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Spokane, Washington  Est. May 19, 1883

Tobacco Firms Want To Stop Accusations Lawyers Ask Court To Dismiss Antitrust Claims In State’s Suit

Tim Klass Associated Press

Antitrust law provides no basis for a $1-billion-plus Washington state claim against tobacco companies to recover Medicaid payments, industry lawyers argued in court Thursday.

Nor is there any legal support for two other tobacco damage claims based on vague accusations of “unjust enrichment” and “special duty,” sometimes called the “good Samaritan” requirement, they told King County Superior Court Judge George A. Finkel.

“A manifest duty that floats in the air will not do” as grounds for a lawsuit, said John W. Phillips, representing Philip Morris.

Lawyers for the state countered that the seven companies, their research divisions and a public relations company must be held accountable for tobacco-related illnesses that boost Medicaid and other medical costs borne by Washington taxpayers.

The suit, one of 15 pending nationwide, contends that tobacco companies stifled research that could have led to production of safer cigarettes, manipulated nicotine levels to assure addiction, pitched advertising to children and issued false assurances of concern about public health.

The case involves “a massive, sweeping conspiracy that has cost the state of Washington in excess of $1 billion,” said Steve W. Berman, a class-action specialist hired by the state as special counsel.

Finkel said he would rule later on the tobacco industry’s motion to dismiss four of the seven causes for action in the suit - two antitrust claims and one each on the duty and enrichment issues.

“It’s not going to be anytime soon,” the judge added.

Even if all four claims are dismissed, the same damages could be recovered under two accusations that the tobacco companies violated consumer protection laws and a third claim of civil conspiracy, said Jon P. Ferguson, chief of the state attorney general’s antitrust section.

Maurice A. Leiter of Los Angeles and other industry lawyers said they would move later to dismiss those three claims.

Much of the argument in court concerned antitrust issues.

Antitrust claims can be brought only by direct customers or competitors for damage from trade-inhibiting practices, argued Bradley S. Keller, a lawyer for R.J. Reynolds.

“The injury that is alleged here is not an antitrust injury, and the state is not an injured party. It is too remote,” Keller said.

Ferguson said the state’s claims begin with what he described as a meeting of top tobacco industry executives in 1953 to plot strategy on health concerns about smoking.

“This conspiracy is a classic antitrust violation,” he said. “There is a direct line between what the defendants did and what the state paid in (health) benefits … we are the intended victim of the conspiracy.”

Named as defendants in the case Philip Morris, R.J. Reynolds, Brown & Williamson, Liggett Group, Lorillard, American Tobacco, U.S. Tobacco, The Tobacco Institute, Council for Tobacco ResearchUSA, Smokeless Tobacco Council, B.A.T. Industries and the public relations firm Hill & Knowlton.

Similar suits, some with different defendants, are pending in Alabama, Arizona, Connecticut, Florida, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, Oklahoma and Texas.

Finkel scheduled a conference Oct. 17 to set a pretrial schedule and possibly a trial date. The case was filed in June and is tentatively set for trial in October 1997.

The judge also said he might ask the two sides to provide funds for him to hire a law clerk for the case, a procedure lawyers said was unusual but not unprecedented. Unlike federal judges, trial judges in Washington state almost never have staff law clerks.

Lawyers for both sides said they would probably go along with the idea.