5 Tobacco Lawsuits to Consolidate Common Allegations for State Trial

Five major California lawsuits seeking billions in damages against the tobacco industry will be consolidated for trial--perhaps beginning in February, a Superior Court judge here ruled Monday.

Judge Ronald S. Prager issued the order after a brief hearing, saying that all the cases--including one filed by California Atty. Gen. Dan Lungren, another by his gubernatorial rival Lt. Gov. Gray Davis, and yet another by Los Angeles County--involve numerous common allegations and legal issues. In a rare point of agreement, both the plaintiffs and the cigarette companies had previously said that consolidation made sense.

Prager’s order is likely to increase the importance of the California cases among the many lawsuits facing the tobacco industry nationwide. Until now, the cases have been little watched.

The stakes are substantial in the five pending cases. As in other states, the plaintiffs--the state, three California cities and 15 counties--are seeking reimbursement for the tobacco-related health costs imposed on state programs such as Medi-Cal. In addition, the state and local officials are seeking rulings that tobacco companies conspired to hide the hazards of smoking and suppressed the development of a safer cigarette.

Only one major suit against the industry has been resolved in California and that case, which ended in a settlement two years ago, had a big impact. That time, R.J. Reynolds Tobacco Co. agreed to settle a suit that contended that the company’s “Joe Camel” marketing campaign had violated state law by illegally targeting minors. The company agreed to pay $10 million, including about $1.5 million to Los Angeles County.

More importantly, RJR, the nation’s second-largest cigarette maker, agreed to make public thousands of internal documents. When the papers were released last year, members of Congress said they provided clear evidence that the company had tried to lure teenagers into consuming addictive products.

Monday’s action comes as representatives of many of the 36 states who have sued the tobacco industry are negotiating with the cigarette companies to settle those cases en masse. The negotiations, which include representatives from Lungren’s office, began in earnest in June after the U.S. Senate killed major tobacco legislation that would have resolved the state cases, raised the price of cigarettes by $1.10 a pack and severely restricted industry marketing practices.

The bill that died, sponsored by Sen. John McCain (R-Ariz.), grew out of a proposed $368.5-billion national settlement the industry reached with state attorneys general and private lawyers in June 1997. But the proposed legislation was much harsher on the industry than the proposed settlement had been.

Much narrower legislation has been introduced by the House Republican leadership. But the bill is given scant chance of passage, so the focus of anti-tobacco efforts has returned to the nation’s courtrooms. Several states, including Washington, Arizona, Oklahoma and Massachusetts, have trials against the industry scheduled to begin in several months, with Washington’s being first in mid-September.

In the past year, the industry has settled cases filed by Mississippi, Florida, Texas and Minnesota for a total of $39.1 billion. Prior to last summer, the industry had never paid damages in 40 years of litigation. But the cigarette companies decided to settle the state cases for sums previously unheard of in an attempt to avoid an adverse verdict while legislation was pending in Congress.

Now that the McCain bill has been scuttled and the tobacco manufacturers continue a multimillion-dollar advertising campaign against cigarette tax hikes, it is unclear whether they will risk a trial against any of the states.

Attorneys for both sides are actively preparing for trial in Washington. But after the hearing Monday, Tracey Buck-Walsh, a special assistant attorney general in Lungren’s office, said negotiations would resume soon.

The oldest of the five California cases, an industry conspiracy to suppress information about the dangers of smoking, was filed in 1992 by former San Diego schoolteacher Julia Cordova on behalf of all California residents. In June 1996, San Francisco became the first city in the nation to sue the industry. Since then, 17 cities and counties and four health organizations--the American Cancer Society, the American Heart Assn., the American Academy of Pediatrics and the California Medical Assn., have joined the suit.

In July 1996, James Ellis, an Orange County resident who contracted cancer after years of smoking, sued the industry, alleging deceptive business practices. In 1997, Davis joined the suit, which seeks to reimburse the state for an estimated $500 million to $700 million in yearly expenses for treating sick smokers.

Los Angeles County joined the fray in August 1996, seeking recompense for an estimated $400 million the county spends annually to treat sick smokers.

In June 1997, less than a month before the industry agreed to the proposed national settlement, Lungren filed his suit attempting to recover part of the expenses California has incurred treating sick smokers under the Medi-Cal program.

Under the consolidation order, those cases would proceed in two phases. First, a trial would be held before a judge to determine whether the companies engaged in unfair business practices or violated antitrust laws by acting in concert to suppress information about the dangers of tobacco. If a judge rules against the companies in that phase of the case, he could order them to pay restitution to the state, repay profits that resulted from illegal practices and submit to an injunction limiting their marketing practices.

In the second phase, a jury would hear the allegations about damages the state and local governments say they incurred treating sick smokers. If the jury agreed with the claims, it could order the companies to pay compensation that could mount to billions of dollars.

Prager told a courtroom packed with dozens of lawyers and a smattering of public health advocates here that he would recommend to the state Judicial Council that the cases be tried in San Diego. Three of the five cases already are being handled by San Diego Superior Court Judge Robert May, he noted.

Under California court procedures, the state Judicial Council, headed by Chief Justice Ronald George, has the power to choose the trial site and select the judge who will hear the cases after a consolidation order has been issued. The council is likely to agree with Prager on placing the cases in San Diego, legal experts said. Of the various parties involved, only the city of San Francisco has objected to a San Diego trial.

Prager said he would issue a ruling by July 31 on the schedule for some pretrial proceedings in the case. Once the Judicial Council decides which judge will handle the trials, a trial date will be set by that judge.