Tobacco Industry Fails to Block Lawsuit

A tobacco industry bid to block Connecticut’s $1-billion lawsuit has been turned back by a federal judge.

U.S. District Judge Peter C. Dorsey is letting Connecticut proceed with a suit in state court that attempts to recover from tobacco companies the taxpayer money spent on treating smoking-related illnesses.

Connecticut Atty. Gen. Richard Blumenthal said Thursday that he believes it was the first time a judge has thrown out one of the lawsuits tobacco companies have filed to block states from bringing Medicaid claims against them. Nineteen states have such claims against the industry.

“The linchpin of this powerful and profound precedent is the court’s conclusion that an important state interest is at stake,” Blumenthal said. “This court is the first to reach that conclusion, which is absolutely critical to litigation around the country.”

Dorsey, in a decision issued Monday in New Haven, said the tobacco companies’ case suffered from faulty logic.

The tobacco companies alleged it was illegal for Connecticut to shift its Medicaid burden onto out-of-state companies that made a legal product that the state regulated and taxed. They also fought the state on constitutional issues.

The companies that filed the preemptive lawsuit in Connecticut were Lorillard Tobacco and Philip Morris, both based in New York; R.J. Reynolds of Winston-Salem, N.C.; and Brown & Williamson of Louisville, Ky.

Their lawsuit was filed a month before Connecticut sued them under state laws that regulate consumer protection and unfair trade practices.

The state lawsuit seeks to recover $1 billion in Medicaid funds spent on tobacco-related illnesses. It also seeks to stop the marketing of tobacco to teenagers.

“It just seems to me that at best, this is a procedural win for the state. It has nothing really to do with the case they filed in state court,” said Michael York, a lawyer for Philip Morris. “It’s wildly premature for anyone to handicap this race. The state has a long, long way to go and an uphill battle legally.”

Blumenthal disagreed, saying the ruling sets an important precedent for other states that have filed lawsuits against tobacco companies.

“It demonstrates the tobacco industry can’t use the federal courts to intimidate or hamper legitimate efforts to recover taxpayers’ money and to stop the illegal marketing and advertising of tobacco products to children, as well as concealing harmful effects of tobacco products,” Blumenthal said.

York said Philip Morris and other companies will decide in the next few weeks whether to appeal.