Lungren, Liggett Reach Accord

With Democrats having a field day attacking him and politically popular lawsuits bypassing him throughout the land, Republican Atty. Gen. Dan Lungren took a step Thursday toward getting into the nationwide litigation over tobacco.

At a Los Angeles news conference, Lungren announced that California has reached an agreement in principle with the Brooke Group Ltd. and its Liggett Tobacco Co. subsidiary that could allow the state access to internal tobacco company documents that Liggett has released to other states.

Lungren said it was “extraordinary that California did not even have to sue Liggett in order to strike this agreement.”

But his critics, both in the Legislature and in the plaintiffs’ bar, said the move was primarily an attempt to reduce the heat Lungren has been getting for declining to sue tobacco companies.

Lungren, the state’s chief lawyer, and an all-but-certain candidate for governor, has refused to join 22 other state attorneys general and more than a dozen California cities and counties, including Los Angeles, in suing the major tobacco companies.

Lungren argues that state law does not allow him to sue. His opponents say he is wrong.

The suits seek to recover billions of dollars that governmental entities say they have laid out over the years to pay medical costs of ill smokers. State costs for California are estimated at more than $600 million a year.

State taxpayers are unlikely to receive much, if any, money from Thursday’s settlement because Liggett is in precarious financial condition--a point Lungren noted. And critics of Lungren noted that the documents in question are primarily of importance for pursuing litigation against other tobacco companies.

“The Liggett settlement will only be helpful to a state that has need to use the admissions of Liggett . . . in a trial against the other [tobacco] companies,” said Mark Robinson, a Laguna Niguel lawyer who represents Los Angeles County in one of the suits against the tobacco industry. If the state is not going to join the lawsuits, “this settlement means nothing for California,” he said.

Assembly Speaker Cruz Bustamante (D-Fresno) and other legislators have proposed changing state law to clearly authorize a suit. Others, citing court rulings in a major tobacco suit pending in San Diego, say no clarification is needed, and Lungren already has all the authority he needs.

But regardless of how the legal dispute is resolved, the argument looms as a major political problem for Lungren as he faces a continuing chorus from critics charging him with “pro-business bias.”

With Lungren almost certain to be the Republican candidate for governor next year--and with leading Democrats having carried legislation for cigarette companies in the past--the dispute over how the state’s legislators have handled tobacco-related issues is likely to be widely aired before California voters in the coming months.

Lungren’s critics note that among the advisors to his campaign for governor is the Dolphin Group, which conducted the losing campaign for tobacco-supported Proposition 188 in 1994 and which counts the tobacco giant Philip Morris among its present clients.

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From 1993 to 1996, Lungren accepted campaign donations totaling $41,000 from a handful of tobacco interests, records show. He has since declared that he will accept no more tobacco money.

Lungren has tried to shift the onus to leading Democrats, particularly state Senate Leader Bill Lockyer of Hayward, who is considering a run for the attorney general’s job, and former Speaker Willie Brown. A deal they made a decade ago to protect the tobacco industry is tying his hands now, Lungren argues.

Existing law “shuts the door” on any state lawsuit against the tobacco industry, Lungren wrote in a recent testy exchange of letters with Lt. Gov. Gray Davis, a possible Democratic opponent in next year’s race for governor.

The key sentence in the state’s existing product liability law provides that “a manufacturer or seller shall not be liable if . . . the product is inherently unsafe and the product is known to be unsafe by the ordinary consumer who consumes the product with the ordinary knowledge common to the community.”

Lungren and his backers argue that that language, which the statute goes on to say applies to products “such as sugar, castor oil, alcohol, tobacco and butter,” clearly bars any liability suit against cigarette companies.

The other side argues that the statute does nothing to interfere with a suit charging fraud and deception. The existing litigation against the tobacco companies alleges, among other things, that they conspired to hide the addictive nature of nicotine.

In November, San Diego Superior Court Judge Robert May rejected arguments from the tobacco industry that he should throw out a massive fraud suit against the Council for Tobacco Research and the major tobacco companies. May rejected the arguments of industry lawyers that he dismiss the case because of the current state law. The law did not apply to a case of this type, he ruled.

Lungren is waging partisan attack over the existing law, noting that it was Democrats who ensured it would specifically exempt the tobacco industry from product liability lawsuits.

The law, he argues, is the result of the Capitol’s most renowned back-room pact, the so-called “napkin deal” made among lawmakers and lobbyists 10 years ago at a capital restaurant, Frank Fat’s. Notes on the napkin outlined the shape of the present product liability law.

The law bears the names of its two chief supporters, Brown and Lockyer.

As the circulator of the napkin at Frank Fat’s--and proud owner still of the piece of linen, Lockyer maintains that it does not prevent Lungren from suing.

Were he attorney general now, Lockyer said of the product liability law, “I would read it as I wrote it” and immediately sue tobacco companies.

On Thursday, Lockyer was quick to try to turn Lungren’s settlement announcement to his own advantage. “It’s obvious [Liggett] settled because they were liable under California’s current law,” he said. “This settlement comes in spite of Lungren’s efforts not to sue his buddies in the tobacco industry.”

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Since the tobacco litigation began, Lungren has taken several different positions. At one point he argued that federal law barred a state from suing tobacco companies. At other times he has said that adding a surcharge to existing cigarette taxes was preferable to suing. Then, after the settlement last month between Liggett--the smallest of the major tobacco companies--and the states that have already sued, Lungren announced that he, too, was prepared to sue to recoup medical costs, but only if the state’s product liability law is changed.

That put Lungren at odds with his own party’s leaders in the Legislature, who oppose changing the existing law.

Even if the law is changed, Lungren “would always move cautiously against any legally operated business,” said his spokesman, Rob Stutzman. In this instance, “the personal responsibility of an individual who smokes should not be lost in this debate,” he said--an argument that has played a key role in the tobacco industry’s defense efforts.

On Thursday, Lungren stressed that regardless of whether the law is changed, he still believes the best solution to the controversy would be a “far-reaching global settlement with all tobacco companies initiated by Congress” rather than years of litigation.

Such a deal ought to include a monetary settlement, disclosure of all tobacco industry research on smoking and health and restraints on marketing to minors, he said.

Liggett also announced Thursday that it has reached a settlement with San Francisco and several other California counties that have sued the industry. That agreement provides that those localities would get key Liggett documents, but it does not include any cash.

Lawyers for Los Angeles County have had “some discussion with Liggett’s counsel. But at this time there is no deal,” with the county, Robinson said.