STATE'S TOBACCO LAWSUIT STARTS TODAY

Festooned with video equipment and microphones, and computers for
multimedia presentations, one of the area's largest courtrooms is
being prepared for a potentially historic trial, where lawyers will
explore the country's long relationship with cigarettes and the
behavior of the industry that sells them.

The tobacco industry goes on trial today in King County Superior
Court, defending itself against a $5.7 billion lawsuit and the
accusation that, through an enormous conspiracy, it tricked people
about the health effects of smoking.

Jury selection is expected to take two weeks, and the entire trial
could last three months. Christine Gregoire, Washington's attorney
general, has assembled a team of 11 lawyers who will be part of the
trial, and the tobacco industry likely will have 12 or more.

Each side also will have dozens of lawyers who will work on the case
outside public view, supporting the legal teams with research and advice.

The stakes are high. The jury could penalize the industry for even
more than the $5.7 billion sought by the state. For the attorney
general, the case holds tremendous social currency: During the trial,
state lawyers can publicly explore arguments that the tobacco industry
targeted children with their marketing tactics, "and talk about
something other than the money. We brought this case because of their
practices, not just because of the money," said John Hough, an
assistant attorney general.

Beyond that, the nation will be watching, because the case here could
have implications for others - 37 states have filed similar lawsuits.
Four other states have settled out of court, with the states
collecting a total of $36.8 billion.

If Gregoire and her lawyers beat Big Tobacco, they will have carried
the water for other states; if the tobacco industry wins, the case
could start a domino effect and pave the way to its winning other cases.

Both sides would rather settle

It is not the preference of either side to take that big a chance;
both would prefer to settle out of court. An encompassing national
agreement reached in June 1997 failed to make it through Congress, but
the two sides are still trying to agree on their own, without the
federal government's help.

Gregoire has said a settlement - which, like a 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. Gregoire has
been the lead negotiator for at least eight states, and informally for
a several dozen others.

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

But the on-and-off settlement talks in a Manhattan law office don't
appear to be yielding much now.

Tricked people into smoking?

Gregoire charges that the tobacco industry tricked people into
smoking, conspiring to hold back important information from the public
and manipulating nicotine levels in cigarettes. Also, Gregoire says,
the industry lied in advertisements and marketed cigarettes to
children. Lawyers say Washington wants payment for all the money it
has spent, and will have to spend, to care for people with
smoking-related illnesses. Washington also wants the industry fined.

State lawyers call it a "law-enforcement case" about the violation of
consumer-protection and antitrust laws, not a case about the morality
or legality of smoking. Lawyers say that, ultimately, the case will

come down to secret documents, who knew what when, and what laws were
broken.

"This is like any other antitrust or consumer case, this is about how
(tobacco companies) marketed cigarettes . . . and what information
they held back," Hough said.

Gregoire's legal team also figures it has a card to play in a man
named Lawrence Meyer, a former lawyer for the Liggett tobacco company,
who was disturbed by what he saw when he worked for the company from
the mid-1970s to mid-1980s.

Meyer, a lawyer in Washington, D.C., is expected to testify that
Liggett could have marketed a safer cigarette. It didn't, according to
a recent article in the Los Angeles Times, because other tobacco
companies were opposed.

State a hypocrite?

In large part, tobacco lawyers will spend their time targeting
arguments by state lawyers, arguing that Washington's position is that
of a hypocrite.

The tobacco-industry lawyers likely will question every statistic and
number the state uses in its case. And they will deny that they
suppressed information, manipulated nicotine levels, or launched any
conspiracies.

But a new twist, which tobacco sees as a powerful weapon, is an
argument that has never been allowed in tobacco litigation:
Washington, lawyers say, willingly participated in the selling of
cigarettes because it made millions of dollars in taxes from cigarette
sales. (Washington takes in more than 80 cents per pack sold.) Tobacco
lawyers will argue that Washington did nothing about cigarettes so it
could continue to collect taxes.

What's more, tobacco lawyers will point out, Washington, through the
State Investment Board that manages pension funds and other money,
invested $800 million in tobacco stocks in the late 1980s. It now
holds $200 million in stocks.

"We just need people to listen, to listen with an open mind. Most
people generally do that," said Jim Milliman, a lawyer for Brown and
Williamson. "Jurors will take that responsibility seriously. If you
look back (at cases brought against tobacco companies by individuals)
if we can get people to listen . . ., we can be successful."

Milliman said the case does have something to do with choice: No
matter how the industry behaved, people still chose to smoke. Packages
contained warnings, and public education discouraged smoking. "(The
public) was well aware of the health risks of smoking. The state has
been well aware of the risks. They're going to have a very, very
difficult time proving consumer fraud."

Settlement could come anytime

The case could be settled at any time, even during trial, as happened
last January in Minnesota.

"That's difficult because it is strange trying to settle with them and
be banging at them at the same time," said Fred Olsen, director of
administration for the attorney general's office. "But, yes, that
could happen," he said.

Checked-by: Rich O'Grady