Tobacco Wars Now Shifting to Courtroom

With the collapse in the Senate on Wednesday of sweeping antismoking legislation, the tobacco wars shift from their central stage in Congress to a swarm of pitched battles in the nation’s courts, where the scope of claims against the $50-billion industry is more immense than ever.

The demise of the legislation, which occurred when Senate Republican leaders sent it back to committee, came almost a year after the June 20, 1997, announcement of the giant tobacco truce, in which the industry offered to fund a wide array of antismoking measures in return for relief from attack in the courts.

The Senate refused to bless the deal and was considering much tougher legislation, which the industry, with a hugely expensive lobbying and advertising campaign, has now helped kill. Barring unforeseen developments, the sweeping legislation appears dead, although House Republicans are proposing a narrower bill that could pass this year.

Even so, cigarette makers appear to be worse off than they were a year ago. They now face more major lawsuits, an even bigger arsenal of incriminating documents and the psychological fallout from a series of multibillion-dollar settlements.

The failure of the legislation, which would have affirmed the authority of the Food and Drug Administration to regulate the nicotine in tobacco, also makes a forthcoming ruling by a federal appeals court enormously important.

The U.S. 4th Circuit Court of Appeals is considering whether the drug agency is empowered under existing federal law to restrict or even ban nicotine in tobacco products. Legislation clearly establishing that right could have made the ruling moot. But it now appears that the agency’s authority will be decided not by Congress but by the federal courts.

On the litigation front, cigarette makers have put four of the biggest cases behind them, settling for a total of $36 billion with the states of Mississippi, Florida, Texas and Minnesota. All those states had sued to recover smoking-related health care costs.

But the industry still faces suits filed by 36 other state attorneys general--cases that would have been resolved by the tobacco bill. Several of these state cases have trial dates in the next few months, including Washington in September, Oklahoma in November, Massachusetts in February and California and Arizona next March.

About 15 class-action suits on behalf of allegedly addicted smokers, which also would have been resolved by the legislation, now can go forward as well.

Moreover, a flood of new claims filed since June (cases that the industry had hoped to preempt through a nationwide settlement) have a clear green light. These include suits by Blue Cross and Blue Shield plans in 38 states and more than 30 class-action suits by union health-care funds seeking recovery of costs for smoking-related ailments. An additional 800 or so lawsuits by individual smokers also are pending.

To be sure, none of the major cases had been formally postponed in deference to Congress. But the cases “have moved slowly in the last year because, by and large, the courts have been waiting to see what happened in Congress,” said John Coale, a plaintiffs’ attorney involved in class-action suits against the industry.

While many of the cases have been treading water, the millions of industry documents produced in the recently settled case in Minnesota have endowed antitobacco lawyers with a trove of potentially damaging new evidence.

And the industry’s willingness to settle some of the state cases for billions of dollars might prejudice jurors elsewhere if cases come to trial in their state.

“Because they’ve paid out a lot of money . . . , the jury pool now understands that there’s more than just personal choice at work here, and that is different” from a year ago, Coale said.

Arizona Atty. Gen. Grant Woods said that jury research by the attorneys general in a number of states suggests that, “as time has gone on, our prospects for victory have improved greatly.”

Woods expects each side to have its share of victories and defeats. If the industry eschews settlement and resumes a scorched-earth approach, “I think that they probably will prevail in some states, but I think they will probably lose in most states,” Woods said.

“I don’t think they can afford to lose in most states.”

Industry spokesman Scott Williams said that the companies “will look at each case and make a judgment [about settling] based on each case.”

And jurors, he said, “are going to need to base their judgments on the merits of the case” and not the needs of “any particular state treasury.”

In recent weeks, some attorneys general and their lawyers have spoken privately of bypassing Congress, should the legislation fail to win passage, and entering into new negotiations with the industry aimed at a narrower settlement of the state cases.

“That was a notion that always was out there,” Williams said Wednesday. But “I’m not aware of active negotiations to do that.”