Most of San Francisco’s Tobacco Suit Dismissed

The nation’s tobacco companies claimed a major victory Thursday when a federal judge dismissed most of San Francisco’s massive lawsuit against them.

Judge D. Lowell Jensen said San Francisco’s attorney could amend the complaint, but industry lawyers contended that it would be very difficult for the plaintiffs to leap the hurdles now in front of them.

Lawyers for San Francisco, however, sharply disagreed with that interpretation of Jensen’s 32-page ruling.

Last June, the city-county of San Francisco became the first local government in the nation to sue the $50-billion-a-year tobacco industry, seeking to recover millions of dollars spent annually to treat smoking-related illnesses.

The suit contended that six tobacco companies and two associations violated state and federal laws in a 40-year conspiracy to conceal the addictive nature of their product. Twenty-three states and several other localities--including Los Angeles County--have filed similar suits around the country and Mississippi’s is scheduled to be the first to go to trial in June.

In one part of his decision, Jensen said that “in order to recover monies spent on health care for individual smokers, plaintiffs will be required to prove that each of those smokers’ injuries were actually caused by smoking.”

At another point, Jensen said, “plaintiffs face the difficult task of proving that the health-care expenses incurred for each individual smoker were a result of that smoker’s tobacco use, as opposed to some other factor.”

Dan K. Webb, the former U.S. attorney in Chicago who argued the case for the tobacco companies, cited those two paragraphs and said they represented “an extremely significant victory for the industry.

“I think this opinion literally destroys the ability of a state or city to pursue this type of large group lawsuit on behalf of its citizens,” Webb said.

“These lawsuits are designed to lump together tens of thousands of claims into one lawsuit without proving smoking-related injuries for individual smokers. This opinion says you have to do that and it’s a stake through the heart of the whole plaintiffs’ theory” in cases around the country, with the exception of Florida, which passed a law specifically permitting this type of lawsuit.

But both San Francisco City Attorney Louise Renne and Richard Heimann, the city’s special outside counsel, declared that they were generally pleased with Jensen’s decision, other than his ruling knocking out claims based on federal anti-racketeering laws.

Renne said Jensen’s decision permits San Francisco to amend its complaint and specifically tells the city what it will have to do to make its claims legally sufficient to go forward.

“I’m very pleased with the outcome,” Heimann said. In particular, he cited Jensen’s rejection of the industry’s argument that the case could not go forward because of a statute known in Sacramento as “the napkin law,” because it was put together on a napkin in a restaurant near the state Capitol.

That statute makes it particularly difficult to sue tobacco makers on product liability grounds. However, Jensen noted that this case is not a product liability suit. “California law recognizes a distinction between claims based on fraudulent conduct and claims based on defects in a product,” Jensen wrote.

As to San Francisco’s claims of fraud, the judge said the plaintiffs had sufficiently presented their allegations that the defendants had knowingly made misrepresentations about the health hazards of smoking. But he said that thus far the plaintiffs had failed to argue that they had relied on the defendants’ misrepresentations--an essential element of a fraud case.

Heimann said he thought the plaintiffs could easily meet this requirement.