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Tobacco Industry Challenge To Be Aired In Court One-Day Hearing In Fight Over Fda Rules

Mon., Feb. 10, 1997, midnight

When the judge bangs the gavel in a North Carolina courtroom today, the proceedings may not have the drama of other recent high-profile trials.

But the stakes will be high.

Lawyers for the government will argue that at issue are the 400,000 lives lost each year to tobacco-related illnesses.

Opposing lawyers, representing the tobacco and advertising industries, will argue that the case is about nothing less than preserving the U.S. Constitution from unwarranted government regulations.

The confrontation will occur in a one-day hearing in U.S. District Court in Greensboro, where the tobacco industry is challenging the Clinton administration’s controversial plan to curb underage smoking.

After a two-year investigation, U.S. Food and Drug Administration asserted control over tobacco products by deeming them drug-delivery devices. Last August, the FDA issued a broad set of regulations to restrict the marketing and promotion of cigarettes and smokeless tobacco to minors. Those regulations are scheduled to be phased in beginning Feb. 28.

The tobacco industry claims the FDA rules are the beginning of “backdoor prohibition” of tobacco products. The industry argues that the laws governing neither the FDA nor Congress allow the agency to assert jurisdiction over tobacco products. It also says the advertising restrictions would violate the industry’s First Amendment rights.

U.S. District Judge William Osteen Sr. has limited testimony to a single day and will not rule on the matter right away. The case eventually could be appealed as far as the U.S. Supreme Court.

In the weeks leading up to the court confrontation, however, negotiations have appeared to intensify to settle all or part of the complex web of litigation involving the tobacco industry, a settlement that could render the court proceedings moot.

According to sources close to the negotiations, two deals are being explored.

First is an attempt by the Liggett Corp. to settle lawsuits brought by 21 states against tobacco companies in exchange for turning over sensitive, possibly damaging internal industry documents.

The second, broader effort is an attempt to settle all of the state suits against the entire tobacco industry in return for a large but as yet unspecified sum of money - and possibly a partial retreat by the FDA.

Much of the activity has been shrouded in vagueness and mystery. “It’s like shadow-dancing in the dark,” said Matthew L. Myers of the anti-tobacco group Coalition for Tobacco-Free Kids.

It is unclear, for example, whether the tobacco industry is involved in the discussions. While several top executives of tobacco companies have declared in recent months that they would not rule out a settlement, industry spokesmen have denied that the companies have been negotiating.

One of the lead negotiators in the Liggett talks said a possible deal still is moving forward. Liggett, the smallest of the major tobacco companies, broke ranks with the rest of the industry by signing a settlement with a number of state attorneys general and attorneys suing the industry in 1996.

More recently, the company has been discussing a settlement that could remove it from all remaining state lawsuits. Negotiations over that Liggett settlement proposal have been going on with increasing urgency for weeks, largely through a series of conference calls among attorneys general and private lawyers.

Attorney General Grant Woods of Arizona has taken a prominent role in that effort, according to participants. As the talks have progressed, there has been a sense that a deal could be imminent. But the complexity of the issues has kept the process dragging on.”It’s like herding cats,” said one attorney.

The broader settlement would require legislation to be passed by Congress. That deal was initiated last year by Mississippi attorney Richard Scruggs, a driving force in many of the state suits and brother-in-law of Senate Majority Leader Trent Lott, R-Miss.

This year, Scruggs has said he is too busy preparing for his state’s lawsuit to try to keep the settlement possibility alive. But rumors have persisted that talks have continued.

Some sources even say that negotiations on the broad settlement have been carried on with the White House and with key congressional figures such as Lott.

Lott said at a briefing last week that he has not been directly involved in negotiations, though he has discussed the issues with the White House. “It could be that something will come out in that area,” the senator said, adding that any agreement would be forged by private parties, not lawmakers.

Whether either of the negotiations is successful, the growing perception that a deal is near has widened the divide among the states who are suing the tobacco industry.

Although the suits share a common theme of demanding repayment for tobacco-related Medicaid expenses, the substance and tactics of the suits vary widely. And as the current round of negotiations shows, so do the states’ commitment to seeing the lawsuits through to judgment.

States such as Minnesota, which has gathered 26 million pages of tobacco-industry documents in warehouses in Minneapolis and London, is among the states most ardent to go to court. The settlement negotiations have prompted Minnesota to work with like-minded states to put together a detailed outline of what they believe any settlement should contain.

The Minnesota document, obtained by The Washington Post, would create a fund of undetermined size to mount tobacco-education programs and would require the disbanding of industry groups such as the Tobacco Institute and the Center for Tobacco Research.


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