The state of Iowa has no legal right to collect money from tobacco companies to cover the cost of treating sick smokers, the state's Supreme Court ruled Wednesday.
The tobacco industry hailed the decision as a major victory.
But Iowa Atty. Gen. Tom Miller said the fight is far from over. "I consider this a setback, but only a temporary setback," Miller said.
The decision upheld a lower court ruling that found nothing in Iowa law permitting the state to be compensated for treating smokers.
The court agreed with tobacco industry contentions that the state's claims for damages were derivative and too remote because they arose from alleged injuries to smokers and not to the state. The Iowa judges said a ruling to the contrary would have meant that "any employer or insurer who paid medical expenses of an employee or insured injured by smoking would have a claim against the tobacco industry."
"We are not inclined to open the proverbial floodgates of litigation to such an extent," the court said.
Dan K. Webb, the lead lawyer for Philip Morris Cos., which makes Marlboro cigarettes, said it was the first time a state's highest court had considered the validity of the legal theories underlying claims for reimbursement of Medicaid funds spent to treat sick smokers.
He called the decision "a landmark opinion with profound ramifications." If ruling is followed by other state supreme courts, Webb said, "this could be the end" of the wave of lawsuits filed by state attorneys general and union health-care plans seeking reimbursement for money spent treating sick smokers.
Despite Wednesday's ruling, Miller said Iowa still could proceed legally against the industry on the basis of the state's Ongoing Criminal Conduct law and on the grounds of consumer fraud.