TOBACCO FIRMS BLAME THE STATE

It seemed so out of character. A lead tobacco-industry lawyer spending
the better part of the morning telling a jury how bad cigarettes are.

Tobacco lawyers following him yesterday hedged on that a little, but
he had made his point: How can the state of Washington accuse Big
Tobacco of keeping secrets about smoking when, it seemed, everybody
has known for years that cigarettes are bad?

Bradley Keller displayed for the jury writings and textbooks and
pamphlets - some 100 years old - calling tobacco foul, poisonous, an
enslaver of the mind and soul. Keller said it is unfair, absurd even,
that Washington claims in its lawsuit against Big Tobacco that it was
tricked about the health effects of smoking.

Indeed, the reason that Washington is suing the tobacco industry is
because it is unwilling to own up to its mistakes, he said. Keller
said the state was a "willing partner" in the sale of cigarettes,
collecting more than $4 billion in taxes since the mid-1950s but
spending its money elsewhere.

"The state was very aware of the health risks of cigarettes," Keller
said. "The evidence is going to show . . . the state has to accept
responsibility for its choices."

His speech came on the second day of the tobacco case in King County
Superior Court in Judge George Finkel's courtroom. Financially, and
socially, the stakes in this case are some of the highest ever:
Washington is seeking up to $2.2 billion in Medicaid reimbursements,
and penalties for violating Washington's consumer-protection and
antitrust laws that could double that amount.

Also, the case here could have implications for other states - 37
others have filed lawsuits against the tobacco industry. (Four states
have settled out of court, collecting a total of $36.8 billion.) If
Washington state beats the tobacco industry, it will have carried the
water for other states; if the industry wins, the case could start a
domino effect, paving the way for it to win other cases.

Tobacco-industry lawyers acknowledged yesterday that cigarettes are
unhealthful and, in fact, addictive, as the word ``addictive'' is
commonly used. It was a far cry from the recalcitrance of tobacco
executives who testified before Congress a few years ago, however,
last January they acknowledged that nicotine is addictive.

Keller displayed on an overhead projector article after article to
show that Americans, smokers and nonsmokers, knew about the effect of
cigarettes on health for decades. In fact, he said, the tobacco
industry helped let America know: It paid for research that showed the
bad effects of cigarettes, research that the surgeon general himself
used in a report in the 1960s.

To a jury that is looking bleary-eyed after only two days, industry
lawyers offered a point-by-point rebuttal of the state's case:

- -- The state says the tobacco companies conspired to not compete,
violating antitrust laws, and that they agreed to quash plans to
produce a safer cigarette. Industry lawyers said the tobacco companies
competed for years and have made low-tar cigarettes.

- -- The state accuses the industry of lying about cigarettes and
tricking consumers. Let's not be naive, industry lawyers said. The
industry only knew so much 40 years ago. The tobacco companies didn't
lie. They just tried to stay in business.

Beyond that, lawyers, as expected, called Washington's position that
of a hypocrite and began tearing Washington lawyers' arguments down.

Keller said Washington only a few years ago was the world's largest
shareholder in RJR Nabisco, which makes cigarettes. He described
Washington as a "gatekeeper" that charged a toll for cigarettes, a
tax, that brought in so much money that Washington had plenty to pay
for sick smokers on Medicaid.

Keller said that Washington gets $10.14 per carton of cigarettes sold.
The tobacco industry gets $9.09.

The industry does not deny the health effects of smoking, Keller said.
"We're saying it's unfair to turn around and collect the toll twice."

Lawyers for Washington had made their opening statement all day
Monday. Lead lawyer Paul Luvera told the jury the tobacco industry had
lied to America for decades, devilishly planning to keep people
addicted to cigarettes. Luvera said Washington state's case is not
about the legality or morality of smoking. Instead, he said, it is
about a conspiracy by cigarette companies to lie about tobacco, about
how they would market it and about what it could do to the body.

Keller yesterday responded to state lawyers' use of secret tobacco
documents. He said many of those documents were written decades ago
and cannot be looked at through the lens of 1990s society. Also, he
said, some employees of tobacco companies simply were wrong and should
not have written, or thought, what they did.

"Did they make mistakes? You bet they did," he said.

The trial is proceeding, after a day off today, even as negotiators in
New York try to settle the case. Washington state Attorney General
Christine Gregoire has said a settlement - which, like the trial, also
would have implications for other states because those states could
sign on to the agreement - would enable states to bargain for
concessions a jury cannot demand, such as limits on advertising tactics.

The tobacco industry wants a settlement because it would mean it could
know for certain what its costs will be. It could then bargain for
things such as immunity from other lawsuits, something a jury also
could not give it.

Matthew Ebnet's phone message number is 206-515-5698. His e-mail
address is: mebnet@seattletimes.com

Checked-by: Patrick Henry