Tobacco Firms Nix Mega-Settlement Idea

Cigarette makers Thursday threw cold water on an ambitious proposal by a federal judge in Brooklyn to craft a global settlement of major anti-tobacco suits, telling the judge in writing that they do not think talks would be fruitful and would invite a flood of opportunistic new claims.

But some observers said U.S. District Judge Jack B. Weinstein, renowned for crafting sweeping settlements in complex cases such as Agent Orange, is unlikely to take no for an answer and will probably insist on exploratory talks before a mediator or special master. Weinstein is scheduled to meet today with tobacco company lawyers and plaintiffs’ attorneys. The latter group has told the judge it is ready to negotiate.

At issue is Weinstein’s order seeking talks to settle the six big anti-tobacco suits in his court, along with major tobacco cases elsewhere in the U.S., including a multibillion-dollar suit by the Justice Department and the landmark Engle class-action case in Florida that is about to enter a crucial punitive-damages phase.

In his order issued April 18, Weinstein asked lawyers in the six cases to respond within 10 days. In letters to the court late Thursday, Philip Morris and R.J. Reynolds Tobacco, the two leading cigarette makers, said they thought the effort would prove a waste of time because a global truce could not be fashioned that would pass Supreme Court muster.

“We must respectfully decline to enter into the negotiations Your Honor proposes,” said the letter signed by RJR attorney Theodore M. Grossman. The exercise would be futile, according to the letter, in light of past Supreme Court rulings that thousands of disparate injury claims “cannot be aggregated for . . . settlement purposes.”

Second, Grossman wrote, the company could wind up triggering more claims by sending “a false signal to potential litigants that R.J. Reynolds proposes to settle claims for personal damages; it does not.”

Despite its negative tone, the industry response was seen by some as a call for the judge to put his cards on the table and show how the legal and logistical obstacles could be overcome.

For the cigarette makers, the prospect of settling the Brooklyn cases alone has limited appeal. Five federal appeals courts, including the U.S. 2nd Circuit Court of Appeals that sits over Weinstein, have dismissed lawsuits of the type pending before him. Therefore, tobacco firms believe they can win the cases at trial, or at least reverse any defeat on appeal.

But a truce resolving all of the most-threatening cases--which the industry tried but failed to achieve in 1997 negotiations with the states--has remained a cherished goal.

Despite Thursday’s negative response from the industry, discussions may be just beginning, said Vincent Fitzpatrick, who represents a group of 20 Blue Cross and Blue Shield plans that sued tobacco firms to recover billions of dollars spent treating sick smokers. He predicted the judge will require the industry to take part in talks, “and will seek to allay . . . [their] fears that a global settlement may not stand up.”