Attorneys General Debate Whether to Raise Tobacco Settlement Stakes

A number of state attorneys general met Monday and discussed raising demands in their talks with cigarette companies to settle health-related lawsuits, including the amount of money to ask for and whether to give U.S. tobacco farmers a cut of any settlement.

The officials also, for the first time since talks began last winter, debated whether to press the companies to reduce the nicotine in cigarettes and to admit that nicotine is addictive, participants of meeting in Chicago said.

The meeting was the first opportunity for the states suing the industry to decide whether to ratchet up their demands after they won an unexpected bargaining chit on Friday, when a judge ruled that the federal Food and Drug Administration can regulate cigarettes.

“It gives us a stronger bargaining position,” Mississippi Atty. Gen. Michael Moore, a leader of the 25 state officials suing the industry, said during a break in the talks.

California has not filed a suit, but several municipalities have done so, among them Los Angeles County and the city of San Francisco.

The state attorneys general convened for almost six hours trying to smooth out differences among themselves.

A vast majority of the states are in agreement on the major points, according to Jeff Modisett, Indiana’s attorney general. Monday’s meeting was to get the other 5% aboard, he said.

Representatives of the two biggest U.S. cigarette makers--Philip Morris Cos. and RJR Nabisco Holdings Corp.--will meet early next week with the anti-tobacco groups. The two sides had been scheduled to meet Thursday.

Shares of Philip Morris gained 12.5 cents to close at $39.625, and RJR shares closed unchanged at $28.875 on the New York Stock Exchange. Both companies declined comment on the talks.

One item discussed Monday is a move to reduce the amount of nicotine in cigarettes, the substance believed to keep smokers hooked.

The companies are offering to pay up to $300 billion over 25 years in return for settling current lawsuits and getting protection from future litigation. Some state prosecutors want more.

“We have to get together with each other” on the money issue “before we can deal seriously with the industry,” said Joe Loveland, a spokesman for Minnesota’s attorney general.

The attorneys general also discussed whether to seek at the negotiating table a raft of FDA restrictions on tobacco promotion and advertising that North Carolina Judge William Osteen struck down Friday.