lawyer coalition formed to pursue silicon breast implant cases, Gauthier recruited a plaintiffs lawyer "dream team" to sue cigarette makers. Most of the charter members were prominent Louisiana plaintiffs lawyers such as Russ Herman and Daniel Becnel, Jr., both of whom knew Castano. But as word of the coalition spread, dozens of firms expressed interest in joining. San Francisco lawyers Melvin Belli, the now-deceased "king of torts," and Cabraser, a pioneer of na- tional class actions, both signed on. So did Knowles of Atlanta; Peter Angelos of Baltimore; John O'Quinn of Houston, and Chesley of Cincinnati. John Coale of Washington, D.C., nicknamed "Bhopal Coale" after winging it to India to sign up clients in the wake of the Union Carbide chemical plant disaster, also came on board. And so did Charleston's Ronald Motley. Eventually the coalition grew to more than 60 firms, with late arrivals paying a $125,000 lump-sum admission fee.

Russ Herman says that his firm has put about $1.75 million in cash and an additional $6 million in lawyer and support staff time into Castano. So far they've gotten nothing back.

FROM THE START, THE Castano group struggled to keep the egos of its members in check. Plaintiffs lawyers, unlike their defense brethren, are not natural pack animals. And the collection of superpreda tors in the Castano group was more difficult to manage than most. In truth, divisions existed long before they came together. After John Coale's excursion to India, Russ Herman, a former president of the Association of Trial Lawyers of America, called him a "cesspool" in print. Chesley was another frequent target for disdain. In a 1994 American Lawyer article about Chesley, one colleague labeled him "the ultimate grotesque, exaggerat ed perversion of what if means to be a lawyer." As one Castano veter an puts it: "Some of these guys can't stand each other's guts."

At the top of this uneasy alliance was Gauthier. With a folksy manner and a disarming charm, the Cajun from tiny Iota, Louisiana, is a "born peacemaker," o according to Russ Her- man. Gauthier took charge of the group's executive committee. And in March of 1994 the Castano group, with Gauthier in the lead, filed suit in New Orleans against eight tobacco companies, alleging that they had fraudulently concealed the addictive nature of nicotine. The suit sought compensatory damages for every smoker in the U.S. who had ever been addicted to nicotine, as well as punitive damages and a separate fund to monitor the medical condition of each addicted smoker. In February 1995 federal district court judge Okla Jones II certified the case as a nationwide class action. With a potential class of up to 50 million smokers and former smokers, the prospective damages seemed enough to bankrupt the industry.

Just over a year later, though, the Castano class certification was reversed by the U.S. Court of Appeals for the Fifth Circuit. After that, Castano lost much of its momentum. A prospective settlement with Liggett Group Inc., the nation's fifth-largest tobacco company, was scuttled. The group went on to file "sons of Castano" class actions in individual states, a strategy that, in the words of one former group attorney, "really hasn't been all that successful." Some prominent Castano members, especially Motley, disagreed with the state class action strategy and wanted to concentrate on repre- renting state attorney generals in their efforts to recoup Medicaid expenses from the tobacco industry. Gauthier felt that that created a conflict of interest with class members, and Motley bolted from the group. It proved a wise decision. After the McCain bill suffered a surprising defeat, the attorneys general of 46 states reached a seperate $206 billion settlement with the industry in November of last year. Motley's firm earned hundreds of millions in contingency fees from the deal while Castano's class actions have so far produced nothing [see "Fee Fight"].

Moreover, five years after becoming the first lawyers to seriously challenge the industry, the Castano group has yet to try its first tobacco case. Nor has it collected a nickel in fees-though sources close to the litigation verify that the tobacco companies have paid the group a modest amount for costs in connection with failed settlement negotiations. The long delay has put a strain on group cohesion and finances. Castano essentially functions as a small law firm. The group currently has a full-time staff of 20, comprised of eight attorneys, six paralegals, and eight data entry, secretarial, and administrative personnel. The group leases 12,000 square feet of office space on two floors of the Energy Centre skyscraper in New Orleans's central business district. The lower floor is used for data input and document storage; the upper floor is offices and meeting rooms. Contributions from member firms go to cover staff costs and overhead as well as incidental expenses, such as court costs, fees for court reporters, and copying costs. Not covered, however, are each lawyer's and firm's individual expenses in prosecuting Castano cases. If a lawyer travels to take a deposition in a case, his or her airfare, hotel rooms, meals, and time are not reimbursed. In addition, member firms have attorneys and staff assigned to work on Castano cases, an expense borne solely by the member firm. Every quarter, firms are supposed to submit a report to the group's finance committee detailing its

Castano member Turner Branch doubts that the gun suits could work in the Southwest. He's opted out. "Those cases will never fly out here," he says.

Castano-related expenses. If a recovery is ever made in a Castano suit, a fee committee will be appointed that will crack open the books and award each firm a fair share of the recovery. In the five years since the original Castano case was filed, many firms say their Castano expenses have nun into the millions. Gauthier says his firm has $1.5-2 million in costs invested in Castano litigation and about $8-10 million in lawyer and staff time. Though Gauthier says he's been able to absorb that nvestment relatively pain-free, other Castano firms have had to stretch. The New Orleans firm of Herman, Herman, Katz & Cotlar was a charter member of the group. Name partner Russ Herman serves on the group's executive commit tee, and his younger brother Maury chairs the finance committee. Russ says that the seven-partner firm has invested about $1.75 million in cash into Castano and an additional $6 million in lawyer and support staff time. "We're in the upper echelon as far as that goes," says Maury, adding that at least ten Castano firms have as much or more invested in the group. The Hennans' tobacco litigation has at times put the health of their firm at risk. By the end of 1995 the firm had maxed out its lines of credit, and the partners had to recapitalize the firm by selling personal assets. The firm rebounded, however, and last year played a lead role in a pair of $50 million recoveries in class actions. "Plaintiffs lawyering isn't like a defense firm, where you can budget based on ssociates billing 2,000 hours," says Herman, "and it's not for the risk-averse." While no formal accounting of the Castano firms' overall investment in tobacco litigation has been done, extrapolating Maury Herman's numbers would place the five-year total at nearly $100 million: $15-20 million in hard costs and $75-80 million in so-called soft costs, such as billable time and overhead.

In the wake of Gauthier's filing of the New Orleans gun case, several Castano members expressed concern about the use of group resources to fund litigation they didn't plan to support. To address such concerns, the Castano group has created a twin entity to prosecute the gun cases. The new group-currently called the Castano Safe Gun Legal Committee-will be walled off from the Castano tobacco group, according to Maury Herman. Further, Herman says, Castano guns will be billed any time it uses the resources or personnel of Castano tobacco. As to the prospects of the long-suffering sons-of-Castano tobacco cases, Gauthier has a message for those who count the group out of the tobacco fight: "We are going to win, absolutely. There is no question about it." The boast is not without some support. On Febnnary 26 the Louisiana Supreme Court voted 5 to 2 to certify a statewide class action on the issue of medical monitoring. But other suits look a lot less promising. The group has tobacco class actions pending in 19 other states and Puerto Rico, but most of those are still stalled on the class certification question. Only the Louisiana case is anywhere near going to trial.

OF COURSE, THE GUN LITIGATION may be even further from a potential payday than tobacco. Castano has thus far received the lion's share of the public ity on gun litigation, but in fact only three cities-New Orleans, Cincinnati, and Cleveland-have signed on as clients. Six other cities-Chicago, Atlanta, Miami- "bas, Dade County, Detroit-Wayne County, St. Louis, and Bridgeport-all have so far declined to use Castano. Chicago mayor Richard Daley even made it clear that trial lawyers such as Castano are not welcome. "We of fered our services, but we were shunned," is how Castano lawyer Kenneth Moll of Chicago put it. Meanwhile, of the cities contemplating filing actions, only Newark is squarely in the Castano camp. The others either have yet to decide on representation or would not disclose information regarding representation.

The reluctance of some cities to sign on as clients reflects a larger unease within the gun control movement with Castano. From the outset of gun litigation, the group has been working closely with Dennis Henigan, legal director of the Center to Prevent Handgun Violence, which appears as cocounsel on several of the city pleadings. It was Henigan who, over a breakfast meeting in Washington, convinced Gauthier that the city suits would be viable. But other advocates are less comfortable with the coalition. "The goal has to be good public policy, not money. We'll be very disappointed if the process is derailed by a group who wants a monetary settlement," says Kristen Rand of the Violence Policy Center, a nonprofit group headquartered in Washington, D.C., that seeks a ban on handguns. Others within the gun control community are more blunt in their assessment of the impact that the Castano attorneys are having on the movement.

Many within the gun control movement are uneasy with Castano. "These guys don't have the first idea what they're talking about," says one gun control advocate.

"These guys don't have the first idea about what they are talking about and all they've done is give the [gun] industry a big fat target to shoot at," says one longtime gun control advocate who declined to be identified.

To some extent, these differing views on Castano reflect a philosophical division within the gun control movement. While Henigan favors suits that will force gun makers to incorporate safety features on weapons, the Violence Policy Center argues that handguns constitute an unreasonable danger to the public and should be banned entirely. (In the city gun cases there are two basic theories of recovery: that gun makers have failed to engineer available safety technology into their weapons, and that the companies have been reckless in how they market and sell their products.) When asked about a potential split between Castano and some members of the gun control movement, Gauthier chooses his words carefully: `We want to stay together on this, but you can't listen to zealots, and we've got to do what is in the best interest of our clients." Gauthier predicts that once Castano has done some heavy lifting in discovery, mistrust will abate, and dissident groups will r4lly around Castano's flag.

In any event, the internal divisions within the gun control movement are a welcome sign to the gun industry and its lawyers, most of whom are dismissive of Castano and the city suits. "These [mayors] have been hoodwinked by the plaintiffs bar into thinking these suits are an easy source of revenue," says Paul Janniwzo, general counsel of Glock, Inc., one of the largest importers of handguns into country. But whatever comfort the industry may draw from rifts within the plaintiffs camp must be tempered with the knowledge that their own house is far from in order. Historically gun makers have not been a cohesive group and have never shown much interest in developing the kind of joint defense strategy used so effectively by the tobacco companies. Where tobacco companies view their products as essentially interchangeable for litigation purposes, gun makers still tend to sound more like automakers, empha

sizing the differences between their models and those of their competitors. This is especially true when it comes to the volatile issue of gun safety. Some gun makers embrace the use of devices such as trigger locks and chamber indicators, while others view them as cumbersome and unreliable. Connecticut-based gun maker Colt Manufacturing Company, Inc., has gotten particular heat from its fellow manufacturers for taking the lead in so-called smart-gun safety technology.

In the face of the city suits, gun makers recently began to mend their fractious ways. The companies have formed the Hunting and Shooting Sports Heritage Foundation, a kind of legal action committee to coordinate industry response to litigation. Under the foundation's umbrella, the industry has also formed a Firearms Litigation Support Council comprised of five industry lawyers, including the general counsel of Beretta U.S.A. Corp.; Sturm, Ruger & Company, Inc.; and Glock, Inc. The council, which according to Beretta GC Jeff Reh is still getting its sea legs, will be funded by the foundation and tasked with coordinating the industry's litigation strategy. Companies participating in the foundation have agreed to pledge 1 percent of annual sales to the foundation, half of which will go to litigation support services.

Apart from issues of solidarity, though, the gun industry differs from Big Tobacco in another important aspect: money. The number of handguns sold in the United States peaked in 1994 at about 3.8 million and has been contracting ever since, hitting about 1.79 million in 1998. It is difficult to gauge the full impact of this contraction, because financial information for most gun makers is not publicly available. But one major gun maker, Lorcin Engineering Co., Inc., declared bankruptcy in 1996 in response to shrinking sales and litigation pressures, and others have seen significant declines in profitability. SEC filings by Sturm, Ruger & Co., the largest U.S.-owned gun manufacturer, show that it had a net income of $23.4 million in 1998-down from $34.4 million in 1996. By contrast, Philip Morris Companies Inc., the country's largest maker of cigarettes, reported a net income of $9.97 billion in 1998. What's more, the overall domestic market for guns is valued at between $1.5 and $2 billion a year. Tobacco's annual market is valued at about $45 billion roughly 25 times the size of the gun industry.

FOR MONTHS ANY MENTION OF the "S" word-settlement-was greeted with a chorus of denials by both Castano and gun industry representatives. But in the wake of the high school massacre in Littleton, Colorado, there is clear evi dence that the industry is adopting a more conciliatory line. "Littleton changed the political calculus overnight," asserts Stan Chesley, who compares the psychological impact of the tragedy to the Oklahoma City bombing. Before Littleton the NRA was pursuing a state-by-state legislative strategy seeking to strip municipalities of their power to sue the industry. In support of the effort the NRA mounted a kind of lobbying road show, led by its 74-year-old celebrity chairman Charlton Heston. In April, Heston testified in Castano's backyard before the Louisiana state legislature, saying that suing gun makers for injuries caused by their products was like holding the utility company responsible "for you sticking your fork into the toaster." The NRA succeeded in getting legislation passed in Louisiana and Georgia and appeared well on its way to doing so in other states as well when the school massacre intervened. Ac cording to Coale, who is monitoring the effort on behalf of Castano, the NRA has shelved

any other efforts for at least this year (NRA spokesman James Manown says that the organization still supports the legislative effort). Meanwhile, in what seems like a more immediate threat to the gun industry, members of Congress and the White House are both pushing gun control measures, including mandatory trigger locks and regulation of gun shows.

If any serious settlement discussions are to take place between Castano and the gun industry, the first thing the parties will need to do is secure an open line of communication. In a May meeting at the White House, Coale presented industry representatives with a list of 17 proposed reforms, including mandatory chamber indicators; magazine safeties; gun show regulation; advertising reforms; and dedication of 1 percent of the industry's gross revenues to smart-gun safety research. Not mentioned was a monetary settlement; Castano would take a percentage of any money allocated to the cities under any settlement agreements.

People defending the industry gay they're not sure how respond to Castano's demands. "There isn't really much money here, and the smart-gun technology they say they want simply doesn't exist yet," says one attorney defending the gun companies. Still, in a signal that the gun makers are serious about confronting the Castano effort, they hired New Orleans attorney Scott Delacroix, Gauthier's foil on a number of high-profile cases, including the original Castano federal class action. And apparently, the projected cost of defending the suits clearly has smaller companies such as Colt Manufacturing looking at their bottom line. Colt currently sells about one-fourth of its handguns to consumers, with the rest supplying military and law enforcement contracts. "If the cost of litigation exceeds what we make on sales, well, we're not stupid . . . we'd have to take a look at getting out," says Carlton Chen, general counsel of Colt. Others representing the industry are of the belief that, since they can't afford to settle, they may as well fight on until the money runs out.

Castano lawyers say they don't read too much into the industry's scorched-earth rhetoric. They believe that there is nothing like a good discovery battle to make defendants reach for their wallets. If the industry refuses to come to terms, the Castano lawyers are prepared to go forward with their litigation strategy. "That's why the courts exist," says Russ Herman. "To make unreasonable people act reasonably."

As for Gauthier, he feels that the setbacks his group has taken can be shrugged off. In the year after his initial talk with Chesley at the Willard hotel, he has watched a sure-bet national tobacco settlement go up in smoke, witnessed former Castano members earning hundreds of millions in fees from the attorney general cases he took a pass on, and opened up a second-front war against the firearms industry that half his troops won't fight in. Still, his optimism is intact. Like many generals, he believes that victory is one more big push away. And in his line of work, he doesn't have to win, he only has to settle. The tens of millions of dollars in debt will disappear. The Castano group will achieve success in tobacco and, ultimately, in guns. The splits within the coalition will be spliced. The faith his colleagues have placed in him these past five years will prove justified. "If there's one thing I learned a long time ago," be says with a laugh, "it's that persistence is more important than talent."