Source: Houston Chronicle, page 1
(http://www.chron.com/cgibin/auth/story/content/chronicle/
page1/97/08/26/tobacco.22.html)
Contact: viewpoints@chron.com

Florida tobacco lawsuit settled

Industry to pay $11.3 billion, conduct antismoking drive

Copyright 1997 Houston Chronicle News Services [Washington Post]

The nation's largest tobacco companies settled Florida's lawsuit
against them Monday by agreeing to pay the state $11.3 billion
over the next 25 years and to take steps aimed at reducing
underage smoking.

"The tobacco industry has conceded defeat, and we have a
settlement of historic proportions," Democratic Gov. Lawton
Chiles said at a televised news conference after signing the deal
in the West Palm Beach courtroom where jury selection for the
state's suit had been under way.

In a joint statement, the tobacco companies called the agreement
"another step in a process to end the climate of confrontation
and litigation that has marked the national debate on tobacco
related issues."

The deal possibly the largest approved legal settlement in
history is similar to a settlement with Mississippi, and is
the latest sign that the industry has shifted away from its
historic posture of fiercely battling every legal challenge.

The agreement could boost the momentum of the proposed national
tobacco settlement, which Congress will take up after the summer
recess. That proposal calls for the industry to pay $368 billion
over the next 25 years and to sharply reduce advertising and
promotion of tobacco products in return for protection from some
lawsuits. Florida's settlement would be superseded if the
national deal goes through.

Under the terms of the Florida deal, the companies will pay the
state an initial $550 million and another $200 million for an
antismoking campaign by Sept. 15. The cigarette makers will
remove their billboard ads within 1,000 feet of schools right
away, and those ads will be replaced with antitobacco
advertising funded by the settlement. Other billboards will be
removed over the next few months. Ads in sports stadiums and on
mass transit also will go. The industry has agreed that the
public health provisions of the Florida settlement will continue
regardless of whether the national deal is approved.

The agreement also calls for the removal of vending machines in
any area accessible to minors, and for the industry to hand over
hundreds of internal documents that it had fought against
releasing in the state's case. By releasing the documents, "We've
blown away the smoke screen of lies," Chiles said.

The companies signing the settlement were Philip Morris; Reynolds
Tobacco, a unit of RJR Nabisco Holdings; Brown & Williamson
Tobacco; Lorillard Tobacco; and U.S. Tobacco.

Settlement talks have been going on between Florida officials and
the industry since soon after the announcement of the national
settlement proposal. That settlement must be approved by
Congress, however, and so the individual state suits have moved
forward pending legislative action.

Mississippi, the first state to file such a suit to recover the
Medicaid costs of treating sick smokers, and the first with a
trial date, announced its separate settlement with the industry
just days before the case was to go to trial. That settlement
brought Mississippi $3.6 billion, but none of the public health
initiatives that Mississippi Attorney General Michael Moore and
colleagues had pushed for in the national deal.

Florida got the public health measures, in part, because it had a
stronger case than Mississippi. The state legislature had passed
a law making a thirdparty suit by the state against the industry
possible. By suing in place of smokers, the state was able to
brush away the powerful defense that has helped the industry win
so many suits: that smokers assumed the risks of smoking and
should bear the responsibility for it.

The Florida negotiations had stalled in recent weeks. But
depositions last week by the heads of Philip Morris and R.J.
Reynolds were crucial in getting a settlement, attorneys for the
states said. In those depositions, both CEOs admitted after
caveats that they were speaking from personal belief, not stating
corporate policy that tobacco products kill. Lawyers suing the
industry claimed that the statements by Geoffrey Bible and
Stephen Goldstone showed a new attitude in an industry that
allowed Florida and, eventually perhaps, Congress to strike
a deal.

Far from being a spontaneous corporate change of heart, however,
the statements were actually negotiated word for word in the
final days of settlement talks between attorneys general and the
industry, Moore said part of the change in corporate culture
called for in the text of the deal. "We were not going to enter
the settlement until we knew that they were going to answer the
questions truthfully," Moore said in an interview.

Those supporting and opposing the national settlement proposal
Monday claimed that the news out of Florida supported their
position. Washington attorney John Coale, who helped negotiate
the national deal, said that Florida's case "actually highlights
the need for a national settlement," because statebystate
settlements cannot affect nationwide provisions such as Food and
Drug Administration authority over tobacco products or penalties
for failing to reach youth smoking reduction targets. Minnesota
Attorney General Hubert Humphrey III countered that Florida's
settlement shows that the industry is "desperate" to avoid seeing
vast quantities of its internal documents released at trial a
sign that cases like his state's, scheduled to begin early next
year, must move forward, and that the national settlement is
unnecessary.

Taking a middle ground, Mohammed Akhter, head of the American
Public Health Association, said that Florida's deal increases
pressure on the White House and Congress to implement a national
settlement, but one that is tougher on industry. Because the
heads of the two largest tobacco companies made guarded
admissions last week that smoking kills, Akhter said, "Congress
will be hardpressed to confirm their original settlement."

Bruce Lindsey, deputy counsel at the White House, which is
reviewing the deal, said of the Florida settlement, "I don't
think it'll affect it much one way or the other."

The next state suit, Texas', is scheduled to begin at the end of
September. A spokesman for Attorney General Dan Morales could not
confirm that settlement negotiations are under way. In a state
classaction lawsuit against the industry in Pennsylvania, the
class of plaintiffs was certified Monday, which will allow that
case to go forward in October unless it, too, is settled.