Court Upholds Plan to Spend Tobacco Funds on Health Care

An Orange County Superior Court commissioner Thursday upheld Measure H, a voter-approved county initiative that earmarks hundreds of millions of dollars in national tobacco lawsuit settlement funds for health care.

The ruling is a setback for county supervisors who had challenged the measure after a long battle with health care and community leaders over how the tobacco dollars should be spent.

Commissioner Jane D. Myers ruled that the initiative does not interfere with the board’s management or administration of county government, as the supervisors had argued.

The ballot measure mandated that most of the $750 million in tobacco settlement funds the county will receive over the next 25 years be spent on health care, not on bankruptcy debt and jail beds, as the board majority had wanted.

Additionally, Measure H, approved by 65% of the voters in November, will not be enacted until July 1, giving “the Board of Supervisors sufficient time to plan for its inclusion in future budgets.”

Supervisor Chuck Smith, one of a three-member majority who pushed for the legal challenge, said the board will discuss the ruling at a closed session during Tuesday’s regular board meeting.

Smith was disappointed at the decision but would not say the county is ready to drop the challenge. “I don’t know what we’re going to do at this point,” he said.

Board Chairwoman Cynthia P. Coad was out of the country Thursday. Vice Chairman Jim Silva, who was in Sacramento, said he had no comment because he had neither seen the ruling nor spoken to the county’s attorney.

Supervisors Todd Spitzer and Tom Wilson, who supported Measure H, said they plan to argue against an appeal. “I think the people have spoken and so have the courts,” Wilson said.

Spitzer said that based on Coad’s comments in the media, she wanted only to verify the constitutionality of the initiative. “What I will argue is [that] the voters overwhelmingly approved this measure and you have tested the constitutionality,” he said. “You’ve survived the legal hurdle that this money can be spent. We now need to get this money into people’s hands for health care.”

County lawyers say their challenge still has merit and will probably argue that Tuesday, but they declined to talk about what their recommendation might be.

“We believe there was merit in our legal position,” said Ben de Mayo, assistant county counsel. “We could appeal. But we’ll meet with the board, and it’s up to the board to decide what to do next.”

Commissioner Rules Suit Wasn’t Nuisance

While the ruling was a victory for the health care community, represented in the lawsuit by defendant Dr. J. Brennan Cassidy, Myers did not grant Cassidy’s motion to declare the county’s challenge a nuisance lawsuit. The motion would have made it easier for Cassidy to recover his legal costs.

In fact, Myers found that the county had “well-reasoned arguments” and did have a valid legal basis to bring the lawsuit.

Cassidy, immediate past president of the Orange County Medical Assn., hopes that county supervisors will enact the measure and not appeal the decision.

“Appeal? I don’t understand why they challenged it in the first place,” Cassidy said. “It’s pretty basic, and the initiative is simply written. I’m sure the voters would like the supervisors to accept this as the final chapter and not have to pay more taxpayer money on it.”

Myers’ ruling is the second legal setback for the county on the tobacco issue. In August, supervisors unsuccessfully tried to keep the initiative off the ballot.

Health care leaders negotiated with supervisors for nearly two years over how to spend the money. After talks ended without an agreement, the health care community raised more than $700,000--mostly from hospitals, physicians and clinics--to put Measure H on the ballot.

The measure requires the county to spend 80% of its annual $30-million share of a national tobacco settlement on health care and anti-smoking programs.

“We’re still hoping for a conclusion now that we’ve been down the [legal] road twice,” said Michelle Blair Revelle, spokeswoman for the Orange County Medical Assn. “As far as we’re concerned, the supervisors should just enact the voters’ choice.”

During the hearings, Cassidy was represented by a number of attorneys, including state Atty. Gen. Bill Lockyer, who intervened to protect the public’s right to the initiative process; state Sen. Joe Dunn (D-Santa Ana); and Thomas W. Hiltachk, a Sacramento attorney who also represents medical groups.

“Today’s ruling represents an important victory for Orange County voters and the initiative process in California,” Lockyer said in a prepared statement. “The voters of Orange County spoke, and the court listened.”

Throughout their defense of Cassidy, attorneys homed in on his right to circulate a petition and shepherd an initiative to the county ballot without fear of retaliation, in this case by county supervisors.

Hiltachk said Cassidy can appeal the commissioner’s decision on the nuisance section. “Obviously, we have a victory. Now if the county should come to its senses and accept the fact that now two judges have said Measure H is valid, obviously I have no reason to fight the decision.”