State Sues Tobacco Firms Over Health Costs

California joined the immense legal battle over smoking Thursday, becoming the 37th state to sue the tobacco industry over smoking-related health care costs.

The lawsuit, filed in Sacramento Superior Court, resolves a political controversy in which Democrats had attacked the Wilson administration for failing to join the assault on tobacco.

At a news conference in Los Angeles shortly before the filing, Gov. Pete Wilson signed a bill authorizing the case and Atty. Gen. Dan Lungren vowed to aggressively pursue it.

“The high costs of smoking are all too familiar,” Wilson said. “Who among us has not lost a friend to cancer, emphysema or heart disease?”

He said the case seeks relief for a different group of victims--”taxpayers who have not taken a single puff.”

The suit seeks more than $1 billion in damages from seven tobacco companies and four industry lobbying and public relations groups that allegedly ran a campaign of disinformation over at least four decades concerning the risks and addictiveness of smoking.

It comes against a backdrop of intense negotiations between tobacco representatives, state attorneys general and private anti-tobacco lawyers aimed at reaching a “global settlement” in the $50-billion industry’s vast legal and regulatory problems. The California suit is unlikely to have a big influence on the talks.

Lungren, a Republican and likely candidate for governor, had come under sharp attack in recent months from Democrats and anti-smoking groups for failing to join other states in suing the industry.

Wilson has also been accused by anti-smoking groups of being too friendly to tobacco because he has diverted tobacco tax funds from anti-smoking campaigns to other health programs.

As if sympathizing with their position, R.J. Reynolds spokeswoman Peggy Carter said: “We certainly understand why the governor and attorney general of the state may feel pressure to bring such a suit. That doesn’t change the reality that neither the law nor the facts support this litigation.”

“We’re disappointed that they’re filing,” said Greg Little, senior assistant general counsel for Philip Morris. But Little said recent rulings in other states “confirm that these cases are not supported by the law.”

The suit seeks recovery of money spent in the last three years on smoking-related ailments under Medi-Cal--California’s version of Medicaid, the health insurance program for the poor. The annual cost, says the suit, is about $433 million, with the state and United States splitting the tab.

The complaint also seeks penalties of no less than $500 million for alleged violations of the state Business and Professions Code, which bars deceptive marketing practices.

According to the suit, tobacco companies carried on a coordinated, decades-long campaign to suppress information about the risks of their products and to block introduction of less hazardous cigarettes.

Among the lawsuit’s charges:

* Tobacco companies maintained nicotine was not addictive, “when they knew that it was.

* They “agreed not to develop and market safer cigarettes,” knowing “that the introduction of safer cigarettes would imply other cigarettes were not safe.”

* They specifically targeted minors through their advertising and marketing campaigns. The lawsuit cites a report by the California Department of Health Services that it said found that stores within 1,000 feet of schools had “significantly more tobacco advertising and promotion than the average store.”

Until now, Lungren argued that he had been stymied by a 1987 state law barring product liability claims against tobacco firms, which made it impossible for him to successfully sue the industry. The ban on anti-tobacco claims--part of the infamous “napkin deal” worked out at Frank Fat’s restaurant in Sacramento--was shepherded by former Democratic Assembly Speaker Willie Brown and state Senate Leader Bill Lockyer (D-Hayward).

In remarks to the press, Lungren repeatedly referred to the measure as the “Brown-Lockyer” bill, lest anyone forget which party pushed it through.

Lungren’s critics--including his potential gubernatorial opponent, Lt. Gov. Gray Davis--contended that Lungren could bring the anti-tobacco suit under other state laws.

Nonetheless, Assembly Speaker Cruz Bustamente(D-Fresno) introduced the bill that Wilson signed Thursday allowing the state to sue. The bill, which sailed through the Legislature with strong bipartisan support, did not disturb the ban on product liability suits by individual smokers, but allowed lawsuits by state or local governments.

Wilson told reporters that Lungren had no way to bring the lawsuit until now. And he called attacks on him by anti-smoking groups “absurd”--arguing that the state’s efforts to combat smoking outstrip those of every other state.

Lungren said that although the state’s case is strong, citizens and lawmakers should realize that it “is no slam-dunk.”

The effort may also be expensive. Unlike other states, which have contracted with private law firms to litigate their cases in exchange for a percentage of settlements or judgments, California will let its case be handled entirely by state employees, Lungren said.

Should it proceed through trial, this will mean hiring 34 more attorneys, 45 paralegals and 42 support staff at a cost of $14.5 million, Lungren said.

Asked why he is not retaining private attorneys on a contingent fee basis, Lungren replied “we are simply not selling tickets to a lottery for law firms.”

Because legislators favored the lawsuit, “I assume now they’ll be willing to pay” for it, he said.

With California’s entry, states representing more than than 90% of the U.S. population are now involved in the litigation. Cigarette makers also face about 20 class-action suits on behalf of smokers, as well as more than 200 individual claims.

Tired of waiting for Lungren, a number of California’s counties--including Los Angeles and San Francisco--filed lawsuits last year to recoup their own tobacco-related care costs. Lungren said it is uncertain if those suits will be consolidated with the state’s. Lungren on Thursday also endorsed the “global” tobacco settlement that has been the subject of negotiations for nearly 2 1/2 months.

Such a settlement would not only provide billions of dollars per year to resolve pending Medicaid, class-action and individual lawsuits, but would limit future claims. In addition, it would restrict tobacco advertising, and define the U.S. Food and Drug Administration’s role in regulating nicotine.

But some tobacco critics, including the American Lung Assn. and Bustamente, called on Lungren Thursday to refuse to sign on to any settlement covering more than the state Medicaid claims.

In a letter praising Lungren for filing suit, lung association officials explained their opposition to the global deal. “Time after time tobacco has escaped meaningful regulation because of inappropriate compromises and concessions,” the letter said.

* DEAL TENTATIVELY OKd: Health organizations give tentative approval to proposed tobacco suit settlement. D1