San Francisco Sues 6 Tobacco Firms

This city Thursday became the first local government in the United States to sue the tobacco industry, seeking to recover millions of dollars the city and county of San Francisco spend annually in the treatment of smoking-related illnesses.

The San Francisco city attorney’s office, aided by a high-powered law firm, filed suit in U.S. District Court here, alleging that six tobacco companies and two trade associations violated state and federal laws in a 40-year conspiracy to conceal the addictive nature of their product.

“It’s more than time for public officials in California to hold the tobacco industry responsible for the staggering human and financial costs of smoking,” said San Francisco City Atty. Louise Renne. “If the tobacco companies are going to knowingly market a product that is going to cause illness and death, they ought to pay for it, not the taxpayers,” she added, referring to federal studies estimating that cigarette smoking in the United States causes 400,000 deaths a year and numerous health problems.

“Counties in particular cannot afford their scarce public funds being drained by having to pay for the treatment of tobacco-related illness. These are funds that would be better spent on preventive health care, education and other urgent public needs,” Renne added. (San Francisco is a unique governmental entity--a joint city-county and Renne is its chief legal officer.)

As soon as she filed the lawsuit, Renne moved to broaden it. On Thursday she sent letters to the chief legal officers for California’s 57 other counties inviting them to join the lawsuit.

Los Angeles County Supervisor Zev Yaroslavsky said he would introduce a resolution in the near future asking that the county direct its attorneys to join the lawsuit.

“We have talked to our own health department and we believe there is ample evidence that we have incurred substantial expense because of the tobacco companies,” Yaroslavsky said.

San Francisco contends that the industry violated California’s fair business practices code and the federal Racketeer Influenced and Corrupt Organizations Act.

The massive lawsuit is similar to those filed by nine states in the last two years, including one lodged by Washington in a state court Wednesday. Several other states are on the verge of filing such suits. A spokesman for California Atty. Gen. Dan Lungren said the office is considering whether to file as well.

Philip Morris attorney Michael York decried the San Francisco lawsuit: “We don’t believe the city of San Francisco has any more basis to file this kind of radical claim than do any of the states that have filed. We believe the cases are utterly without legal merit, particularly the RICO claim.”

York emphasized that Philip Morris had announced its own proposal for federal legislation aimed at reducing smoking among youths last month and contended that if San Francisco “is truly interested in fighting youth smoking they would join Philip Morris and everyone else who wants to enact broad federal legislation instead of filing a lawsuit that under the best of circumstances will take years to resolve.”

Like the state actions, the San Francisco suit asks that the cigarette companies and the trade associations be held liable for fraud and conspiracy for: falsely denying that cigarettes are addictive; for denying that the industry manipulates nicotine levels in cigarettes; for denying that smoking is harmful to health; for concealing the industry’s own research findings about the dangers of smoking, and for suppressing research on “safer” cigarettes.

The suit also asks the court to order the defendants to fund corrective public education programs, to stop targeting minors in their advertising campaigns and to disclose all their research on smoking addiction and related health issues.

Lieff, Cabraser, Heimann & Bernstein, a San Francisco law firm that specializes in representing plaintiffs in complex litigation, is serving as special counsel for the city in the case on a contingency basis. Renne said the firm would receive 20% of any recovery up to $25 million and 15% of any recovery beyond that. She said that is well below the firm’s normal fees and noted that because the firm would be bearing the upfront expense, the case would not result in any substantial costs for San Francisco.

Elizabeth Laporte, chief of special litigation for the San Francisco city attorney’s office, said the agency had filed the suit after reviewing the issues and passage of a Board of Supervisors resolution endorsing such a suit. The resolution was signed by Mayor Willie Brown, who while he was speaker of the Assembly raised $500,000 from the tobacco industry.

Asked about Brown’s previous acceptance of tobacco industry contributions, spokesman P.J. Johnston said: “It’s a new day. The mayor is the leader of San Francisco, and as such he feels it is appropriate for San Francisco to enter into this lawsuit.”

San Francisco Supervisor Angela Alioto, who wrote the resolution urging that the case be filed, said that representatives of 23 cities told her they would like to join the suit, which she called “eminently winnable. It will encourage consumer suits in the state. It will literally open the floodgates,” she said.

Ann Ravel, chief assistant Santa Clara County counsel, said the county has not previously considered such a suit. “It’s very interesting though, and it is something we certainly will consider,” Ravel said.

She praised San Francisco for being “creative,” but said she assumed “the lawsuit is more of a political statement than a concern about recovering” money spent on health care.

But Renne said the city was very serious about attempting to recover funds. San Francisco budget analyst Harvey Rose said the city’s public and private health care costs attributable to smoking-related illnesses in 1993 reached $151 million. He said his office reported that figure based on a conversation with a county health official.

Dr. Sandra R. Hernandez, San Francisco’s director of health, said “the [health] department will be working in collaboration with the city attorney to provide all supporting documents necessary in this legal action.”

Laporte of the San Francisco city attorney’s office said she would welcome participation by the California attorney general’s office. As recently as March, spokesmen for Lungren indicated that he did not see merit in such a lawsuit.

However, on Thursday, Lungren press secretary Steve Telliano said the attorney general’s office had formed a working group in late April to consider suing the tobacco industry. He said representatives of the attorney general’s office spoke to Alioto about this last week. Telliano said he expected the attorney general’s office to make a decision soon.

The tobacco industry has long been a major contributor to California politicians. In 1995, Lungren received $8,500 from Philip Morris, $10,000 from R.J. Reynolds and $5,000 from the Tobacco Institute, the industry’s lobbying organization.

Telliano said the contributions “have never had any impact on any decision made by this attorney general.”

He emphasized that the issue of whether to sue is being reviewed by “a group of attorneys--civil servants--who are in their positions regardless of who the attorney general is.”

Weinstein reported from Los Angeles and Dolan from San Francisco. Times staff writer Dan Morain in Sacramento contributed to this story.