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Sticking Points Snag Accord on Smoking Suit

TIMES LEGAL AFFAIRS WRITER

Negotiators striving to reach a massive settlement of tobacco litigation plan to resume talks in Washington this week, but there still are several major unresolved issues, and as the talks drag on, more thorny problems seem to arise.

Mississippi Atty. Gen. Mike Moore, the lead negotiator for 34 states that have sued the industry seeking to recover Medicaid money spent treating sick smokers, said in an interview Sunday that his side and industry representatives have not reached an accord on three major points.

They are: How much control the federal Food and Drug Administration would have over the $50-billion industry; whether there will be any restrictions on people’s rights to sue tobacco companies, referred to as the “liability issue”; and how large a multibillion-dollar settlement fund would be.

“We’re not going to give up on the FDA piece or on liability . . . . It’s very difficult at this point,” Moore said. On Friday, industry representatives said they would not go along with any deal unless it bars both class-action suits and punitive damages against the industry. The attorneys general of the 34 states have agreed to the former, but not the latter.

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In addition, Arizona Atty. Gen. Grant Woods said the two sides were still at loggerheads on how any settlement would be enforced. The attorneys general are pushing for consent decrees that would give every state the ability to enforce the deal’s provisions--in particular its restrictions on marketing and selling cigarettes to minors. Sources said the industry would prefer enforcement by a federal agency so that it has fewer bureaucracies to deal with.

“We have more loose ends than closed ends,” said another participant in the talks, speaking on condition of anonymity. Another significant unresolved issue, according to this attorney, is how the settlement money would be allocated--including how much of the pot would go toward smoking-cessation programs that the industry has agreed to fund.

Despite the uncertainties, Moore, Woods and the attorney negotiator expressed confidence a deal could be reached in the next two weeks.

Moore’s suit against the industry is scheduled to go to trial July 7 in Pascagoula, Miss. He has said repeatedly that he thinks if a pact is not achieved by then, a “unique window of opportunity will pass.”

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But some longtime tobacco foes think the process needs to be slowed down. Just last week former FDA Commissioner David A. Kessler, who is co-chairing a special advisory committee on tobacco policy, warned that anyone who seeks to reach a settlement without securing the approval of the public health community does so “at their peril.”

The beleaguered industry is hoping to get out from under Mississippi’s case and nearly three dozen other major lawsuits that could lead to billions of dollars in damages. In return for curtailing the threat of litigation, the tobacco industry, represented in the talks by attorneys from high-powered New York law firms, is said to be willing to pay more than $300 billion and alter the way they do business.

In talks, the tobacco companies already have agreed to stringent restrictions on their advertising and other sales techniques. “At the end of the day, they will almost not be able to market their product,” in this country, said Woods, an ardent advocate of the proposed settlement.

“Right now, 3,000 kids start smoking every day,” Woods said. The settlement’s marketing restrictions, including the elimination of cartoon figures like Joe Camel and a prohibition on vending machine sales, can help stop that. Moreover, he said the cessation programs could result in 15 million Americans--about a third of the nation’s current smokers--having their lives extended for 20 years.

Nonetheless, there are significant skeptics, including some of tobacco’s longtime foes, who fear there will be loopholes in the deal that will benefit the industry.

For example, several public health advocates are concerned that provisions dealing with the FDA’s right to regulate the industry, and in particular nicotine--the chemical component that makes smoking addictive--are not sufficiently airtight. “The FDA must have a sweeping mandate, including all the legal tools it needs in the future to solve this problem,” said one anti-tobacco lawyer.

“Even if you get nicotine content way down, the cigarette companies could come up with a new ‘enhancer’ to hook people,” the attorney said. The attorneys general have agreed that nicotine would not be banned for the first 10 years of a pact, while further research is done.

On Friday, another potential impediment surfaced. Sen. Ron Wyden (D-Ore.) said he would “vigorously oppose any settlement that will be financed by the creation or expansion of tobacco markets abroad.”

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The key anti-tobacco senator said the settlement must meet three demands from the World Health Organization: A portion of the settlement funds should be earmarked for international anti-smoking education; a ban on overseas tobacco sales promotion; and large health warnings on cigarettes that are exported.

Sources familiar with the industry’s thinking said tobacco representatives clearly have no sympathy for such proposals, particularly as their overseas sales are rising and domestic sales are expected to drop if the settlement goes through.

While Moore expressed sympathy for Widen’s proposals, he cautioned: “We can’t solve the world’s [smoking] problems in this settlement.” Moore had hoped to have the proposed deal close enough to resolution that he could present it to a meeting of all the attorneys general on Tuesday in Dallas. But that meeting was called off after the five members of the negotiating team concluded they weren’t ready.

Moore, Woods and the three other attorney general negotiators will reconvene in Washington today, along with plaintiffs’ lawyers who have filed class-action suits against the industry, and tobacco company representatives. Moore said he hoped to present a full proposal to all the attorneys general in a conference call this week or early next week and to describe the deal to President Clinton in person.


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